<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------------------------
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997 OR
/ / 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)
<TABLE>
<S> <C> <C>
Nevada 33-5628-NY 87-0263643
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
</TABLE>
23/F Office Tower, Convention Plaza
1 Harbour Road
Wanchai, Hong Kong
(Address of principal executive offices)
Registrant's telephone number, including area code: 011-852-2810-7205
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
filing 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: 6,029,004 shares of
common stock, $.001 par value, as of November 13, 1997.
Page 1 of 29 pages Exhibit Index on Page 23
<PAGE> 2
CONVENTIONS
Unless otherwise specified, all references in this report to "U.S.
Dollars," "Dollars," "U.S.$," or "$" are to United States 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 the Operating Subsidiaries maintain their
accounts in Renminbi yuan. The financial statements of the Company and its
subsidiaries are prepared in Renminbi. Translations of amounts from Renminbi 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, 1997, which was U.S.$1.00 = Rmb8.30.
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" refer to Billion Luck Company Ltd., a
British Virgin Islands company, which is a wholly-owned subsidiary of the
Company.
References to "Company" and "Registrant" are to China Resources
Development, Inc., and include, unless the context requires otherwise, the
operations of Billion Luck, HARC, First Supply, and Second Supply (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 "First Supply" are to First Goods And Materials Supply And
Sales Corporation, a company organized in the PRC and a wholly-owned subsidiary
of HARC.
References to "Guilinyang Farm" are to Hainan Province Guilinyang State
Farm, a PRC entity which is owned and controlled by the Farming Bureau.
References to "Hainan" are to Hainan Province of the PRC.
References to "Hainan State Farms" are to the rubber farms in Hainan
controlled by the Farming Bureau.
References to "HARC" are to Hainan Zhongwei Agricultural Resources
Company Limited, a company organized in the PRC, whose capital is owned 56% by
Billion Luck, 39% by the Farming Bureau and 5% by Guilinyang Farm.
References to "Operating Subsidiaries" are to the consolidated
operations, assets and/or activities, as the context indicates, of First Supply
and Second Supply.
-2-
<PAGE> 3
References to the "PRC" or "China" are to the People's Republic of China
and include all territory claimed by or under the control of the Central
Government, except Hong Kong, Macau, and Taiwan.
References to "Second Supply" are to Second Goods And Materials Supply
And Sales Corporation, a company organized in the PRC and a wholly-owned
subsidiary of HARC.
References to "Tons" are to metric tons.
-3-
<PAGE> 4
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
CHINA RESOURCES DEVELOPMENT, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Amounts in thousands, except share and per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Note September 30, September 30,
----------------------------------------- ------------------------------------------
1997 1996 1997 1997 1996 1997
RMB RMB USD RMB RMB USD
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
SALES 419,295 486,788 50,517 893,762 1,282,507 107,682
COST OF SALES (410,396) (445,430) (49,445) (860,071) (1,165,224) (103,623)
--------- --------- -------- --------- ----------- ---------
GROSS PROFIT 8,899 41,358 1,072 33,691 117,283 4,059
DEPRECIATION OF (1,195) (484) (144) (2,039) (1,692) (246)
FIXED ASSETS
SELLING AND (6,263) (14,132) (755) (21,979) (39,305) (2,648)
ADMINISTRATIVE --------- --------- -------- --------- --------- --------
EXPENSES
OPERATING INCOME 1,441 26,742 173 9,673 76,286 1,165
FINANCIAL INCOME/ (859) (10,122) (103) 31 (31,798) 4
(EXPENSES), NET
OTHER INCOME 19,981 11,127 2,407 38,726 15,370 4,666
--------- --------- -------- --------- --------- --------
INCOME BEFORE 20,563 27,747 2,477 48,430 59,858 5,835
INCOME TAXES
INCOME TAXES (1,806) (2,335) (217) (7,959) (7,912) (959)
--------- --------- -------- --------- --------- --------
NET INCOME BEFORE 18,757 25,412 2,260 40,471 51,946 4,876
MINORITY INTERESTS
MINORITY INTERESTS (9,979) (9,807) (1,202) (21,577) (23,208) (2,600)
--------- --------- -------- --------- --------- --------
NET INCOME FOR THE 8,778 15,605 1,058 18,894 28,738 2,276
PERIOD ========= ========= ======== ========= ========= ========
EARNINGS PER SHARE 2 1.46 5.31 0.18 3.19 9.78 0.38
========= ========= ======== ========= ========= ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
-4-
<PAGE> 5
CHINA RESOURCES DEVELOPMENT, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(Amounts in thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997 DECEMBER 31, 1996 SEPTEMBER 30, 1997
------------------ ----------------- ------------------
RMB RMB USD
NOTES (UNAUDITED) (AUDITED) (UNAUDITED)
--------
ASSETS
CURRENT ASSETS
<S> <C> <C> <C> <C>
Cash and cash equivalents 127,852 131,006 15,404
Trade receivables 10,130 4,212 1,220
Other receivables, deposits and 59,323 48,755 7,147
prepayments
Inventories 3 69,874 55,452 8,419
Amounts due from related 143,216 147,221 17,255
companies
Amount due from Farming 6,187 298,570 745
Bureau ------- ------- -------
TOTAL CURRENT ASSETS 416,582 685,216 50,190
FIXED ASSETS 4 6,484 6,504 781
INVESTMENTS 11,128 12,344 1,341
GOODWILL 1,028 1,049 124
------- ------- -------
TOTAL ASSETS 435,222 705,113 52,436
======= ======= =======
LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Bank loans - 292,560 -
Amounts due to related companies 8,929 - 1,076
Amounts due to shareholders 299 4,976 36
Accounts payable 19,594 25,848 2,361
Income taxes payable 21,636 17,063 2,607
Other payables and accrued 16,623 43,295 2,002
liabilities ------- ------- -------
TOTAL CURRENT 67,081 383,742 8,082
LIABILITIES
MINORITY INTERESTS 130,157 108,580 15,681
------- ------- -------
TOTAL LIABILITIES 197,238 492,322 23,763
======= ======= =======
</TABLE>
-5-
<PAGE> 6
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997 DECEMBER 31, 1996 SEPTEMBER 30, 1997
------------------ ----------------- ------------------
RMB RMB USD
NOTES (UNAUDITED) (AUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
SHAREHOLDERS' EQUITY Common Stock,
US$0.001 par value: Authorized -
200,000,000 shares in 1997 and 1996
Issued and outstanding - 6,029,004
shares in 1997 and 5,779,004 shares
in 1996 48 48 6
Preferred stock, authorized -
10,000,000 shares in 1997 and 1996:
Series B preferred stock, US$0.001 par
value: Authorized 3,200,000 shares in
1997 and 1996 Issued and outstanding -
3,200,000 shares in 1997 and 1996 270 270 33
Additional paid-in capital 153,493 147,194 18,493
Reserves 17,748 17,748 2,138
Retained earnings 66,425 47,531 8,003
------- ------- -------
TOTAL SHAREHOLDERS' EQUITY 237,984 212,791 28,673
------- ------- -------
TOTAL LIABILITIES AND 435,222 705,113 52,436
SHAREHOLDERS' EQUITY ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
-6-
<PAGE> 7
CHINA RESOURCES DEVELOPMENT, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Amounts in thousands, except share and per share data)
<TABLE>
<CAPTION>
Series B
Series A Convertible Series B
Common Preferred Preferred Preferred
Stock Stock Stock Stock
RMB RMB RMB RMB
<S> <C> <C> <C> <C>
Balance at December 48 -- -- 270
31, 1996
Issuance of 250,000 -- -- -- --
shares of common
stock as compensation
for consulting services
received
Net income for the
period
------ --------- ---------- ------
Balance at September
30, 1997 48 -- -- 270
====== ========= ========== ======
<CAPTION>
Additional
Paid-In Retained
Capital Reserves Earnings Total
RMB RMB RMB RMB
<S> <C> <C> <C> <C>
Balance at December 147,194 17,748 47,531 212,791
31, 1996
Issuance of 250,000 6,299 -- -- 6,299
shares of common
stock as compensation
for consulting services
received
Net income for the
period 18,894 18,894
-------- -------- -------- -------
Balance at September
30, 1997 153,493 17,748 66,425 237,984
======== ======== ======== =======
</TABLE>
-7-
<PAGE> 8
CHINA RESOURCES DEVELOPMENT, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Amounts in thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
--------------------------------------------------
1997 1996 1997
RMB RMB USD
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income 18,894 28,738 2,276
Adjustments to reconcile net income to net
cash provided by operating activities:
Minority interests 21,577 23,208 2,600
Depreciation and amortization 2,060 1,713 248
Loss on disposal of fixed assets 799 5 96
Decrease/(increase) in assets:
Trade receivables (5,918) (103,484) (713)
Other receivables, deposits and prepayments (4,269) (82,800) (515)
Inventories (14,422) (81,574) (1,738)
Amount due from Farming Bureau (177) 31,879 (21)
Amounts due from related companies 4,005 34,632 483
Other current assets -- 19,448 --
Increase/(decrease) in liabilities:
Amounts due to related companies 8,929 13,055 1,076
Accounts payable (6,254) 109,291 (753)
Income taxes payable 4,573 3,608 551
Other payables and accrued liabilities (26,672) 57,215 (3,213)
--------- --------- ---------
Net cash provided by operating activities 3,125 54,934 377
--------- --------- --------
CASH FLOWS PROVIDED BY/(USED IN)
INVESTING ACTIVITIES:
Purchases of fixed assets (2,821) (1,994) (340)
Purchases of investments -- (200) --
Reduction of minority interests -- (164) --
Proceeds from disposal of fixed assets 3 -- --
Proceeds from sale of investments 1,216 -- 147
-------- --------- --------
Net cash used in investing activities (1,602) (2,358) (193)
-------- --------- --------
</TABLE>
-8-
<PAGE> 9
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-----------------------------------------------------
1997 1996 1997
RMB RMB USD
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS PROVIDED BY/(USED IN)
FINANCING ACTIVITIES:
Issue of share capital less share offering costs -- 73,937 --
Repayment of loans to shareholders (4,677) (15,428) (564)
Repayments of bank borrowings -- (440) --
Short term advances -- (86,917) --
-------- -------- --------
Net cash used in financing activities (4,677) (28,848) (564)
-------- -------- --------
NET INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS: (3,154) 23,728 (380)
Cash and cash equivalents, at beginning of period 131,006 56,942 15,784
-------- --------- --------
Cash and cash equivalents, at end of period 127,852 80,670 15,404
======== ========= ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
-9-
<PAGE> 10
CHINA RESOURCES DEVELOPMENT, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands)
1. BASIS OF PRESENTATION:
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles 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 nine months period ended September
30, 1997, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997. The unaudited condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended December 31,
1996.
2. EARNINGS PER SHARE:
The computation of primary earnings per share for the three months and
nine months ended September 30, 1997, are based on the weighted average
number of common stock outstanding after giving effect to dilutive stock
options, which are included as common share equivalents using the
treasury stock method and assumed to be converted to common stock. The
number of shares used in computing the primary earnings per share for
the three months and nine months ended September 30, 1997, were
6,029,004 and 5,917,893 respectively. Fully diluted earnings per share
is not materially different from primary earnings per share.
The computation of primary earnings per share for the three months and
nine months ended September 30, 1996, is based on the weighted average
number of common stock outstanding after giving effect to dilutive stock
options and Series B convertible preferred stock, which are included as
common share equivalents using the treasury stock method and assumed to
be converted to common stock, respectively. The number of shares used in
computing the primary earnings per share was 2,939,589 as if the
one-for-ten reverse stock split had been completed at the beginning of
the period. Fully diluted earnings per share is not materially different
from primary earnings per share.
3. INVENTORIES:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
RMB RMB
(unaudited) (audited)
<S> <C> <C>
Finished goods 69,874 55,452
========= =========
</TABLE>
Inventories are stated at the lower of cost or market. Cost is
determined using the first-in, first-out method.
-10-
<PAGE> 11
4. FIXED ASSETS:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
RMB RMB
(unaudited) (audited)
<S> <C> <C>
Cost:
Buildings 3,876 3,806
Plant, machinery and equipment 1,883 1,645
Transportation vehicles and equipment 5,560 4,264
------- -------
11,319 9,715
------- -------
Accumulated depreciation:
Buildings 2,374 1,711
Plant, machinery and equipment 451 238
Transportation vehicles and equipment 2,010 1,262
------- --------
4,835 3,211
------- --------
Net book value 6,484 6,504
======= ========
</TABLE>
5. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1997 1996
RMB RMB
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Cash paid during the period for interest expenses 3,561 19,959
====== ======
</TABLE>
-11-
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATION
RESULTS OF OPERATIONS
The following table shows the selected unaudited condensed consolidated
income statements data of the Company and its subsidiaries for the three months
and nine months ended September 30, 1996 and 1997. The data should be read in
conjunction with the unaudited Condensed Consolidated Financial Statements of
the Company and related Notes thereto:
The discussions below are presented in the Company's primary operating
currency which is the Renminbi Yuan ("Rmb"). For information purposes the
amounts have been translated into U.S. dollars at an exchange rate of $1.00 =
Rmb8.30 which represents the approximate single rate of exchange as quoted by
the People's Bank of China on September 30, 1997. No representation is made that
Rmb amounts could have been, or could be, converted into U.S. dollars at that
rate or any other rate.
<TABLE>
<CAPTION>
(Amounts in thousands)
Three months Nine months
ended ended
September 30, September 30,
---------------------- --------------------------
1997 1996 1997 1996
RMB RMB RMB RMB
<S> <C> <C> <C> <C>
Sales:
Distribution of natural rubber
Procurement of materials and 408,073 390,544 857,222 977,964
supplies 11,222 96,244 36,540 304,543
------- ------- ------- ---------
419,295 486,788 893,762 1,282,507
------- ------- ------- ---------
Gross profit 8,899 41,358 33,691 117,283
Gross profit margin (%) 2.12 8.50 3.77 9.14
Income before income taxes 20,563 27,747 48,430 59,858
Income taxes (1,806) (2,335) (7,959) (7,912)
------- ------- ------- --------
Net income 18,757 25,412 40,471 51,946
Minority interests (9,979) (9,807) (21,577) (23,208)
------- ------- ------- --------
Net income after minority
interests 8,778 15,605 18,894 28,738
======= ======= ======= =======
</TABLE>
-12-
<PAGE> 13
SALES AND GROSS PROFIT
Total net sales for the third quarter of fiscal 1997 decreased by
approximately Rmb68 million (US$8 million) or 13.9% to approximately Rmb419
million (US$50 million), compared to approximately Rmb487 million (US$59
million) for the corresponding period in 1996. It was mainly due to the decrease
in net sales from procurement of materials and supplies by approximately Rmb85
million (US$10 million) or 88.3% to approximately Rmb11 million (US$1.3 million)
compared to approximately Rmb96 million (US$12 million) for the corresponding
period in 1996.
For the nine months ended September 30, 1997, the Company's total net
sales decreased by Rmb389 million (US$47 million) or 30.3%. The net sales of
natural rubber and materials and supplies decreased by Rmb121 million (US$15
million) or 12.3% and Rmb268 million (US$32 million) or 88%, respectively, as
compared to the corresponding period in 1996.
The domestic natural rubber consumption market remained sluggish for the
first half of fiscal 1997 and was worse in the third quarter due to the currency
crisis in Southeast Asia. Asian currencies have in recent months weakened
against the U.S. dollar, while the yuan remains relatively stable. The currency
deflation of most of the largest natural rubber producing countries like
Thailand, Indonesia and Malaysia caused a significant drop in the international
natural rubber price from approximately Rmb10,400 per ton in the first half of
fiscal 1997 to approximately Rmb9,000 per ton in the third quarter of 1997. The
average domestic natural rubber price for the nine months ended September 30,
1997, was approximately Rmb10,000 per ton compared to approximately Rmb12,000
per ton for the comparable period in 1996. Management expects that the
international rubber price will continue to drop in the next quarter and will
only become stable in early 1998.
Net sales from procurement of materials and supplies remained low in the
first half of fiscal 1997 because of the weak consumption market. The Company
also reduced the scope of those procurement segments with unsatisfactory net
margin contribution. There was a high margin contribution from trading of
agricultural products in 1996. However, this market was not favorable in 1997 as
compared to 1996. This accounted for the drop in net sales and gross profit
margin.
For the nine months ended September 30, 1997, gross profit decreased by
Rmb84 million (US$10 million) or 71% to Rmb34 million (US$4 million), compared
to Rmb117 million (US$14 million) for the corresponding period in 1996. The
overall gross profit margin also decreased from 9.14% to 3.77% due to the
unsatisfactory profit margin contribution from the procurement business and the
significant drop in natural rubber price during the period.
SELLING AND ADMINISTRATIVE EXPENSES
For the nine months ended September 30, 1997, selling and administrative
expenses decreased by Rmb17,326,000 (US$2,087,000) or 44.1% to Rmb21,979,000
(US$2,648,000) compared to the corresponding period in fiscal 1996. The
reduction was primarily a result of the restructuring of operations implemented
effective the last quarter of fiscal 1996. The restructuring has resulted in
reduced administrative overheads, staff costs and the related welfare expenses.
Also, management exercised tighter control on the selling and administrative
expenses in view of the continued worsening of market conditions. The reduction
in operating expenses achieved through the restructuring of operations was
partially offset by the increase in legal and professional fees associated with
regulatory compliance and public relations costs incurred as a result of the
NASDAQ listing status of the Company.
-13-
<PAGE> 14
NET FINANCIAL INCOME/(EXPENSES)
The Company recorded net financial income of Rmb31,000 (US$4,000) for
the nine months ended September 30, 1997, compared to net financial expenses of
Rmb31,798,000 (US$3,831,000) for the corresponding period in fiscal 1996. This
was primarily attributable to the reduction in bank interest expenses following
the execution of the Restructuring Agreement effective on October 1, 1996.
Pursuant to the Restructuring Agreement, all outstanding bank loans of the
Company were deemed assigned to the Farming Bureau. As a result, all bank
interest incurred by the Company commencing October 1, 1996 was recovered from
the Farming Bureau. The net financial income for the nine months ended September
30, 1997, represented mainly the bank interest income and foreign exchange gain.
OTHER INCOME/NET
Other income increased by Rmb23,356,000 (US$2,814,000) or 152% to
Rmb38,726,000 (US$4,666,000) for the nine months ended September 30, 1997,
compared with Rmb15,370,000 (US$1,852,000) for the corresponding period in 1996.
The increase was mainly due to more income earned from trading of rubber futures
contracts during the nine months ended September 30, 1997, as compared to that
of 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary liquidity needs are to fund accounts receivable,
inventories and to expand business operations. The Company has financed its
working capital requirements through a combination of internally generated cash
and proceeds from the offshore private placements completed in the year 1996.
Net cash provided by the operating activities was Rmb3.1 million (US$377,000)
for the nine months ended September 30, 1997, compared to that of Rmb54.9
million (US$6.6 million) for the corresponding period in 1996. The Company had a
working capital surplus of approximately Rmb350 million (US$42.1 million) as of
September 30, 1997, compared to that of Rmb301 million (US$36.3 million) as of
December 31, 1996.
On March 28, 1997 and March 31, 1997, the Company completed formal
assignments, in the aggregate of approximately Rmb293 million (US$35.3 million),
of bank loans to the Farming Bureau.
There has been no other significant change in financial condition and
liquidity since the fiscal year ended December 31, 1996. The Company believes
that the net proceeds retained from its capital raising efforts, together with
internally generated funds, will be sufficient to satisfy its anticipated
working capital needs for at least the next twelve months.
-14-
<PAGE> 15
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) The following Exhibits are filed as part of this Form 10-Q
or incorporated by reference as indicated below:
<TABLE>
<CAPTION>
Exhibit No. Exhibit Description
<S> <C>
3.1 Articles of Incorporation of the Registrant, filed on January
15, 1986 (Filed with Annual Report on Form 10-K/A for the
fiscal year ended December 31, 1994, and incorporated herein
by reference.)
3.2 By-laws of the Registrant (Filed with Annual Report on Form
10-K/A for the fiscal year ended December 31, 1994, and
incorporated herein by reference.)
3.3 Certificate of Amendment of Articles of Incorporation of the
Registrant, filed on November 18, 1994 (Filed with Annual
Report on Form 10-K/A for the fiscal year ended December 31,
1994, and incorporated herein by reference.)
3.4 Certificate of Amendment of Articles of Incorporation of the
Registrant, filed on November 18, 1994 (Filed with Annual
Report on Form 10-K/A for the fiscal year ended December 31,
1994, and incorporated herein by reference.)
3.5 Certificate of Amendment of Articles of Incorporation of the
Registrant, effective March 31, 1995, and filed on June 19,
1995 (Filed with Quarterly Report on Form 10-Q/A for the
fiscal quarter ended March 31, 1995, and with Current Report
on Form 8-K dated June 19, 1995, and incorporated herein by
reference.)
</TABLE>
-15-
<PAGE> 16
<TABLE>
<S> <C>
3.6 Certificate of Amendment of Articles of Incorporation of the
Registrant, effective December 30, 1996 (Filed with Annual
Report on Form 10-K for the fiscal year ended December 31,
1996, and incorporated herein by reference.)
3.7 Amended and Restated By-laws of the Registrant, as amended on
December 30, 1996 (Filed with Annual Report on Form 10-K for
the fiscal year ended December 31, 1996, and incorporated
herein by reference.)
4.1 Certificate of Designation of Series B Convertible Preferred
Stock, filed on December 13, 1995 (Filed with Current Report
on Form 8-K dated March 8, 1996, and incorporated herein by
reference.)
4.2 Certificate of Amendment of Certificate of Designation of
Series B Convertible Preferred Stock, effective December 31,
1997 (Filed with Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, and incorporated herein by
reference.)
10.1 Assignment Agreement dated January 21, 1994, by and between
Hong Wah (Holdings) Limited and Billion Luck Company Ltd.
(Filed with Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1994, and incorporated herein by
reference.)
10.2 Contract on Investment for the Setting up of Hainan
Agricultural Resources Company Ltd. dated January 31, 1994, by
and among Hainan Province Agricultural Reclamation General
Company (the Farming Bureau), Hainan Province Guilinyang State
Farm, and Billion Luck Company Ltd. (Original Chinese version
with English translation filed with Annual Report on Form
10-K/A for the fiscal year ended December 31, 1994, and
incorporated herein by reference.)
10.3 Loan Agreement dated May 10, 1994, by and among Everbright
Finance & Investment Co. Limited, Worlder International
Company Limited, Hong Wah Investment Holdings Limited,
Silverich Limited, Brender Services Limited, and Billion Luck
Company Ltd. (Filed with Annual Report on Form 10-K/A for the
fiscal year ended December 31, 1994, and incorporated herein
by reference.)
10.4 Credit Agreement dated June 1, 1994, by and among Everbright
Finance & Investment Co. Limited, Worlder International
Company Limited, Hong Wah Investment Holdings Limited and
Billion Luck Company Ltd. (Filed with Annual Report on Form
10-K/A for the fiscal year ended December 31, 1994, and
incorporated herein by reference.)
10.5 Contract on the Transfer of Share Ownership of Hainan Zhongya
Aluminum Co., Ltd. dated July 11, 1994, by and between Hainan
Province Guilinyang State Farm and Hainan Agricultural
Resources Co., Ltd. (Filed with Annual Report on Form 10-K/A
for the fiscal year ended December 31, 1994, and incorporated
herein by reference.)
10.6 Letter Agreement dated August 8, 1994, by and among Everbright
Finance & Investment Co. Limited, Worlder International
Company Limited, Hong Wah Investment Holdings Limited and
Billion Luck Company Ltd., supplementing Credit Agreement
dated June 1, 1994 (Filed with Annual Report on Form 10-K/A
for the fiscal year ended December 31, 1994, and incorporated
herein by reference.)
</TABLE>
-16-
<PAGE> 17
<TABLE>
<S> <C>
10.7 Letter Agreement dated October 24, 1994, by and among
Everbright Finance & Investment Co. Limited, Worlder
International Company Limited, and Billion Luck Company Ltd.
(Filed with Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1994, and incorporated herein by
reference.)
10.8 Acquisition Agreement, by and among the Registrant and the
shareholders of Billion Luck Company Ltd. (Filed with Annual
Report on Form 10-K/A for the fiscal year ended December 31,
1994, and incorporated herein by reference.)
10.9 Agreement on Service and Cooperation dated November 5, 1994,
by and between Hainan Province Agricultural Reclamation
General Company (the Farming Bureau) and Hainan Agricultural
Resources Company Ltd. (Original Chinese version with English
translation filed with Annual Report on Form 10-K/A for the
fiscal year ended December 31, 1994, and incorporated herein
by reference.)
10.10 Land Use Agreement dated November 5, 1994, by and between
Hainan Province Agricultural Reclamation No. 1 Materials
Supply & Sales Company (First Supply) and Hainan Province
Agricultural Reclamation Jin Long Materials General Company
(Original Chinese version with certified English translation
filed with Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1994, and incorporated herein by
reference.)
10.11 Land Use Agreement dated November 5, 1994, by and between
Hainan Province Agricultural Reclamation No. 2 Materials
Supply & Sales Company (Second Supply) and Hainan Province
Agricultural Reclamation Jin Huan Materials General Company
(Original Chinese version with certified English translation
filed with Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1994, and incorporated herein by
reference.)
10.12 Long-Term Sale and Purchase Agreement dated November 5, 1994,
by and among Hainan Province Agricultural Reclamation General
Company (the Farming Bureau), Hainan Agricultural Resources
Company Ltd., Hainan Province Agricultural Reclamation No. 1
Materials Supply & Marketing Company (First Supply), and
Hainan Province Agricultural Reclamation No. 2 Materials
Supply & Marketing Company (Second Supply) (Original Chinese
version with English translation filed with Annual Report on
Form 10-K/A for the fiscal year ended December 31, 1994, and
incorporated herein by reference.)
10.13 Agreement on Assignment of Accounts Receivable dated November
5, 1994, by and among Hainan Province Agricultural Reclamation
General Company (the Farming Bureau), Billion Luck Company
Ltd., Hainan Province Guilinyang State Farm, Hainan
Agricultural Resources Company Ltd., Hainan Province
Agricultural Reclamation No. 1 Materials Supply & Marketing
Company (First Supply), and Hainan Province Agricultural
Reclamation No. 2 Materials Supply & Marketing Company (Second
Supply) (Original Chinese version with English translation
filed with Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1994, and incorporated herein by
reference.)
10.14 Rental Agreement, by and between General Bureau of Hainan
State Farms (the Farming Bureau) and Hainan Agricultural
Resources Company Limited (Original Chinese version
</TABLE>
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<PAGE> 18
<TABLE>
<S> <C>
with English Translation filed with Annual Report on Form
10-K/A for the fiscal year ended December 31, 1994, and
incorporated herein by reference.)
10.15 Guaranty Agreement, by and among Hainan Province Agricultural
Reclamation General Company (the Farming Bureau), Hainan
Agricultural Reclamation No. 1 Materials Supply & Sales
Company (First Supply) and Hainan Agricultural Reclamation No.
2 Materials Supply & Sales Company (Second Supply) (Original
Chinese version with certified English Translation filed with
Annual Report on Form 10-K/A for the fiscal year ended
December 31, 1994, and incorporated herein by reference.)
10.16 Financial Consulting Agreement dated February 1, 1994, by and
between Brender Services Limited and Billion Luck Company
Ltd., and Extension Agreement dated November 1, 1994, by and
between Brender Services Limited and Billion Luck Company Ltd.
(Filed with Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1994, and incorporated herein by
reference.)
10.17 Exchange Agreement, by and among the Registrant, Hong Wah
Investment Holdings Limited, Everbright Finance & Investment
Co. Ltd., Worlder International Company Limited and Silverich
Limited, executed as of March 31, 1995 (Filed with Quarterly
Report on Form 10-Q/A for the fiscal quarter ended March 31,
1995, and incorporated herein by reference.)
10.18 China Resources Development, Inc., 1995 Stock Option Plan,
adopted as of March 31, 1995 (Filed with Quarterly Report on
Form 10-Q/A for the fiscal quarter ended March 31, 1995, and
the Current Report on Form 8-K dated June 19, 1995, and
incorporated herein by reference.)
10.19 Consulting Agreement between the Registrant and Brender
Services Limited, dated April 30, 1995 (Filed with Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30,
1995, and incorporated herein by reference.)
10.20 Letter dated June 1, 1995, extending the repayment date to
December 31, 1995, for loans extended to Billion Luck by
Everbright Finance & Investment Co. Limited, Worlder
International Company Limited and Hong Wah Investment Holdings
Limited, pursuant to Credit Agreement dated June 1, 1994
(Filed with Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1995, and incorporated herein by
reference.)
10.21 Agreement on Administrative Expenses Apportionment between
First Supply and Jin Ling Corporation, dated March 15, 1995
(Original Chinese version with English translation filed with
Annual Report on Form 10-K for the fiscal year ended December
31, 1995, and incorporated herein by reference.)
10.22 Agreement on Administrative Expenses Apportionment between
Second Supply and Jin Huan Corporation, dated March 15, 1995
(Original Chinese version with English translation filed with
Annual Report on Form 10-K for the fiscal year ended December
31, 1995, and incorporated herein by reference.)
10.23 Agreement on Rubber Purchase Deposits among HARC, First Supply,
Second Supply and the Farming Bureau, dated March 30, 1995
(Original Chinese version with English
</TABLE>
-18-
<PAGE> 19
<TABLE>
<S> <C>
translation filed with Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, and incorporated herein
by reference.)
10.24 Employment Agreement between Billion Luck and Han Jian Zhun,
dated August 1, 1995 (Filed with Annual Report on Form 10-K
for the fiscal year ended December 31, 1995, and incorporated
herein by reference.)
10.25 Employment Agreement between Billion Luck and Li Fei Lie,
dated August 1, 1995 (Filed with Annual Report on Form 10-K
for the fiscal year ended December 31, 1995, and incorporated
herein by reference.)
10.26 Contract on Investment in the Xilian Timber Mill between HARC
and the State-Run Xilian Farm of Hainan Province dated July 7,
1994, and Supplementary Agreement dated December 24, 1994
(Original Chinese version with English translation filed with
Annual Report on Form 10-K for the fiscal year ended December
31, 1995, and incorporated herein by reference.)
10.27 Exchange Agreement, by and between the Registrant and
Everbright Finance & Investment Co. Limited, dated July 22,
1996 (Filed with Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1996, and incorporated herein by
reference.)
10.28 Loan Agreement between HARC and the Farming Bureau, dated
March 25, 1996, and the supplementary agreement dated December
31, 1996 (Certified English translation of original Chinese
version filed with Annual Report on Form 10-K/A for the fiscal
year ended December 31, 1996, and incorporated herein by
reference.)
10.29 Loan Agreement between HARC and the Registrant, dated March
25, 1996 (Certified English translation of original Chinese
version filed with Annual Report on Form 10-K/A for the fiscal
year ended December 31, 1996, and incorporated herein by
reference.)
10.30 Rental Agreement between HARC and the Hainan Farming Bureau
Testing Center, dated August 9, 1996 (Certified English
translation of original Chinese version filed with Annual
Report on Form 10-K for the fiscal year ended December 31,
1996, and incorporated herein by reference.)
10.31 Shareholders' Agreement on Business Restructuring among the
Farming Bureau, Guilinyang Farm and Billion Luck, dated as of
October 1, 1996 (Certified English translation of original
Chinese version filed with Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, and incorporated herein
by reference.)
10.32 Assets and Staff Transfer Agreement among the Farming Bureau,
HARC, First Supply and Second Supply, dated as of October 1,
1996 (Certified English translation of original Chinese
version filed with Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, and incorporated herein by
reference.)
10.33 Exchange Agreement, by and between the Registrant and
Everbright Finance & Investment Co. Limited, dated December
31, 1996 (Filed with Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, and incorporated herein by
reference.)
</TABLE>
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<PAGE> 20
<TABLE>
<S> <C>
10.34 China Resources Development, Inc., Amended and Restated 1995
Stock Option Plan, as amended on December 30, 1996 (Filed with
Annual Report on Form 10-K for the fiscal year ended December
31, 1996, and incorporated herein by reference.)
10.35 Agency Agreement on Natural Rubber Distribution between Hainan
General Bureau Jin Huan Materials Supply General Company and
HARC, dated January 2, 1997 (Certified English translation of
original Chinese version filed with Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 1997, and
incorporated herein by reference.)
10.36 Advertising and Media Agreement by and between the Registrant
and Marketing Direct Concepts, Inc., dated April 1, 1997
(Filed with Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1997, and incorporated herein by
reference.)
10.37 Financial Consulting Agreement by and between the Registrant
and Integrated Capital Development Group, Inc., dated May 1,
1997 (Filed with Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1997, and incorporated herein by
reference.)
11 Computation of Earnings (Loss) Per Share (Contained in
Financial Statements in Part I, Item 1, hereof.)
27.3 Financial Data Schedule (Filed herewith. For SEC use only.)
(b) During the three months ended September 30, 1997, the Company
filed no Current Reports on Form 8-K.
</TABLE>
-20-
<PAGE> 21
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 13, 1997 By:/s/ Li Shunxing
---------------------------------------------
Li Shunxing, President
By:/s/ Tam Cheuk Ho
-------------------------------------------
Tam Cheuk Ho, Chief Financial Officer
-21-
<PAGE> 22
EXHIBITS
-22-
<PAGE> 23
EXHIBITS INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit Description Page No.
----------- ------------------- --------
<S> <C> <C>
3.1 Articles of Incorporation of the Registrant, filed on January
15, 1986 (Filed with Annual Report on Form 10-K/A for the fiscal
year ended December 31, 1994, and incorporated herein by
reference.)
3.2 By-laws of the Registrant (Filed with Annual Report on Form
10-K/A for the fiscal year ended December 31, 1994, and
incorporated herein by reference.)
3.3 Certificate of Amendment of Articles of Incorporation of the
Registrant, filed on November 18, 1994 (Filed with Annual Report
on Form 10-K/A for the fiscal year ended December 31, 1994, and
incorporated herein by reference.)
3.4 Certificate of Amendment of Articles of Incorporation of the
Registrant, filed on November 18, 1994 (Filed with Annual Report
on Form 10-K/A for the fiscal year ended December 31, 1994, and
incorporated herein by reference.)
3.5 Certificate of Amendment of Articles of Incorporation of the
Registrant, effective March 31, 1995, and filed on June 19, 1995
(Filed with Quarterly Report on Form 10-Q/A for the fiscal
quarter ended March 31, 1995, and with Current Report on Form
8-K dated June 19, 1995, and incorporated herein by reference.)
3.6 Certificate of Amendment of Articles of Incorporation of the
Registrant, effective December 30, 1996 (Filed with Annual
Report on Form 10-K for the fiscal year ended December 31, 1996,
and incorporated herein by reference.)
3.7 Amended and Restated By-laws of the Registrant, as amended on
December 30, 1996 (Filed with Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, and incorporated herein by
reference.)
4.1 Certificate of Designation of Series B Convertible Preferred
Stock, filed on December 13, 1995 (Filed with Current Report on
Form 8-K dated March 8, 1996, and incorporated herein by
reference.)
4.2 Certificate of Amendment of Certificate of Designation of
Series B Convertible Preferred Stock, effective December 31,
1997 (Filed with Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, and incorporated herein by reference.)
10.1 Assignment Agreement dated January 21, 1994, by and between
Hong Wah (Holdings) Limited and Billion Luck Company Ltd. (Filed
with Annual Report on Form 10-K/A for the fiscal year ended
December 31, 1994, and incorporated herein by reference.)
</TABLE>
-23-
<PAGE> 24
<TABLE>
<S> <C> <C>
10.2 Contract on Investment for the Setting up of Hainan
Agricultural Resources Company Ltd. dated January 31, 1994, by
and among Hainan Province Agricultural Reclamation General
Company (the Farming Bureau), Hainan Province Guilinyang State
Farm, and Billion Luck Company Ltd. (Original Chinese version
with English translation filed with Annual Report on Form 10-K/A
for the fiscal year ended December 31, 1994, and incorporated
herein by reference.)
10.3 Loan Agreement dated May 10, 1994, by and among Everbright
Finance & Investment Co. Limited, Worlder International Company
Limited, Hong Wah Investment Holdings Limited, Silverich
Limited, Brender Services Limited, and Billion Luck Company Ltd.
(Filed with Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1994, and incorporated herein by reference.)
10.4 Credit Agreement dated June 1, 1994, by and among Everbright
Finance & Investment Co. Limited, Worlder International Company
Limited, Hong Wah Investment Holdings Limited and Billion Luck
Company Ltd. (Filed with Annual Report on Form 10-K/A for the
fiscal year ended December 31, 1994, and incorporated herein by
reference.)
10.5 Contract on the Transfer of Share Ownership of Hainan Zhongya
Aluminum Co., Ltd. dated July 11, 1994, by and between Hainan
Province Guilinyang State Farm and Hainan Agricultural Resources
Co., Ltd. (Filed with Annual Report on Form 10-K/A for the
fiscal year ended December 31, 1994, and incorporated herein by
reference.)
10.6 Letter Agreement dated August 8, 1994, by and among Everbright
Finance & Investment Co. Limited, Worlder International Company
Limited, Hong Wah Investment Holdings Limited and Billion Luck
Company Ltd., supplementing Credit Agreement dated June 1, 1994
(Filed with Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1994, and incorporated herein by reference.)
10.7 Letter Agreement dated October 24, 1994, by and among
Everbright Finance & Investment Co. Limited, Worlder
International Company Limited, and Billion Luck Company Ltd.
(Filed with Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1994, and incorporated herein by reference.)
10.8 Acquisition Agreement, by and among the Registrant and the
shareholders of Billion Luck Company Ltd. (Filed with Annual
Report on Form 10-K/A for the fiscal year ended December 31,
1994, and incorporated herein by reference.)
10.9 Agreement on Service and Cooperation dated November 5, 1994,
by and between Hainan Province Agricultural Reclamation General
Company (the Farming Bureau) and Hainan Agricultural Resources
Company Ltd. (Original Chinese version with English translation
filed with Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1994, and incorporated herein by reference.)
</TABLE>
-24-
<PAGE> 25
<TABLE>
<S> <C> <C>
10.10 Land Use Agreement dated November 5, 1994, by and between
Hainan Province Agricultural Reclamation No. 1 Materials Supply
& Sales Company (First Supply) and Hainan Province Agricultural
Reclamation Jin Long Materials General Company (Original Chinese
version with certified English translation filed with Annual
Report on Form 10-K/A for the fiscal year ended December 31,
1994, and incorporated herein by reference.)
10.11 Land Use Agreement dated November 5, 1994, by and between Hainan
Province Agricultural Reclamation No. 2 Materials Supply & Sales
Company (Second Supply) and Hainan Province Agricultural
Reclamation Jin Huan Materials General Company (Original Chinese
version with certified English translation filed with Annual
Report on Form 10-K/A for the fiscal year ended December 31,
1994, and incorporated herein by reference.)
10.12 Long-Term Sale and Purchase Agreement dated November 5, 1994, by
and among Hainan Province Agricultural Reclamation General
Company (the Farming Bureau), Hainan Agricultural Resources
Company Ltd., Hainan Province Agricultural Reclamation No. 1
Materials Supply & Marketing Company (First Supply), and Hainan
Province Agricultural Reclamation No. 2 Materials Supply &
Marketing Company (Second Supply) (Original Chinese version with
English translation filed with Annual Report on Form 10-K/A for
the fiscal year ended December 31, 1994, and incorporated herein
by reference.)
10.13 Agreement on Assignment of Accounts Receivable dated November 5,
1994, by and among Hainan Province Agricultural Reclamation
General Company (the Farming Bureau), Billion Luck Company Ltd.,
Hainan Province Guilinyang State Farm, Hainan Agricultural
Resources Company Ltd., Hainan Province Agricultural Reclamation
No. 1 Materials Supply & Marketing Company (First Supply), and
Hainan Province Agricultural Reclamation No. 2 Materials Supply
& Marketing Company (Second Supply) (Original Chinese version
with English translation filed with Annual Report on Form 10-K/A
for the fiscal year ended December 31, 1994, and incorporated
herein by reference.)
10.14 Rental Agreement, by and between General Bureau of Hainan
State Farms (the Farming Bureau) and Hainan Agricultural
Resources Company Limited (Original Chinese version with English
Translation filed with Annual Report on Form 10-K/A for the
fiscal year ended December 31, 1994, and incorporated herein by
reference.)
10.15 Guaranty Agreement, by and among Hainan Province Agricultural
Reclamation General Company (the Farming Bureau), Hainan
Agricultural Reclamation No. 1 Materials Supply & Sales Company
(First Supply) and Hainan Agricultural Reclamation No. 2
Materials Supply & Sales Company (Second Supply) (Original
Chinese version with certified English Translation filed with
Annual Report on Form 10-K/A for the fiscal year ended December
31, 1994, and incorporated herein by reference.)
</TABLE>
-25-
<PAGE> 26
<TABLE>
<S> <C> <C>
10.16 Financial Consulting Agreement dated February 1, 1994, by and
between Brender Services Limited and Billion Luck Company Ltd.,
and Extension Agreement dated November 1, 1994, by and between
Brender Services Limited and Billion Luck Company Ltd. (Filed
with Annual Report on Form 10-K/A for the fiscal year ended
December 31, 1994, and incorporated herein by reference.)
10.17 Exchange Agreement, by and among the Registrant, Hong Wah
Investment Holdings Limited, Everbright Finance & Investment Co.
Ltd., Worlder International Company Limited and Silverich
Limited, executed as of March 31, 1995 (Filed with Quarterly
Report on Form 10-Q/A for the fiscal quarter ended March 31,
1995, and incorporated herein by reference.)
10.18 China Resources Development, Inc., 1995 Stock Option Plan,
adopted as of March 31, 1995 (Filed with Quarterly Report on
Form 10-Q/A for the fiscal quarter ended March 31, 1995, and the
Current Report on Form 8-K dated June 19, 1995, and incorporated
herein by reference.)
10.19 Consulting Agreement between the Registrant and Brender
Services Limited, dated April 30, 1995 (Filed with Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1995,
and incorporated herein by reference.)
10.20 Letter dated June 1, 1995, extending the repayment date to
December 31, 1995, for loans extended to Billion Luck by
Everbright Finance & Investment Co. Limited, Worlder
International Company Limited and Hong Wah Investment Holdings
Limited, pursuant to Credit Agreement dated June 1, 1994 (Filed
with Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1995, and incorporated herein by reference.)
10.21 Agreement on Administrative Expenses Apportionment between
First Supply and Jin Ling Corporation, dated March 15, 1995
(Original Chinese version with English translation filed with
Annual Report on Form 10-K for the fiscal year ended December
31, 1995, and incorporated herein by reference.)
10.22 Agreement on Administrative Expenses Apportionment between
Second Supply and Jin Huan Corporation, dated March 15, 1995
(Original Chinese version with English translation filed with
Annual Report on Form 10-K for the fiscal year ended December
31, 1995, and incorporated herein by reference.)
10.23 Agreement on Rubber Purchase Deposits among HARC, First
Supply, Second Supply and the Farming Bureau, dated March 30,
1995 (Original Chinese version with English translation filed
with Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, and incorporated herein by reference.)
10.24 Employment Agreement between Billion Luck and Han Jian Zhun,
dated August 1, 1995 (Filed with Annual Report on Form 10-K for
the fiscal year ended December 31, 1995, and incorporated herein
by reference.)
</TABLE>
-26-
<PAGE> 27
<TABLE>
<S> <C> <C>
10.25 Employment Agreement between Billion Luck and Li Fei Lie,
dated August 1, 1995 (Filed with Annual Report on Form 10-K for
the fiscal year ended December 31, 1995, and incorporated herein
by reference.)
10.26 Contract on Investment in the Xilian Timber Mill between HARC
and the State-Run Xilian Farm of Hainan Province dated July 7,
1994, and Supplementary Agreement dated December 24, 1994
(Original Chinese version with English translation filed with
Annual Report on Form 10-K for the fiscal year ended December
31, 1995, and incorporated herein by reference.)
10.27 Exchange Agreement, by and between the Registrant and
Everbright Finance & Investment Co. Limited, dated July 22, 1996
(Filed with Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1996, and incorporated herein by reference.)
10.28 Loan Agreement between HARC and the Farming Bureau, dated
March 25, 1996, and the supplementary agreement dated December
31, 1996 (Certified English translation of original Chinese
version filed with Annual Report on Form 10-K/A for the fiscal
year ended December 31, 1996, and incorporated herein by
reference.)
10.29 Loan Agreement between HARC and the Registrant, dated March
25, 1996 (Certified English translation of original Chinese
version filed with Annual Report on Form 10-K/A for the fiscal
year ended December 31, 1996, and incorporated herein by
reference.)
10.30 Rental Agreement between HARC and the Hainan Farming Bureau
Testing Center, dated August 9, 1996 (Certified English
translation of original Chinese version filed with Annual Report
on Form 10-K for the fiscal year ended December 31, 1996, and
incorporated herein by reference.)
10.31 Shareholders' Agreement on Business Restructuring among the
Farming Bureau, Guilinyang Farm and Billion Luck, dated as of
October 1, 1996 (Certified English translation of original
Chinese version filed with Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, and incorporated herein by
reference.)
10.32 Assets and Staff Transfer Agreement among the Farming Bureau,
HARC, First Supply and Second Supply, dated as of October 1,
1996 (Certified English translation of original Chinese version
filed with Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, and incorporated herein by reference.)
10.33 Exchange Agreement, by and between the Registrant and
Everbright Finance & Investment Co. Limited, dated December 31,
1996 (Filed with Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, and incorporated herein by reference.)
10.34 China Resources Development, Inc., Amended and Restated 1995 Stock
Option Plan, as amended on December 30, 1996 (Filed with Annual
Report
</TABLE>
-27-
<PAGE> 28
<TABLE>
<S> <C> <C>
on Form 10-K for the fiscal year ended December 31, 1996, and
incorporated herein by reference.)
10.35 Agency Agreement on Natural Rubber Distribution between Hainan
General Bureau Jin Huan Materials Supply General Company and
HARC, dated January 2, 1997 (Certified English translation of
original Chinese version filed with Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 1997, and
incorporated herein by reference.)
10.36 Advertising and Media Agreement by and between the Registrant
and Marketing Direct Concepts, Inc., dated April 1, 1997 (Filed
with Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1997, and incorporated herein by reference.)
10.37 Financial Consulting Agreement by and between the Registrant
and Integrated Capital Development Group, Inc., dated May 1,
1997 (Filed with Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1997, and incorporated herein by
reference.)
11 Computation of Earnings (Loss) Per Share (Contained in Financial
Statements in Part I, Item 1, hereof.)
27.3 Financial Data Schedule (Filed herewith. For SEC use only.) 29
</TABLE>
-28-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> RENMINBI YUAN
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 8.30
<CASH> 127,852
<SECURITIES> 0
<RECEIVABLES> 10,130
<ALLOWANCES> 0
<INVENTORY> 69,874
<CURRENT-ASSETS> 416,582
<PP&E> 11,319
<DEPRECIATION> 4,835
<TOTAL-ASSETS> 435,222
<CURRENT-LIABILITIES> 67,081
<BONDS> 0
0
270
<COMMON> 48
<OTHER-SE> 237,666
<TOTAL-LIABILITY-AND-EQUITY> 435,222
<SALES> 893,762
<TOTAL-REVENUES> 932,519
<CGS> 860,071
<TOTAL-COSTS> 884,089
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 48,430
<INCOME-TAX> 7,959
<INCOME-CONTINUING> 18,894
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,894
<EPS-PRIMARY> 3.19
<EPS-DILUTED> 3.19
</TABLE>
