BOE TECHNOLOGY GROUP CO., LTD — Annual Report 2003

Apr 27, 2004

BOE TECHNOLOGY GROUP CO., LTD. SUMMARY OF ANNUAL REPORT 2003 (Overseas Version)

§1. Important Notes

1.1 Board of Directors of BOE TECHNOLOGY GROUP CO., LTD. (hereinafter referred to as the Company) and its members individually and collectively accept responsibility for the correctness, accuracy and completeness of the contents of this report and confirm that there are no material omissions nor errors which would render any statement misleading. The summary of annual report 2003 is abstracted from the annual report; the investors are suggested to read the full text of annual report to understand more details. If there is any different meaning between those two language, please abide the original Chinese meaning.

1.2 No director stated that they couldn't ensure the correctness, accuracy and completeness of the contents of the Annual Report or have objection for this report.

1.3 Director of the Company, Mr. Xuan Jiansheng, Zhao Caiyong, Wang Hui and Xie Zhi Hua were absent from the Board meeting, Xuan Jiansheng and Zhao Caiyong entrusted Director Mr. Chen Yanshun and Jiang Yukun in writing to exercised the voting right on their behalf.

1.4 PricewaterhouseCoopers Zhongtian Certified Public Accountants issued an unqualified Auditors' Report for the Company.

1.5 Chairman of the Board and concurrently CEO Mr. Wang Dongsheng, President and concurrently COO Mr. Liang Xinqing, CFO Mr. Wang Yanjun, and Vice CFO and concurrently Secretary of Planning & Financial Dept. Ms. Sun Yun hereby confirm that the Financial Report enclosed the Annual Report is true and complete.

§2. Company Profile

Short form of the stock	BOE– A,BOE– B
Stock code	000725, 200725
Listed stock exchange	Shenzhen Stock Exchange
Registered address and office address	No. 10, Jiuxianqiao Road, Chaoyang District, Beijing
Post code	100016
Internet web site of the Company	http://www.boe.com.cn
E-mail of the Company	web.master@boe.com.cn

2.1 Basic information

2.2 Contact person and method

	Secretary of the Board ofDirectors	Representative in charge ofSecurities Affairs
Name	Zhong Huifeng

Contact address	No.10,JiuxianqiaoRoad,
	Chaoyang District, Beijing
Telephone	010-64366264
Fax	010-64366264
E-mail	hfzhong@boe.com.cn

§3. Summary of Accounting Data and Financial Indexes

3.1 Major accounting data	Unit: In RMB'000
Profit before tax:	519,332
Net profit	411,234
Sales gross profit	1,727,377
Income from other business	39,745
Operation income	665,837
Net cash inflow	709,206
Balance of cash and its equivalence in the year end	2,051,459

3.2 Major financial indexes (Unit: RMB.000)

				2001
指标项目	2003	2002	Before	After
			adjustment	adjustment
Sales	11,180,106	4,782,587	2,669,543	2,683,798
Net profit	411,234	79,000	22,817	22,817
Total assets	12,040,450	6,779,294	4,034,811	4,034,811
Shareholder's	2,569,080
rights		2,176,390	2,113,010	2,113,010
				Unit RMB
Income per share	0.62	0.12	0.04	0.04
Net asset per share	3.90	3.96	3.84	3.84
Net cash flow per	1.08
share from		0.35	0.78	0.78
operations
The ratio of net	16%	3.63%	1.08%	1.08%
assets (%)

3.3 Difference of net profit as audited by Chinese Accounting Standard (CAS) and

International Accounting Standard (IAS) Applicable Inapplicable

Unit: In RMB'000

	National accounting system		International accounting system
Net profit	403,185.3		411,234.0
		Net asset	Net profit
	Balance as reported under Accounting System
	for Enterprise Business	2,570,869	403,185
	Adjustment based on IFRS and other:
	- Difference in term of amortization of goodwill	4,001	1,333
Explanation	- Reckoning rewards and welfares of the employee
on difference	into administrative expenses		828
	- Government subsidy	3,014	1,987
	- Capitalization of R&D expenses	8,676	8,676
	- Difference in negative goodwill when acquire the
	equity of subsidies	2,171
	- others	1,279	453
	Balance after adjustment under IAS	2,569,080	411,234

3.4 Changes in shareholders' equity in the report period (Unit: RMB'000)

	Ordinary	Premium			Total
Items	share	share capital	Other reserve	Retained profit
Jan. 1, 2003	549,554	1,150,895	280,767	195,174	2,176,390
Transferring capital
reserve into share capital	109911	-109911		-
Profit as of this year	-	-	-	411234	411234
Translation difference	-	-	-18,554	-	-18544
Public reserve	-	-	160,943	-160,943
Dec. 31, 2003	659,465	1,040984	423,166	445,465	2569080

§4. Changes in Share Capital and Particulars about Shareholders

4.1 Statement of change in share capital (Unit: share)

		Increase / decrease in this time(+, -)
	Before thechange	Transferringcapital reserveSub-totalinto share		After thechange
I. Unlisted Shares
1. Sponsors' shares	328,029,000	65,605,800	65,605,800	393,634,800
Including: State-owned share	328,029,000	65,605,800	65,605,800	393,634,800
Domestic legal person's shares			0	0
Foreign legal person's shares			0	0

Others			0	0
2. Raised legal person's shares	3,575,000	715,000	715,000	4,290,000
3. Inner employees' shares	8,450,000	1,690,000	1,690,000	10,140,000
4. Preference shares or others			0	0
Total unlisted shares	340,054,000	68,010,800	68,010,800	408,064,800
II. Listed Shares
1. RMB ordinary shares	60,000,000	12,000,000	12,000,000	72,000,000
2. Domestically listed foreign	149,500,000	29,900,000	29,900,000	179,400,000
shares
3.Overseaslistedforeign			0	0
shares
4. Others			0	0
Total listed shares	209,500,000	41,900,000	41,900,000	251,400,000
III. Total shares	549,554,000	109,910,800	109,910,800	659,464,800

4.2 Statement of shares held by the top ten shareholders and the top ten shareholders of circulation share

Total number of shareholders at the end of report period			51,815
	Particulars about shares held by the top ten shareholders
Full name of Shareholders	Increase /decrease inthe reportyear (share)	Holdingshares atthe year-end(share)	Proportion(%)	Type of shares(Circulating/Non-circulating)	Number ofsharepledged/frozen(share)	Nature ofshareholders(State-ownedshareholder/foreignshareholder)
Beijing BOE Investment & Development	58,411,800	350,470,800	53.14	Non-circulating	Unknown	State-owned
Co., Ltd.						shareholder
Beijing Dongdian Industrial DevelopmentCompany	6,674,000	40,044,000	6.07	Non-circulating	Unknown	State-ownedshareholder
Beijing Yixin Microdisplay Technology	715,000	4,290,000	0.65	Non-circulating	Unknown	Legal person
Development Center						shareholder
FF GREATER CHINA FD GT1 24037	Unknown	3,499,940	0.53	Circulating	Unknown	Foreignshareholder
Beijing CRT General Plant	520,000	3,120,000	0.47	Non-circulating	Unknown	State-ownedshareholder
Yu Long Securities Investment Funds	Unknown	2,581,395	0.39	Circulating	Unknown
ABUDHABIINVESTMENTAUTHORITY	Unknown	2,483,000	0.38	Circulating	Unknown	Foreignshareholder
BEST RELIANCE INVESTMENTS LTD	Unknown	2,040,400	0.31	Circulating	Unknown	Foreignshareholder
DZBKINTLSAA/CUNIONINVESTMENT LUX SA S/A UNIEMFERNOST	Unknown	2,000,000	0.30	Circulating	Unknown	Foreignshareholder

NBP/FRUCTILUX SICAV	Unknown	1,999,730	0.30	Circulating	Unknown	Foreign
						shareholder
Explanation on associated relationship				The actual controller of Beijing BOE Investment & Development Co., Ltd., Beijing
among the top ten shareholders or	Dongdian Industrial Development Company and Beijing CRT General Plant is
consistent action				Beijing Electronics Holding Co., Ltd For other shareholders, the Company is
				unknown whether there exists associated relationship.

	Particulars about shares held by the top ten shareholders of circulation share
Name of shareholder (full name)	Number of circulation shares	Type (A-share, B-share,
	held at the year-end (share)	H-share and other)
FF GREATER CHINA FD GT1 24037	3,499,940	B-share
YU LONG SECURITIES INVESTMENT	2,581,395	A-share
FUNDS
ABUDHABIINVESTMENT	2,483,000	B-share
AUTHORITY
BEST RELIANCE INVESTMENTS LTD	2,040,400	B-share
DZBKINTLSAA/CUNION	2,000,000	B-share
INVESTMENT LUX SA S/A UNIEM
FERNOST
NBP/FRUCTILUX SICAV	1,999,730	B-share
CHINA SOUTHERN (HK) CO., LTD.	1,900,000	B-share
TOYOSECURITIESASIA	1,664,580	B-share
LIMITED-A/C CLIENT.
SHANGHAI (HONG KONG) WANGUO	1,654,854	B-share
SECURITIES
JF REATER CHINA ABSOLUTE FUND	1,599,985	B-share
Explanationonassociated	TheCompanyisunknown	whetherthereexistsassociated
relationshipamongthetopten	relationship or consistent action.
shareholderscirculationshareor
consistent action

4.3 Particulars about controlling shareholders and actual controller of the Company

4.3.1 Particulars about change in controlling shareholders and actual controller of the Company

Applicable Inapplicable 4.3.2 Introduction of especial situation for controlling shareholder and other actual controller

Beijing BOE Investment & Development Co., Ltd. holds 53.15% of the Company's total shares, therefore is the virtual controlling shareholder of the Company; Beijing Electronics Holding Co., Ltd. holds 56.25% of the total shares of Beijing BOE Investment & Development Co. Ltd. and therefore is the virtual controller of the Company. Beijing Electronics Holding Co., Ltd. is a state-owned holding company under Beijing Municipal Government and is authorized to operate state-owned assets. Beijing BOE Investment & Development Co., Ltd.

Legal Representative: Wang Dongsheng Date of Foundation: Oct.15, 1956 Location: No.10 Jiuxianqiao Road,Chaoyang District, Beijing Registered Capital: RMB 680.982 million Business Scope: project investment, manufacture and design of electronic products, communications equipment, computer software & hardware, paper products, industrial gasses, mould and matrix, steam; acquisition and sales of mechanical and electrical equipment, metal products, computer software and hardware and supporting equipment, construction material, general merchandise; technical development, technical consultation, technical service and transfer, undertaking exhibitions and sales Beijing Electronics Holding Co., Ltd. Legal Representative: Bao Yutong Date of Foundation: April 8, 1997 Location: No.12 Jiuxianqiao Road, Chaoyang District, Beijing Registered Capital: RMB 1307.37 million Type: Limited Liability Company (owned and funded solely by the state) Business scope: operation and management of state-owned assets within authorization; Communications equipments, audio & visual products for broadcasting and television; computer and its supporting equipments and the applied products; electronic raw material and components; home electric appliances and electronic products; electronic surveying instruments and meters; mechanical and electric equipments; electronic transportation products and investment in business fields other than electronics and its management; development of real estate, lease and sales of commodity apartments; property management.

§5. Particulars About Directors, Supervisors and Senior Executives

5.1 Particulars about changes in shares held by directors, supervisors and senior executives

					Shares held	Shares held	Reason for change
Name	Title	Gender	Age	Office term	at the	at the
					year-begin	year-end
Wang Dongsheng	Chairman of the Board,	Male	46	June 2001-June 2004	6500	7800	2002profitdistribution:
	Chairman of the Executive						transferring capital reserve
	Committee, CEO						into share capital at the rate
							of 2 shares for every 10
							shares
Jiang Yukun	Vice Chairman of the Board	Male	50	June 2001-June 2004	3900	4680	2002profitdistribution:
							transferring capital reserve
							into share capital at the rate
							of 2 shares for every 10
							shares
Liang Xinqing	Executive Director, President	Male	51	June 2001-June 2004	2600	3120	2002profitdistribution:

	and COO						transferring capital reserve
							into share capital at the rate
							of 2 shares for every 10
							shares
Cui Bingdou	Executive Director, Executive	Male	54	Oct. 2003- June 2004	0	0
	Vice-President
Chen Yanshun	Executive Director, Senior	Male	38	June 2001-June 2004	0	0
	Vice-President
Sun Jiping	Executive Director, Senior	Male	45	June 2001-June 2004	0	0
	Vice-President
Zhao Caiyong	Director	Male	56	June 2001-June 2004	6500	7800	2002profitdistribution:
							transferring capital reserve
							into share capital at the rate
							of 2 shares for every 10
							shares
Wang Hui	Director	Male	48	June 2001-June 2004	0	0
Tai Zhonghe	Independent Director	Male	53	June 2001-June 2004	0	0
Xie Zhihua	Independent Director	Male	44	May 2002- June 2004	0	0
Zhang Baizhe	Independent Director	Male	60	Oct. 2003- June 2004	0	0
Li Zhaojie	Independent Director	Male	48	Oct. 2003- June 2004	0	0
Wang Aizhen	Convener of the Supervisory	Female	54	June 2001-June 2004	1300	1560	2002profitdistribution:
	Committee						transferring capital reserve
							into share capital at the rate
							of 2 shares for every 10
							shares
Mu Chengyuan	Supervisor	Male	36	Sep. 2001-June 2004	650	780	2002profitdistribution:
							transferring capital reserve
							into share capital at the rate
							of 2 shares for every 10
							shares
Yang Anle	Supervisor	Male	33	June 2001-June 2004	0	0
Xu Yan	Employee Supervisor	Female	52	June 2001-June 2004	3900	4680	2002profitdistribution:
							transferring capital reserve
							into share capital at the rate
							of 2 shares for every 10
							shares
Cao Hong	Employee Supervisor	Male	49	Aug. 2003- June 2004	1300	1560	2002profitdistribution:
							transferring capital reserve
							into share capital at the rate
							of 2 shares for every 10
							shares
Song Ying	Senior Vice-President	Female	46	June 2001-June 2004	6500	7800	2002profitdistribution:
							transferring capital reserve
							into share capital at the rate

							of 2 shares for every 10
							shares
Ren Jianchang	Senior Vice-President	Male	57	June 2001-June 2004	0	0
Han Guojian	Vice-President	Male	50	June 2001-June 2004	2600	3120	2002profitdistribution:
							transferring capital reserve
							into share capital at the rate
							of 2 shares for every 10
							shares
Liu Xiaodong	Vice-President	Male	39	Apr. 2003- June 2004	0	0
Wang Jiaheng	Vice-President	Male	35	June 2001-June 2004	0	0
Wang Yanjun	Chief Financial Officer	Male	34	June 2001-June 2004	2600	3120	2002profitdistribution:
							transferring capital reserve
							into share capital at the rate
							of 2 shares for every 10
							shares
Zhang Peng	Chief Tech. Supervisor	Male	39	June 2001-June 2004	0	0
Zhong Huifeng	Secretary of the Board	Male	33	Apr. 2002- June 2004	0	0

5.2 Particulars about directors and supervisors holding the post in Shareholding Company

Applicable Inapplicable

Name	Name of ShareholdingCompany	Title in ShareholdingCompany	Office term	Drawing the paymentfrom the ShareholdingCompany (Yes / No)
Jinag Yukun	Beijing BOE Investment &Development Co., Ltd.	Director, President andSecretary of the PartyCommittee	2004.1-2007.1	Yes
Zhao Caiyong	Beijing BOE Investment &Development Co., Ltd.	Director, StandingVice-President and ChiefAccountants	2004.1-2007.1	Yes
	BeijingDongdianIndustrialDevelopment Company	General Manager		No
Wang Aizhen	Beijing BOE Investment &Development Co., Ltd.	Supervisor, Vice Secretary ofthe Party Committee,Secretary of DisciplineCommission andChairwoman of Labor Union	2004.1-2007.1	Yes
Mu Chengyuan	Beijing BOE Investment &Development Co., Ltd.	Secretary of the Board andVice-President	2004.1-2007.1	Yes
	Beijing BOE Investment &Development Co., Ltd.	Manager of Planning andFinancial Department		Yes
Yang Anle	BeijingDongdianIndustrialDevelopment Company	Chief Accountant	2004.1-2007.1	No

Total annual payment	RMB 6.135 million
Total annual payment of the top three directors	RMB 3.121 million
drawing the highestpayment
Total annual payment of the top three senior	RMB 3.121 million
executives drawing the highestpayment
Allowance of independent director	Mr. Tai Zhonghe: US$ 10,000 per yearMr. Xie Zhihua:
	RMB 50,000 per yearMr. Zhang Baizhe& Mr. Li
	Zhaojie: RMB 12,500 per quarter
Other treatment of independent directors	N/S
Name of directors and supervisors receiving no	Jiang yukun, Zhao yongcai, Wang Hui, Wang aizhen, Mu
payment or allowance from the Company	chengyuan, Yang anle
Payment (RMD)	Number of persons
More than 200 thousand	12
100 thousand to 200 thousand	2
Less than 100 thousand	1

5.3 Particulars about the annual payment of directors, supervisors and senior executives

§6. Report of the Board of Directors

6.1 Discussion and analysis to the whole operation in the report period

In the report period, the Company firmly carried out the work policy of "Changing those impossible into possible and creating strong points of individual, department and company", on the one hand, overcoming the influence of SARS epidemic, fully pushing the industrial development in all causes especially in TFT-LCD cause by catching market chance and gaining relatively good operating achievements; on the other hand, constructing and accomplishing the flat display industrial structure with TFT-LCD cause as the core so as to found a foundation for the future development of the Company. In the report period, the Company realized income from main operations amounting to RMB 11180 million, an increase of 133.77% over the same period of last year, and realized net profit amounting to RMB 411 million, an increase of 420.25% over the same period of last year.

6.2 Statement of main operations classified according to industries or products

					Unit: RMB'000
Classified according	Income from	Cost of main	Gross	Increase/decrea	Increase/decr	Increase/decrea
to industries or	main	operations	profit	se in income from	ease in cost of	se in gross
products	operations	(RMB)	ratio	main operations	main	profit ratio
	(RMB)		(%)	over the last	operations	over the last
				year (%)	over the last	year (%)
					year (%)
Business of monitor
terminal products	3,145,925	2,948,751	6.27%	20.89%	21.09%	-2.49%

Business of display
devices –Thin film	5,673,909	4,561,763	19.61%
transistor liquid
Businessof
small-sized	2,006,577	1,713,599	14.61%	15.42%	24.22%	-29.25%
display device
Other businesses	514,365	389,841	24.21%	13.33%	13.19%	0.37%
Others	-160,670	-161,225
Counteraction	11,180,106	9,452,729	15.46%	133.77%	128.14%	16.33%
Sum	3,145,925	2,948,751	6.27%	20.89%	21.09%	-2.49%

6.3 Particulars about main operations classified according to areas

						Unit: RMB'000
		Sales		Total asset	Expense
	2003	2002	2003	2002	2003	2002
China main
land	4,819,366	2,089,709	6,082,407	5,625,647	331,327	709,568
Korea	1,475,971	506,144	5,282,140	893,756	3,286,213	30,045
Taiwan	1,049,462	-	349,625	-	902	-
US	952,761	691,978	43,676	22,348	-	-
Germany	848,566	545,950	116,014	237,543	-	-
Other EU
countries	498,578	682,676	-	-	-	-
Other
countries
in Asia	337,536	129,832	166,588	-	458	-
Other
countries	1,197,866	136,298	-	-	-	-
	11,180,106	4,782,587	12,040,450	6,779,294	3,618,900	739,613

6.4 Particulars about the customers of purchase and sales

			Unit: RMB'0000
Total amount of purchase	368,656.00	Proportioninthetotal	39.00%
of the top five suppliers		amount of purchase
Total amount of sales of the	357,763.00	Proportioninthetotal	32.00%
top five sales customers		amount of sales

6.5 Operation of share-holding companies (applicable to the situation where investment earnings takes over 10% of its net profit)

Applicable Inapplicable

Name of share-holding companyBeijing·Matsushita Color CRT Co., Ltd.
-------------------------------------------------------------------------

Investment earnings contributed in the period		8,862.00
Proportion in net profit of the listed company		21.98%
Shareholding company	Business scope	Production of CRT used in color TVs and CDT used incolor monitors, sales of self-produced products andprovision of after service
	Net profit	29,539.00

6.6 Explanation on reasons of material changes in main operations and its structure Applicable Inapplicable

Since the Company entered into the field of TFT-LCD business in Jan. 2003, the business volume of TFT-LCD business reached over 50% in main operations of the Company. BOE-Hydis Technology Co., Ltd., a subsidiary in Korea, was listed into the consolidated scope of the Company.

6.7 Explanation on reasons of material changes in profitability capability of main operations (gross profit ratio) than that in the last year

Applicable Inapplicable

6.8 Analysis to reasons of material changes in operating results and profit structure compared with the previous year

Applicable Inapplicable

Since the Company entered into the field of TFT-LCD business in Jan. 2003, the business volume of TFT-LCD business reached over 50% in main operations of the Company. BOE-Hydis Technology Co., Ltd., a subsidiary in Korea, was listed into the consolidated scope of the Company.

Analysis to reasons of material changes in the whole financial position than that in the last year

Applicable Inapplicable

6.9 Explanation on the past, current and future important effects of the material changes in production and operation environment, macro-policies and regulations on the Company's financial position and operating results

Applicable Inapplicable

• 6.10 Completion of the profit estimation
  • Applicable Inapplicable
• 6.11 Completion of the business plan Applicable Inapplicable

6.12 Application of the raised proceeds Applicable Inapplicable

Unit: RMB'0000

Totalamountofraised	Total amount	Total amount of raised
proceeds	ofraised	proceedsused

	proceeds usedaccumulatively
		in the report
		year
Committed projects	Planned	Change	Actual	Accrued amount of	Compliance with
	amount of	projects or not	amount of	earnings	planned progress and
	input		input		estimated earnings or
					not
Innovationprojectin		No			No
developmenttechnologyof
municipal traffic "All-in-one	10,000.00		7,511.00	-836.00
Card" system in Beijing
Brand access cause operating		No			Yes
project	11,200.00		9,345.00
PurchaseofTFT-LCD		No			Yes
business project of Korean	13,574.43		13,574.43	52,010.00
Hydis Technology Inc.
Total	34,774.43	-	30,000.43	51,174.00	-
Explanation on not reaching					Beijing urban traffic "All-in-one card" project: Due to adjustment in the whole implementation plan
planned progress and earnings					of traffic "All-in-one card" project, the progress of engineering construction burdened by the
(In detailed projects)					Company was adjusted accordingly. It was predicted that the trial operation in partial bus, track and
		taxi line would be enlarged in the second half of year 2003.
Explanation on reasons and					Annual Shareholders' General Meeting 2002 of the Company held on May 30, 2003 considered and
proceduresofchange(In					passed Proposal on Changing and Adjusting Use of the Raised Proceeds in Partial Projects. The
detailed projects)	Company				changed the use of the rest raised proceeds amounting to RMB 10.34 million in "BOE
				E-commerce project" to supplement the running capital of the Company;	All of the rest raised
					proceeds amounting to RMB 910,000 in "Technical reconstruction project of terminal production
					lines for special computers" accomplished and the rest RMB 1.79 million in "Technical reconstruction
					project of production lines in mobile computers" was adjusted to supplement the Company's running
					capital. For details, please refer to Public Notice on Resolutions of Annual Shareholders' General
					Meeting 2002 of BOE Technology Group Co., Ltd. published on Ta Kung Pao, Securities Times,
		China Securities and Shanghai Securities News dated May 31, 2003.

Particulars about the changed projects Applicable Inapplicable

	Unit: RMB'0000
Total amount of capital						1,304.00
of changed investment
projects
Projects after change		Corresponding	Planned	Actual amount	Accrued	Compliance with
		projects committed	input	of input	amount of	planned progress
		originally	amount of		earnings	and estimated
			changed			earnings or not
			projects
Supplementing running	BOE	E-commerce	1,034.00	1,034.00	1,034.00	Yes

capital	project
Supplementing running	Technical				Yes
capital	reconstruction project
	of terminal production	91.00	91.00	91.00
	linesforspecial
	computers
Supplementing running	Technical				Yes
capital	reconstruction project
	of production lines in	179.00	179.00	179.00
	mobile computers
Total	-	1,304.00	1,304.00	1,304.00	-
Explanationonnot	Naught
reachingplanned
progress and earnings
(In detailed projects)

6.13 Application of the proceeds not raised through shares offering

Applicable Inapplicable

Unit: RMB'0000

Names of projects	Amount of projects	Progress of projects	Earnings of projects
Purchaseof3.49%	556.00	Completed	1084
equity from Hyundai
LCD Inc.
Jointlyestablishing	6,208.00	Investment amount in	-966
BeijingBOE		the 1st phase
Photoelectric
Technology Co., Ltd.
Purchase of 26.36%	111,142.00	Completed	Not annexed in 2003
equityfromTop
Victory Technology
Jointlyestablishing	620.70	Investment amount in	288
BOEHyundaiLCD		the 2nd phase
Inc.
Reconstructionof	10,247.00	Developed as	1874
VFD production lines		scheduled
Engineering of main	1,308.00	Developed as	Cannotcalculate
body of factories		scheduled	independently income
			duetothe
			construction of factory
Engineering of clear	1,233.00	Developed as	Cannotcalculate
factories		scheduled	independently income
			duetothe
			construction of factory
Total	241,932.59	-	-

6.14 Explanation of the Board of Directors on the "Qualified Opinion" made by the Certified Public Accountants

Applicable Inapplicable

6.15 Business plan as of the next year of the Board of Directors (If it has) Applicable Inapplicable

Profit estimation of the next year (If it has) Applicable Inapplicable

6.16 The preplan on the profit distribution and capitalization of capital public reserve of the Board of Directors

The Company realized net profit amounting to RMB 403,185,267 in 2003. According to the provisions in the Articles of Association of the Company, after 10% of the net profit being appropriating as statutory reserve amounting to RMB 40,235,748, 5% of the net profit being appropriating as statutory welfare funds amounting to RMB 20,117,874 and 25% of the net profit being appropriating as discretionary surplus reserve amounting to RMB 100,589,369 and after appropriated employee bonus and welfare funds amounting to RMB 827,792 being deducted, plus the accumulative retained earnings in previous years amounting to RMB 192,962,577, the actual profit available for distribution to shareholders was RMB 434,377,061 in 2003.

According to the Company's need for capital in the operation, the Board of Directors suggested no cash dividends being distributed in 2003 but capitalizing capital reserve to all its shareholders at the rate of 5 shares capitalized and RMB 0.1 (Tax included) distributed for every 10 shares based on the total share capital of the Company amounting to 975,864,800 shares after additional issuance of B shares.

§7. Significant Events

7.1 Purchase of assets

Applicable Inapplicable

Unit: (RMB) '0000

Transaction parties and theassets purchased	Date of purchase	Purchase price	Contribution to net profit of theCompany of the assetspurchased from the date ofpurchase to the year-end	Relatedtransaction ornot (if yes,explain principleof pricing)
TFT-LCDbusinessofHYDIS	Jan. 22, 2003		52,010.00	No
26.36% equity of TPV	Dec. 30, 2003		0.00	No

7.2 Sales of assets

Applicable Inapplicable

Unit: (RMB) '0000

Transaction parties and theassets sold	Dateofsale	Saleprice	Contribution to net profit ofthe Company of the assetssold from the year-beginningto the date of sale	Profit orlossfromsale	Related transaction or not (if yes,explain principle of pricing)
Transactionparty:BeijingElectronics Town Co., Ltd.; theassets sold: 70% equity ofBeijing BOE Land Co., Ltd.held by the Company	Apr.21,2003	3,880.00	0.00	0.00	Yes,pricingbasedontheassessed property price under theprinciple of market
Transactionparty:BeijingBOE Land Co., Ltd.; the assetssold: Xingke Building	Jul10,2003	8,270.00	0.00	0.00	Yes,pricingbasedontheassessed price of land use right,house property and affiliatedequipments of Xing Ke Buildingunder the principle of market

Influence on consistence of business and stability of managers caused by the issues interfered in purchase and sale

It is in favor of concentrating on the development of display industry, meanwhile is in favor of realizing the professional operation of real estate business.

7.3 Important guarantee

Applicable Inapplicable

7.4 Related credits and liabilities current

Applicable Inapplicable

Unit: (RMB) '0000

	Supply funds to related parties		Related parties supplied funds to the
Related parties			Company
	Occurred amount	Balance	Occurred amount	Balance
Beijing·Matsushita Color CRT
Co., Ltd.	0.00	3,407.00	8,699.00	0.00
Top Victory Technology Co.,
Ltd.	0.00	29,725.00	0.00	5,293.00
BeijingOrientMosler
Intelligence Technology Co.,	345.00	211.00	135.00	0.00
Ltd.
Beijing Xingcheng Land Co.,
Ltd.	1,240.00	3,340.00	0.00	0.00
Beijing BOE Land Co., Ltd.	1,049.00	1,049.00	0.00	387.00
Beijing BOE Investment &
Development Co., Ltd.	0.00	144.00	563.00	0.00
Shenzhen Zhongda Industrial
Co., Ltd.	0.00	37.00	67.00	0.00

BeijingBOEDigital	0.00	0.48	396.30	0.00
Technology Co., Ltd.
Total amount	2,634.00	37,913.48	9860.00	5,681.00

7.5 Entrusted assets

Applicable Inapplicable

7.6 Implementation of commitment items

Applicable Inapplicable

7.7 Significant lawsuit and arbitration Applicable Inapplicable

The Korean subsidiary of the Company, BOE-Hydis Technology Co., Ltd. received the notification of Sharp Corporation, LG·Philips LCD and Guardian Industries who announced the Company infringed some patent right of them and counterclaimed the use expense. The investigation of the event was still in process and it was difficult to assess the result of potential lawsuit temporarily, so the Company has not appropriated any provision for liabilities caused by the event in the consolidated statement.

7.8 Particulars about the performance of obligations of Independent Directors

The Company has engaged four independent directors at present, which were the specialists in IT, finance, law and TFT-LTD. During their term, independent directors performed their duties as Independent Director according to the relevant regulations of Guiding Opinions on the Establishment of Independent Director System in Listed Companies, actively expressed independent opinions on the Company's vital purchasing of assets, related transaction, posts change of directors and senior executives and the other major projects and played an important role in promoting the Company's strategic decision-making process, and safeguarded the benefits of the mass of medium and small shareholders and the interest of the Company in real earnest.

§8.Report of the Supervisory Committee

Meetings of the Supervisory Committee and their resolutions

On Apr. 18, 2003, the Company held the 7th meeting of the 3rd Supervisory Committee, which examined and approved Work Report of the Supervisory Committee in 2002, Financial Settlement Report in 2002, Profit Distribution Preplan for 2002, Annual Report 2002 and Summary, Proposal on Adjusting Usage of Raised Capital of Partial Items and Explanation on Usage of the Last Raised Capital.

On Apr. 29, 2003, the Company held the 8th meeting of the 3rd Supervisory Committee, which examined and approved the 1st Quarterly Report of 2003 of the Company.

On May 12, 2003, the Company held the 9 th meeting of the 3 rd Supervisory Committee, which examined and approved Proposal on Increasing Examined Items in Annual Shareholders' General Meeting 2002.

On Aug. 21, 2003, the Company held the 10th meeting of the 3 rd Supervisory Committee, which examined and approved Semiannual Report 2003 of the Company. On Oct. 29, 2003, the Company held the 10th meeting of the 3 rd Supervisory Committee, which examined and approved the 3 rd Quarterly Report of 2003 of the Company.

Independent opinion of the Supervisory Committee

In the report year, the Supervisory Committee supervised over the validity when the directors and senior executives of the Company executed the duties in the Company strictly according to relevant laws, regulations, Articles of Association of the Company and Procedure Rule for the Supervisory Committee, checked relevant financial report of the Company, put forward to new proposal before holding Annual Shareholders' General Meeting 2002 and specially examined the usage of the raised capital of the Company. Aiming for the work of the Company in this year, the Supervisory Committee expressed the independent opinion as follows:

(1) The Board of Directors, directors and other senior executives of the Company carried on the work strictly according to laws, regulations and Articles of Association of the Company and there was no behavior of damaging the interest of the Company and the shareholders.

(2) The Company truly and completely issued financial statement strictly according to relevant accounting laws, regulations and rules, standardized the internal control system in a systemic way, established and perfected the financial system of the Company.

(3) Taking the maximum of the interest of the shareholders and the Company as springboard, the Company consistently perfected the construction of the Company's administration structure, actually implemented every resolution of the Shareholders' General Meeting, did a large amount of work with effect in respect of urging the maximum of the fortune of the shareholders.

(4) The related transactions involved by the Company was strictly in accordance with the market rule and obeyed the principle of fairness and justness. There existed no situation of damaging the interest of minority shareholders and the Company made information disclosure for the significant related transactions in time and engaged financial consultant to issue consultant's opinion and the independent directors also expressed the independent opinion.

(5) The appointing and removing of senior executives of the Company was in accordance with relevant laws, regulations and the meet of stratagem development of the Company.

(6) The raised capital of the Company was put in strictly according to the promised items and the increase of used items and change of usage of the raised capital all implemented relevant law procedures.

(7) The relevant purchase behaviors of significant assets of the Company were made the feasibility research of the items. The Company engaged relevant experts to examine them and implemented relevant procedures of submitting and authorization in compliance with the systemic regulations of external investment and guaranteed the investment was scientific.

§9. Financial Report

9.1 Auditors' opinion

Please look though the attachment files behind

9.2 Consolidated Financial Reports Prepared by: BOE Technology Group Co., Ltd. Please look though the attachment files behind

9.3 Explanation on change of accounting policy, accounting assessment and settlement method compared with the latest annual report Applicable Inapplicable

9.4 The company's subsidiaries Suzhou Boe CHATANI Co. Ltd. and BOE-Hydis have been annexed into the range of accounting statement during report periods.

Board of Directors of Boe Technology Group Co., Ltd. Apr. 23, 2004

Report of the auditors

To the shareholders of BOE Technology Group Co., Ltd.

We have audited the accompanying consolidated balance sheet of BOE Technology Group Co., Ltd. (the Company) and its subsidiaries (the Group) as of 31 December 2003 and the related consolidated income and cash flow statements for the year then ended. These financial statements set out on pages 2 to 45 are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements present fairly in all material respects, the financial position of the Group as of 31 December 2003 and of the results of its operations and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

PricewaterhouseCoopers Zhong Tian CPAs Co., Ltd.

23 April 2004

BOE TECHNOLOGY GROUP CO., LTD.

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2003

		Year ended 31 December
(all amounts in RMB thousands)	Notes	2003	2002
Sales		11,180,106	4,782,587

Cost of sales	(9,452,729)	(4,147,036)
I.Gross profit	1,727,377	635,551
II.
Other operating income	39,745	18,979
Distribution costs	(288,021)	(160,302)
Administrative expenses	(792,720)	(274,640)
Other operating expenses	(20,544)	(4,301)
III.Profit from operations	665,837	215,287
Finance costs – net	(235,550)	(65,542)
IV.Group profit before tax	430,287	149,745
Available-for-sale investments - losses	(11,047)	(5,761)
Share of result of associates before tax	100,092	72,922
V.Profit before tax	519,332	216,906
VI.
Income tax expenses	(30,003)	(51,356)
Group profit before minority interest	489,329	165,550
Minority interests	(78,095)	(86,550)
VII.Net profit	411,234	79,000
Basic earnings per share	Rmb0.62	Rmb0.12

BOE TECHNOLOGY GROUP CO., LTD.

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2003

	As at 31 December
(all amounts in RMB thousands)	Notes	2003	2003	2002	2002
ASSETS
Non-current assets
Property, plant and equipment		4,221,901		1,326,218
Investment Property		14,780		17,430
Intangible assets		41,438		96,924
Land use rights		109,797		100,266
Investments in associates		1,901,399		741,841
Available-for-sale investments		66,474		93,200
Held-to-maturity investments		173		22
Deferred tax assets		10,759		3,753
Other assets		125,547		15,664
			6,492,268		2,395,318
Current assets
Inventories		1,248,919		560,402
Receivables and prepayments		2,247,804		1,529,348
Cash and cash equivalents		2,051,459		2,294,226
			5,548,182		4,383,976
Total assets			12,040,450		6,779,294
EQUITY AND LIABILITIES
Capital and reserves
Ordinary shares		659,465		549,554
Share premium		1,040,984		1,150,895
Other reserves		423,166		280,767
Retained earnings		445,465		195,174
			2,569,080		2,176,390
Minority interests			525,602		457,862
Non-current liabilities
Borrowings		1,766,291		268,804
Deferred tax liabilities		8,383		9,523
Post-employment benefit obligations		14,643		6,428
Other liabilities		441,357		72,912

		2,230,674		357,667
Current liabilities
Trade and other payables	2,426,082		1,481,219
Current tax liabilities	13,530		28,751
Borrowings	4,249,483		2,263,875
Provisions	25,999		13,530
		6,715,094		3,787,375
Total liabilities		8,945,768		4,145,042
Total equity and liabilities		12,040,450		6,779,294

BOE TECHNOLOGY GROUP CO., LTD.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEAR ENDED 31 DECEMBER 2003

	Ordinary	Share		Retained
(all amounts in RMB thousands) Notes	shares	premium	Other reserves	earnings	Total
Balance at 1 January 2002	549,554	1,150,895	235,871	176,690	2,113,010
Addition of capital reserves	-	-	4,412	-	4,412
Dividends relating to 2001	-	-	-	(27,478)	(27,478)
Net profit	-	-	-	79,000	79,000
Currency translation differences			7,446	-	7,446
Provision of general reserves	-	-	33,038	(33,038)	-
Balance at 31 December 2002/
1 January 2003	549,554	1,150,895	280,767	195,174	2,176,390
Conversion of share premium to
ordinary shares	109,911	(109,911)	-	-	-
Net profit	-	-	-	411,234	411,234
Currency translation differences	-	-	(18,544)	-	(18,544)
Provision of general reserves	-	-	160,943	(160,943)	-
Balance at 31 December 2003	659,465	1,040,984	423,166	445,465	2,569,080

BOE TECHNOLOGY GROUP CO., LTD.

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2003

		Year ended 31 December
(all amounts in RMB thousands)	Notes	2003	2002
Cash flows from operating activities
Net profit		411,234	79,000
Adjustments for:
Minority interests		78,095	86,550
Tax		18,889	47,189
Depreciation		615,248	136,756
Amortisation		23,968	22,091
Impairment charge and write off		109,756	28,358
Loss on sale of property, plant and equipment		6,475	188
Finance costs		211,824	64,644
Share of result before tax of associates		(100,092)	(72,922)
Changes in working capital:
Inventories		(381,001)	(152,479)
Trade and other receivables		(129,678)	(748,400)
Pensions and other retirement benefits		8,215	6,428
Payables		(183,185)	712,276
Cash generated from operations		689,748	209,679
Interest received		39,651	8,629
Tax paid		(20,193)	(25,669)
Net cash from operating activities		709,206	192,639
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired		(2,433,235)	(526,396)
Purchase of property, plant and equipment		(643,878)	(255,880)
Purchase of intangible assets		(15,505)	(34,170)
Purchase of available-for-sale investments		(84)	(25,171)
Purchase of association		(1,174,623)	(11,443)
Disposal of subsidiary, net of cash disposed		1,389	2,704
Proceeds from sale of property, plant and machinery		15,716	179
Dividends received		20,442	3,733
Net cash used in investing activities		(4,229,778)	(846,444)
Cash flows from financing activities
Proceeds from convertible bonds		-	130,720
Proceeds from minority interest		-	134,512
Proceeds from borrowings		8,811,082	3,332,947
Proceeds from other financial activities		104,413
Repayments of borrowings		(5,352,148)	(1,787,367)
Dividends paid to group shareholders		(13,434)	(42,487)
Dividends paid to minority interests		(3,864)	(7,840)

Interest paid	(216,241)	(80,359)
Payment for other financing activities	(34,019)	(17,795)
Net cash from financing activities	3,295,789	1,662,331
Effects of exchange rate changes	(17,984)	16,502
Increase/(Decrease) in cash and cash equivalents	(242,767)	1,025,028
Cash and cash equivalent at beginning of year	2,294,226	1,207,639
Cash and cash equivalent at end of year	2,051,459	2,232,667