BOE TECHNOLOGY GROUP CO., LTD — Annual Report 2004

Apr 28, 2005

BOE TECHNOLOGY GROUP CO., LTD. SUMMARY OF ANNUAL REPORT 2004 (Overseas Version)

§1. Important Notice

1.1 The 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 2004 is abstracted from the annual report; the investors are suggested to read the full text of annual report to understand more details. This report was prepared in both Chinese and English, should there be any difference in interpretation between the two versions, the Chinese version shall prevail.

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 All directors attend the Board meeting.

1.4 Horwath 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 and concurrently Secretary of the Board Mr. Wang Yanjun, Person in charge of accounting and concurrently Head of Planning & Financial Dept. Ms. Sun Yun hereby confirm that the Financial Report enclosed the Annual Report is true and complete.

§2. Company Profile

2.1 Basic information

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

E-mail of the Company web.master@boe.com.cn

2.2 Contact person and method
	Secretary of the Board ofDirectors	Representative in charge ofSecurities Affairs
Name	Wang Yanjun	Zhong Huifeng
Contact address	No. 10, Jiuxianqiao Road,Chaoyang District, Beijing	No. 10, Jiuxianqiao Road,Chaoyang District, Beijing
Telephone	010 64366264, 64318888ext.	010 64366264, 64318888 ext.
Fax	010 64366264	010 64366264
E-mail	wangyanjun@boe.com.cn	hfzhong@boe.com.cn

§3. Summary of Accounting Data and Financial Indexes

3.1 Major accounting data	Unit: RMB'000
	2004
Profit before tax	496,955
Net profit	353,701
Sales gross profit	1,283,868
Income from other operating	30,736
Operating profit	188,009
Net cash inflow arising from operating activities	424,865
Balance of cash and cash equivalence at the year-end	1,535,970

3.2 Major financial indexesUnit: RMB'000
Indexes/Items	2004	2003		Increase/decrease overthe last year(%)	2002
		After	Before
		adjustment	adjustment
Sales income	12,441,708	11,180,106	11,180,106	11.28%	4,782,587
Net profit	353,701	396,016	411,234	-10.68%	79,000
Total assets	18,106,758	12,232,806	12,040,450	48.02%	6,779,294
Shareholders' equity	5,154,384	2,553,862	2,569,080	101.83%	2,176,390
Earnings per share(RMB)	0.29	0.60	0.67	-51.67%	0.14
Net asset per share(RMB)	3.52	3.87	3.90	-9.04%	3.96
Net cash flow per sharearisingfromoperations activities(RMB)	0.29	1.08	1.08	-73.15%	0.35
The ratio of net assets(%)	6.85	15.50	16.00	-8.65%	3.63

3.3 Difference of net profit as audited by Chinese Accounting Standards (CAS) and International Accounting Standards (IAS) Applicable Inapplicable

			Unit: RMB'000
Net profit	CAS206,013	IAS		353,701
Explanationon difference		Profit aftertaxation andminorityinterestsRMB'000	shareholder'sfundsRMB'000
	As determined pursuant to PRCaccounting regulationsDifference in amortisation of goodwillAppropriation of staff bonus andwelfare fun	206,013(1,334)(1,922)	4,956,439(5,334)-

Government grant	841	(3,014)
Capitalisation of certain development cost	163,786	172,473
Capitalisation of finance costs	(11,186)	18,448
Difference in negative goodwill
recognition arising from acquisition
of a subsidiary	-	(2,171)
Recognition of loss on deemed disposal of
a subsidiary	(2,945)	16,529
Others	448	1,014
As determined pursuant to IFRS	353,701	5,154,384

§4. Changes in Share Capital and Particulars about Shareholders

4.1 Statement of change in share capital(Unit: share)
	Before thechange		Increase / decrease in this time (+, -)
		Transferringcapital reserveinto share	Additionalissuance	Sub-total
I. Unlisted Shares
1. Sponsors' sharesIncluding: State-owned share	393,634,800393,634,800	196,817,400196,817,400	0	196,817,400196,817,400	590,452,200590,452,200
Domestic legal person's shares				0	0
Foreign legal person's sharesOthers				00	00
2. Raised legal person's shares 4,290,000		2,145,000		2,145,000	6,435,000
3. Inner employees' shares	10,140,000	0		0	0
4. Preference shares or others				0	0
Total unlisted shares	408,064,800	198,962,400	0	198,962,400	596,887,200
II. Listed Shares
1. RMB ordinary shares	72,000,000	41,070,000		41,070,000	123,210,000
2. Domestically listed foreignshares	179,400,000	247,900,000	316,400,000	564,300,000	743,700,000
3. Overseas listed foreignshares				0	0
4. Others				0	0
Total listed shares	251,400,000	288,970,000	316,400,000	605,370,000	866,9100,000
III. Total shares	659,464,800	487,932,400	316,400,000	804,332,400	1,463,797,200

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			75,658
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 CO., LTD.	175,235,400	525,706,200	35.91	Non- circulating	Naught	State- ownedshareholder

FIELDS PACIFIC LIMITED		90,000,000	6.15	Circulating	Unknown	Foreignshareholder
BEIJING DONGDIAN INDUSTRIALDEVELOPMENT COMPANY	20,022,000	60,066,000	4.10	Non- circulating	Naught	State- ownedshareholder
SHANGHAI WANGUO (HONG KONG)SECURITIES		26,601,148	1.82	Circulating	Unknown	Foreignshareholder
BANK OF CHINA GROUP SECURITIESLIMITED		23,813,945	1.63	Circulating	Unknown	Foreignshareholder
GUOTAI JUNAN SECURITIES HONGKONG LIMITED		14,858,149	1.02	Circulating	Unknown	Foreignshareholder
TOP RESPECT GROUP LIMITED		13,500,000	0.92	Circulating	Unknown	Foreignshareholder
CITIC CAPITAL SECURITIES CO.,LTD.		9,693,899	0.66	Circulating	Unknown	Foreignshareholder
SUN HUNG KAI INVESTMENTSERVICESLTD-CUSTOMERS A/C		8,504,463	0.58	Circulating	Unknown	Foreignshareholder
KGI ASIA LIMITED		6,914,274	0.47	Circulating	Unknown	Foreignshareholder
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, H-share
		held at the year-end (share)		and other)
FIELDS PACIFIC LIMITED		90,000,000	B-share
SHANGHAI WANGUO (HONG KONG) SECURITIES		26,601,148		B-share
BANK OF CHINA GROUP SECURITIES LIMITED		23,813,945B-share
GUOTAI JUNAN SECURITIES HONG KONG LIMITED		14,858,149B-share
TOP RESPECT GROUP LIMITED		13,500,000B-share
CITIC CAPITAL SECURITIES CO., LTD.		9,693,899B-share
SUN HUNG KAI INVESTMENT SERVICESLTD- USTOMERS A/C		8,504,463		B-share
KGI ASIA LIMITED		6,914,274	B-share
MERRILL LYNCH INTERNATIONAL		5,996,251	B-share
TOYO SECURITIES ASIA LIMITED-A/C CLIENT		4,731,896		B-share
Explanation on associatedrelationship among the top ten				The actual controller of Beijing BOE Investment & Development Co., Ltd. andBeijing Dongdian Industrial Development Company is Beijing Electronics Holding
shareholders or consistent action				Co., Ltd For other shareholders, the Company is unknown whether there exists
	associated relationship. The Company is unknown whether there exists associated

relationship or 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 35.91% 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 Dongdian Industrial Development Company (holding 4.1% equity of the Company) and Beijing CRT General Plant (holding 0.3% equity of the Company) are the wholly-owned enterprises of Beijing Electronics Holding Co., Ltd. and are related enterprises with Beijing BOE Investment & Development Co., Ltd.. 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

As the equity encouragement platform implemented by the Company to the whole core management personnel and technology personnel, the equity of Beijing Intelligence & Science Technology Development Co., Ltd. was held by all personnel simulating and implementing the equity encouragement mechanism plan. The above 20 investors are nominal shareholders and the investment proportion is no actual equity proportion. For the relevant information, please refer to Report on Change of Holding Shares of BOE

Technology Group Co., Ltd. published on Mar. 2, 2005.

§5. Particulars About Directors, Supervisors and Senior Executives

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

	executives
Name	Title	Gender Age		Office term	Shares heldat theyear- begin	Shares heldat theyear- end	Reason for change
WangDongsheng	Chairman of the Board,Chairman of theExecutive Committeeand CEO	Male	47	2004.6-2007.6	7800	11700	Transferring capital reserveinto share capital
Jiang Yukun	Vice Chairman of theBoard	Male	51	2004.6-2007.6	4680	7020	Transferring capital reserveinto share capital
Liang Xinqing	Executive Director,President, COO	Male	52	2004.6-2007.6	3120	4680	Transferring capital reserveinto share capital
Cui Bingdou	Executive Director,Executive Vice- president	Male	55	2004.6-2007.6	0	0
XuanJiansheng	Executive Director,Executive Vice- president	Male	61	2004.6-2007.6	0	0
Zhao Caiyong	Director	Male	57	2004.6-2007.6	7800	11700	Transferring capital reserveinto share capital
Chen Yanshun	Director	Male	39	2004.6-2007.6	0	0
Tai Zhonghe	Independent Director	Male	54	2004.6-2007.6	0	0
Xie Zhihua	Independent Director	Male	45	2004.6-2007.6	0	0
Zhang Baizhe	Independent Director	Male	61	2004.6-2007.6	0	0
Li Zhaojie	Independent Director	Male	49	2004.6-2007.6	0	0
Xia Zhenzhi	Convener of theSupervisory Committee	Male	42	2004.6-2007.6	3120	750
Mu Chengyuan Supervisor		Male	37	2004.6-2007.6	780	1170	Transferring capital reserveinto share capital
Yang Anle	Supervisor	Male	34	2004.6-2007.6	0	0
Xu Yan	Employee Supervisor	Female	53	2004.6-2007.6	4680	7020	Transferring capital reserveinto share capital
Cao Hong	Employee Supervisor	Male	46	2004.6-2007.6	1560	2340	Transferring capital reserveinto share capital
Wang Yanjun	CFO, Secretary of theBoard	Male	35	2004.6-2007.6	3120	4680	Transferring capital reserveinto share capital
Song Ying	Vice-president	Female	47	2004.6-2007.6	7800	11700	Transferring capital reserveinto share capital
Ren Jianchang	Vice-president	Male	58	2004.6-2007.6	0	0
Han Guojian	Vice-president	Male	51	2004.6-2007.6	3120	4680	Transferring capital reserveinto share capital
Liu Xiaodong	Vice-president	Male	40	2004.6-2007.6	0	0
Wang Jiaheng	Vice-president	Male	36	2004.6-2007.6	0	0
Feng Weidong	Vice-president	Male	37	2004.9-2007.6	0	0
Su Zhiwen	Head of Auditing	Male	36	2004.9-2007.6	0	0

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

Name	Name of Shareholding	Title in Shareholding	Office term	Drawing the payment
	Company	Company		from the ShareholdingCompany (Yes / No)

Jiang Yukun	Beijing BOE Investment &Development Co., Ltd.	Director, President and Secretaryof the Party Committee	Jan. 2004-Jan. 2007	Yes
Zhao Caiyong	Beijing BOE Investment &Development Co., Ltd.	Director, StandingVice-President and ChiefAccountants	Jan. 2004-Jan. 2007	Yes
Zhao Caiyong	Beijing Dongdian IndustrialDevelopment Company	General Manager	Jan. 2004-Jan. 2007	No
Xia Zhenzhi	Beijing BOE Investment &Development Co., Ltd.	Deputy General Manager,Secretary of the Party Committee		Yes
	Mu Chengyuan Beijing BOE Investment &Development Co., Ltd.	Secretary of the Board andVice-President	Jan. 2004-Jan. 2007	Yes
Yang Anle	Beijing BOE Investment &Development Co., Ltd.	Manager of Planning andFinancial Department	Jan. 2004-Jan. 2007	Yes
Yang Anle	Beijing Dongdian IndustrialDevelopment Company	Chief Accountant	Jan. 2004-Jan. 2007	No

	5.3 Particulars about the annual payment of directors, supervisors and senior executives
Total annual payment	RMB 6.7 million
Total annual payment of the top three directors	RMB 3.635 million
drawing the highest payment
Total annual payment of the top three seniorexecutives drawing the highest payment	RMB 3.635 million
Allowance of independent director	Mr. Tai Zhonghe: USD 10,000 per year Mr. XieZhihua: RMB 50,000 per year Mr. Zhang Baizhe:50,000 per year Mr. Li Zhaojie: 50,000 per year
Name of directors and supervisors receiving no	Jiang Yukun, Zhao Caiyong, Chen Yanshun, Xia Zhenzhi,
payment or allowance from the Company	Mu Chengyuan and Yang Anle
Payment (RMD)	Number of persons
RMB 100,000RMB 200,000	1
Over RMB 200,000	12

§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 working guideline of "changing impossible into possible, and creating strengths of individuals, departments, and the Company", actively adopted measures, propel investment construction of Beijing TFT-LCD production line of the 5th generation with all efforts. TFT-LCD production line of the 5th generation accom plished plant construction before December 2004 as schedule and realized trial production. With the fluctuation of TFT-LCD industry cycle, after experiencing the booming term of Feb., 2003 to June., 2004, TFT-LCD entered into downturn since the second half of 2004. In addition, low market price of TFT-LCD brought negative influence with big margin to operating achievements of global TFT -LCD enterprises, which resulted in big decrease of gross profit ratio of TFT-LCD products. In the report period, the Company realized sales income amounting to RMB 12441 million, increasing 11.28% over the same period; realized net profit amounting to 354 million, decreasing 10.68% over the same period of last year.

6.2 Statement of main operations classified according to industries or products Unit: RMB'000

	Main operations classified according to industries
Classified according toindustries or products	Income frommainoperations(RMB)	Cost of mainoperations(RMB)	Grossprofitratio (%)	Increase/decreasein income frommain operationsover the last year(%)	Increase/decrease in cost of mainoperations overthe last year (%)	Increase/decreasein gross profit ratioover the last year(%)
Business of monitorterminal productsBusiness of display	4,459,014	4,232,516	5.08%	41.74%	43.54%	-18.96%
devices -Thin filmtransistor liquid	5,973,178	5,452,935	8.71%	5.27%	19.54%	-55.57%
Business of small-sizeddisplay device	3,461,161	3,104,600	10.30%	72.49%	81.17%	-29.44%
Other businesses	763,939	575,897	24.61%	48.52%	49.10%	-1.17%
Total	12,441,708	11,157,840 11.51%		11.28%	18.08%	-37.19%
Including: relatedtransactions	2,215,584	2,208,108	--	--	--	--
Pricing rules for relatedtransactionsNecessity and durativeof related transactions	Price of transaction between the Company and related companies was determinedaccording to the market price.the continuing connected transactions are in the ordinary and usual course of business ofthe company, on normal commercial terms, are fair and reasonable and in the interests ofthe shareholders as a whole.

Including: total amount of related transactions that the listed company sold products or provided labor service to the controlling shareholder and its subsidiaries was RMB 238.58Million in the report period.

6.3 Particulars about main operations classified according to areas

	Sales 2004RMB'000	Increase/decrease in income from mainoperations over the last year (%)
PRC Mainland	613343	27.27
Republic ofKorea	244294	-14.67
Taiwan	48425	-64.05
U.S.A.	290088	204.47
Germany	48021	-59.91
Other Europeancountries	1244171	11.28

6.4 Particulars about the customers of purchase and sales

		Unit: RMB'0000
Total amount of purchase of the top fivesuppliers	302219 Proportion in the total amount ofpurchase	27.10%
Total amount of sales of the top fivesales customers	504166 Proportion in the total amount ofsales	40.52%

6.5 Operation of share-holding companies

Applicable Inapplicable

Unit: RMB'0000

	Name of share-holding company Top Victory Technology Co., Ltd.
Investment earnings contributed	22795Proportion in net profit of64.45%
in the period		listed company

in the period			listed company
Share-holdingcompany	Business scope	Design, manufacture and sales of various monitors, mainproducts: CRT monitor, TFT-LCD and TFT liquid crystal TV
	Net profit
		Name of share-holding company Beijing·Matsushita Color CRT Co., Ltd.
in the period	Investment earnings contributed	8782	Proportion in net profit oflisted company	24.83%
Share-holdingcompany	Business scope	Production of CRT used in color TVs and CDT used in colormonitors, sales of self-produced products and providingservice after sales
	Net profit	29273

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

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

	The price of the Company's main products has decreased in the second half of year
	2004 due to the periodicity fluctuation of industry, which resulted in the decrease of
gross profit ratio of the products.

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

Applicable Inapplicable 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 Due to the periodicity fluctuation of TFT-LCD industry, the price of the Company's

main products has decreased from the second half of year 2004, which resulted in the decrease of gross profit ratio of the products.

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
Total amount of raised	HKD 1922.07 million	Total amount of raised proceeds	HKD 1922.07 million (approximately RMB
proceeds	(approximately RMB	used in the report year	2048.16 million)
	2048.16 million)
		Total amount of raised proceeds	HKD 1922.07 million (approximately RMB

		used accumulatively		2048.16 million)
Committed projects	Planned amount of input	Change	Actual amount	Accrued	Compliance	Compliance
		projects or not	of input	amount	with planned	with estimated
				of	progress or	earnings or no
				earnings	no
Refunding bank loan	USD 90 million	No	USD 90 million	-	Yes	Yes
amounting to USD 90	(approximately RMB		(approximately
million caused by	744.30 million)		RMB 744.30
purchase of TFT- LCD			million)
business from HYDIS
Investing USD 22.35	USD 22.35 million	No	USD 22.35	-	Yes	Yes
million in TFT Colored	(approximately RMB		million
Crystal Display Moduleproject	184.83 million)		(approximatelyRMB 184.83
			million)
Refunding bank loan		Increase	USD 85 million	-		Yes
amounting to USD 85			(approximately
million from purchase of			RMB 702.95
partial equity of Top			million)
Victory Technology Co.,
Ltd.
Refunding bank loan		Increase	RMB 416.08	-		Yes
amounting to RMB			million
416.08 million
Total		-			-	-

Particulars about the changed projects Applicable Inapplicable

6.13 Application of the proceeds not raised through shares offering Applicable Inapplicable

			Unit: RMB'0000
Names of projects	Amount of		Progress of projects Earnings of projects
	projects
ODF	28,702	Jan, 2005	-
5G TFT-LCD Facilities	24,011	June,2005	-
VFD FAB Reconstruction	26,910	June,2005	-
Total	79,623	-	-

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

Applicable Inapplicable

Profit estimation of the next year

Applicable Inapplicable

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

Applicable Inapplicable

Based on total share capital of the Company amounting to 1,463,797,200 shares on Dec. 31, 2004, capitalizing with capital reserve to all its shareholders at the rate of

RMB 0.20 (tax included) for every 10 shares.

The Company did not appropriate share distribution preplan though the Company achieved the profit in the report period

Applicable Inapplicable

§7. Significant Events

7.1 Purchase of assets

Applicable Inapplicable 7.2 Sales of assets

Applicable Inapplicable

7.3 Important guarantee

Applicable Inapplicable

Unit: RMB'0000

Particulars about the external guarantee of the Company (Barring the guarantee for the controlling subsidiaries)
Name of the Company	Date of	Amount of	Guarantee type	Guarantee term	Complete	Guarantee
guaranteed	happening	guarantee			Implemen	for related
	(date ofsigning				tation ornot	party (yes orno)
	agreement)
Beijing Municipal	Jan, 2004				Yes	No
Administration&Communications Card		450.00		Suretyship April,2006
Co., Ltd.
Total amount of guarantee in the report period						650
Total balance of guarantee at the end of the report period			450
Guarantee of the Company for the controlling subsidiaries
Total amount of guarantee for controlling subsidiaries in the report period						169,364.68
Total balance of guarantee for controlling subsidiaries at the end of the report period						169,364.68
Particulars about the external guarantee of the Company (Including the guarantee for the controlling subsidiaries)
Total amount of guarantee					169,814.68
The proportion of the total amount of guarantee in the net assets of the Company						32.95
Particulars about the guarantees out of line
Total amount of guarantee for other related parties, which the Company or controlling						0.00
shareholders held less than 50%
The debts guarantee amount provided for the guarantee of which the assets-liabilit y						0.00
ratio exceeded 70%
Proportion of total amount of guarantee in net assets of the Company exceeded 50%					No
(Yes or No)
Total amount of guarantee breaking regulations						0.00

7.4 Significant related transactions

7.4.1 Related purchase and sale

Appl icable Inapplicable

				Unit: RMB'000
Related parties	service to related parties	Selling products and providing	service to related parties	Purchasing products and accepting
	Transactionamount	Proportion in thesame kind oftransaction amount	Transa ctionamount	Proportion in thesame kind oftransaction amount

TPV Technology	277,092.00	22.27%	28,998.00	2.60%
Limited
Beijing MatsushitaColor CRT Co., Ltd.	9,904.00	0.80%	0.00	0.00%
Beijing Orient MoslerSecurity TechnologySystems Co., Ltd.	345.00	0.03%	0.00	0.00%
Beijing NissinElectronics PrecisionComponent Co., Ltd.	418.00	0.03%	0.00	0.00%
Beijing NittanElectronics Co., Ltd.	259.00	0.02%	0.00	0.00%
Beijing ElectronicHoldings LTD. Co.,	225.00	0.02%	0.00	0.00%
Beijing OrientInvestment andDevelopment Co., Ltd	14.00	0.00%	45.00	0.00%
Beijing OrientalSoftware Co., Ltd	36.00	0.00%	0.00	0.00%
BOE Land Co., Ltd.	36.00	0.00%	0.00	0.00%
Beijing OrientElectronic IndustryCo., Ltd	0.00	0.00%	12.00	0.00%
Total	288,329.00	23.17%	29,055.00	2.60%

7.4.2 Current related credits and liabilities Applicable Inapplicable

Unit: RMB'0000 Related parties Supply funds to related parties Related parties supplied funds to the Company Occurred amount Balance Occurred amount Balance Beijing Matsushita Color CRT Co., Ltd. 564.14 2,211.19 25.60 25.60 TPV Technology Limited 18,038.36 46,319.96 4,200.30 10,472.94 Beijing Orient Mosler Security Technology Systems Co., Ltd. 12.15 222.65 0.00 0.00 Hyundai LCD, Inc. 14,534.35 14,534.35 14,184.17 14,184.17 Beijing Orient Electronic Industry Development Co., Ltd. 0.00 0.00 966.06 966.06 Beijing Orient Investment and Development Co., Ltd 346.69 491.19 90.40 90.40 Beijing Star City Real Estate Development Co., 4,300.64 7,305.31 0.00 0.00

Ltd.
Beijing Intelligence &Science TechnologyDevelopment Co., Ltd.	0.00	485.90	0.00	0.00
Beijing Orient ElectronicIndustry Co., Ltd	0.00	0.00	1.30	1.30
Beijing BOE YAMATOPhotoelectron Co., Ltd.	0.00	0.00	36.99	36.99
Beijing BOE DigitalTechnology Co., LTD.	0.00	57.33	0.00	0.00
Beijing Nittan ElectronicsCo., Ltd.	0.00	0.00	0.00	1.08
BOE Technology Co.,LTD.	0.00	0.00	1.77	1.77
Shenzhen EvergreatIndustrial Co., Ltd.	0.00	37.39	0.00	0.00
Beijing Orient MouldFactory	6.82	402.44	0.00	0.00
Total	37,803.15	72,067.71	19,506.59	25,780.31

Including: in the report period, the capital amount the listed company provided to controlling shareholder and its subsidiaries was RMB and the balance was RMB .

	7.5 Entrusted financing

Applicable Inapplicable

7.6 Implementation of commitment items Applicable Inapplicable

	2004	2003
	RMB'000	RMB'000
Property, plant and equipment	387,368	1,099,217
Equity investments	37,244	-
Toatl	424,612	1,099,217

7.7 Significant lawsuit and arbitration

Applicable Inapplicable

7.8 Particulars about the performance of obligations of Independent Directors Particulars about the independent directors attending the Board

Name ofIndependentDirectors	This year timesof attending theBoard meeting	Presence inperson	Entrustedpresence(times)	Absence(Times)	Notes
Tai Zhonghe	9	9
Xie Zhihua	9	7		2
Zhang Baizhe	9	8		1
Li Zhaojie	9	7		2

Particulars about the independent directors proposed different opinions about the relevant

matters of the Company

Applicable Inapplicable

§8.Report of the Supervisory Committee Applicable Inapplicable

I. Meetings of the Supervisory Committee and contents of the resolutions According to relevant regulations of the Company Law and Articles of Association of the Company, the Supervisory Committee had strictly performed its duties. In the report period, the Supervisory Committee had held totally 6 meetings, and attended meetings of the Board as non-voting delegates. Details were as follows: 1. On Feb. 24, 2004, the 12th meeting of the 3rd Supervisory Committee was held. The meeting examined and approved: 1) Proposal on Listing the TFT -LCD Cause Overseas; 2) Proposal on Increasing the Use of the Surplus Proceeds Raised Through the Reissue of B-share. 2. On Apr. 23, 2004, the 13th meeting of the 3 rd Supervisory Committee was held. The meeting examined and approved: 1) Work Report 2003 of the Supervisory Committee; 2) Report on the Operation Work of 2003 and the Operation Plan of 2004; 3) Preplan of 2003 Profit Appropriation and the Transfer of Capital Reserve into Share Capital; 4) Text of Annual Report 2003 and Summary; 5) Proposal on Withdrawing the Award Funds 2003 and Setting the Indicators for Performance Appraisal 2004 of the Award Funds; 6) Proposal on Investing and Building the Product Line Project of the 5th Generation TFT -LCD; 7) Proposal on Increasing the Investment to BOE Hyundai (Beijing) LCD Inc. and Building the CSTN Product Line; 8) Proposal on the Line of Loans and External Guarantees; 9) Proposal on the Changing Election of the Supervisory Committee. 3. On Apr. 28, 2004, the 14th meeting of the 3r d Supervisory Committee was held. The meeting examined and approved: 1) The 1s t Quarterly Report of 2004; 2) Proposal on Conducting Asset Rectification to Part of the Subordinate Enterprises. 4. On May 28, 2004, the 1s t meeting of the 4th Supervisory Committee was held. The meeting examined and approved the Proposal on Choosing a Convener of the Supervisory Committee of the Company. 5. On Aug. 27, 2004, the 2nd meeting of the 4th Supervisory Committee was held. The meeting examined and approved the Semi-Annual Report 2004. 6. On Oct. 28, 2004, the 3 rd meeting of the 4th Supervisory Committee was held. The meeting examined and approved the 3r d Quarterly Report of 2004. II. Independent opinions of the Supervisory Committee 1. The Company's operation according to laws In conformity with relevant regulations, such as the Company Law, Articles of Association and Rules of Procedure of the Supervisory Committee, etc., the Supervisory Committee had dutifully performed its responsibilities. In the report period, members of the Supervisory Committee had attended meetings of the Board as non-voting delegates, and supervised the holding procedures and decision-making procedures of the Shareholders' General Meeting and the Board of Directors, implementation of the resolutions of the Shareholders' General Meeting by the Board, as well as the performance of the Company's resolutions. The Committee believed that all the resolutions of the Company made in the report period had been legal, and directors and senior administrative personnel of the Company had no deeds that had been against the Articles of Association of the Company, or had done harm to the interests of the shareholders or the Company. 2. Inspection of the Company's financial status The Supervisory Committee believed that the auditing opinions furnished by Beijing Jingdu Certified Public Accountants and Horwath International Certified Public Accountants had been objective, and that the Financial Report had truly reflected the financial status and operation achievements of the Company. 3. The use of raised proceeds The Company had reissued 316.4 million B-shares from Jan. 13 to 15,

1. Concerning the use of the raised proceeds through the reissue of B-shares, the Supervisory Committee believed that the raised proceeds of the Company had been strictly invested in the exact promised projects, and the use of the surplus raised proceeds had also undergone relevant legal procedures. 4. Purchases and sales of assets made by the Company In the report period, the transaction prices of the sales of assets by the Company were reasonable and the transactions were in conformity with the legal procedures. No insider dealings had ever happened, nor had there been any cases that had done harm to part of the shareholders or led to the loss of the Company's assets. 5. Related transactions Related transactions, in which the Company had involved, had strictly conformed to the market rules, and stuck to the principle of being fair and impartial. There was no case that had done harm to the interests of minority shareholders. The information of related transactions of great importance had been disclosed in time, financial consultant had been engaged to give consultant opinions, and independent directors had also expressed independent opinions.

§9. Financial Report

9.1 Auditors' opinion

Auditors' opinion: standard unqualified auditor's opinion

9.2 Financial statements

9.3 Explanation on changes of accounting policy, accounting estimation and settlement compared with the latest annual report

Applicable Inapplicable

9.4 Contents, correct amount, reason and its influence of significant accounting errors Applicable Inapplicable

For correcting accounting errors in 2003, net profit in 2003 and encouragement fund withdrawn in 2003 was adjusted with a decrease of RMB 15,217,569 and RMB 4,668,871.39 respectively. On Dec. 29, 2003, the Company received borrowing amounting to RMB 200 million from Beijing Economic Technology Investment Company, but entered it into account in 2004. The Company adjusted bank deposit and long-term payables with an increase of RMB 200 million respectively.

9.5 Explanation on change of consolidated scope compared with the latest annual report Applicable Inapplicable

(1) Beijing BOE YAMATO Photoelectron Co., Ltd. and Beijing BOE Mobile Technology Co., Ltd. were not listed in the consolidated scope of accounting statements in the report year. (2) This year, income statement and cash flow statement of Hyundai LCD Inc. were listed into consolidated scope, and balance sheet of it was not listed into consolidated scope. (3) Beijing BOE Land Co., Ltd. was listed into consolidation scope of accounting statements this year.

Board of Directors of BOE Technology Group Co., Ltd. Apr. 25, 2005

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2004

(Expressed in Renminbi thousands)

		2004	2003
			(As restated)
	Notes	RMB'000	RMB'000
Sales	4	12,441,708	11,180,106
Cost of sales		(11,157,840)	(9,449,140)
Gross profit		1,283,868	1,730,966
Other operating income		30,736	39,745
Distribution costs		(315,449)	(288,021)
Administrative expenses		(791,896)	(788,051)
Other operating expenses		(19,250)	(20,544)
Profit from operations	5	188,009	679,147
Finance costs	6	(25,085)	(235,550)
Group profit before taxation		162,924	438,545
Available-for-sale investments – losses		(30,196)	(11,047)
Share of results of associates before tax		364,227	76,616
Profit before tax		496,955	504,114
Income tax expenses	8	(61,293)	(30,003)
Group profit before minority interests		435,662	474,111
Minority interests		(81,961)	(78,095)
Net profit		353,701	396,016
Earnings per shareBasic	9	RMB0.288	RMB0.601

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2004

(Expressed in Renminbi thousands)

		2004	2003
			(As restated)
	Notes	RMB'000	RMB'000
Non-current assets
Property, plant and equipment	11	10,118,211	4,174,525
Investment property	12	13,893	14,780
Intangible assets	13	213,492	41,438
Land use rights	14	133,355	108,130
Investments in associates	15	2,180,519	1,926,561
Available-for-sale investments	16	8,020	17,836
Held-to-maturity investments		170	173
Deferred tax assets	26	13,220	10,759
Other non-current assets	17	77,936	125,547
		12,758,816	6,419,749
Current assetsInventoriesReceivables and prepaymentsConvertible bonds – current portionCash and cash equivalents	181921	1,127,0662,342,55744,0311,834,288	1,252,5082,309,090-2,251,459
Current liabilitiesTrade and other payablesCurrent tax liabilitiesBorrowingsProvisions	222328	3,188,1477,1725,506,25943,994	2,433,65613,5304,249,48325,999
		8,745,572	6,722,668
Net current liabilities		(3,397,630)	(909,611)
Total assets less current liabilities		9,361,186	5,510,138

5,347,942

CONSOLIDATED BALANCE SHEET (CONTINUED) AS AT 31 DECEMBER 2004

(Expressed in Renminbi thousands)

	Notes	2004RMB'000	2003(As restated)RMB'000
Total assets less current liabilities		9,361,186	5,510,138
Non-current liabilitiesBorrowingsDeferred tax liabilitiesPost-employment benefit obligationsOther non-current liabilities	23262725	2,503,3811519,6851,158,748	1,766,2918,38314,643641,357
		3,681,829	2,430,674
Minority interests		524,973	525,602
Net assets		5,154,384	2,553,862
Representing:
Capital and reserves
Ordinary sharesShare premiumOther reservesRetained earnings	3132	1,463,7972,284,812696,414709,361	659,4651,040,984406,358447,055
		5,154,384	2,553,862

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEAR ENDED 31 DECEMBER 2004

(Expressed in Renminbi thousands)

	Ordinaryshares	Sharepremium	Otherreserves	Retainedearnings	Total
Balance at 31 December 2002	(Note 31)549,554	(Note 31)1,150,895	(Note 32)280,767	195,174	2,176,390
Conversion of share premiumto ordinary shares	109,911	(109,911)	-	-	-
Net profit	-	-	-	396,016	396,016
Currency translation difference	-	-	(18,544)	-	(18,544)
Provision of general reserves	-	-	144,135	(144,135)	-
Balance at 31 December 2003	659,465	1,040,984	406,358	447,055	2,553,862
Balance at 31 December 2003As previously reported	659,465	1,040,984	423,166	445,465	2,569,080
Prior year adjustment arisingfrom fundamental errors (Note 2)	-	-	(16,808)	1,500	(15,218)
As restated	659,465	1,040,984	406,358	447,055	2,553,862
Issue of new shares	316,400	1,731,760	-	-	2,048,160
Conversion of share premiumto ordinary shares	487,932	(487,932)	-	-	-
Net profit	-	-	-	353,701	353,701
Currency translation difference	-	-	208,419	-	208,419
Dividend paid	-	-	-	(9,758)	(9,758)
Provision of general reserves	-	-	81,637	(81,637)	-
Balance at 31 December 2004	1,463,797	2,284,812	696,414	709,361	5,154,384

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2004

(Expressed in Renminbi)

		2004	2003
			(As restated)
	Notes	RMB'000	RMB'000
Cash flows from operating activities
Net profit		353,701	396,016
Adjustment for:
Minority interests		81,961	78,095
Tax	8	13,112	18,889
Depreciation	11,12	717,579	615,248
Amortisation		19,737	23,968
Impairment charge and write off		114,776	109,756
Net loss on sale of property,
plant and equipment		500	6,475
Gain on disposal of associates		(31,421)	-
Finance costs	6	25,085	211,824
Share of result of associates before tax	15	(364,227)	(76,616)
Changes in working capital:
Inventories		(482,135)	(384,590)
Receivables and prepayments		(289,049)	(134,347)
Pension employment benefit obligations		5,102	8,215
Trade and other payables		232,173	16,815
Cash generated from operations		396,894	889,748
Interest received		53,358	39,651
Tax paid		(25,387)	(20,193)
Net cash from operating activities		424,865	909,206

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2004

(Expressed in Renminbi)

		2004	2003
	Notes	RMB'000	(As restated)RMB'000
Cash flows from investing activities
Acquisition of a subsidiary, net of cash acquired		(4,200)	(2,433,235)
Purchase of property, plant and equipment
and land use rights		(5,422,599)	(643,878)
Purchase of intangible assets		(371,341)	(15,505)
Purchase of available-for-sale investments		-	(84)
Refund of investment costs		32,978	-
Purchase of associates		(400)	(1,174,623)
Purchase of debentures		(2,235)	-
Net cash outflow on change of subsidiary to associate	33	(105,281)	-
Other investing activities		(11,144)	(18,304)
Disposal of subsidiary, net of cash disposed of		428	1,389
Proceeds from sale of property, plant and machinery		49,509	15,716
Proceeds from disposal of subsidiary		57,769	-
Proceeds from disposal of associates		66,757	-
Placement of long term fixed deposits		(220,749)	-
Net cash inflow on consolidation of subsidiary		45,430	-
Dividends received		48,577	20,442
Net cash used in investing activities		(5,836,501)	(4,248,082)
Cash flows from financing activities
Proceeds from debentures		71,448	-
Proceeds from issue of new shares		2,072,101	-
Proceeds from minority interest		4,020	-
Proceeds from borrowings		10,399,068	8,811,082
Proceeds from other financial activities		-	104,413
Repayments of borrowings		(7,902,354)	(5,352,148)
Dividends paid to group shareholders		(17,555)	(13,434)
Dividends paid to minority interests		(10,477)	(3,864)
Interest paid		(287,847)	(216,241)
Other long-term loan borrowings		450,000	-
Finance lease repayments		(22,907)	-
Payment for other financing activities		(39,111)	(34,019)
Net cash from financing activities		4,716,386	3,295,789
Effects of exchange rate changes		59,624	(17,984)

Cash and cash equivalent at beginning of year		2,171,596	2,232,667
Cash and cash equivalent at end of year	21	1,535,970	2,171,596