京东方Ａ(000725)京东方2004年年度报告摘要（英文版）

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 of Representative in charge of Directors Securities Affairs Name Wang Yanjun Zhong Huifeng Contact address No. 10, Jiuxianqiao Road, No. 10, Jiuxianqiao Road, Chaoyang District, Beijing Chaoyang District, Beijing Telephone 010－64366264, 64318888 010－64366264, 64318888 ext. 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 indexes Unit: RMB’ 000 Indexes/Items 2004 2003 Increase/ 2002 decrease over the last year (%) 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 ｓｈａｒｅ ａｒｉｓｉｎｇ ｆｒｏｍ ０．２９ １．０８ １．０８ －７３．１５％ ０．３５ ｏｐｅｒａｔｉｏｎｓ ａｃｔｉｖｉｔｉｅｓ （ＲＭＢ） 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 CAS IAS Net profit 206,013 353,701 Explanation Profit after on difference taxation and minority shareholder’s interests funds RMB’000 RMB’000 As determined pursuant to PRC accounting regulations 206,013 4,956,439 Difference in amortisation of goodwill (1,334) (5,334) Appropriation of staff bonus and welfare fun (1,922) - 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 the Increase / decrease in this time (+, -) After the change change Transferring Additional Sub-total capital reserve issuance into share I. Unlisted Shares 1. Sponsors’ shares 393,634,800 196,817,400 0 196,817,400 590,452,200 Including: State-owned share 393,634,800 196,817,400 196,817,400 590,452,200 Domestic legal person’s shares 0 0 Foreign legal person’s shares 0 0 Others 0 0 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 foreign 179,400,000 247,900,000 316,400,000 564,300,000 743,700,000 shares 3. Overseas listed foreign 0 0 shares 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 / Holding Proportion Type of shares Number of Nature of decrease in shares at (%) (Circulating/No share shareholders the report the year-end n-circulating) pledged/ (State-owned year (share) (share) frozen shareholder/ (share) foreign shareholder) BEIJING BOE INVESTMENT & 175,235,400 525,706,200 35.91 Non- circulating Naught State- owned DEVELOPMENT CO., LTD. shareholder FIELDS PACIFIC LIMITED 90,000,000 6.15 Circulating Unknown Foreign shareholder BEIJING DONGDIAN INDUSTRIAL 20,022,000 60,066,000 4.10 Non- circulating Naught State- owned DEVELOPMENT COMPANY shareholder SHANGHAI WANGUO (HONG KONG) 26,601,148 1.82 Circulating Unknown Foreign SECURITIES shareholder BANK OF CHINA GROUP SECURITIES 23,813,945 1.63 Circulating Unknown Foreign LIMITED shareholder GUOTAI JUNAN SECURITIES HONG 14,858,149 1.02 Circulating Unknown Foreign KONG LIMITED shareholder TOP RESPECT GROUP LIMITED 13,500,000 0.92 Circulating Unknown Foreign shareholder CITIC CAPITAL SECURITIES CO., 9,693,899 0.66 Circulating Unknown Foreign LTD. shareholder SUN HUNG KAI INVESTMENT 8,504,463 0.58 Circulating Unknown Foreign SERVICES LTD-CUSTOMERS A/C shareholder KGI ASIA LIMITED 6,914,274 0.47 Circulating Unknown Foreign shareholder 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 23,813,945 B-share GUOTAI JUNAN SECURITIES HONG KONG LIMITED 14,858,149 B-share TOP RESPECT GROUP LIMITED 13,500,000 B-share CITIC CAPITAL SECURITIES CO., LTD. 9,693,899 B-share SUN HUNG KAI INVESTMENT SERVICES 8,504,463 B-share LTD- USTOMERS A/C 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 associated The actual controller of Beijing BOE Investment & Development Co., Ltd. and relationship among the top ten Beijing 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 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. 4.3.3 The property right and controlling relationship between the actual controller and the Company is as follows: Ｗａｎｇ Ｄｏｎｇｓｈｅｎｇ ２０％ Ｊｉａｎｇ Ｙｕｋｕｎ １０％ Ｌｉａｎｇ Ｘｉｎｑｉｎ １０％ Ｚｈａｏ Ｃａｉｙｏｎｇ ６．６６７％ Ｓｈｉ State-ownedAssets supervision& Ｄｏｎｇ ６．６６７％ Ｃｈｅｎ Ｙａｎｓｈｕｎ ６．６６７％ Ｓｏｎｇ Ｙｉｎｇ ６．６６７％ Ｈａｎ Ｇｕｏｊｉａｎ ６．６６７％ Ｇｏｎｇ administration Commission of Beijing People’s government Ｘｉａｏｑｉｎｇ ３．３３３％ Ｗａｎｇ Ｙａｎｊｕｎ ３．３３３％ Ｗａｎｇ Ｊｉａｈｅｎｇ ３．３３３％ Ｌｉｕ Ｘｉａｏｄｏｎｇ ３．３３３％ Ｒｅｎ Ｊｉａｎｃｈａｎｇ １．６６７％ Ｓｕｎ Ｊｉｐｉｎｇ １．６６７％ Ｚｈａｎｇ Ｐｅｎｇ １．６６７％ Ｗａｎｇ Ａｉｚｈｅｎ １．６６７％ Ｍｕ Ｃｈｅｎｇｙｕａｎ１．６６７％ Ｘｕ Ｙａｎ １．６６７％ Ｈｕａ Ｙｕｌｕｎ１．６６７％ Ｚｈｏｎｇ Ｈｕｉｆｅｎｇ１．６６７％ Ｂｅｉｊｉｎｇ Ｅｌｅｃｔｒｏｎｉｃｓ Ｈｏｌｄｉｎｇ Ｂｅｉｊｉｎｇ Ｉｎｔｅｌｌｉｇｅｎ ｃｅ ＆ Ｓｃｉｅｎｃｅ Ｃｏ．， ＬＴＤ． Ｔｅｃｈｎｏｌｏｇｙ Ｄｅｖｅｌｏｐｍｅｎｔ Ｃｏ．， Ｌｔｄ． Beijing Boe Investment&Development Co., Ltd. BOE 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 held Shares held Reason for change at the at the year- begin year- end Wang Chairman of the Board, Male 47 2004.6-2007.6 7800 11700 Transferring capital reserve Dongsheng Chairman of the into share capital Executive Committee and CEO Jiang Yukun Vice Chairman of the Male 51 2004.6-2007.6 4680 7020 Transferring capital reserve Board into share capital Liang Xinqing Executive Director, Male 52 2004.6-2007.6 3120 4680 Transferring capital reserve President, COO into share capital Cui Bingdou Executive Director, Male 55 2004.6-2007.6 0 0 Executive Vice- president Xuan Executive Director, Male 61 2004.6-2007.6 0 0 Jiansheng Executive Vice- president Zhao Caiyong Director Male 57 2004.6-2007.6 7800 11700 Transferring capital reserve into 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 the Male 42 2004.6-2007.6 3120 750 Supervisory Committee Mu Chengyuan Supervisor Male 37 2004.6-2007.6 780 1170 Transferring capital reserve into 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 reserve into share capital Cao Hong Employee Supervisor Male 46 2004.6-2007.6 1560 2340 Transferring capital reserve into share capital Wang Yanjun CFO, Secretary of the Male 35 2004.6-2007.6 3120 4680 Transferring capital reserve Board into share capital Song Ying Vice-president Female 47 2004.6-2007.6 7800 11700 Transferring capital reserve into 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 reserve into 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 Shareholding Company (Yes / No) Jiang Yukun Beijing BOE Investment & Director, President and Secretary Jan. 2004- Yes Development Co., Ltd. of the Party Committee Jan. 2007 Zhao Caiyong Beijing BOE Investment & Director, Standing Jan. 2004- Yes Development Co., Ltd. Vice-President and Chief Jan. 2007 Accountants Zhao Caiyong Beijing Dongdian Industrial General Manager Jan. 2004- No Development Company Jan. 2007 Xia Zhenzhi Beijing BOE Investment & Deputy General Manager, Yes Development Co., Ltd. Secretary of the Party Committee Mu Chengyuan Beijing BOE Investment & Secretary of the Board and Jan. 2004- Yes Development Co., Ltd. Vice-President Jan. 2007 Yang Anle Beijing BOE Investment & Manager of Planning and Jan. 2004- Yes Development Co., Ltd. Financial Department Jan. 2007 Yang Anle Beijing Dongdian Industrial Chief Accountant Jan. 2004- No Development Company Jan. 2007 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 senior RMB 3.635 million executives drawing the highest payment Allowance of independent director Mr. Tai Zhonghe: USD 10,000 per year Mr. Xie Zhihua: 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 100,000 ～ RMB 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 5ht generation with all efforts. TFT-LCD production line of the 5ht 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 to Income from Cost of main Gross Increase/decrease Increase/decreas Increase/decrease industries or products main operations profit in income from e in cost of main in gross profit ratio operations (RMB) ratio (%) main operations operations over over the last year (RMB) over the last year the last year (%) (%) (%) Business of monitor terminal products 4,459,014 4,232,516 5.08% 41.74% 43.54% -18.96% Business of display devices -Thin film transistor liquid 5,973,178 5,452,935 8.71% 5.27% 19.54% -55.57% Business of small-sized display 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: related 2,215,584 2,208,108 －－ －－ －－ －－ transactions Pricing rules for related Price of transaction between the Company and related companies was determined transactions according to the market price. Necessity and durative the continuing connected transactions are in the ordinary and usual course of business of of related transactions the company, on normal commercial terms, are fair and reasonable and in the interests of the shareho lders 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 2004 Increase/decrease in income from main RMB’000 operations over the last year (%) PRC Mainland ６１３３４３ ２７．２７ Republic of ２４４２９４ －１４．６７ Korea Taiwan ４８４２５ －６４．０５ U.S.A. ２９００８８ ２０４．４７ Germany ４８０２１ －５９．９１ Other European １２４４１７１ １１．２８ countries 6.4 Particulars about the customers of purchase and sales Unit: RMB’ 0000 Total amount of purchase of the top five ３０２２１９ Proportion in the total amount of ２７．１０％ suppliers purchase Total amount of sales of the top five ５０４１６６ Proportion in the total amount of ４０．５２％ sales customers sales 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 ２２７９５ Proportion in net profit of ６４．４５％ in the period listed company in the period listed company Share-holding Business scope Design, manufacture and sales of various monitors, main company products: CRT monitor, TFT-LCD and TFT liquid crystal TV Net profit Name of share-holding company Beijing·Matsushita Color CRT Co., Ltd. Investment earnings contributed ８７８２ Proportion in net profit of ２４．８３％ in the period listed company Share-holding Business scope Production of CRT used in color TVs and CDT used in color company monitors, sales of self-produced products and providing service 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 Module 184.83 million) (approximately project RMB 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 of tation or party (yes or signing not no) agreement) Beijing Municipal Ｊａｎ， ２００４ Yes No Administration ４５０．００ Ｓｕｒｅｔｙｓｈｉｐ Ａｐｒｉｌ，２００６ &Communications Card 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 Selling products and providing Purchasing products and accepting service to related parties service to related parties Transaction Proportion in the Transa ction Proportion in the amount same kind of amount same kind of transaction amount transaction amount TPV Technology ２７７，０９２．００ ２２．２７％ ２８，９９８．００ ２．６０％ Limited Beijing Matsushita ９，９０４．００ ０．８０％ ０．００ ０．００％ Color CRT Co., Ltd. Beijing Orient Mosler Security Technology ３４５．００ ０．０３％ ０．００ ０．００％ Systems Co., Ltd. Beijing Nissin Electronics Precision ４１８．００ ０．０３％ ０．００ ０．００％ Component Co., Ltd. Beijing Nittan ２５９．００ ０．０２％ ０．００ ０．００％ Electronics Co., Ltd. Beijing Electronic ２２５．００ ０．０２％ ０．００ ０．００％ Holdings LTD. Co., Beijing Orient Investment and １４．００ ０．００％ ４５．００ ０．００％ Development Co., Ltd Beijing Oriental ３６．００ ０．００％ ０．００ ０．００％ Software Co., Ltd BOE Land Co., Ltd. ３６．００ ０．００％ ０．００ ０．００％ Beijing Orient Electronic Industry ０．００ ０．００％ １２．００ ０．００％ Co., Ltd 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 Balance Occurred Balance amount amount Beijing Matsushita Color ５６４．１４ ２，２１１．１９ ２５．６０ ２５．６０ CRT Co., Ltd. TPV Technology Limited １８，０３８．３６ ４６，３１９．９６ ４，２００．３０ １０，４７２．９４ Beijing Orient Mosler Security Technology １２．１５ ２２２．６５ ０．００ ０．００ Systems Co., Ltd. Hyundai LCD, Inc. １４，５３４．３５ １４，５３４．３５ １４，１８４．１７ １４，１８４．１７ Beijing Orient Electronic Industry ０．００ ０．００ ９６６．０６ ９６６．０６ Development Co., Ltd. Beijing Orient Investment ３４６．６９ ４９１．１９ ９０．４０ ９０．４０ and Development Co., Ltd Beijing Star City Real ４，３００．６４ ７，３０５．３１ ０．００ ０．００ Estate Development Co., Ltd. Beijing Intelligence & Science Technology ０．００ ４８５．９０ ０．００ ０．００ Development Co., Ltd. Beijing Orient Electronic ０．００ ０．００ １．３０ １．３０ Industry Co., Ltd Beijing BOE YAMATO ０．００ ０．００ ３６．９９ ３６．９９ Photoelectron Co., Ltd. Beijing BOE Digital ０．００ ５７．３３ ０．００ ０．００ Technology Co., LTD. Beijing Nittan Electronics ０．００ ０．００ ０．００ １．０８ Co., Ltd. BOE Technology Co., ０．００ ０．００ １．７７ １．７７ LTD. Shenzhen Evergreat ０．００ ３７．３９ ０．００ ０．００ Industrial Co., Ltd. Beijing Orient Mould ６．８２ ４０２．４４ ０．００ ０．００ Factory 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 of This year times Presence in Entrusted Absence Notes Independent of attending the person presence (Times) Directors Board meeting (times) 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 12 th 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 13 th meeting of the 3rd 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 ProfitAppropriation 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 4ht 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 3rd 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, 2004. 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 18 8,009 679,147 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 36 4,227 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 share Basic 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 13,89 3 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 assets Inventories 18 1,127,066 1,252,508 Receivables and prepayments 19 2,342,557 2,309,090 Convertible bonds –current portion 44,031 - Cash and cash equivalents 21 1,834,288 2,251,459 5,347,942 Current liabilities Trade and other payables 22 3,188,147 2,433,656 Current tax liabilities 7,172 13,530 Borrowings 23 5,506,259 4,249,483 Provisions 28 43,994 25,999 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 CONSOLIDATED BALANCE SHEET (CONTINUED) AS AT 31 DECEMBER 2004 (Expressed in Renminbi thousands) 2004 2003 (As restated) Notes RMB’000 RMB’000 Total assets less current liabilities 9,361,186 5,510,138 Non-current liabilities Borrowings 23 2,503,381 1,766,291 Deferred tax liabilities 26 15 8,383 Post-employment benefit obligations 27 19,685 14,643 Other non-current liabilities 25 1,158,748 641,357 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 shares 31 1,463,797 659,465 Share premium 2,284,812 1,040,984 Other reserves 32 696,414 406,358 Retained earnings 709,361 447,055 5,154,384 2,553,862 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEAR ENDED 31 DECEMBER 2004 (Expressed in Renminbi thousands) Ordinary Share Other Retained shares premium reserves earnings Total (Note 31) (Note 31) (Note 32) Balance at 31 December 2002 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 - - - 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 2003 As previously reported 659,465 1,040,984 423,166 445,465 2,569,080 Prior year adjustment arising from 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 premium to 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 Amortisati on 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 (As restated) Notes RMB’000 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) Net de crease in cash and cash equivalents (635,626) (61,071) 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