09:08     CHINA ORIENTAL<00581> - Results Announcement (2)                    

                                                                              
    (b) Consolidation                                                         
                                                                              
    The consolidated accounts include the accounts of the Company and its     
    subsidiaries made up to 31 December 2004.                                 
                                                                              
    Subsidiaries are those entities in which the Group, directly or           
    indirectly, controls more than one half of the voting power; has the power
    to govern the financial and operating policies; to appoint or remove the  
    majority of the members of the board of directors; or to cast majority of 
    votes at the meetings of the board of directors.                          
                                                                              
    Except for those companies comprising the Group upon the Reorganisation,  
    which have been accounted for on the merger basis, as described in remark 
    2(a) above, the results of subsidiaries acquired or disposed of during the
    year are included in the consolidated profit and loss account from the    
    effective date of acquisition or up to the effective date of disposal, as 
    appropriate.                                                              
                                                                              
    The gain or loss on the disposal of a subsidiary represents the difference
    between the proceeds of the sale and the Group's share of its net assets  
    together with any unamortised goodwill or negative goodwill on            
    acquisition.                                                              
                                                                              
    All significant intercompany transactions and balances within the Group   
    are eliminated on consolidation.                                          
                                                                              
    Minority interests represent the interests of outside shareholders in the 
    operating results and net assets of subsidiaries.                         
                                                                              
    In the Company's balance sheet, the investments in subsidiaries are stated
    at cost less provision for impairment losses.  The results of subsidiaries
    are accounted for by the Company on the basis of dividends received and   
    receivable.                                                               
                                                                              
    3.      EARNINGS PER SHARE                                                
    The basic earnings per share is calculated based on the profit            
    attributable to shareholders of RMB 1,176,608,000 and weighted average of 
    2,769,506,849 shares in issue during the year.                            
                                                                              
    The comparative basic earnings per share is calculated based on the profit
    attributable to shareholders of RMB 1,076,290,000 and on an aggregate of  
    2,100,000,000 shares, comprising 1,000,000 shares issued immediately after
    incorporation of the Company and 2,099,000,000 shares issued upon the     
    Reorganisation, which were deemed to have been in issue since 1 January   
    2003.                                                                     
                                                                              
    The diluted earnings per share is not presented as the Company has no     
    dilutive potential ordinary shares as at 31 December 2004 (2003: Nil).    
                                                                              
    For more details, please refer to the press announcement today.