China Information Technology Development Limited — Earnings Release 2004

Aug 11, 2003

GEM

XTEAM SOFTWARE<08178> - Results Announcement

Xteam Software International Limited announced on 11/08/2003:
(stock code: 08178 )
Year end date: 31/03/2004
Currency: HKD
Auditors' Report: N/A
Review of Interim Report by: Audit Committee

Important Note:

This result announcement form only contain extracted information
from and should be read in conjunction with the detailed results
announcement of the issuer, which can be view on the GEM website
at http://www.hkgem.com

                                                    (Unaudited )
                                 (Unaudited )       Last
                                 Current            Corresponding
                                 Period             Period
                                 from 31/03/2003    from 31/03/2002
                                 to 30/06/2003      to 30/06/2002 
                           Note  ('000      )       ('000      )

Turnover 2 : 2,913 7,634
Profit/(Loss) from Operations : (4,062) 2,596
Finance cost : 6 (30)
Share of Profit/(Loss) of
Associates : N/A N/A
Share of Profit/(Loss) of
Jointly Controlled Entities : N/A N/A
Profit/(Loss) after Tax & MI : (4,229) 2,566
% Change over Last Period : N/A %
EPS/(LPS)-Basic (in dollars) 4 : (0.72) 0.47
-Diluted (in dollars) 4 : (0.72) 0.41
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit/(Loss) after ETD Items : (4,229) 2,566
1st Quarterly Dividend : N/A N/A
per Share
(Specify if with other : N/A N/A
options)

B/C Dates for
1st Quarterly Dividend : N/A
Payable Date : N/A
B/C Dates for (-)
General Meeting : N/A
Other Distribution for : N/A
Current Period

B/C Dates for Other
Distribution : N/A

For and on behalf of 
Xteam Software International Limited

Name : Mak To Wai
Title : Director

Responsibility statement

The directors of the Company (the "Directors") as at the date hereof
hereby collectively and individually accept full responsibility for
the accuracy of the information contained in this results announcement
form (the "Information") and confirm, having made all reasonable
inquiries, that to the best of their knowledge and belief the
Information are accurate and complete in all material respects and
not misleading and that there are no other matters the omission of
which would make the Information herein inaccurate or misleading. The
Directors acknowledge that the Stock Exchange has no responsibility
whatsever with regard to the Information and undertake to indemnify
the Exchange against all liability incurred and all losses suffered
by the Exchange in connection with or relating to the Information.

Remarks:

1. Basis of presentation
   The principal accounting policies adopted in preparing the unaudited
   consolidated results conform with all applicable Statements of
   Standard Accounting Practice (��SSAPs��) and Interpretations issued
   by the Hong Kong Society of Accountants and accounting principles
   generally accepted in Hong Kong. The 2003/2004 first quarterly
   report also complies with the disclosure provisions of the
   GEM Listing Rules.
   The Company is an investment holding company. The Group is
   principally engaged in software development and provision of the
   Chinese Linux operating system with kernel rewritten to cater for
   Chinese users and software based on the Linux operating platform
   for various hardware appliances including servers and personal
   computers in the PRC. It also provides technical support and
   after-sales services to its customers.

2. Turnover and revenue
   Turnover represents the invoiced value of goods sold and services
   rendered, net of value added tax and business tax in the PRC, and
   after allowances for goods returned and trade discounts.

3. Taxation
   (i) No provision for profits tax has been made as no income was
   earned or derived from Hong Kong during the period.
   (ii) No provision for profits tax has been provided in respect of
   the Cayman Islands or the British Virgin Islands as there were no
   assessable tax for the year in those jurisdictions. The tax
   expenses during the period represents tax charges on the
   assessable profits of certain subsidiaries operating in the PRC
   calculated at the applicable rates.
   (iii) No provision for deferred tax has been made as the Group
   had overall deferred tax benefits which will be recognized when
   realization of such benefits is assured beyond reasonable doubt.

4. (Loss)/earnings per share
   The calculation of basic loss per share for the three months ended
   30th June, 2003 is based on the Group��s unaudited loss after tax
   of approximately HK$4,229,000 (2002: profit of approximately
   HK$2,566,000), and on the weighted average number of 588,327,938
   shares in issue during the period (2002: 550,253,233).
   The calculation of diluted loss per share for the three months
   ended 30th June, 2003 is based on the Group��s unaudited loss after
   tax of approximately HK$4,229,000 (2002: profit of approximately
   HK$2,566,000), and the weighted average number of 588,327,938 shares
   (2002: 622,282,149 shares), taking into account the options granted
   to certain executive directors of the Company and employees of the
   Group to subscribe for a total of 91,000,000 shares of the Company
   under the Pre-IPO Share Option Scheme of the Company.