China Information Technology Development Limited — Earnings Release 2003

Jun 27, 2003

GEM

XTEAM SOFTWARE<08178> - Results Announcement (Final, 2002/2003, Summary)

Xteam Software International Limited announced on 26/06/2003:
(stock code: 08178)

Year end date :31/03/2003
Currency :HKD
Auditors' report :Unqualified
Review of Quarterly Report by :Audit Committee & Auditors

Important Note :

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

                                       (Audited)         (Audited)
                                         Current              Last 
                                                     Corresponding
                                          Period            Period
                                 from 01/04/2002   from 01/04/2001
                                   to 31/03/2003     to 31/03/2002
                                           $'000             $'000

Turnover : 26,694 21,835
Profit/(Loss) from Operations : (10,127) 3,714
Finance cost : (200) (236)
Share of Profit/(Loss) of Associates : N/A N/A
Share of Profit/(Loss) of Jointly
Controlled Entites : N/A N/A
Profit/(Loss) after Taxation & MI : (10,589) 3,478
% Change Over the Last Period : N/A
EPS / (LPS)
Basic (in dollar) : (HKD 0.0184) HKD 0.0072
Diluted (in dollar) : (HKD 0.0175) HKD 0.0068
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit (Loss) after ETD Items : (10,589) 3,478
Final Dividends per Share : NIL NIL
(specify if with other options) : N/A N/A
B/C Dates for Final Dividends : N/A
Payable Date : N/A
B/C Dates for (-) General Meeting : N/A
Other Distribution for Current Period : NIL
B/C Dates for Other Distribution : N/A

                                   For and on behalf of
                            Xteam Software International Limited
                        Signature :
                             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 whatsoever 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. Corporate information

The Company was incorporated in the Cayman Islands on 24 May 2001
as an exempted company with limited liability under the Companies
Law (2001 Second Revision) of the Cayman Islands. The shares of the
Company have been listed on the Growth Enterprise Market ("GEM") of
The Stock Exchange of Hong Kong Limited ("Stock Exchange") since 11
December 2001.

Pursuant to a group re-organisation (the "Reorganisation") in
preparation for the listing of the Group on GEM, the Company became
the ultimate holding company of the subsidiaries now comprising the
Group. Details of the Reorganisation and corporate structure were
set out in the prospectus of the Company dated 30 November 2001
("Prospectus").

During the year, the Group was 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 provided
technical support and after-sales services to its customers.

1. Revenue and turnover

Revenue recognised during the year are as follows:-

                                                     2003      2002
                                                  HK$'000   HK$'000

Turnover
Sales of computer software 21,596 21,605
Income from provision of system integration
and related services 4,500 -
Provision of software development and related
services 598 230
-------- --------
26,694 21,835
-------- --------

Other revenue
Bank interest income 138 119
Sundry income 404 40
-------- --------
542 159
-------- --------
27,236 21,994
======== ========

1. (Loss)/profit from operating activities

(Loss)/profit from operating activities is arrived at after
charging:

                                                     2003      2002
                                                  HK$'000   HK$'000

Amortisation of goodwill 253 -
Amortisation of intangible assets 4,625 2,702
Auditors' remuneration 400 335
Bad and doubtful debts (recovery) 24 (1,126)
Depreciation of fixed assets 485 452
Loss on disposal of fixed assets - 168
Operating lease rentals in respect of land and
buildings 1,406 1,508
Staff costs:
Wages and salaries (including directors' emoluments) 6,383 4,690
Contributions to retirement/pension schemes and
other benefits 308 578
======== ========

1. Taxation

The amount of taxation in the consolidation income statement
represents:

                                                     2003      2002
                                                  HK$'000   HK$'000

Hong Kong profit tax (Note (a)) - -
Overseas taxation (Note (b)) 117 -
-------- --------
117 -
======== ========

(a) No provision for profits tax has been made as no income was earned
or derived from Hong Kong during the year.

(b) No provision for profits tax has been provided in the Cayman
Islands and the British Virgin Islands as there were no assessable
profits for the year in those jurisdictions. Overseas taxation
represented tax charges on the assessable profits of certain
subsidiaries operating in the PRC calculated at the applicable
rates.

(c) No provision for deferred tax has been made as the Group and
overall deferred tax benefits which will be recognised when
realisation of such benefit is assured beyond reasonable doubt.

1. Loss for the year attributable to shareholders

The net loss attributable to shareholders dealt with in the financial
statements of the Company amounted to HK$2,670,000 (2002:
HK$1,156,000).

1. (Loss)/earnings per share

The basic (loss)/earnings per share is calculated based on the
Group's (loss)/earnings attributable to shareholders of
HK$10,589,000 (2002: profit of HK$3,478,000) and on the weighted
average of 574,075,967 (2002: 481,335,823) ordinary shares in issue
during the year.

The diluted earnings per share is based on 604,696,820 (2002:
481,335,823) ordinary shares which is the weighted average number
of ordinary shares in issue during the year plus the weighed average
of 30,620,853 (2002: 28,561,411) ordinary shares deemed to be issued
if all outstanding options had been exercised at the date they were
granted.