China Information Technology Development Limited — Earnings Release 2005

May 12, 2005

GEM

XTEAM SOFTWARE<08178> - Results Announcement

Xteam Software International Limited announced on 11/05/2005:
(stock code: 08178 )
Year end date: 31/12/2005
Currency: HKD
Auditors' Report: N/A
Interim report reviewed 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 01/01/2005    from 01/01/2004
                                 to 31/03/2005      to 31/03/2004
                           Note  ('000      )       ('000      )

Turnover 2 : 9,406 1,691
Profit/(Loss) from Operations : 1,506 (23,746)
Finance cost : (115) (44)
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 : 1,102 (23,789)
% Change over Last Period : N/A %
EPS/(LPS)-Basic (in dollars) 4 : 0.0003 (0.0344)
-Diluted (in dollars) : N/A (0.0341)
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit/(Loss) after ETD Items : 1,102 (23,789)
1st Quarter Dividend 5 : N/A N/A
per Share
(Specify if with other : N/A N/A
options)

B/C Dates for
1st Quarter 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 : Company Secretary

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. Basis of presentation

The Hong Kong Institute of Certified Public Accountants ("HKICPA") has
converged all Hong Kong Financial Reporting Standards ("HKFRSs") with
International Financial Reporting Standards ("IFRSs") issued by the
International Accounting Standards Board at 1st January, 2005.
As a result, the HKICPA has aligned HKFRSs with the requirements of
IFRSs in all material respects. The unaudited financial statements
have been prepared in accordance with accounting principles generally
accepted in Hong Kong, accounting standards issued by the HKICPA, and
the disclosure requirements of the Rules Governing the Listing of
Securities on the Growth Enterprises Market of the Stock Exchange of
Hong Kong (the "GEM Listing Rules"). They have been prepared under
the historical cost convention.

In 2005, the Group has adopted all HKFRSs pertinent to its operations.
The applicable HKFRSs are set out below and the 2004 unaudited financial
statements have been restated in accordance with the relevant
requirements.

HKAS 1 Presentation of Financial Statements
HKAS 2 Inventories
HKAS 7 Cash Flow Statements
HKAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
HKAS 10 Events after Balance Sheet Date
HKAS 12 Income Taxes
HKAS 14 Segment Reporting
HKAS 16 Property, Plant and Equipment
HKAS 17 Leases
HKAS 18 Revenue
HKAS 19 Employee Benefits
HKAS 21 The Effects of Changes in Foreign Exchange Rates
HKAS 24 Related Party Disclosures
HKAS 27 Consolidated and Separate Financial Statements
HKAS 32 Financial Instruments: Disclosure and Presentation
HKAS 33 Earnings Per Share
HKAS 36 Impairment of Assets
HKAS 37 Provisions, Contingent Liabilities and Contingent Assets
HKAS 38 Intangible Assets
HKAS 39 Financial Instruments: Recognition and Management
HKFRS 2 Share-based Payments
HKFRS 3 Business Combinations

The accounting policies which have material impacts on the Group are set
out below:

HKFRS 2 requires an expense to be recognized where the Group buys goods
or services in exchange for shares or rights over shares, or in exchange
for other assets equivalent in value to a given number of shares or
rights over shares. HKFRS 2 requires the expensing of employees' and
directors' share options and other share-based incentives by using an
option-pricing model. The Group has taken advantage of the transitional
provisions of HKFRS2 in respect of equity-settled awards and has applied
HKDRS2 only to share options granted after 7th November, 2002 that had
not vested on or before 31st December, 2003.

The adoption of HKFRS 3, HKAS 36 and HKAS 38, which was also early
adopted in the audited financial statements for the nine months ended
31st December, 2004, has resulted in a change in the accounting policy
for goodwill. Prior to this, goodwill was:

• amortised on a straight-line basis over a period of not
  exceeding 20 years; and
• assessed for impairment at each balance sheet date.

In accordance with the provisions of HKFRS3:

• the Group ceased amortization of goodwill from 1st April, 2003;
• accumulated amortization as at 31st March, 2003 has been
  eliminated with corresponding decrease in the cost of goodwill;
• from the year ended 31st March, 2004 onwards, goodwill is
  tested annually for impairment, as well as when there are
  indications of impairment.

The adoption of other new HKFRSs does not result in substantial changes
to the Group's accounting policies except certain presentation and
disclosure of the financial statements would be affected on the 2005
half-year and annual reports.

1. Turnover

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.

1. Taxation

(i)No provision for Hong Kong 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 period 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)Certain of the subsidiaries in the PRC enjoy tax exemptions.

(iv)No deferred tax asset has been recognized due to the
unpredictability of future profit streams.

1. Earnings/(loss) per share

The basic earnings per share is calculated based on the Group's
profit attributable to shareholders of HK$1,102,000 (2004: loss of
approximately HK$23,789,000 (restated)) and on the weighted
average of 3,758,471,752 (2004: 693,007,938) ordinary shares
in issue during the period.

Diluted earnings per share amount for the three months ended
31st March, 2005 has not been disclosed as the outstanding options
had an anti-dilutive effect on the basis earnings per share for
the current period.

The comparative diluted earnings per share was based on
697,220,479 ordinary shares, which was the weighted average number
of ordinary shares in issue during the prior period plus the
weighted average of 4,212,541 ordinary shares deemed to be issued
if all outstanding options had been exercised at the date they were
granted.

1. Dividend

The Board does not recommend the payment of an interim dividend for
the period (2004: Nil).

1. Comparative amounts

Certain comparative amounts have been reclassified to conform with
current period's presentation.