China Information Technology Development Limited — Earnings Release 2004

Mar 24, 2005

GEM

XTEAM SOFTWARE<08178> - Results Announcement

Xteam Software International Limited announced on 23/03/2005:
(stock code: 08178 )
Year end date: 31/12/2004
Currency: HKD
Auditors' Report: Unqualified

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

                                                    (Audited   )
                                 (Audited   )       Last
                                 Current            Corresponding
                                 Period             Period
                                 from 01/04/2004    from 01/04/2003
                                 to 31/12/2004      to 31/03/2004
                           Note  ('000      )       ('000      )

Turnover 3 : 51,739 26,823
Profit/(Loss) from Operations : 12,589 (31,944)
Finance cost : (198) (36)
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 : 11,297 (33,722)
% Change over Last Period : N/A %
EPS/(LPS)-Basic (in dollars) 5 : 0.0051 (0.0520)
-Diluted (in dollars) : N/A (0.0519)
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit/(Loss) after ETD Items : 11,297 (33,722)
Final Dividend 6 : N/A N/A
per Share
(Specify if with other : N/A N/A
options)

B/C Dates for
Final 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 : Jason Mak
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 financial statements have been prepared in accordance with
   accounting policies generally accepted in Hong Kong and under the
   historical cost convention and in compliance with the Companies
   Ordinance.

The accounting policies and methods of computation used in the
preparation of the financial statements for the nine months ended
31st December, 2004 are consistent with those adopted in the
financial statements for the twelve months ended 31st March, 2004
except that the Group has early adopted certain new and revised
Hong Kong Financial Reporting Standards ("HKFRSs") issued by the
Hong Kong Institute of Certified Public Accountants up to 31st
December, 2004 pertinent to its operations. The applicable HKFRSs
are set out below.

HKAS 36 Impairment of Assets
HKAS 38 Intangible Assets
HKFRS 3 Business Combinations

The early adoption of HKFRS 3, HKAS 36 and HKAS 38 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.

• Change of financial year end date
  During the period, the Company's financial year end date has been
  changed from 31st March to 31st December and these financial
  statements will cover a period of nine months instead of twelve
  months.

• 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.

• 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
   TThe basic earnings per share is calculated based on the Group's
   profit attributable to shareholders of HK$11,297,000 (twelve months
   ended 31st March, 2004: loss of approximately HK$33,722,000 (restated))
   and on the weighted average of 2,231,313,416 (twelve months ended 31st
   March, 2004: 648,122,801) ordinary shares in issue during the period.

Diluted earnings per share amount for the nine months ended 31st
December, 2004 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 649,648,509
ordinary shares, which was the weighted average number of ordinary
shares in issue during the prior year plus the weighted average of
1,525,708 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 a final dividend for the
period (twelve months ended 31st March, 2004: Nil).

1. Comparative amounts

Due to the early adoption of HKFRS3, HKSA36 and HKSA38 during the
current period, a prior year adjustment has been made and certain
comparative amounts have been restated to conform with the current
period's presentation. In addition, as a result of the change of
financial year end date from 31st March to 31st December, the comparative
amounts for the consolidated profit and loss account, consolidated
statement of changes in equity, consolidated cash flow statement
and related notes may not be comparable.