Crypto Flow Technology Limited — Earnings Release 2002

Nov 12, 2002

GEM

WAFER SYSTEMS<08198> - Results Announcement (Q3, 2002, Summary)

Wafer Systems Limited announced on 12/11/2002
(stock codes: Ord: 08198)

Year end date :31/12/2002
Currency :HKD
Auditors' report :N/A
Review of 3rd Quarterly Report by :Audit Committee

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

                                    (Unaudited)      (Unaudited)
                                       Current    Last Corresponding
                                       Period           Period
                                   from 01/01/2002   from 01/01/2001
                                     to 30/09/2002     to 30/09/2001
                                             $'000             $'000

Turnover : 113,380 90,826
Profit/(Loss) from Operations : (3,851) 3,673
Finance cost : (2,110) (2,529)
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 : (6,552) 953
% Change Over the Last Period : N/A
EPS / (LPS)
Basic (in dollar) : (HKD 0.0289) HKD 0.0059
Diluted (in dollar) : N/A HKD 0.005
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit (Loss) after ETD Items : (6,552) 953
3rd Quarterly Dividends per Share : NIL NIL
(specify if with other options) : N/A N/A
B/C Dates for 3rd Quarterly 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
                                   Wafer Systems Limited
                        Signature :
                             Name :Pang Kin Man, Edmond
                            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 Company was incorporated in the Cayman Islands on 26 November 1998
   as an exempted company with limited liability under the Companies Law
   of the Cayman Islands. The Company's shares were listed on GEM on
   17 May, 2002.

The unaudited consolidated results have been prepared in accordance
with accounting principles generally accepted in Hong Kong and comply
with accounting standards issued by the Hong Kong Society of
Accountants.

In January 2002, the Group acquired approximately HK$5,200,000
non-current assets and adopted the following accounting policy:

Other non-current assets

Other non-current assets are stated at cost less accumulated
amortization and accumulation impairment losses. Amortization
is provided on a straight-line method over its estimated useful
life of three years.

Subject to the above, the principal accounting policies and basis of
preparation adopted for the preparation of the unaudited consolidated
results are consistent with those adopted by the Group in its
annual financial statements for the year ended 31 December 2001.

The unaudited consolidated results are unaudited but have been
reviewed by the Company's Audit Committee.

1. Turnover
   Turnover comprises (i) fees from fixed price contracts in connection
   with the sale of network equipment and software and the provision of
   related network infrastructure services, (ii) fees for the provision
   of network professional services, and (iii) sale of the Group's
   proprietary network software, after exclusion of value-added tax and
   deduction of business tax in Mainland China.

2. All of the Group's operations are classed as continuing.

3. Taxation
   Hong Kong profits tax has been provided at a rate of 16% (2001: 16%)
   on the estimated assessable profits during the periods under review.

Taxation arising in other jurisdictions is calculated at the rates
prevailing in the relevant jurisdictions

1. (Loss)/Earning per share
   The calculation of basic (loss)/earnings per share for the three
   months and the nine months ended 30 September 2002 is based on
   the unaudited (loss)/profit attributable to shareholders of
   approximately HK$(1,861,000) and approximately HK$(6,552,000)
   (three months and nine months ended 30 September 2001:
   approximately HK$292,000 and approximately HK$953,000,
   respectively) and on the weighted average number of
   approximately 282,268,000 shares and approximately 226,989,000
   shares respectively (2001: approximately 177,778,000 and
   approximately 160,803,000 respectively) in issue during the
   period.

Diluted loss per share has not been presented for the three
months and nine months ended 30 September 2002 since the effect
is anti-dilutive.

The calculation of the diluted earnings per share for the three
months and nine months ended 30 September 2001 is based on the
net profit attributable to shareholders of approximately
HK$292,000 and approximately HK$953,000, respectively, and on
the weighted average number of approximately 190,533,000 shares.