Crypto Flow Technology Limited — Earnings Release 2004

Nov 15, 2004

GEM

WAFER SYSTEMS<08198> - Results Announcement (Q3, 2004, Summary)

Wafer Systems Limited announced on 12/11/2004:
(stock code: 08198 )

Year end date :31/12/2004
Currency :HKD
Auditors' report :N/A
3rd Quarterly Report Reviewed 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 01/01/2004   from 01/01/2003
                                     to 30/09/2004     to 30/09/2003
                                             $'000             $'000

Turnover : 208,488 127,919
Profit/(Loss) from Operations : 3,805 3,082
Finance cost : (1,885) (2,599)
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 : 1,896 483
% Change Over the Last Period : +292.55%
EPS / (LPS)
Basic (in dollar) : HKD 0.0065 HKD 0.0017
Diluted (in dollar) : HKD 0.0065 N/A
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit (Loss) after ETD Items : 1,896 483
3rd Quarter Dividends per Share : NIL NIL
(specify if with other options) : N/A N/A
B/C Dates for 3rd Quarter 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
(bdi: both days inclusive)

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 unaudited consolidated results have been prepared in
accordance with accounting principles generally accepted
in Hong Kong and comply with the Hong Kong Financial
Reporting Standards issued by the Hong Kong Institute
of Certified Public Accountants.

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 2003.

The unaudited consolidated results have been reviewed
by the audit committee of the Company.

1. Turnover

Turnover represents the aggregate of the net amounts received and
receivable from third parties in connection with the provision of
network infrastructure solutions, network professional services
and network software.

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

2. Taxation

No provision for Hong Kong profits tax has been made for
the three months and nine months ended 30 September 2004
as the Group had no assessable profit arising in or derived
from Hong Kong (2003: Nil).

Pursuant to the relevant laws and regulations in the PRC,
the Company's PRC subsidiaries are entitled to exemption
from PRC income tax for two or three years commencing
from their first profit-making year of operation and thereafter,
these PRC subsidiaries will be entitled to a 50% relief from
PRC income tax for the following three years. During the
Review Period, one of the Company's PRC subsidiaries is
within its tax exemption period, the rest are within their
50% tax relief period.

No deferred tax asset has been recognized in respect of
the unutilized tax losses due to the unpredictability of
future profit streams.

1. Earnings per share

The calculation of basic earnings per share for the three months
and the nine months ended 30 September 2004 is based on the
unaudited net profit attributable to shareholders of approximately
HK$1,382,000 (2003: net loss of HK$582,000) and approximately
HK$1,896,000 (2003: HK$483,000), respectively and on the weighted
average number of approximately 289,945,000 (2003: 289,945,000)
shares and approximately 289,945,000 (2003: 286,092,000) shares,
respectively, in issue during the period.

The calculation of the diluted earnings per share for the nine months
ended 30 September 2004 is based on the net profit attributable to
shareholders of approximately HK$1,896,000 and on the weighted
average number of approximately 290,215,000 shares.

Diluted earnings per share has not been presented for the three
months ended 30 September 2004 and for the three months and
nine months ended 30 September 2003 since the effect is
anti-dilutive.