Crypto Flow Technology Limited — Earnings Release 2004

May 14, 2004

GEM

WAFER SYSTEMS<08198> - Results Announcement (Q1, 2004, Summary)

Wafer Systems Limited announced on 14/05/2004:
(stock code: 08198 )

Year end date :31/12/2004
Currency :HKD
Auditors' report :N/A
1st 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 31/03/2004     to 31/03/2003
                                             $'000             $'000

Turnover : 40,493 58,113
Profit/(Loss) from Operations : (596) 1,843
Finance cost : (382) (828)
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 : (987) 1,015
% Change Over the Last Period : N/A
EPS / (LPS)
Basic (in dollar) : (HKD 0.0034) HKD 0.0036
Diluted (in dollar) : N/A N/A
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit (Loss) after ETD Items : (987) 1,015
1st Quarter Dividends per Share : NIL NIL
(specify if with other options) : N/A N/A
B/C Dates for 1st 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

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.

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 Standard issued
by the Hong Kong Society of 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.

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 as the
Group had no assessable profit for the three months ended
31 March 2004 and its corresponding period in 2003.

PRC income tax has not been provided for the three months
ended 31 March 2004 and its corresponding period in 2003 as
the Company's PRC subsidiaries had no assessable profit or
were within their tax exemption period.

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

1. (Loss)/earnings per share

The calculation of basic (loss)/earnings per share for the three months
ended 31 March 2004 is based on the unaudited net loss attributable
to shareholders of approximately HK$987,000 (2003: net
profit of approximately HK$1,015,000) and on the weighted
average number of approximately 289,945,000 shares
(2003: approximately 282,268,000 shares) in issue during the
period.

Diluted (loss)/earnings per share has not been presented for the three
months ended 31 March 2004 and its corresponding period in 2003
since the effect is anti-dilutive.