Crypto Flow Technology Limited — Earnings Release 2003

Mar 25, 2004

GEM

WAFER SYSTEMS<08198> - Results Announcement (Final, 2003, Summary)

Wafer Systems Limited announced on 25/03/2004:
(stock code: 08198)

Year end date :31/12/2003
Currency :HKD
Auditors' report :Unqualified
Interim Report Reviewed by :N/A

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

                                         (Audited)         (Audited)
                                           Current              Last 
                                                       Corresponding
                                            Period            Period
                                   from 01/01/2003   from 01/01/2002
                                     to 31/12/2003     to 31/12/2002
                                             $'000             $'000

Turnover : 165,879 180,333
Profit/(Loss) from Operations : 4,349 (4,214)
Finance cost : (3,207) (2,186)
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 : 857 (5,849)
% Change Over the Last Period : N/A
EPS / (LPS)
Basic (in dollar) : HKD 0.003 (HKD 0.024)
Diluted (in dollar) : HKD 0.0029 N/A
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit (Loss) after ETD Items : 857 (5,849)
Final Dividends per Share : NIL NIL
(specify if with other options) : N/A N/A
B/C Dates for Final 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 is incorporated in the Cayman Islands as an exempted
company with limited liability. The shares of the Company were
listed on the Growth Enterprise Market of The Stock Exchange of
Hong Kong Limited (the "Stock Exchange") on 17th May, 2002.

The financial statements have been prepared under the historical
cost convention and in accordance with accounting principles
generally accepted in Hong Kong. The principal accounting
policies adopted are as follows.

The consolidated financial statements incorporate the financial
statements of the Company and its subsidiaries made up to 31
December each year. All significant inter-company transactions
and balances within the Group are eliminated on consolidation.

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
   2002 2003
   HK$'000 HK$'000
   Overprovision of H.K. Profits Tax
   in prior years - 747
   PRC income tax (285) (196)
   Total taxation (charge) credit (285) 551

No provision for Hong Kong Profits Tax has been made in the
financial statements as the Group had no assessable profit for the
year. 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 year, only one of the
Company's subsidiaries is within its 50% tax relief period, the rest
are within their exemption period. No deferred tax asset has been
recognised in respect of the unutilized tax losses due to the
unpredictability of future profit streams. These tax losses may be
carried forward indefinitely.

1. EARNINGS (LOSS) PER SHARE

The calculation of the basic and diluted earnings (loss) per share is
based on the following data:
2003 2002
Earnings:
Net profit (loss) attributable to
shareholders for the purposes of
basic and diluted earnings (loss)
per share HK$857,000 HK$(5,849,000)

Number of shares:
Weighted average number of ordinary
shares for the purposes of basic
earnings (loss) per share 287,084,369 243,625,000
Effect of dilutive potential ordinary
shares - warrants 2,646,915 N/A

Weighted average number of ordinary
shares for the purposes of diluted
earnings (loss) per share 289,731,284 243,625,000

The computation of diluted earnings per share does not assume the
conversion of the Company's outstanding convertible bonds for
both years since their exercise would result in an increase in
earnings per share from continuing ordinary operations for 2003
and a decrease in loss per share from continuing ordinary
operations in 2002. The effect of share options is excluded from
the calculation of diluted earnings (loss) per share for both year
because the exercise price of the Company's share options is higher
than the average market price of ordinary shares for both years.

The computation of diluted earnings per share did not assume the
conversion of the Company's outstanding warrants for 2002 since
their exercise would result in a decrease in loss per share from
continuing ordinary operations for 2002.