Crypto Flow Technology Limited — Earnings Release 2005

Nov 10, 2005

GEM

WAFER SYSTEMS<08198> - Results Announcement (Q3, 2005, Summary)

Wafer Systems Limited announced on 10/11/2005:
(stock code: 08198 )

Year end date :31/12/2005
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) (Restated)
                                          Current Last Corresponding
                                           Period            Period
                                   from 01/01/2005   from 01/01/2004
                                     to 30/09/2005     to 30/09/2004
                                             $'000             $'000

Turnover : 292,615 208,488
Profit/(Loss) from Operations : 3,168 3,592
Finance cost : (1,995) (1,885)
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 : 1,179 1,683
% Change Over the Last Period : -29.95%
EPS / (LPS)
Basic (in dollar) : HKD 0.0041 HKD 0.0058
Diluted (in dollar) : N/A HKD 0.0058
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit (Loss) after ETD Items : 1,179 1,683
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 financial results have been prepared in
accordance with Hong Kong Financial Reporting Standards issued
by the Hong Kong Institute of Certified Public Accountants
("HKICPA") and the applicable disclosure requirements of the Rules
Governing the Listing of Securities on the Growth Enterprise
Market of the Stock Exchange of Hong Kong Limited.

During the Review Period, the Group has adopted all of the new and
revised Hong Kong Financial Reporting Standards and Hong Kong
Accounting Standards ("new HKFRSs") issued by the HKICPA
which are effective for accounting periods beginning on or after
1 January 2005.

Profit for the period for the nine months ended 30 September 2005 and
30 September 2004 has been reduced by approximately HK$115,000
and HK$212,000, respectively as the result of the adoption of FRS2
Share-based Payments.

Except for the above, the adoption of these new HKFRSs did not
result in material changes to the Group's principal accounting
policies and basis of preparation adopted in its annual financial
statements for the year ended 31 December 2004.

The unaudited consolidated results have been reviewed by the Audit
Committee.

(2) 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.

(3) All of the Group's operations are classed as continuing.

(4) Taxation

The charges represented PRC income tax that were calculated at
rates applicable to the respective PRC subsidiaries.

No provision for Hong Kong profits tax has been made as the Group
had no assessable profit for the nine months ended 30 September
2005 and its corresponding period in 2004.

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, the Company has one PRC
subsidiary within its tax exemption period and one PRC subsidiary
within its 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.

(5) Earnings per share

The calculation of basic earnings per share for the three months and
the nine months ended 30 September 2005 is based on the unaudited
profit attributable to shareholders of the Company of approximately
HK$317,000 (2004: HK$1,310,000) and approximately
HK$1,179,000 (2004: HK$1,683,000) respectively and on the
weighted average number of approximately 289,945,000 (2004:
289,945,000) shares in issue during the period.

Diluted earnings per share has not been presented for the three
months and nine months ended 30 September 2005 and for the
three months ended 30 September 2004 since the effect is anti-
dilutive.

The calculation of the diluted earnings per share for nine months
ended 30 September 2004 is based on the profit attributable to
shareholders of the Company of approximately HK$1,683,000 and
on the weighted average number of approximately 290,215,000
shares.