Crypto Flow Technology Limited — Earnings Release 2006

Aug 14, 2006

GEM

WAFER SYSTEMS<08198> - Results Announcement (Q2, 2006, Summary)

Wafer Systems Limited announced on 11/08/2006:
(stock code: 08198 )

Year end date :31/12/2006
Currency :HKD
Auditors' report :N/A
2nd 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 01/01/2006   from 01/01/2005
                                     to 30/06/2006     to 30/06/2005
                                             $'000             $'000

Turnover : 140,948 218,930
Profit/(Loss) from Operations : 2,823 2,211
Finance cost : (1,811) (1,355)
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 : 1,012 862
% Change Over the Last Period : +17.40%
EPS / (LPS)
Basic (in dollar) : HKD 0.0035 HKD 0.003
Diluted (in dollar) : N/A N/A
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit (Loss) after ETD Items : 1,012 862
2nd Quarter Dividends per Share : NIL NIL
(specify if with other options) : N/A N/A
B/C Dates for 2nd 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 condensed financial statements have been prepared in accordance
with Hong Kong Accounting Standard No.34 "Interim Financial
Reporting" 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.

The accounting policies adopted in preparing the condensed
consolidated financial report were in consistent with those applied for
the annual financial report for the year ended 31 December 2005.

The condensed financial statements are unaudited but have been
reviewed by the audit committee of the Company.

(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

No provision for Hong Kong and overseas profits tax has been made as
the Group had either no assessable profit or had tax losses brought
forward to set off the estimated assessable profit for the six months
ended 30 June 2006 and the corresponding period in 2005.

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 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.

(5) Earnings per share

The calculation of basic earnings per share for the three months and the
six months ended 30 June 2006 is based on the unaudited profit
attributable to equity holders of the parent of approximately
HK$4,902,000 (2005: HK$84,000) and approximately HK$1,012,000
(2005: HK$862,000) respectively and on the weighted average
number of approximately 289,945,000 (2005: 289,945,000) shares in
issue during the period.

Diluted earnings per share has not been presented for the three months
and six months ended 30 June 2006 since the effect is anti-dilutive.