Crypto Flow Technology Limited — Earnings Release 2006

May 12, 2006

GEM

WAFER SYSTEMS<08198> - Results Announcement (Q1, 2006, Summary)

Wafer Systems Limited announced on 12/5/2006:
(stock code: 08198 )

Year end date :31/12/2006
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 01/01/2006   from 01/01/2005
                                     to 31/03/2006     to 31/03/2005
                                             $'000             $'000

Turnover : 46,358 152,048
Profit/(Loss) from Operations : (3,141) 1,640
Finance cost : (749) (803)
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 : (3,890) 778
% Change Over the Last Period : N/A
EPS / (LPS)
Basic (in dollar) : (HKD 0.0134) HKD 0.0027
Diluted (in dollar) : N/A HKD 0.0027
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit (Loss) after ETD Items : (3,890) 778
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
(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 applicable accounting 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 2005.

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 represent PRC income tax which is calculated at rates
applicable to respective PRC subsidiaries.

No provision for Hong Kong profits tax has been made as the Group
had no assessable profit for the three months ended 31 March 2006
and its 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 its 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.

(5) (Loss) earnings per share

The calculation of basic (loss) earnings per share for the three months
ended 31 March 2006 is based on the unaudited loss attributable to
equity holders of the parent of approximately HK$3,890,000 (2005:
profit of approximately HK$778,000) and on the weighted average
number of approximately 289,945,000 ordinary shares (2005:
approximately 289,945,000) in issue during the period.

Diluted loss per share has not been presented for the three months
ended 31 March 2006 since the effect is anti-dilutive.

The calculation of the diluted earnings per share for the three months
ended 31 March 2005 is based on the net profit attributable to equity
holders of the parent of approximately HK$778,000 and on the
weighted average number of approximately 289,946,000 ordinary
shares.