Crypto Flow Technology Limited — Earnings Release 2005

Mar 29, 2006

GEM

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

Wafer Systems Limited announced on 28/3/2006:
(stock code: 08198 )

Year end date :31/12/2005
Currency :HKD
Auditors' report :Unqualified

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) (Restated)
                                          Current Last Corresponding
                                           Period            Period
                                     from 1/1/2005     from 1/1/2004
                                     to 31/12/2005     to 31/12/2004
                                             $'000             $'000

Turnover : 368,250 269,688
Profit/(Loss) from Operations : 4,782 5,767
Finance cost : (2,707) (2,593)
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 : 1,443 2,736
% Change Over the Last Period : -47.26%
EPS / (LPS)
Basic (in dollar) : HKD 0.005 HKD 0.0094
Diluted (in dollar) : N/A HKD 0.0094
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit (Loss) after ETD Items : 1,443 2,736
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
(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) Application of Hong Kong Financial Reporting Standards
In the current year, the Group has applied, for the first time, a
number of new Hong Kong Financial Reporting Standards (HKFRSs),
Hong Kong Accounting Standards (HKASs) and Interpretations
(hereinafter collectively referred to as "new HKFRSs") issued
by the Hong Kong Institute of Certified Public Accountants
("HKICPA") that are effective for accounting periods beginning
on or after 1st January, 2005. The application of the new HKFRSs
has resulted in a change in the presentation of the consolidated
income statement, consolidated balance sheet and consolidated
statement of changes in equity. In particular, the presentation
of minority interest has been changed. The changes in presentation
have been applied retrospectively. The adoption of the new HKFRSs
has resulted in changes to the Group's accounting policies that
have an effect on how the results for the current and prior
accounting years are prepared and presented.

2) Basis of preparation
The consolidated financial statements have been prepared in
accordance with HKFRSs issued by the HKICPA. In addition,
the consolidated financial statements include applicable
disclosures required by the Rules Governing the Listing of
Securities on the Growth Enterprise Market of The Stock
Exchange and by the Hong Kong Companies Ordinance.

The consolidated financial statements have been prepared
under the historical cost basis.

3) 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.

4) Profit before taxation
Profit before taxation has been arrived at after charging:
2005 2004
HK$'000 HK$'000
(restated)
Directors' emoluments 1,561 1,557
Other staff's retirement benefits scheme
contributions 2,205 1,317
Other staff costs 15,971 15,974
Share-based payments expenses 68 177
Less: Staff costs capitalized in software
product development costs (1,988) (2,096)
--------- ---------
17,817 16,929
--------- ---------
Impairment loss on trade and retention
money receivables 3,685 2,435
Amortization of software product
development costs 2,076 1,989
Auditors' remuneration 470 440
Depreciation of property, plant
and equipment 2,355 3,308
Loss on disposal of property, plant
and equipment - 9
Operating lease rentals in respect of
land and buildings 2,729 2,630

and after crediting:

Exchange gain 674 -
Interest income 155 261
========= =========

5) Taxation
The charge represents PRC income tax which is calculated at
rates applicable to respective PRC subsidiaries.

No provision for Hong Kong Profits Tax has been made in the
financial statements as the Group had no assessable profit for the
year.

6) Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
2005 2004
(restated)
Earnings:
Profit attributable to shareholders
for the purposes of basic and diluted
earnings per share HK$1,443,000 HK$2,736,000
============== ==============
Number of shares:

Weighted average number of ordinary
shares for the purposes of basic
earnings per share 289,944,745 289,944,745
==============
Effect of dilutive potential ordinary shares
- options 177,389
--------------
Weighted average number of ordinary shares
for the purposes of basic and diluted
earnings per share 290,122,134
===============

For the year ended 31st December, 2005, there were no potential
dilutive ordinary shares outstanding as the exercise price of
the Company's outstanding share options is higher than the
average market price for the Company for the year ended
31st December, 2005.

For the year ended 31st December,2004, the computation of
diluted earnings per share does not assume the conversion of the
Company's outstanding convertible bonds since their exercise
would result in an increase in earnings per share from continuing
ordinary operations for the year ended 31st December, 2004.

For the year ended 31st December, 2004, the effect of share options
of granted on 30th April and 12th July, 2002 and
23rd February, 2004 were excluded from the calculation of
diluted earnings per share because their exercise price of
the Company's share options was higher than the average market
price of ordinary shares.