Crypto Flow Technology Limited — Interim / Quarterly Report 2002

Aug 13, 2002

Quarterly Results announcement form

Name of listed company :WAFER SYSTEMS LIMITED

Stock code :8198

Year end date :31 December 2002

Auditors' report : Modified
Qualified
Unqualified
X 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

Currency: HK$'000
( Unaudited) ( Unaudited)
Quarterly Results Announcement Current Last Corresponding
Period Period
from 01/01/2002 from 01/01/2001
to 30/06/2002 to 30/06/2001
HK$'000 HK$'000

Turnover : 73,376 50,792
Profit/(Loss) from Operations : -2,436 2,306
Finance cost : -1,599 -1,454
Share of Profit/(Loss) of Associates : 0 0
Share of Profit/(Loss) of
Jointly Controlled Entites : 0 0
Profit/(Loss) after Taxation & MI : -4,691 661
% Change Over the Last Period : N/A %
EPS / (LPS) - Basic : -2.3 cents 0.43 cent
- Diluted : N/A 0.35 cent
Extraordinary (ETD) Gain/(Loss) : 0 0
Profit (Loss) after ETD Items : -4,691 661
2nd Q Dividend per Share : Nil Nil
(specify if with other options) : N/A N/A
B/C Dates for 2nd Q Dividend : N/A to N/A bdi.
Payable Date : N/A
B/C Dates for AGM/SGM : N/A to N/A bdi.
Other Distribution for Current Period : Nil
B/C Dates for Other Distribution : N/A to N/A bdi.
(bdi: both days inclusive)

                                     For and on behalf of
                                     WAFER SYSTEMS LIMITED
                          Signature :
                               Name :Mr. CHAN Sek Keung, Ringo
                              Title :Executive Director

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.

Remark:

1. Basis of presentation
   The Company was incorporated in the Cayman Island on 26 November 1998
   as an exempted company with limited liability under the Companies Law
   of the Cayman Islands. The Company's shares were listed on GEM on
   17 May, 2002.

The condensed financial statements have been prepared in accordance
with the Statement of Standard Accounting Practice No.25 "Interim
Financial Reporting" issued by the Hong Kong Society of Accountants
and the disclosure requirements set out in Chapter 18 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 acquired approximately HK$5,200,000
non-current assets and adopted the following accounting policy:

Other non-current assets

Other non-current assets are stated at cost less accumulated
amortization and accumulation impairment losses. Amortization
is provided on a straight-line method over its estimated useful
life of three years.

Subject to the above, the principal accounting policies and basis of
preparation adopted for the preparation of these condensed financial
statements are consistent with those adopted by the Group in its
annual financial statements for the year ended 31 December 2001.

The condensed financial statements are unaudited but have been
reviewed by the Audit Committee.

1. Turnover
   Turnover comprises (i) fees from fixed price contracts in connection
   with the sale of network equipment and software and the provision of
   related network infrastructure services, (ii) fees for the provision
   of network professional services, and (iii) sale of the Group's
   proprietary network software, after exclusion of value-added tax and
   deduction of business tax in Mainland China.

2. All of the Group's operations are classed as continuing.

3. Taxation
   Hong Kong profits tax has been provided at a rate of 16% (2001: 16%)
   on the estimated assessable profits during the periods under review.

Taxation arising in other jurisdictions is calculated at the rates
prevailing in the relevant jurisdictions

1. Earning/ (Loss) per share
   The calculation of basic earnings/(loss) per share for the three
   months and the six months ended 30 June 2002 is based on the
   unaudited (loss)/profit attributable to shareholders of approximately
   HK$(1,014,000) and approximately HK$(4,691,000) (three months and
   six months ended 30 June 2001: approximately HK$4,390,000 and
   approximately HK$661,000 respectively) and on the weighted average
   number of approximately 230,603,000 shares and approximately
   204,342,000 shares respectively (2001: approximately 154,884,000 and
   approximately 152,315,000 respecively) in issue during the period.

Diluted loss per share has not been presented for the three months
and six months ended 30 June 2002 since the effect is anti-dilutive.

The calculation of the diluted earnings per share for the three
months ended 30 June 2001 is based on the net profit attributable to
shareholders of approximately HK$4,903,000 and approximately
HK$661,000 and on the weighted average number of approximately
261,360,000 shares and approximately 190,533,000 shares respectively.