NETD.L Regulatory News (NETD)

NetDimensions (Holdings) Limited

("NetDimensions", the "Group" or the "Company")

Preliminary Results for the year ended 31 December 2010

NetDimensions (AIM: NETD), a provider of performance, knowledge and learning management systems, announces its Preliminary Results for the year ended 31 December 2010.

Financial Highlights

·; Revenues up 22% to US$8.3M (2009: US$6.8M)

·; Pre-tax profit of US$0.1M* (2009: US$0.7M)

·; Cash balances of US$6.0M (2009: US$7.4M) despite$1.9M of acquisition related expenses

·; Revenue from new clients contributing 21% of the total revenue

·; Deferred income up 21% to US$3.5M (2009: US$2.9M) indicates strong revenue pipeline in 2011

·; Set up US$1.3m credit facility with Citibank HK

* Pre-tax profit of $0.1M is after charging $0.1M exchange loss, $0.1M acquisition amortisation expense and $0.4M of one off costs related to acquisition and settlement of patent infringement claim

Operational Highlights

·; Acquired client business line from UK reseller

·; Acquired US custom content developer to extend US footprint

·; Formed wholly foreign owned enterprise in Shanghai

·; 106 new clients added

·; Four major product upgrades and deployment of new mobile learning system (mEKP)

Roger Durn, Chairman of NetDimensions, commented: "We have built a stronger business and distribution model around the world in 2010 and we will continue to explore new markets to expand our global growth. This growth is expected to be strengthened by identifying further acquisitions candidates, funded by our current strong cash position and improved positive cash flows from the existing business.

We continue to focus on employee and extended enterprise training and performance support applications, mostly for clients in highly regulated and compliance driven industries.

The recent political unrest in the Middle East and natural disasters in Japan at the beginning of the year may affect the investment mood of some clients but we believe that this will be outweighed by recent positive economic indicators in most of the industrialised nations, thereby leading to enhanced growth potential for our business. The Company's 2011 first quarter trading results were in line with management's growth expectations."

A full set of the annual report and accounts will be sent to shareholders and will also be available on the company website at: www.netdimensions.com

Enquiries:

CHAIRMAN'S STATEMENT

Financial Summary

I am pleased to report on the financial results for NetDimensions for the year ended 31 December 2010. During the year, the Company focused on strategic geographic expansion that led to strong sales growth of 22% to US$8.3M (2009: US$6.8M) despite the US still being in the midst of economic recovery and the continuing financial crisis in Europe.

We continued with our growth strategy, which included the purchase of a client business line from one of our UK resellers followed by enhancing the NetDimensions operation in the UK to support the increase in the client base. At the end of 2010, we also acquired a US custom content developer to strengthen our US footprint; and formed a wholly foreign owned enterprise (WFOE) in Shanghai. If we included the full year contribution of the two acquisitions, our 2010 pro-forma revenue would have been US$9.3M.

In 2010, we added 106 new clients through our reseller channel and direct sales effort, which together made up almost 21% of invoiced sales. The Europe, Middle East and Africa (EMEA) region was still our biggest market with 53% of total sales, North America (Canada, USA and the Caribbean) represented 30% of sales and the rest of the world made up the rest at 17%. All three regions recorded around 20% growth. The Company saw license sales increase by 34%, professional services by 66% and support & maintenance by 25%. Hosting sales were flat, mainly due to EMEA clients' preference in license purchases.

The Company recorded US$0.1M of profit before tax after a US$0.1M unfavourable exchange loss and US$0.1M in acquisition related amortisation. In addition, the profit reflected the Company's aggressive approach to strengthening our infrastructure to prepare for future sales growth. Profit was also impacted by US$0.4M of non-capitalised acquisition expenses, settlement of patent infringement litigation in the US and fees and related costs for a Japanese market penetration study.

The Company maintained a strong cash position after spending US$1.9M on acquisitions and related one-time expenses, with cash balances of US$6.0M (2009: US$7.4M) and no borrowing. The Company was successful in setting up a US$1.3M credit facility with Citibank HK supported by US$0.5M pledged deposit. This credit line is not currently drawn down but will help build a credit rating to enable the Company to finance future growth in part by the use of debt instead of cash should the Board so decide.

The Board does not recommend payment of a dividend at this stage. It remains the Board's intention to pay dividends in the future with surplus funds to be reinvested to support the continued growth of the Company.

Operational Review

In 2010, NetDimensions invested heavily in product development and various engineering improvement programs that resulted in four major product upgrades during the year and the deployment of the new mEKP system, a mobile learning management system on a flash drive with strong security protection. We expect these developments to make an impact over time and enhance the Company's product usage.

As a software provider, NetDimensions traditionally has not benefited from a substantial degree of professional services revenue on its product offerings. During the year, we started to regionalise our own professional services capacity in line with our expanded geographic footprint and start to build a solid infrastructure which can offer new services and real time customer support to clients. All these operational efforts should improve the Company's market position and improve top-line revenue growth.

Outlook

NetDimensions built a stronger business and distribution model around the world in 2010 and we will continue to explore new markets to expand our global growth. This growth is expected to be strengthened by identifying further acquisitions candidates, funded by our current strong cash position and improved positive cash flows from the existing business.

We continue to focus on employee and extended enterprise training and performance support applications, mostly for clients in highly regulated and compliance driven industries.

The recent political unrest in the Middle East and natural disasters in Japan at the beginning of the year may affect the investment mood of some clients but we believe that this will be outweighed by recent positive economic indicators in most of the industrialised nations, thereby leading to enhanced growth potential for our business. The Company's 2011 first quarter trading results were in line with management's growth expectations.

Roger Philip Edward Durn

Chairman

18 April 2011

Consolidated IncomeStatement

For the year ended 31December 2010

Consolidated Statement of

Comprehensive Income

For the year ended 31December 2010

Consolidated Statement of

Financial Position

As at 31 December 2010

The consolidated financialstatements were approved by the Board of Directors on 18 April 2011 and were signed on its behalf by:

Clarence on Pong Wu

Director

Consolidated Statement of

Changes in Equity

For the year ended 31December 2010

Consolidated Statement of

Cash Flows

For the year ended 31December 2010

Notes to the Financial Statements

The following notes are only an extract of the full notes to the annual report and accounts.

1.  GENERAL INFORMATION

The Company was incorporated in the Cayman Islands as a limitedliability company under the Companies Law (2000) Revision on 10 July 2000.  Its shares are listed on the London Stock Exchange AIM. The registered office  of  the  Company  is located at  P.O. Box 309,  Ugland  House,  South  Church  Street,  George  Town, Grand  Cayman,  Cayman  Islands, British West  Indies. Its principal place of businessis located at 17/F., Siu On Centre, 188 Lockhart Road, Wan Chai, Hong Kong.

The principalactivities of  the  Company  and  its subsidiaries  (hereinafter  collectively referred  to  as the  "Group")are  licensing of computersoftware  and the provision of related  services.The principal activity of the Company isinvestment holding.  The principal activitiesof its subsidiaries are set out innote 32 to the financial statements.

2.  CRITICALACCOUNTING ESTIMATES AND JUDGEMENTS

(a)  Critical accountingestimates

Useful lives and impairment of intangible assets

The Group  determinesthe  useful lives and  related  amortisation  charges  for the  intangible  assets  based  on the  historical experience  of the  actual  useful  lives of the  intangible  assets  of similar nature  and  functions  and  by reference  to  the relevant  acquisition  contracts. The estimated useful lives could change significantly as a result of technical innovations and competitoractions in response to severe industry cycles.

The Group  determineswhether intangible  assets  are  impaired  at  least  on  an  annual  basis. Thisrequires an estimation of the value in use of the cash-generating units to which the intangible assets are allocated.  Estimating the value in use requires  the  Group  to  make  an  estimate  of the  expected  future  cash  flows from the  cash-generating units and  also to choose  asuitable  discount  rate  in order  tocalculate the  present  value of those  cash flows. The carryingamount of the intangible assets at 31 December 2010 was US$1,223,940 (2009:US$26,138). The Group  does  not  have  to  recognise an impairment  loss as at 31 December  2010  based  on the  impairment  assessment performed.

2.  CRITICALACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)

(b)  Critical judgements

Estimates and judgements are continually evaluated  and arebased  on historical experience  and other  factors,  including expectations  of future  events  that  are believed to be reasonable  under  the  circumstances.

3.  FINANCIAL RISK MANAGEMENT

The Group's  current  activities result  in the  following  financial  risks and  management's responses  to  those  risks in order  to minimise any resulting adverse  effects  on the  Group's financial performance.

(a)  Foreign exchange risk

The Group's reporting currency is US dollars. Its principal activities are licensing of computer software and the provision of related servicesin various currencies, particularly US dollars and Hong Kong dollars("HK dollars").  Since HK dollars is currently pegged to the USdollars, no significant exposure is expected onHK dollars transactions and balances.

The following table  indicates  the  approximate  change  in the  Group's profit after  taxation  (and accumulated losses) and other  componentsof consolidated equity inresponse  to  reasonably  possible changes  in the  foreign  exchange  rates  to which  the  Group  has  significant exposure  at  the  end  of the  reporting  period.  The analysis includes  balances  between Group  entities  where  the  denomination of the  balances  is in a currencyother  than  the  functional  currencies.

The sensitivity analysis has  been  determined assuming  that  the  change  in foreign  exchange  rates  had  occurred  at  the end  of  the  reporting  period  and  had  been  applied  to  each  of  the  Group  entities'  exposure  to  currency  risk for both derivative and  non-derivative  financial instruments in existence  at  that  date,  and  that  all other  variables, inparticular interest  rates,  remain  constant.

The stated  changes  represent management's assessment of reasonably  possible changes  in foreign  exchange  rates  over the  period  until the  end  of next  annual  reporting  period.  In this respect,  it is assumed  that  the  pegged rate  between the  HK dollars  and  US dollars  would  not  be  materially affected  by any changes  in movement in value of  US dollars against  other  currencies.  Results of the  analysis as presented in the  above  table  represent an aggregation of the  effects on  each  of  the  Group  entities'  profit  after  taxation and  accumulated  losses  measured  in  the  respective  functional currencies,  translated into  US dollars  at  the  exchange  rate  ruling at  the  end  of  the  reporting  period  for presentation purposes. The analysis is performed on the same basis for 2009.

3.  FINANCIAL RISK MANAGEMENT (CONTINUED)

(b)  Interest rate risk

Interest rate  risk arises from debt  borrowings  and  cash held on deposit.  The Group  has no external  borrowings therefore the Group currently has no interest rate riskexposure.  The Group's cash balances  are kept in interest  bearing current  accounts  and  on short-term deposits,  so as to maximise the  level of return  while maintaining  an adequate level of liquidity.

(c) Credit risk

The Group's credit risk is primarily attributable to trade and other receivables.  Management has a credit policy in place and the exposure to credit risk is monitoredon an ongoing basis. Credit evaluations are performed on allcustomers requiring credit over a certain amount. The Group doesnot require collateralin respect of financialassets.

At the  end  of the  reporting  period,  there  were  no  significant  concentrations of credit  risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position.

(d)  Liquidityrisk

The availability of adequate cash resources is managed by the Group through managing its funds conservatively thereby ensuring it meets  its continual  operational requirements.  The  Group's  financial  liabilities as  at  31  December 2010, which fall due  within 12 months  from the  end  of reporting  period  were  US$1,036,352 (2009:  US$812,678).

(e)  Equity price risk

The Group  is exposed  to  equity  price changes  arising  from  equity  investments  classified as available-for-sale  financial assets.

The Group's investments  are listed on the  London Stock Exchange AIM.Listed  investments  held  as  available-for- sale  financial  assets  have  been  chosen  based  on  their  longer  term  growth  potential and  are  monitoredregularly  for performance against  expectations.

4.  REVENUE

Revenue representsthe  aggregate of income  from software  licensing, hosting  services, support  and  maintenance and  software customisation and  implementation services during  the  year and  is analysed asfollows:

5.  NET FINANCE(COSTS)/GAINS

6.  PROFIT BEFORE TAXATION

Profit before taxation isarrived after charging:

2010  2009

US$ US$

Depreciation of property, plant and equipment 86,215  94,766

Amortisation of intangible assets  148,018 43,009

Loss on disposal of property, plant and equipment  - 523

Statutory audit services 57,264  46,608

Taxation services 58,480  67,769

Operating lease rentals in respect of leased premises  205,952 178,885

Research and development expenditures 3,117,293 2,314,726

7.  TAXATION

Taxation  on  overseas  profits  has  been  calculated  on  the  estimated  assessable  profit  for  the  year  at  the  rates  of  taxation prevailing in the  countries  in which the  group  entities  operate.

2010  2009

US$  US$ Current tax - Overseas

Provision for the year  - 21,000

The taxation charge for the year can be reconciled tothe profit before taxation perconsolidated income statement as follows:

Deferred  tax  assets have  not been  recognised  in  respect  of  tax  losses  available  to  carry  forward  against  suitable  future trading  profits and  timing differences  relating  to  capital allowances  in excess of depreciation  as the  directors  consider  there  is insufficient evidence  that  the  assets  will be recovered.

8.  EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share isbased on the following data:

2010  2009

US$ US$

Earnings used for the 'Earnings per share'

Earnings for the purpose ofbasic earnings per share being net profit

attributable to equity shareholders of the Company  116,051 679,757

Earnings for the purpose ofdiluted earnings per share  116,051 679,757

2010  2009

Number of shares

Weighted average number of ordinary shares forthe purpose of basic

earnings per share  25,058,925 24,961,658

Effect of dilutivepotential ordinaryshares on shares options  2,220,646 1,226,500

Weighted average number of ordinary shares forthe purpose of dilutive

earnings per share  27,279,571 26,188,158

Diluted  earnings  per  share  is calculated  adjusting  the  weighted average  number  of  ordinary  shares  outstanding to  assume conversion  of  all dilutive potential  ordinary  shares.  The dilutive potential ordinary shares of the Company are share options. For the  share  options,  a  calculation  is done  to  determine the  number  of shares  that  could  have  been  acquired  at  fair value (determined as the average  annual  market  share  price of the Company)  based  on the monetary  value of the subscription  rights attachedto outstanding share  options.  The number  of shares  calculated  as above  is compared with the  number  of shares  that would  have been  issued assuming  the  exercise of the  share  options.

9.  SEGMENTAL ANALYSIS

The Group operates in three geographic segments, North America, Europe, Middle East and Africa ("EMEA") and Restof the World.  These geographic segments are the basis on which the Group reports its primary segment information, as presented below:

Segmental information for the yearended 31 December 2010:

Other segment items included in the income statement for the yearended 31 December 2010:

9.  SEGMENTAL ANALYSIS (CONTINUED)

Information  regarding  segment assets  and  liabilities as at  31  December  2010  and  capital  expenditure in the  year then  ended, based  on the  locations  of customers:

It  is  considered  that  there  is  no  material  difference  in  the  information  regarding  segment  assets  and  liabilities as  at  31