Full year results

18 April 2011

DDD Group PLC

Emerging 3D consumer market yields high margin royalty growth

Los Angeles, California: DDD Group plc ("DDD" or "the Group"), the 3D consumer technology licensing group, has published its full year results for the year ended 31 December 2010.

Highlights

·; Over 2.5m units of DDD TriDef 2D to 3D conversion solutions shipped by TV and PC licensees

·; Alliance with Texas Instruments to implement the 3D solution on OMAP™ smartphone processors - first opportunities to view 3D without glasses

·; Recent PC software licensees signed up including Samsung, LG and a leading PC chip manufacturer

·; Turnover, excluding discontinued businesses, up 12% to £1,298,000 (2009: £1,156,000)

·; Loss from continuing operations before tax £921,000 (2009: loss £842,000)

·; Loss per share per share reduced to 0.82p (2009: loss 0.98p).

·; Net cash outflow from operating activities £765,000 (2009: outflow £827,000)

·; Net cash at 31 December 2011 £2,734,000 (2009: £902,000)

·; Placing raising approximately £3,380,000 after expenses and conversion of loan notes in June 2010

Chris Yewdall, Chief Executive said:

"2010 was a key year in our development as the number of units of TVs and PCs shipped with our 2D to 3D conversion solutions jumped from 100,000 to over 2.5 million. TriDef 3D is now at the heart of a growing number of 3D products from brand name companies.

"We have maintained the momentum in 2011 and are rapidly adding new licensees, in particular for our TriDef PC software solutions, as evidenced by our recent agreements with the leading PC/monitor companies of LG Electronics, Samsung and a leading chip manufacturer. We are also seeing opportunities in the mobile device market driven by our recently completed TriDef 3D Mobile Android™ software. We expect to secure additional OEM design wins in this market in the near future.

"Our focus remains firmly on developing and delivering continued growth in the high margin, recurring, royalty business through the licensing of our technologies in the TV, PC and mobile consumer markets."

Enquiries

About DDD Group

DDD, also known as Dynamic Digital Depth, is transforming the viewing experience with applications for 3D displays. Its patented technologies enable: 3D viewing with and without glasses; simple integration of computer games applications with 3D displays; supply of 3D content through 2D to 3D conversion; and 3D transmission over existing networks. DDD's shares are quoted on the London Stock Exchange's AIM Market (AIM: DDD).

2010 saw strong growth in demand for the Group's automatic 2D to 3D conversion solutions as new 3D consumer products, including 3D TVs and PCs, were introduced by DDD's licensees. 2D to 3D conversion is quickly becoming a standard feature of most 3D products and was an integral part of many new products released in 2010.

The Group's licensees shipped in excess of 2.5 million units of TriDef 2D to 3D conversion during the year. The Group has secured additional license agreements in both the TV and PC sectors, which are expected to yield further 3D product launches during 2011.

The Group saw strong growth in royalty revenue and an increase in gross margins as products began shipping during the year. This contrasted to the prior year where licensing income was the largest contributor to revenue.

As previously announced, given the availability of 3D products in retail channels, the Group exited the 3D equipment product sales business that included the sale of 3D monitors and glasses to resellers and consumers.

The Group raised £3.5m before expenses via a placing in early June 2010. This has allowed DDD to invest in additional staff in both Los Angeles and Perth in order to continue to meet the growing demand from new and prospective licensees.

Revenues for the period ended 31 December 2010 were £1,298,000 (2009: £1,156,000), an increase of 12%. This excludes £111,000 (2009: £254,000) of discontinued businesses.

Total technology revenue, including licensing, royalties and software sales, increased by 20% to £1,117,000 (2009: £931,000).

Following the transition from receiving up-front licensing fees to quarterly royalty income, as expected licensing revenue decreased to £41,000 (2009: £894,000) whilst royalty revenues increased to £993,000 (2009: nil) as the Group's TriDef technologies were deployed by TV and PC licensees.

Consumer software product sales increased 124% to £83,000 (2009: £37,000) as the market for 3D PC systems continued to grow.

Consulting revenues attributable to one-time development fees were £147,000 (2009: £175,000) as the Group transitioned from developing solutions for licensees to implementing go-to-market solutions. Other revenues were £34,000 (2009: £50,000).

Gross profit increased by 16% to £1,197,000 (2009: £1,030,000) and gross margin to 92% (2009: 89%) as a result of the change in the revenue mix toward higher margin intellectual property royalties.

As planned, the administrative expenses increased modestly to £2,188,000 (2009: £2,007,000) with the expansion of headcount to facilitate the procurement and delivery of more licenses for the Group's technologies.

Other income is predominantly comprised of the Australian R&D incentives and declined 9% to £181,000 (2009: £198,000) as the R&D resources were refocused from development to product implementation as licensees readied their new products for delivery.

The non-cash share-based incentive cost was £114,000 (2009: £51,000) as performance-based objectives were achieved.

The adjusted Group loss before tax, before share-based incentive costs, was £807,000 (2009: loss £791,000). The reported pre-tax loss was £921,000 (2009: loss £842,000).

The Group's loss per share reduced to 0.82p (2009: loss 0.98p).

The net cash out-flow from operating activities was £765,000 (2009: £827,000). Capitalised expenditure was £694,000 (2009: £612,000). These cash outflows were offset by the £3.5m raised from the issue of new shares in June 2010 and employee stock option exercises during the period, resulting in cash of £2,734,000 at the end of 2010 (2009:£902,000).

As the majority of the Group's business, including expenses, is denominated in US dollars, DDD will report its on-going financial performance in US dollars with effect from January 2011.

During the year, Samsung Electronics introduced a complete range of 3D plasma, LCD and LED LCD 3D televisions, each incorporating the Group's 2D to 3D conversion technology. Samsung was the first brand name manufacturer to introduce 3D TVs in March 2010 and captured an estimated 60%+ market share in the emerging worldwide 3D TV market during the year.

The Group secured additional licensees in the TV market, signing development and license agreements with two leading chip manufacturers based in the USA and Taiwan. In addition to embedded solutions for 3D televisions, the Group also completed a development and license agreement with a leading US set top box manufacturer. The set top box accessory was demonstrated privately at leading industry trade shows including the National Association of Broadcasters (NAB) in April 2010 and the 2011 Consumer Electronics Show.

In October 2010, DDD announced an agreement with Advanced Micro Devices (AMD) to enable AMD's new 3D-capable Radeon™ HD3D PC graphics processors with the Group's TriDef 3D 2D to 3D videogame conversion software. This development is an important milestone since it allows the Group to offer a 3D content solution to licensees in the PC market who are seeking to use electronic 3D shutter glasses. HP became the first manufacturer to offer the combined solution in late 2010 for its Envy 17 3D notebook PC.

While the Group achieved a number of design wins in the notebook and All-In-One PC market with brands including Acer, Lenovo, Fujitsu and LG Electronics, the late PC chip partner delivery of compatibility with electronics 3D glasses delayed growth in the PC market and the associated revenue that was expected during 2010.

The Group continued to invest in the development of the TriDef 3D solution for converting photos, videos and games to 3D for the PC market. TriDef 3D now converts over 450 of the very latest PC games to 3D and is available in 37 international languages.

Intel showcased DDD's game conversion solution during its keynote presentation at the 2010 Consumer Electronics Show. Intel and DDD's engineers collaborated closely during the year, resulting in the demonstration of the Group's TriDef 3D game conversion software with Intel's new 2nd Gen Core PC processor at the 2011 Consumer Electronics Show in January 2011.

Intel's new 3D capable PC processor represents an important evolution for PC manufacturers since it allows games to be played in 3D without the need for, and cost of, a separate graphics processor. Like the AMD Radeon HD3D processor, the Intel 2nd Gen Core processor also supports electronic 3D glasses.

In the second half of 2010, the Group commenced development of a mobile phone version of the TriDef 3D video and photo conversion software based on the popular Android™ smartphone and tablet PC platform. A number of handset makers have already expressed interest in this solution and the Group commenced delivery of evaluation versions of this application in late 2010.

The Group continued to expand the range of originally made 3D movies available on the Yabazam! online content portal. The portal is initially targeted towards 3D PC users with several OEM's shipping sample 3D movie trailers with their 3D PCs during the year. Income from Yabazam was modest due to the delay in availability of electronic glasses compatibility that also hindered the Group's progress in technology licensing for the PC platform.

Technology Licensing

The Group develops and markets a range of patented technologies under the TriDef® 3D brand name. The primary function of the TriDef 3D products is to convert normal two-dimensional content into stereoscopic 3D content. As the market for 3D consumer devices has diversified into a wide range of products, from televisions to personal computers and mobile telephones, the Group develops device specific packages of the TriDef 3D technologies.

Television market

For licensees in the television market, including Blu-Ray players and set top boxes, the Group has delivered the TriDef 3D Digital firmware reference design that is capable of automatically converting full resolution high definition content to 3D. The firmware version allows licensees to implement the TriDef 3D capabilities in silicon chips intended for use in 3D televisions and related accessories. Since advanced televisions typically have more sophisticated image processing capabilities, the Group offers a premium reference design as well as a basic reference design suited to lower cost devices.

By incorporating the TriDef 3D function in their chipsets, 3D consumer devices such as televisions, set top boxes, Blu-ray players, PC monitors and projectors are able to convert normal 2D content into 3D as it is received. Sources of content include satellite, cable and over-the-air broadcast television, Blu-ray and DVD movies and console games.

When the Group enters into a license agreement with a new customer for TriDef 3D Core, there is normally a one-time development license fee that covers the Group's engineering support to assist the customer in implementing and integrating the code with their target chipset. Once the customer commences production of the chipset, separate license agreements capture per unit royalties either from the licensee directly or from the licensee's customers.

DDD's TriDef 3D Core business model currently includes:

·; the licensing of the TriDef 3D Core technology to TV makers, set top box manufacturers and TV chip makers, yielding licence fees (licensing revenue) and per display or per chip royalties (royalty revenue);

·; one time development fees (consulting revenue) based on DDD's assistance in integrating the TriDef 3D Core technology with the licensee's new 3D television, set top box or video processing chip.

PC market

For licensees in the PC market, including notebooks, All-In-One PCs and PC monitors, the Group has delivered the TriDef 3D Experience software that is capable of automatically converting photos, PC media files, DVD movies and many interactive PC games to 3D. The PC software is available in 37 international languages and is compatible with the latest Microsoft PC operating systems and state of the art 3D PC graphics processors from AMD and Intel.

One of the key features of the TriDef 3D Experience is the ability to convert existing video games from 2D to 3D. Video game players are a key target for many of the Group's customers due to the additional immersion in the game play that 3D offers and the willingness with which game players adopt new technologies.

The Group has placed a great deal of focus on broadening the range of existing games that can be automatically played in 3D, increasing the available games fourfold during the year from approximately 100 to well over 400 by the year end. As customers explore new territories such as China, the Group has also placed emphasis on ensuring that the TriDef 3D software is compatible with popular online games in countries including China and Korea.

By incorporating the TriDef 3D software into their PCs, PC products such as notebooks, All-In-One PCs and PC monitors are able to convert normal 2D content into 3D as it is viewed. Sources of content include PC photo and media files, DVD movies and PC games.

When the Group enters into a license agreement with a new customer for TriDef 3D Experience software, there is an advance license fee that covers the Group's engineering support to assist the customer in testing and integrating the software with their target PC system or monitor. Once the customer commences production of the PC product, the license agreement captures per unit royalties from the distribution of the TriDef 3D software pre-installed on hard drives, shipped in the box on DVD-ROM or downloaded from online websites.

DDD's TriDef 3D software business model currently includes:

·; the licensing of the TriDef 3D Experience software to OEM PC manufacturers, PC chipset suppliers and PC monitor manufacturers yielding license fees (licensing revenue) and per unit royalties (royalty revenue);

·; the sale of TriDef 3D Experience software directly to end users from the Group's website yieldingper unit license fees (software revenue).

Mobile device market

For licensees in the mobile device market, including smartphones and tablet PCs, the Group has delivered the TriDef 3D Mobile application software that is capable of automatically converting mobile photos and media to 3D. The Android™-based software is integrated into existing applications on the device and is compatible with the latest Android™ smart phone processors such as the OMAP™ series from Texas Instruments.

By incorporating the TriDef 3D software into their mobile devices, smartphones and tablet PCs featuring 3D displays that do not require the viewer to wear special 3D glasses are able to automatically convert normal 2D photo and video content into 3D as it is viewed. Sources of content include photo and media files and streaming content delivered to the device.

When the Group enters into a license agreement with a new customer for TriDef 3D Mobile application software, there is normally a one-time development license fee that covers the Group's engineering support to assist the customer in testing and integrating the software with their target handset or tablet. Once the customer commences production of the product, the license agreement captures per unit royalties from the distribution of the TriDef 3D software pre-installed on the phone or tablet PC.

DDD's mobile business model currently includes:

·; the licensing of the DDD Mobile software library to handset makers, yielding licence fees (license revenue) and per handset software royalties (royalty revenue);

·; one time development fees (consulting revenue) based on DDD's assistance in integrating the DDD Mobile software with the licensee's new 3D handset.

Other areas

3D Content Publishing - "Yabazam!"

The Technology Licensing business represents an opportunity to generate royalty income for each device produced that incorporates the Group's TriDef 3D technologies. In November 2009, in response to requests from OEM customers seeking original 3D content to include with their 3D devices, the Group launched Yabazam.com, an online 3D portal offering a variety of high definition originally made 3D movie titles that can be downloaded to the latest PC devices.

The range of available content has continued to grow, including episodic content like the award winning 'Safety Geeks: SVI' series. Many of the latest PCs that incorporate TriDef 3D software also include a range of promotional trailers for 3D movies that are available for download from Yabazam.com.

When end users view the Yabazam! trailers included on their 3D notebook or monitor, they are able to visit the site and view the full range of content that is available for purchase. When end users download the full length versions of titles available on Yabazam! the Group shares the revenue with the film maker under pre-agreed distribution licenses. This provides an opportunity for the Group to participate in incremental content-based revenue, improving the revenue per unit beyond the one time royalty delivered by the technology licensing agreements.

DDD's content publishing business model currently includes:

·; the acquisition of originally made 3D content for delivery to end users of 3D products in the TV, PC and mobile markets yielding per disc/download/embedded content revenue shares (other revenue);

·; the licensing of the Yabazam! promotional content to TriDef 3D technology licensees by offering technology licensing incentives to the licensees to include the Yabazam! content;

·; per download content revenue based on end users of PCs and other TriDef 3D equipped devices visiting the Yabazam! content portal and completing paid downloads of the available content.

2D-3D offline conversion - "3D FACTORY"

The complexity of creating originally made 3D programming currently restricts the application of 3D to premium viewing events such as sports events and concerts. In order to drive growth in the use of 3D TVs, PCs and mobile devices, it is critical that end users have the opportunity to enjoy their favourite shows in 3D. The Group began evaluating how to deliver effective solutions to this opportunity in mid-2009 based on its unique knowledge of automated and post production 3D conversion.

In late 2009, the Group announced a joint marketing agreement with The Littlefield Company, aimed at exploring the demand for the Group's offline 2D to 3D conversion services in the emerging market for 3D TV content. Following the debut of 3D televisions at the 2010 Consumer Electronics Show the Group worked closely with a leading US broadcast network to transform episodes of well know prime time TV shows into 3D using this offline conversion capability.

Consumer focus groups were undertaken during the summer of 2010 that demonstrated a strong consumer acceptance for these shows presented in 3D. The network subsequently developed a business model and a promotional package for this new 3D channel was created towards the end of the year. The network has presented their 3D channel to key distribution partners in the cable, satellite and IPTV markets in the United States with a positive response. The Group is presently engaged in technical distribution evaluations with the network and expects the network to commence commercial negotiations with their channel partners once these evaluations are complete.

DDD's planned 3D content conversion business model currently includes:

·; the competitively-priced conversion of large volumes of high definition 2D video content, yielding service fees (other revenue);

·; sub-licensing components of the converted libraries for distribution through the Yabazam! 3D content portal yielding per download/embedded content revenue shares (other revenue).

2010 was a critical year for the 3D industry as the first mass-market consumer products from leading brands arrived in stores worldwide. The earlier focus on securing agreements with brand name licensees in key markets allowed the Group to successfully transition to high margin, recurring, royalty income as the market emerged during the year. Use of the TriDef 3D products by early adopters has also positioned the Group well in comparison to alternative solutions and suppliers.

The Group continues to focus the research and development resources on improving the automatic 2D to 3D video conversion that drives demand for the TriDef 3D technologies in the TV, PC and mobile markets. The landscape is becoming more competitive, requiring continued innovation and strong partnerships to maintain the Group's competitive advantage.

With the transition from early adopters, who have proven the demand for 3D products, to pragmatists, who need to deliver 3D products to remain competitive, the Group is focusing on securing design wins with 'platform' partners. These can propagate the TriDef 3D solution combined with TV, PC and mobile processors as part of an overall 3D product offering in the TV, PC and mobile markets.

In the near term, the Group remains focused on growing its market share in the TV and PC markets and delivering a similar solution for mobile devices in order to drive high margin royalty revenue growth from the technology licensing business. The Group is also seeking to broaden the reach of the Yabazam! 3D portal to include internet connected 3D TVs as well as mobile devices such as smart phones and tablet PCs.

The Group announced an alliance with Texas Instruments in early 2011 to implement the TriDef 3D solution on the popular OMAP™ smartphone processors. The market for 3D smartphones and tablet PCs holds promise since it is one of the first opportunities for the end user to view 3D without the need to wear glasses.

The Group has also announced license agreements for its TriDef PC software with leading PC monitor OEMs including Samsung and LG as well as securing an important license agreement with a leading PC chip supplier.

As the market for 3D consumer devices continues to grow and diversify, the Group expects to capitalise on the development efforts for the TV chip, PC software and Android variants of the solution during 2011 and beyond.

The Group can now point to a growing portfolio of brand name, market leading licensees in each of these categories and is already engaged in the procurement and delivery of key agreements and new products with additional licensees.

The current year has started in line with the Board's expectations and overall it is looking forward with increasing confidence as the Group builds its momentum.

for the year ended 31 December 2010

1 The loss per share from discontinued operations is negligible and has no effect on the total loss per share from continuing operations.

as at 31 December 2010

for the year ended 31 December 2010

for the year ended 31 December 2010

1 Reserve transfer for exercised, forfeited and expired options.

1. Selected financial data disclosure

The financial information set out above does not constitute the company's statutory accounts for the years ended 31 December 2010 or 2009 but is derived from those accounts. Statutory accounts for 2009 have been delivered to the registrar of companies, and those for 2010 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report except for an emphasis of matter on going concern in 2009 and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

2. Segmental reporting

The Group's operating segments are based primarily upon the Group's licensing and royalty revenue. At present, given the size of the Group, costs of goods sold and operating expenses cannot be allocated on a reasonable basis to the segments below and, as a result, the segmental analysis is limited to the Group gross profit as presented to the Board of Directors.

1 The discontinued operation of 3D equipment product sales has been removed as discussed in Note 3. Total revenues before the removal were £1,409 (2009: £1,410); Gross profit before the removal was £1,213 an 86% margin (2009: £1,045 a 74% margin).

All other assets and liabilities of the Group in addition to the operating expenses are not provided or reviewed at a segmental level.

Major Customers

Samsung Corporation:

For 2010, Samsung Corporation represented approximately £913,000 or 70% of the Group's revenues following the launch of their comprehensive 3D TV range in March. 100% of these revenues were included in the royalties segment. The revenues recorded for this customer in 2009 were £nil.

Wistron Corporation (a related party):

In 2010, £nil revenues of the Group were attributable to Wistron Corporation ("Wistron"). In 2009, they represented approximately £883,000 or 76% of 2009 Group revenues after the effect of the discontinued operation. Over 80% of these revenues were in the Intellectual Property segment as License Fees with another 14% included in the Consulting segment and the remainder in the Other Revenues segment.

Others:

In 2010 and 2009, there are no other greater than 10% contributors of revenue to the Group.

3. Discontinued operations

During the year the '3D equipment product sales' division of the group was closed and the operation discontinued. The closure did not involve any disposal, adjustment of fair value or additional costs.

The discontinued operation carried neither non-current assets nor liabilities associated with them at the time of the closure (2009: Inventory 7; Trade & Other Receivables 77).

4. Loss per share

1 Deferred Shares:

On 5 July 2008 the share capital of the Company was reorganised such that a total of 74,416,547 ordinary shares of par value 10 pence became 74,416,547 deferred shares of par value 9 pence plus 74,416,547 new ordinary shares of par value 1 penny.

The holders of the deferred shares are not entitled to receive any dividend out of the profits of the Company available for distribution. On a distribution of assets on a winding-up or other return of capital (otherwise than on conversion or redemption or purchase by the Company of any of its shares) the holders of the deferred shares are entitled to receive the amount paid up on their shares after distribution (in cash or in specie) to the holders of the new ordinary shares the amount of £100,000,000 in respect of each new ordinary share held by them. The deferred shares do not entitle their holders to any further or other right of participation in the assets of the Company. The holders of deferred shares are not entitled to receive notice of or to attend (either personally or by proxy) any general meeting of the Company or to vote (either personally or by proxy) on any resolution being proposed. No certificates have been or will be issued in respect of the deferred shares. The diluted loss per share does not differ from the basic loss per share as these deferred shares are anti-dilutive.

The diluted loss per share does not differ from the basic loss per share as the exercise of share options would have the effect of reducing the loss per share and is therefore not dilutive under the terms of IAS 33.

5. Issued share capital

Key Movements in the Share Capital and Share Premium accounts are as follows:

1 On 5 January 2009, the Company raised £575,457 before expenses through a placing of 16,441,625 ordinary shares of 1 penny each in the Capital of the Company at a placing price of 3.5 pence per share. The shares were placed with two Directors (Messrs. Yewdall and Arisawa), Mr. Michael Stubbs (existing shareholder) and Wistron which made this strategic investment at the same time as entering into a memorandum of understanding in relation to license agreements with DDD. Restrictions existed on the Wistron shares which expired 5 January 2011 (2 years from purchase).

2 On 9 July 2009, the Company announced that it had raised £1,700,000 before expenses through a placing of 20,000 ordinary shares of 1 penny each in the capital of the Company at a placing price of 8.5 pence per share. The shares were place with two Directors (Messrs. Snook and Brigstocke) and three other existing shareholders (Arisawa Manufacturing Company Limited ("Arisawa"), Wistron and Mr. Nigel Wray) as well as other institution shareholders.

3 On 14 May 2010, the Company announced that it raised £3,500,000 before expenses through a placing of 14,000,000 ordinary shares of 1 penny each in the capital of the Company at a placing price of 25 pence per share. The shares were placed with key shareholders as well as existing and new institutional investors.

4 On 7 June 2010, the 2008 Convertible Loan Notes totalling £510,000 to certain Directors of the Group and to Arisawa were converted to 5,100,000 ordinary shares of 1 penny each in the capital of the Company at the pre-determined price of 10 pence per share, pursuant to the existing authorities granted to the Board of Directors.

5 In each period, shares were issued under the Company's Share Option Plan.

Deferred Shares (par 9p)

On 5 July 2008 the share capital of the Company was split so that a total of 74,416,547 ordinary shares of par value 10 pence became 74,416,547 deferred shares of par value 9 pence plus 74,416,547 new ordinary shares of par value 1 penny.

The holders of the deferred shares shall not be entitled to receive any dividend out of the profits of the Company available for distribution. On a distribution of assets on a winding-up or other return of capital (otherwise than on conversion or redemption or purchase by the Company of any of its shares) the holders of the deferred shares shall be entitled to receive the amount paid up on their shares after distribution (in cash or in specie) to the holders of the new ordinary shares the amount of £100,000,000 in respect of each new ordinary share held by them. The deferred shares shall not entitle their holders to any further or other right of participation in the assets of the Company. The holders of deferred shares shall not be entitled to receive notice of or to attend (either personally or by proxy) any general meeting of the Company or to vote (either personally or by proxy) on any resolution to be proposed. No certificates will be issued in respect of the deferred shares.

Ordinary shares (par 1p)

As mentioned in subnote 1 to the table above, the strategic investment made by Wistron in January 2009 for 12,652,025 ordinary shares included a two year restriction on the sale of those shares which expired 5 January 2011. No other restrictions existed during 2010.

Merger reserve

The Merger Reserve arose in the Group reconstruction in January 2002 prior to its flotation.

Share based payment reserve

The Share Base Payment Reserve comprises the carrying value of the recognized expense under IFRS2 for share options granted that are still exercisable. When options are exercised, forfeited or expire, a reserve transfer is done to move the expense into Retained Earnings.

Translation reserve

The Translation Reserve reflects the exchange differences from retranslation of the opening net investments in overseas subsidiaries to closing rate and translation of the results for the year from average rates to the closing rate.

6. Events after the balance sheet date

Financial:

On 6 January 2011, the Company announced that the Directors had reviewed and approved amendments to the Employee Share Option Scheme. One of the amending schedules required consent of shareholders for local tax purposes and it was passed at a general meeting held on the 11 February 2011.

At that time, the Directors also granted options over 4,000,000 ordinary shares (par value 1p) in the Company to the Directors, officers and certain employees under the amended scheme at an exercise price of 16.9p - 17.5p per ordinary share based on the appropriate plan rules for the recipients.

Also on the 6th of January, the Company announced that two of its Directors (Messrs. Yewdall and Snook) had expressed their intent to exercise their respective January 2006 share options set to expire on 12 January 2011 at the established option price of 12p per ordinary share. Mr. Yewdall exercised 464,476 shares and sold 250,000 immediately representing a net increase in his holdings of 214,476 to 2,081,808 or 1.58%. Mr. Snook's exercise of 250,000 options increased his net holdings to 3,856,652 or 2.9%. An additional 250,000 options have been exercised during 2011 by employees or former employees of the Group as of the date of this report.

Operational:

Since the end of financial year, the Group has announced several significant new license agreements that have been executed. These agreements include licensing of the groups TriDef PC software technologies to LG Electronics and Samsung for their PCs and monitor products as well as a leading PC chip manufacturer.

On 3rd March 2011, the Group announced an agreement with Texas Instruments Incorporated to integrate the Group's 2D to 3D conversion Android™ software solution into the Texas Instruments OMAP™ range of smartphone and tablet PC processors.

Other:

On 4 April 2011, the Group announced that it had hired Canaccord Genuity Limited to serve as Nominated Advisor ("NOMAD") and broker of record for the Company. The Company previously used N+1 Brewin (formerly known as Brewin Dolphin Ltd).

The Group has published regulatory announcements about these activities which can be found on the Group's website at www.ddd.com/about/about_stockinfo.html.

7. The Group's full Annual Report and Accounts will be made available to shareholders on or before 10th May 2011.

8. The Annual General Meeting of DDD Group plc will be held at Norton Rose LLP, 3 More London Riverside, London SE1 2AQ at 10.30am on 6th June 2011.