AGM Statement

Surface Transforms PLC
14 October 2003


RNS Release

14th October 2003 


Chairman's Additional Comments at Annual General Meeting

I thought shareholders would find it informative if I provided an update on
trading and developments within the Company.

As I wrote in my statement in the annual report, the company has made good
progress with important milestones achieved in our principal aerospace and
automotive markets. The position at the year end showed Surface Transforms had
successfully increased revenues from a lower cost base, which produced a marked
reduction in losses in the second half.

In February 2003, the Board conducted a strategic review of the business, which
led to a strengthened board and a refining of our business model, which is now
clearly focussed on three core activities. One of the aims of the strategic
review was to reduce our dependence on a few large client projects, following
our experience in the Formula One brake market. To remind shareholders of these
core activities these are: knowledge-based collaborative ventures with global
commercial partners in aircraft braking and rocket propulsion materials;
contract development activity with commercial partners in the automotive and
transportation markets where carbon fibre reinforced ceramic (CFRC) application
opportunities abound; and CFRC product sales.

In terms of current trading, performance in the first quarter is in line with
budget, supported by payments we have been receiving from one of our global
aircraft brake system partners.

In September, we announced a 12-month contract to supply sample batches of
advanced carbon fibre ceramic materials to the Air Force Research Laboratory,
the United States Air Force's leading-edge research unit. The contract is
progressing well with our first stage of the programme due to be completed and
invoiced before the end of this month.

We are also pleased to report that we have embarked on a braking materials
development programme in the high performance car market. This is a new activity
and work to deliver test samples of bespoke braking compounds has recently
commenced.

I would also like to take this opportunity to introduce Johannah Stretton, who
has recently joined Surface Transforms as Financial Controller & Company
Secretary. Johannah is a chartered accountant who worked for many years with our
auditors KPMG both in the UK and Germany and brings considerable experience of
advising and auditing growth companies in the technology sector.

Looking ahead, our task remains focussed on ensuring we maintain our scientific
lead in carbon fibre reinforced ceramic technology, continue to progress new and
existing contract developments and development collaborations and in increasing
sales in our principal markets.


Kevin D'Silva
Chairman

Enquiries, please contact:

Julio Faria                          Neil Boom
Managing Director                    Managing Director
Surface Transforms plc               Gresham PR Ltd.
01928 735498                         020 7404 9000



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