AGM Statement

Surface Transforms PLC
20 October 2004



RNS Release

20 October 2004

                             Surface Transforms plc
            Chairman's additional comments at Annual General Meeting
                                        
I thought shareholders would find it informative if I provided an update on
developments since the publication of our annual results in August. As I wrote
in my annual report statement, progress towards our goal, which is the
profitable commercial exploitation of our carbon fibre reinforced ceramic (CFRC)
materials, has been boosted by the successful raising of £2.7 million net of
expenses in new funds earlier in the year. These funds have allowed us to
strengthen the management team and our technical capabilities.

Since Dr. Kevin Johnson joined us as Operations Director, progress has already
been made in expanding the technical and business development teams at our
operations located at the Cheshire Innovation Park in Ince. In December 2004,
Antoni Sznerch BSc MBA will join as Business Development Director. He will focus
on increasing our presence in the high-performance road car market. With 20
years' experience selling high-technology, light-weight composite materials to
the European motor industry Mr. Sznerch is well known to many of the companies
operating in our target markets. We anticipate that this focus will help us move
towards achieving our goal to become the industry-leading supplier of carbon
ceramic brake pads and discs.

During the remainder of the 2004/5 financial year we plan to install a new
generation carbon ceramic development plant at the Cheshire site. The process
engineering and development are well underway although the installation and
operational phases are still at an early stage. The new Surface Transforms'
plant will be built using our proprietary technology which we expect will
significantly reduce current production costs and the manufacturing time for
carbon ceramic disc brakes. Once completed, our goal is to further advance our
lead in the provision of world-class, carbon ceramic process technology for
licensing and in-house use, serving both brake and non-friction customers.

Looking ahead, we expect the current financial year's turnover to be a small
improvement over 2003/4. However, investment in new processes, facilities and
management will increase the Company's expenses and overheads in the current
financial year, as we add value to the business.

In our key markets of aircraft brakes, road cars and rocket motors, business and
environmental drivers such as weight saving, improved brake friction efficiency
and reduced wear continue to favour the use of carbon ceramic materials. In
particular, road car brake developments with our German partner METEK are
progressing well. METEK anticipates early system orders to be placed at the
forthcoming Automotive Aftermarket Show in Essen, Germany, which we will be
attending in late November in partnership with METEK. The other key aircraft
brake and anti-ballistics partnership contracts are progressing and currently
both are midway in a sustained period of material testing. Recent testing of our
rocket motor materials has exceeded expectations and we are increasingly
encouraged about success in this market.

Surface Transforms is still a relatively small high-technology development
business in the process of fully commercialising its technology. In this light
your Board has confidence in the progress that is being made and the potential
for the Company's products and technology.

A transcript of the question and answer session at the AGM is available on
www.armshare.com which can be reached via www.surface-transforms.com.

Further details of the Company's business and financial performance, its share
price history and the latest published commercial news can be found at the same
location.

Mr Kevin D'Silva
Chairman of Surface Transforms plc
20 October 2004


Enquiries, please contact:

Julio Faria                                      Neil Boom
Managing Director                                Managing Director
Surface Transforms plc                           Gresham PR Ltd.
01928 735 498                                    020 7404 9000

Simon Clements
John East & Partners Limited
020 7628 2200




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