Final Results

Forbidden Technologies PLC
28 April 2004



                           FORBIDDEN TECHNOLOGIES PLC

            Preliminary Results for the year ended 31 December 2003



Forbidden Technologies plc, which has developed and is marketing a range of
products for video distribution over the Internet and mobile devices including
phones, announces Preliminary Results for the year ended 31 December 2003.



Highlights


•   477k loss (2002: £431k) due to increased product and sales development
    costs

•   2.3 million net current assets

•   New product announced: FORscene Internet editing and publishing tool

•   Range of six products now to be marketed

•   Core compression technology remains at the leading edge



Vic Steel, Chairman, commented:

'2003 has proven to be a year of major technical developments building on the
existing achievements that our highly skilled team has made since the company
was floated in February 2000. We have also adjusted our development programme to
provide products for specific video related applications over multiple devices.
Today, we offer six different products aimed at different user needs.

'I would like to reiterate that we are passionate about our company and our
dynamic technology, and to reinforce our belief that video, over the next
decade, will replace text and sound as the mainstay of communications. Forbidden
Technologies' reputation as a front runner in video delivery is growing.'


                                                                   27 April 2004




Forbidden Technologies plc
    Stephen Streater, Chief Executive                         020 8879 7245
    Greg Hirst, Business Development Director

College Hill
    Nicholas Nelson /Corinna Dorward                          020 7457 2020




CHAIRMAN'S STATEMENT

I am pleased to report on the annual results for Forbidden Technologies for the
fourth completed year of our development. In the year to 31 December 2003 we
made sales of £40,471 compared with £9,040 in the previous year and recorded a
loss of £476,843 compared with £430,981 in the previous year. The increased loss
is the result of higher investment in resources (mainly for business and sales
development). Our balance sheet continues to be very strong with £2.3 million of
net current assets.

2003 has proven to be a year of major technical developments building on the
existing achievements that our highly skilled team has made since the Company
was floated in February 2000. From a modest ambition of developing a proprietary
video compression technology which could work via 56k modem and the achievement
of a 'talking heads' demonstration in our first year, we have created a wide
range of new compression techniques.

We have also adjusted our development programme to provide products for specific
video related applications over multiple devices. Today, we offer six different
products aimed at different user needs. You will see from the Chief Executive's
review that we are focused on providing value added solutions with widespread
market appeal rather than a one product solution.

The marketplace has also changed significantly over the past four years. Prior
to the downturn in the technology market in 2001, there was an expectation of
early widespread availability of true broadband and of 3G mobile. Post the
bubble there has been a recognition that new markets and the adoption of new
technologies will take more time to come into effect. In truth, we should marvel
that such major innovations as video with sound on mobile phones or live
compression of video on a variety of platforms are becoming available in such a
short time.

We have transitioned from a service based organisation to one which is now
product/solution centred. We have moved from our early stage in-house bureau
focused activities to also distributing and licensing our products. We are now
licensing compressors and software to customers, and already have orders for ten
such systems out in the marketplace. We are extending our geographic reach, with
compressors licensed in Japan, Italy, Spain and the UK.

Forbidden's business model ensures that we will be competitively placed to take
advantage of these markets as they develop. On top of our superior products and
technology, we are seemingly rare in our market segment in maintaining tight
budgetary controls and have avoided building up huge losses in developing and
bringing products to market. This strategy allows us to provide value added
products at very competitive prices. Licensing to large potential customer
groups is a further aid to scalability without significant increases in fixed
costs.

The European Commission has recently ruled that Microsoft's compulsory shipping
of its own media player in its operating system was illegal and anticompetitive
and has ordered Microsoft to make versions of its operating system which do not
include its media player. This can only help companies such as ours which work
independently of any installed media players.

Forbidden's video technology allows far reaching access to PCs because it does
not require broadband and does not get blocked by firewalls.   The increasing
spread of Java is playing to Forbidden's strengths. Not only is our video widely
accessible but, by writing our new tools in Java, we are making these accessible
to people with web access too.

I would like to reiterate that we are passionate about our Company and our
dynamic technology, and to reinforce our belief that video, over the next
decade, will replace text and sound as the mainstay of communications. Forbidden
Technologies' reputation as a front runner in video delivery is growing, as
witnessed by the increasing number of visits to our website www.forbidden.co.uk
and the increasing number of unsolicited enquiries we are receiving from
potential customers.


                       CHIEF EXECUTIVE'S REVIEW

In 2003, Forbidden transformed its commercial products and services. The Company
is now set to market a range of six products:

  • Internet editing and publishing tool: FORscene
  • Video for mobile phones: FORmobile
  • Live internet video streaming: FORlive
  • Video presentations with slides: FORpresentation
  • Video email: FORmail
  • Video for websites: FORweb


During the year, the company progressed from offering bureau services to selling
compression systems to enable customers to create their own videos. Forbidden's
products and services enable the distribution of video over both fixed and
mobile Internet to multiple devices.


Sales & Marketing

We have placed increasing importance on marketing during the year. The Company
exhibited at its first international exhibition, IBC in Amsterdam (Europe's
largest broadcast trade show). Due to the popularity of the Company's stand, in
2004 Forbidden has been invited on to the organising committee of the IBC. An
Internet advertising campaign has also increased the profile of the Company.

As well as selling systems, our products can be distributed over the web, and
the website (www.forbidden.co.uk) has proved an extremely effective
communications tool. Daily updates are needed to keep pace with the rapid
progress. Hits have multiplied during the year; we are now contacted regularly
by new leads, increasing the effectiveness of our sales team.

Although the primary focus is on the UK market, we have made sales in three
other countries - Japan, Italy and Spain. As Forbidden's products become
increasingly simple to install and support, the Company is becoming more
confident about sales further afield.


Staff

As a young and dynamic company, Forbidden employs only the highest calibre
people. Over the year, we have expanded to provide additional resource for the
Bureau services and customer support team.  The Company's technical team remains
the same size.


Share options

All full time permanent staff benefit from share options. During 2003, staff
exercised options granted in 2000, allowing them to share the increase in
Forbidden's value they helped to create. Proceeds from this option exercise have
helped keep our reduction in net assets this year similar to last year, in spite
of the Company's increased activity.


IFRS

Forbidden Technologies plc will have the option to adopt IFRS in the financial
statements for the year ended December 2005. The Board has begun considering the
differences between UK accounting standards and IFRS. We have initially
identified accounting for share options and development costs as two areas which
could impact on our financial statements.


Shareholder offer

Forbidden Technologies includes its large shareholder base in the product
development process. This year the company is offering registered shareholders
£100 worth of free credits to use with the new FORscene product, which enters
its alpha test phase this month. FORscene is an exciting and visionary video
compression, editing and publishing product that allows customers to edit video
footage on line. Remarkably, customers can then publish the resulting videos on
the web or on mobile phones at the touch of a button. It is extremely simple and
efficient to use and its Java implementation makes it universally accessible
from a web page.





Profit and loss account
for the year ended 31 December 2003


                                                                                 Unaudited
                                                                                     2003             2002
                                                                                        £                £

Turnover                                                                           40,471            9,040
Administrative expenses                                                          (664,071)        (568,302)

Operating loss                                                                   (623,600)        (559,262)
Other interest receivable and similar income                                       82,589          128,281

                                                                                 (541,011)        (430,981)

Loss on ordinary activities before taxation
Tax on loss on ordinary activities                                                 64,168                 -

Loss for the financial year                                                      (476,843)        (430,981)


Basic and diluted loss per ordinary 0.8 pence share         (Note 2)               (0.64p)          (0.58p)




A statement of recognised gains and losses has not been included as part of
these financial statements as the Company made no gains or losses in the year
other than as disclosed in the profit and loss account.

A note on historical cost gains and losses has not been included as part of the
financial statements as the results disclosed in the profit and loss account are
prepared on an unmodified historical cost basis.

The results stated above are all derived from continuing operations.


Balance sheet
at 31 December 2003

                                                            Unaudited
                                                                2003                                2002
                                              £                    £                £                  £
Fixed assets
Tangible assets                                               13,818                              14,264

Current assets
Debtors                                 167,224                               142,725
Cash                                      8,070                                    ---
Liquid Resources                      2,196,848                             2,673,503
                                      2,372,142                             2,816,228


Creditors: amounts falling due
within one year                         (84,981)                              (86,420)

Net current assets                                         2,287,161                           2,729,808

Net assets                                                 2,300,979                           2,744,072


Capital and reserves
Called up share capital                                      603,800                             594,800
Share premium account                                      2,921,250                           2,896,500
Capital contribution reserve                                 125,000                             125,000
Profit and loss account                                   (1,349,071)                           (872,228)

Shareholders' funds - equity                               2,300,979                           2,744,072







Cash flow statement
for the year ended 31 December 2003


                                                                           Unaudited
                                                                               2003              2002
                                                                                  £                 £

Reconciliation of operating loss to net cash outflow from
operating activities

Operating loss                                                             (623,600)         (559,262)
Depreciation charges                                                         31,631            29,254
Decrease/(Increase) in debtors                                              (55,306)           27,011
Increase/(Decrease) in creditors                                             11,152            27,734

Net cash outflow from operating activities                                 (636,123)         (475,263)

Cash flow statement

Cash flow from operating activities                                        (636,123)         (475,263)
Returns on investments and servicing of finance                             152,965           146,502
Taxation                                                                     24,599                  -
Capital expenditure                                                         (31,185)          (32,077)

Cash outflow before management of liquid resources                         (489,744)         (360,838)

Management of liquid resources                                              476,655           331,377
Financing                                                                    33,750                  -

Increase/(Decrease) in cash in the year                                      20,661           (29,461)

Reconciliation of net cash flow to movement in net funds

Increase/(Decrease) in cash in the year                                      20,661           (29,461)
Cash inflow from decrease in liquid resources                              (476,655)         (331,377)

Movement in net funds in the year                                          (455,994)         (360,838)
Net funds at the start of the year                                        2,660,912         3,021,750

Net funds at the end of the year                                          2,204,918         2,660,912





Notes

1.     Basis of preparation

       The preliminary announcement has been prepared using accounting policies consistent with those set
       out in the financial statements for the year ended 31 December 2002.

       The financial information in this preliminary announcement does not constitute the company's
       statutory accounts for the years ended 31 December 2002 or 2003. The financial information for the
       year ended 31 December 2002 is derived from the statutory accounts for that financial year. Those
       accounts have been reported on by the company's auditors and have been delivered to the registrar of
       companies. The report of the auditors was unqualified and did not contain a statement under section
       237 (2) or (3) of the Companies Act 1985. The statutory accounts for the year ended 31 December 2003
       will be finalised on the basis of the financial information presented by the directors in this
       preliminary announcement and will be delivered to the registrar of companies following the company's
       annual general meeting.

       The preliminary announcement for the year ended 31 December 2003 was approved by the directors on
       27th April 2004.


2.     Earnings per share

       Diluted earnings per share has not been presented as including all potential ordinary shares in the
       calculation would be anti-dilutive.


       Basic earnings per share

       The weighted average number of shares in issue during the period is 74,678,125 (2002: 74,350,000).





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