SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 20-F
(Mark  One)

[ ] REGISTRATION  STATEMENT  PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
    EXCHANGE  ACT  OF  1934
                                       OR

[X] ANNUAL  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT  OF  1934

                    For the fiscal year ended April 30, 2002.

                                       OR

[ ] TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF THE SECURITIES
    EXCHANGE  ACT  OF  1934

        For the transition period from ______________ to _______________


                         Commission File Number 0-21978
                                                -------

                       FUTUREMEDIA PUBLIC LIMITED COMPANY
             (Exact name of registrant as specified in its charter)

                                England and Wales
                 (Jurisdiction of incorporation or organization)

  MEDIA HOUSE, ARUNDEL ROAD, WALBERTON, ARUNDEL, WEST SUSSEX BN18 0QP, ENGLAND
                    (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:
None

Securities  registered or to be registered pursuant to Section 12(g) of the Act:
American  Depositary  Shares  (each  representing  one  Ordinary  Share)
Ordinary  Shares  of  1  1/9  p  each
Redeemable  Warrants

Securities  for  which there is a reporting obligation pursuant to Section 15(d)
of  the  Act:  None

Indicate  the  number  of  outstanding shares of each of the issuer's classes of
capital  or common stock as of the close of period covered by the annual report:
29,648,374  Ordinary  Shares  of  1  1/9  p  each.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the registrant was
required  to  file  such  reports)  and  (2)  has  been  subject  to such filing
requirements  for  the  past  90  days:

Yes  X       No
    ----        ----

Indicate by check mark which financial statement item the registrant has elected
to  follow:

Item  17         Item  18   X
          ----             ----

<PAGE>


                                TABLE OF CONTENTS

EXPLANATORY  NOTE                                                         2

WARNINGS  REGARDING  FORWARD  LOOKING  STATEMENTS                         3

PART  I                                                                   4

ITEM  1.  IDENTITY  OF  DIRECTORS,  SENIOR  MANAGEMENT  AND  ADVISORS     4

ITEM  2.  OFFER  STATISTICS  AND  EXPECTED  TIMETABLE                     4

ITEM  3.  KEY  INFORMATION                                                4

ITEM  4.  INFORMATION  ON  THE  COMPANY                                  14

ITEM  5.  OPERATING  AND  FINANCIAL  REVIEW  AND  PROSPECTS              21

ITEM  6.  DIRECTORS,  SENIOR  MANAGEMENT  AND  EMPLOYEES                 31


ITEM  7.  MAJOR  SHAREHOLDERS  AND  RELATED  PARTY  TRANSACTIONS         38

ITEM  8.  FINANCIAL  INFORMATION                                         41

ITEM  9.  THE  OFFER  AND  LISTING                                       41

ITEM  10.  ADDITIONAL  INFORMATION                                       44

ITEM  11.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES ABOUT MARKET RISK 47

ITEM  12.  DESCRIPTION  OF  SECURITIES  OTHER  THAN  EQUITY  SECURITIES  47

PART  II                                                                 48

ITEM  13.  DEFAULTS,  DIVIDEND  ARREARAGES  AND  DELINQUENCIES           48

ITEM  14.  MATERIAL  MODIFICATIONS  TO THE RIGHTS OF SECURITY
HOLDERS AND USE OF PROCEEDS                                              48

ITEM  15.  CONTROLS  AND  PROCEDURES                                     48

ITEM  16.  [RESERVED]                                                    48

PART  III                                                                49

ITEM  17.  FINANCIAL  STATEMENTS                                         49

ITEM  18.  FINANCIAL  STATEMENTS                                         49

ITEM  19.  EXHIBITS                                                      50

SIGNATURES AND CERTIFICATIONS                                            52

                                       i


<PAGE>
                                EXPLANATORY NOTE

As  used  herein,  except as the context otherwise requires, the terms "Company"
and  "Futuremedia  PLC"  refer  to  Futuremedia  Public  Limited Company and its
subsidiaries.  The Company is organized under the laws of England and Wales. The
Company's  offices are located at Media House, Arundel Road, Walberton, Arundel,
West  Sussex  BN18  0QP,  England.  The  Company's  telephone  number  is
011-44-1243-555000.  The  Company  does  not  have offices in the United States.

Except  as  the context otherwise requires, "Ordinary Shares" or "Shares" refers
to  the  Ordinary  Shares  of  1  1/9  pence  each  of  the  Company.

The  Company's  American  Depositary  Shares  ("ADSs") have traded since May 29,
1996, on the Nasdaq SmallCap Market under the symbol FMDAY.  Each ADS represents
the  right  to receive one Ordinary Share of the Company.  ADSs are evidenced by
American Depositary Receipts ("ADRs").  ADSs evidenced by ADRs are issued by the
Bank  of New York as Depositary (the "Depositary") of the Company's ADR facility
in  accordance with the terms of a deposit agreement between the Company and the
Depositary.

The  Company publishes its Consolidated Financial Statements expressed in United
Kingdom  ("UK")  pounds  sterling.  Such  financial  statements  are prepared in
conformity  with  United  States  generally  accepted accounting principles ("US
GAAP").  In this document, references to "US dollars", "US$", "cents" or "$" are
to  United  States  ("US")  currency  and  references  to  "pounds  sterling",
"sterling",  "GBP",  "pence"  or "p" are to UK currency. Solely for convenience,
this  Report  contains  translations  of  certain pound sterling amounts into US
dollars  at  specified  rates.  These  translations  should  not be construed as
representations  that  the  pound  sterling  amounts  actually represent such US
dollar  amounts  or could have been or could be converted into US dollars at the
rates  indicated or any other rates. Unless otherwise indicated, the translation
of  pounds  sterling  into  US  dollars  have been made at the rate of GBP1.00 =
$1.4631,  the  Noon  Buying  Rate in New York City for cable transfers in pounds
sterling  as  certified for customs purposes, by the Federal Reserve Bank of New
York  (the  "Noon Buying Rate") on April 30, 2002. On November 14, 2002 the Noon
Buying  Rate  was  GBP  1=$1.5872.  For  information regarding rates of exchange
between pounds sterling and US dollars from fiscal 1997 to the present see "Item
3  Selected  Financial  Data  -  Exchange  Rates."

The  Company's  Fiscal  year  ends on April 30 of each year.  References in this
document to a particular year are to the fiscal year unless otherwise indicated.

References in this annual report to the "Companies Act" are to the Companies Act
1985,  as  amended, of Great Britain; references to the "EU" are to the European
Union.

The  Company  furnishes  the  Depositary  with annual reports containing audited
consolidated  financial  statements  and  an  opinion  thereon  by  independent
auditors.  The  Company  also  furnishes  to  the  Depositary  all  notices  to
shareholders  of  the  Company.  The  Depositary makes such notices, reports and
communications  available  for  inspection by record holders of ADRs and, at the
Company's  request  and  expense,  the  Depositary  mails  such  notices  and
communications  to all record holders of ADRs.  Only persons in whose names ADRs
are  registered on the books of the Depositary will be treated by the Depositary
and  the  Company  as  holders  of  ADRs.

Information  contained  on  any of the Company's Internet websites, or any other
websites  referred to herein, does not constitute part of this report and is not
incorporated  by  reference  herein

                                        2


<PAGE>

                  WARNINGS REGARDING FORWARD-LOOKING STATEMENTS

Some  of  the  statements  contained  in  this  Report  and  in  the  documents
incorporated  by  reference  are forward-looking statements made pursuant to the
safe  harbor provisions of the Private Securities Litigation Reform Act of 1995.
In  essence,  forward-looking  statements  are  predictions  of  future  events.
Although  the  Company  would  not  make  forward-looking  statements  unless it
believed  it  had  a reasonable basis for doing so, the Company cannot guarantee
the  accuracy  of  such statements and actual results may differ materially from
those  anticipated  due  to  a number of uncertainties, many of which we are not
aware  of.

The  Company  has  no  plans  to  update  its  forward-looking  statements.  The
Company's  forward-looking  statements  are accurate only as of the date of this
Report,  or  in the case of forward-looking statements in documents incorporated
by  reference,  as  of  the  date  of  those  documents.  The Company identifies
forward-looking  statements  with  the words  "plans," "expects," "anticipates,"
"estimates,"  "will,"  "should"  and  similar  expressions.  Examples  of  the
Company's  forward-looking  statements  may  include  statements  related  to:

-    the  Company's  plans,  objectives,  expectations  and  intentions;

-    the timing, availability, cost of development and functionality of products
     and  solutions  under  development  or  recently  introduced;  and

-    the  anticipated  growth  rate  of  the  market for Internet-based learning
     technologies  and  products  in  general  and  the  Company's  products and
     solutions  in  particular.

Factors  that  could  cause or contribute to differences in the Company's future
financial  results include those discussed in the Risk Factors set forth in Item
3.D.  below  as  well  as  those  discussed  elsewhere  in  this  Report.

Based  on its current operations and financial position, the Company anticipates
that  it  will  need to seek additional financing by the end of the third fiscal
quarter  of  2003.  Management  are  considering  a  number of options which are
explained  in  further  detail  in  other  sections  of this Report (see "Recent
Developments"  in  Item  4).

                                        3


<PAGE>

                                  PART I
                                  ------

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS.
---------------------------------------------------------------
Not  Applicable

ITEM  2.  OFFER  STATISTICS AND EXPECTED TIMETABLE.ITEM
--------------------------------------------------

Not  Applicable

ITEM  3.  KEY  INFORMATION
--------------------------

A.  SELECTED  CONSOLIDATED  FINANCIAL  DATA.
-------------------------------------------

The  selected consolidated financial data as of  April 30, 2001 and 2002 and for
the  years  ended  April  30,  2000,  2001  and  2002 have been derived from the
audited  consolidated  financial statements of the Company included elsewhere in
this  Report.  The  selected  consolidated  financial data as of April 30, 1998,
1999 and 2000, and for the years ended April 30, 1998 and 1999 have been derived
from the audited consolidated financial statements of the Company, which are not
included  in  this  Report.

The  information  set  forth  below  should  be read in conjunction with, and is
qualified  in  its  entirety by reference to, the Company's audited consolidated
financial  statements  and  notes  thereto  and  the discussion thereof included
herein.


<TABLE>
<CAPTION>

<S>                             <C>        <C>     <C>      <C>      <C>      <C>

Income Statement Data                        Years Ended April 30
                                ------------------------------------------------------
                                2002(1)   2002     2001     2000     1999     1998
                                -------   ----     ----     ----     ----     ----
                                        (in thousands, except per share data)
                                   $       GBP      GBP      GBP      GBP     GBP

Net Sales                        1,333      911      743      867    1,534   2,700

Operating loss  .               (2,967)  (2,028)  (3,812)  (2,672)  (1,060)   (777)

Loss before
income taxes                    (2,944)  (2,012)  (3,697)  (2,645)  (1,122)   (886)

Net loss                        (2,944)  (2,012)  (3,697)  (2,645)  (1,122)   (886)


Net loss per share - basic and
diluted                         (9.65)c  (6.60)p  (12.71)p (11.17)p  (5.77)p  (5.58)p
--------------------------------------------------------------------------------------

</TABLE>




                                        4


<PAGE>



<TABLE>
<CAPTION>

<S>                                            <C>         <C>       <C>          <C>         <C>        <C>

Balance Sheet Data                                                        At April 30,
                                              -------------------------------------------------------------------
                                               2002(1)      2002       2001        2000       1999        1998
                                              --------      ----       ----        ----       ----        ----
                                                             (in thousands except number of shares)
                                                   $         GBP        GBP         GBP        GBP         GBP

Cash and cash equivalents                         651         445       2,547       2,612        435         43

Total assets.                                   3,056       2,089       4,713       4,437      2,461      1,970

Total current liabilities                       2,227       1,522       2,208         845        366        722

Long-term debt and capital lease obligations        -           -         442         384        850        818

Net Assets                                        829         567       2,063       3,208      1,245        430

Shareholders' equity                            82998         567       2,063       3,208      1,245        430

Share Capital      .                              481         329         329         305        230        191

Number of Shares                           29,648,374  29,648,374  29,648,374  27,416,152 20,684,522 17,229,976
Shares to be issued   .                    10,346,979  10,346,979           -           -

</TABLE>

(1)  US  dollar  amounts have been translated solely for convenience at the Noon
     Buying  Rate  on  April  30,  2002  of  GBP1.00  =  $1.4631.

EXCHANGE  RATES

The  Company publishes its financial statements in Pounds Sterling. The majority
of  the  Company's  revenues are denominated in Pounds Sterling and U.S. dollars
and  the  majority  of the Company's expenses and debt are denominated in Pounds
Sterling.

The  following  sets  forth  the  exchange  rate between the Company's financial
reporting currency, the Pound Sterling, and the US dollar, using the Noon Buying
Rate.  Such  rates  are  not  used  by  the  Company  in  the preparation of its
Consolidated  Financial  Statements:

     (a)  The  exchange rate as of July 31, 2002, the end of the Company's first
          fiscal  quarter,  was  GBP1=$1.5744,  and  at  November  14,  2002 was
          GBP1=$1.5872.

     (b)  The high and low exchange rates for each month during the previous six
          months  expressed  in  US  dollars per pound sterling were as follows:


         SEVEN MONTHS ENDED OCTOBER 31, 2002      HIGH       LOW
         -----------------------------------     -----     -----

         October, 2002                           1.5801  1.5475
         September, 2002                         1.5614  1.5413
         August, 2002                            1.5704  1.5210
         July, 2002                              1.5866  1.5234
         June, 2002                              1.5320  1.4600
         May, 2002                               1.4700  1.4528
         April, 2002                             1.4631  1.4257

                                        5


<PAGE>


     (c)  For  the  five  most  recent  fiscal years, the average rates for each
          period,  calculated  by using the average of the exchange rates on the
          last  business  day  of each month during the period, were as follows:

          Year Ended April 30     Average

          1998                    1.6457
          1999                    1.6210
          2000                    1.6113
          2001                    1.4676
          2002                      1.4339


B.  CAPITALIZATION  AND  INDEBTEDNESS.
-------------------------------------

Not  Applicable


C.  REASONS  FOR  THE  OFFER  AND  USE  OF  PROCEEDS.
----------------------------------------------------

Not  Applicable


D.  RISK  FACTORS.
-----------------

This  Report  contains  forward-looking  statements,  which  involve  risks  and
uncertainties.  The  Company's actual results could differ materially from those
anticipated  in these forward-looking statements as a result of certain factors,
including  those  set  forth in the following Risk Factors and elsewhere in this
Report.

     Financial  Condition  and  Liquidity;  Need  for  Additional  Financing

As  of  July  31,  2002  the  Company  had working capital deficit of GBP379,000
($555,000).  At  November  14,  2002, the Company's cash resources and available
borrowings are insufficient to fund the current level of operations for the next
twelve  months.  As stated in the auditor's opinion to the financial statements,
these factors raise substantial doubt about the Company's ability to continue as
a  going  concern.  Management  believes that the steps taken to reduce its cost
base  during  the  latter part of the fiscal year ended April 30, 2002, together
with  the  strong  forward order book and active sales prospects it is pursuing,
supported  by  the  recruitment of new sales staff in October and November 2002,
will  enable the Company to return to eventual profitable trading, and therefore
has  prepared  these  financial  statements  on  a  going  concern  basis.  The
availability  of  bridging  finance in anticipation of the sale of the Company's
premises at Arundel Road, Walberton, West Sussex will provide funds to discharge
the  balance  on  the Loan Stock Agreement and further working capital. There is
significant  reliance  therefore  on  the generating of funds through profitable
trading. If the Company is unsuccessful in achieving its anticipated revenues in
its  third  fiscal quarter of the current year, management recognises that there
will  be  a  need  to  secure  additional funding through debt or equity capital
before  the  end  of  the  fiscal  year  to  April  30,  2003.


                                        6


<PAGE>


There  can  be  no assurance that the Company will be successful in implementing
these  plans.  The Company's financial statements do not include any adjustments
to  reflect the possible future effects on the recoverability and classification
of  assets or the amounts and classification of liabilities that may result from
the  outcaome  of  this  uncertainty.

     Listing  Maintenance  Criteria  for  Nasdaq  System; Disclosure Relating to
     Low-Priced  Stocks

The  Company's  ADSs, as evidenced by ADRs, which in turn evidence the Company's
Ordinary  Shares,  are  currently  traded  on  the  Nasdaq  SmallCap  Market. No
assurance  can  be given that an orderly trading market will be sustained in the
future.  Moreover,  the  National  Association of Securities Dealers, Inc., (the
"NASD")  which  administers  Nasdaq,  requires  that,  in  order for a company's
securities  to  continue to be listed on the Nasdaq SmallCap Market, the company
must  maintain  either a minimum stockholder's equity $2,500,000, $35,000,000 in
market  capitalization  or net income of $500,000 in the most recently completed
fiscal  year  or  in two of the last three most recently completed fiscal years.
The  Company  had stockholder's equity of $870,000 as of September 30, 2002, net
loss  for  the  financial  year  ended April 30, 2002 of $2,944,000 and a market
capitalization  of  $3.8  million  on September 30, 2002. In addition, continued
inclusion  requires  that  the  Company  maintain  two  registered  and  active
market-makers.  The  failure  to  meet these listing maintenance criteria in the
future  may  result  in  the  de-listing  of  the Company's ADSs from the Nasdaq
SmallCap  Market.  In  such  an event, an investor may find it more difficult to
dispose  of,  or  to  obtain  accurate quotations as to the market value of, the
Company's  Ordinary  Shares.

In  addition,  in  the  event  the Company's ADSs are delisted from the SmallCap
Market,  the Company's ADSs and Ordinary Shares may become subject to the "penny
stock"  rules  of  the  United  States  Securities  and Exchange Commission (the
"Commission").  A  "penny  stock"  is generally an equity security with a market
price of less than $5 per share which is not quoted through the Nasdaq system or
a  national  securities  exchange  in  the  US.  Due to the risks involved in an
investment  in  penny  stocks, US securities laws and regulations impose certain
requirements  and  limitations  on  broker/dealers who recommend penny stocks to
persons  other  than  their  established  customers  and  accredited  investors,
including  making a special written suitability determination for the purchaser,
providing  purchasers  with  a  disclosure  schedule  explaining the penny stock
market  and  its  risks  and  obtaining the purchaser's written agreement to the
transaction  prior  to  the  sale.  These  requirements may limit the ability of
broker/dealers  to  sell  penny  stocks. Also, because of these requirements and
limitations,  many  broker/dealers may be unwilling to sell penny stocks at all.
In  the  event  the Company's Ordinary Shares become subject to the Commission's
rules relating to penny stock, the trading market for the ADSs may be materially
adversely  affected.


     Dependence  on  Market  for  e-learning

Substantially  all  of the Company's revenues are directly or indirectly related
to  expenditures  of  large  corporate businesses on emerging net-based learning
technologies  and  associated services. These large businesses may be subject to
significant  fluctuations  as  a  consequence  of  general  economic conditions,
industry patterns or other factors affecting such expenditures. Expenditures for
products  and  services  such  as  the  Company's are directly affected by these
fluctuations. The Company expects that its operations will continue to depend on
these  expenditures.  Fluctuations,  downturns  or  slowdowns  in  these  large
businesses  could  have  a  material  adverse  effect on the Company's business,
financial  condition  and  results  of  operations.


                                        7


<PAGE>


     New  Products  and  Technological  Change

The  Company's  business will be significantly impacted by technological changes
and  innovations.  The  market  for  the  Company's products is characterized by
rapidly  changing  technology,  evolving  industry  standards  and  frequent
introductions  of  new  products.  The  Company  has  historically  derived  a
significant  portion of its revenues from the sale of new and enhanced products.
The  Company's  future  success  will  depend  upon  its  ability to enhance its
existing  products  and to develop and introduce, on a timely and cost-effective
basis,  new  competitive  products  with  features  that  meet changing customer
requirements  and  address  technological  developments.

The  Company's  products could be rendered obsolete by new customer requirements
or  the  emergence  of  new technologies. The failure of the Company to develop,
manufacture  and  sell  new  products  and  product  enhancements  in quantities
sufficient  to  offset a decline in revenues from existing products or to manage
product  and  related  inventory transitions successfully, would have a material
adverse  effect  on  the  Company's business, financial condition and results of
operations.

Because  of  the  complexity  of  the Company's products, significant delays can
occur  between  a  product's  initial introduction to the market and wide market
acceptance.  In  addition,  new  products  or enhancements may contain errors or
performance  problems  when  first introduced, when new versions are released or
even  after  such  products or enhancements have been used for a period of time.
Despite  testing  by  the  Company,  such defects may be discovered only after a
product  has  been  installed  and used by customers. Such errors or performance
problems could avoid detection in future shipments of the Company's products and
result  in  expensive  and time consuming design modifications, damaged customer
relationships  and  a  loss  of  market  share.

As  new products are introduced, the Company must attempt to monitor closely the
range  of  its  products  to  be  replaced and to phase out their production and
distribution  in  a  controlled manner. There can be no assurance, however, that
such  product  transitions  will be executed without adversely affecting overall
product sales or that the Company will be successful in identifying, developing,
and  marketing  new  products  or  enhancing  its  existing  products.

The  development of new products has required, and will continue to require, the
Company  to expend significant financial and management resources. The Company's
business  would  be  materially  adversely affected if the Company were to incur
delays  in  developing  new  products  or  enhancements  or  if such products or
enhancements  did  not  gain  market  acceptance.  In  addition, there can be no
assurance  that  products  or  technologies  developed  by  one  or  more of the
Company's  present  or  potential  competitors  could  not  render obsolete both
present  and  future  products  of  the  Company.

     Limited  Product  Life

There is no assurance that the useful life of any product will be long enough to
enable  the  Company  to  recover  its  development costs. In addition, sales of
certain of the Company's products generally may tend to decline over time unless
the  products  are  enhanced  or  repackaged.

     Changing  Customer  Preferences

Customer  preferences  for  instructional  programs,  entertainment  and  other
software  products  are continually changing. There can be no assurance that the
Company's  products  will receive and/or maintain substantial market acceptance.
Changes  in  customer  preferences  could  adversely  affect  levels  of  market
acceptance  of  the  Company's  products  and  its  operating  results.


                                        8


<PAGE>


     Competition

The  net-based  learning  business  is  new  and rapidly evolving with a growing
number  of  competitors  and  subject to rapid technological change. The Company
currently  competes  both  with  smaller  UK  based  companies as well as larger
multinational  firms in the development and implementation of net-based learning
products. Many of these competitors are more established, better capitalized and
have  a  larger  market  position  than  the  Company.

In  addition,  these competitors may have the ability to respond more quickly to
new  or  emerging  technologies,  may  adapt more quickly to changes in customer
requirements  and may devote greater resources to the development, promotion and
sale  of  their  products and services than the Company. The Company may also be
operating at a cost disadvantage compared to competitors who have greater direct
buying  power  from  suppliers  or  who  have  lower  cost  structures.

     Early  Stage  of  Market  Development

The  markets  for most of the Company's products are at a relatively early stage
of  development  and  customer  acceptance.  Broader acceptance of the Company's
products will be dependent upon customer and end-user reaction to those products
and  the  price  and performance of the Company's and its competitors' products.
The  Company  believes  that  the development of these markets will be, in part,
dependent  on  the success of the Company's efforts to inform and demonstrate to
its  customers  the  perceived efficacy of the Company's products. These markets
may  never  develop  further  and the Company's products may not achieve broader
market  acceptance.

Reliance  on  Corporate  Customers;  Lengthy  Sales  Cycle

A  substantial  portion  of  the Company's revenues is derived from sales of its
products  and  services  to  large  corporate  customers  who  use the Company's
products  on  their  own  network  infrastructure. These customers demand highly
reliable  products  and  often require up to several months to evaluate and test
the effectiveness of Company's products before deciding whether to committing to
purchase. Such evaluations are commonly based on the provision by the Company of
demonstration  material based on existing solutions produced for other customers
and  frequently  require  significant  pre-sales  activity.

If  a  corporate  customer decides to purchase the Company's products, the sales
volume  of  these  products  will be significantly dependent upon the timing and
effectiveness  of  the  efforts  of that customer in incorporating the Company's
products into the customer's infrastructure. Some of the Company's customers may
also  source  third  party  e-learning  content  products  that compete with the
Company's  products.  These  customers  could give higher priority to the use of
competing  products.  Some  of  the Company's customers do not have exclusive or
long-term  purchase  obligations  with  the Company. The failure of customers to
decide  to purchase the Company's products after the Company expends significant
marketing  resources  and  the possibility that customers may source third party
competing  products  could  each have a material adverse impact on the Company's
business,  financial  condition  and  results  of  operations.

Reliance  on  Significant  Customers

For  the  fiscal  year ended April 30, 2002, the Company's two largest customers
together  represented  approximately 78% of gross sales of the Company. The loss
of  either  of these major customers could have a material adverse effect on the
Company's  business.


     Overseas  Customers
                                        9


<PAGE>


Some of the Company's products are supplied to customers located outside the UK.
Action  for  the recovery of debts from these customers may prove more difficult
and more expensive, if it is possible at all, than from customers located within
the  jurisdiction of English courts. In addition, claims against the Company may
be  brought in overseas courts, and may prove more costly or difficult to defend
than  claims  brought  in  English  courts.

     Dependence  on  Limited  Sources  of  Supply

The  Company relies on one or only a limited number of suppliers for certain key
software  components,  hosting  services and e-learning content. These suppliers
are  located in various countries. As a result, the Company's relationships with
these  suppliers  are  subject  to  political,  legal,  economic  and  other
uncertainties,  in addition to general risks associated with reliance on limited
sources of supply. A change of control of a supplier could also adversely affect
the  Company's  ability  to obtain supplies and provide continuity of service on
the  same  or  other  favorable  terms,  if  at  all.  The Company does not have
long-term  purchasing  arrangements  with  all  of  its  suppliers. Obtaining an
alternative  source  of supply of critical software components, hosting services
and e-learning content could involve significant delays and other costs, may not
be  available  to  the  Company  on  reasonable terms, if at all, and may have a
material  adverse  effect  on  the  Company's  business, financial condition and
results  of  operations.  The  failure of a software component supplier, service
provider or e-learning content provider to provide acceptable quality and timely
updates  and/or  support at an acceptable price, or an interruption of supplies,
hosting  services  or  support from such a supplier or provider as a result of a
fire,  natural  calamity, strike or other significant event could materially and
adversely  affect  the  Company's  business,  financial condition and results of
operations.

     Dependence  on  Outside  Contractors

The  Company  has limited in-house content production capabilities and relies on
subcontractors  for  the majority of its bespoke content production. Reliance on
outside  contractors  reduces  the  Company's  control over quality and delivery
schedules.  The ability of the Company to provide its customers with products on
a  timely  basis  depends, in part, on the ability of the contractors to deliver
such  products  to  the  Company  on  a  timely  basis.  Any  interruption in or
termination  of  these  supplies,  a  material  change  in  the  purchase terms,
including  pricing  or a reduction in their quality or reliability, could have a
material  adverse  effect  on  the  Company's  business, financial condition and
results  of  operations.

     Dependence  on  Partnerships

Some of the Company's products are built on a model that seeks to bring together
the  best  available  content,  technology  and  services from the best in class
vendors.  A  significant  proportion  of  the Company's proposition is therefore
based  on  the  strength  of  its  partnership  relations and the Company cannot
guarantee  that  it  will be able to maintain the required ongoing relationships
with  its  partners.


     Absence  of  Patent  Protection

The  Company's ability to compete successfully will depend on (i) its ability to
protect  its  proprietary  technology,  and  (ii)  the  ability of the Company's
suppliers  to  protect the technology of the products distributed by the Company
on  their  behalf. The Company has no patents with respect to its product design
or  production  processes.



                                       10


<PAGE>



In choosing not to seek patent protection, the Company instead has relied on the
complexity  of  its technology, its trade secret protection policies, common law
trade  secret  laws,  copyrights,  and confidentiality and/or license agreements
entered  into  with  its  employees,  suppliers,  sales  agents,  customers  and
potential  customers.

As  a  part  of its trade secret protection policies, the Company tries to limit
access  to,  and  distribution of, its software, related documentation and other
proprietary  information.  There  can  be  no  assurance that such strategy will
prevent  or deter others from using the Company's products to develop equivalent
or  superior  products  or  technology,  or  from  doing  so  independently.

Further,  there  can be no assurance that the Company will seek or obtain patent
protection for future technological developments or that any patents that may be
granted  in  the  future  would be enforceable or would provide the Company with
meaningful  protection  from  competitors.

Moreover,  litigation by the Company to enforce or defend its proprietary rights
could result in significant expense to the Company and divert the efforts of the
Company's  technical  and  management  personnel, whether or not such litigation
results  in a favorable outcome for the Company.  In order to avoid such expense
or  diversion  of  resources,  the  Company  could agree to enter into a license
agreement  or  other  settlement  arrangement,  notwithstanding  the  Company's
continuing  belief  in  its  position.

In  addition,  there can be no assurance that the Company's products do not, and
that  its  proposed products will not, infringe any patents or rights of others.
If  a  patent infringement claim is asserted against the Company, whether or not
the Company is successful in defending such claim, the defense of such claim may
be  very  costly.

While  the Company is unable to predict what costs, if any, would be incurred if
the Company were obliged to devote substantial financial or management resources
to  patent  litigation,  its  ability  to  fund its operations and to pursue its
business  goals  may  be  substantially  impaired.

     Dependence  on  Licensing  Arrangements

In  addition  to  its  internally  generated products, the Company markets, as a
distributor, a number of products under license from several suppliers and under
varying  terms  of  exclusivity  and tenure.  While management is confident that
such  licensing  arrangements  will continue and, if considered in the Company's
best  interest, will be renewed, there can be no assurance that licenses will be
extended  on  terms  satisfactory  to the Company, if at all.  While the Company
believes  that  the failure to extend licensing arrangements with respect to one
or  a  small  number of products would not substantially affect the Company, the
failure  to  renew  a  significant  number of the present licenses could have an
adverse  effect  on  the  future  profitability  of  the  Company.

     Seasonality  and  Product  Shortages

The  demand  for  the Company's products is generally expected to be stronger in
the  second  half  of the fiscal year (which ends on April 30) and weaker in the
first  half  due  to  seasonal buying patterns in the UK and the rest of Europe.

     Foreign  Trade  Regulations

While  the  Company  sells non-UK-produced products, it generally purchases them
from  EU  subsidiaries  of  foreign  suppliers.  The Company's ability to remain
competitive  with  respect  to  the  pricing of the imported components could be
adversely  affected  by  increases  in tariffs or duties, currency fluctuations,

                                       11


<PAGE>


changes  in  trade  treaties, strikes in air or sea transportation, and possible
future  European  legislation  with  respect  to  pricing  and  import quotas on
products  from  non-EU  countries. The Company's ability to be competitive in or
with  the  sales  of  imported  components  also  could  be  affected  by  other
governmental  actions  related  to, among other things, anti-dumping legislation
and  international  currency  fluctuations.

     Absence  of  Dividends

The Company has not paid cash dividends during its history with the exception of
a  dividend  paid  in  1990. It is unlikely that the Company will declare or pay
cash  dividends  in  the  foreseeable  future.  The  Company  intends  to retain
earnings,  if  any,  to  expand  its  business  operations.

     Continued  Control  By  Existing  Shareholders

The  present  directors  of  the  Company  and their affiliates beneficially own
approximately  33%  of  the  Company's  outstanding  capital  shares  (excluding
outstanding  warrants  and options) and, accordingly, they will be in a position
to  influence  the  election  of the Company's directors and direct its affairs.

     Changes  in  Exchange  Rates

A  majority  of  the  Company's  revenues  to  date have been received in pounds
sterling  and the Company maintains its financial statements in pounds sterling.
However,  revenues  and proceeds of funding activities are sometimes received in
US dollars, Euro and other European currencies, which are translated into pounds
sterling  as the Company's functional currency. Fluctuations in the value of the
pound  sterling  against the euro and other European currencies have caused, and
are  likely  to  cause,  amounts translated into pounds sterling to fluctuate in
comparison  with  previous periods. The Company currently does not engage in any
hedging  transactions  that might have the effect of minimizing the consequences
of  currency  exchange  fluctuations. Such fluctuations may adversely affect the
Company's  results  of  operations.

     Risks  of  Possible  Future  Acquisitions

The  Company  may  pursue  potential  acquisitions  of  businesses,  products or
technologies  that  could  complement  or  expand the Company's business. If the
Company  identifies an acquisition candidate, the Company cannot assure that the
Company  would  be  able  to  integrate  such  acquired  businesses, products or
technologies  into the Company's existing business and products. The negotiation
of  potential  acquisitions  as  well as the integration of an acquired business
could  cause  diversion  of  management's  time  and  resources.  Any  potential
acquisition, whether or not consummated, could have a material adverse effect on
the  Company's  business,  financial condition and results of operations. If the
Company  consummates one or more significant acquisitions in which consideration
consists  of  Ordinary  Shares,  stockholders  of  the  Company  could  suffer
significant dilution of their interests in the Company. In addition, the Company
could  incur  or assume substantial debt in connection with an acquisition. Such
debt  could  adversely  affect  the  Company's  ability  to obtain financing for
working  capital or other purposes, make the Company more vulnerable to economic
downturns  and  competitive  pressures and have a material adverse effect on the
Company's  business,  financial  condition  and  results  of  operations.

     Possible  Issuance  of  Additional  Shares

The Company presently has outstanding options and warrants, pursuant to which an
aggregate  of    7,486,846  Ordinary Shares may be issued upon exercise thereof.
The  issuance  of  any  additional Ordinary Shares, whether upon the exercise of
derivative  securities,  including options and/or warrants, in connection with a


                                       12


<PAGE>



financing  or  otherwise,  including  additional  Ordinary  Shares issuable as a
consequence  of  any  anti-dilution  provisions  set  forth  in  the instruments
evidencing  such derivative securities, would reduce the proportionate ownership
and  voting  power  of  then-existing  Shareholders.

     Risks  Associated  with  Incorporation  in  England  and  Wales

The  Company  is  incorporated  under  English law. The rights of holders of the
Shares  are  largely  governed by English law, including the Companies Act 1985,
and by the Company's Memorandum and Articles of Association. These rights differ
in  certain respects from the rights of shareholders in typical US corporations.
Although  certain  provisions  of English law resemble various provisions of the
corporation  laws  of the United States and other European countries, principles
of  law  relating  to such matters as the fiduciary duties of management and the
rights  of  the Company's stockholders may differ from those that would apply if
the  Company  were  incorporated  in  another  country.  In  addition,  English
employment  law  imposes  substantial  severance  obligations  on  companies.

     Service  and  Enforcement  of  Legal  Process

All  of  the  Company's  assets  are  located in the United Kingdom. Most of the
Company's  executive  officers  and  directors, and certain of the experts named
herein  are  not residents of the United States, and all or substantial portions
of  the  assets  of  such  persons  are  located outside the United States. As a
result,  it  may  not be possible to effect service of process within the United
States  upon  such persons or to enforce against such persons or the Company any
judgments of United States courts predicated upon the civil liability provisions
of  the  securities  or  other  laws  of  the  United  States.

     Volatility  of  Stock  Price

The  market price for the Ordinary Shares has been and may continue to be highly
volatile.  Factors  such as the announcement of technological innovations or new
products  by the Company or its competitors, variations in anticipated or actual
operating  results, market conditions and general economic conditions may have a
significant  impact  on  the  market  price  of  the  Ordinary  Shares.

                                       13


<PAGE>



ITEM  4.  INFORMATION  ON  THE COMPANY
---------------------------------------


A.  HISTORY  AND  DEVELOPMENT  OF  THE  COMPANY.
-----------------------------------------------

The  legal  and  commercial  name  of the Company is "Futuremedia Public Limited
Company"  or  "Futuremedia  PLC".

The  Company  was incorporated in England and Wales as a private limited company
in  1982.

The  Company  is domiciled in England and Wales. It is incorporated in and under
the  legislation  of  England and Wales. The address of the Company's registered
office  is Media House, Arundel Road, Walberton, Arundel, West Sussex, BN18 0QP,
England  and  the  telephone  number  of  the  Company's  registered  office  is
00-44-1243-555000.

The  Company  provides  e-learning  solutions  to the corporate market. The main
elements  of  the  services provided by the company are; (i) the development and
distribution  of  its web-based Learning Management System, "Solstra "; (ii) the
development  and distribution of its complete e-learning solution, "easycando ";
(iii)  project  management  and instructional design of e-learning content; (iv)
aggregation,  brokerage  and  distribution  of  leading  e-learning  content and
applications  technologies  from leading third party vendors; and (v) consulting
and  other  professional  services to support the development and the successful
implementation  of  e-learning  solutions.

Following  its  pioneering  of  interactive  laserdisc  technology,  the Company
re-registered  as  an  English  public limited company and completed its initial
public  offering on Nasdaq in 1993.  During the period 1993 to 1996, the Company
expanded  into  Germany,  the  Netherlands  and  the US, but withdrew from these
markets in 1997 and 1998, choosing to concentrate its management focus on the UK
home  market  and  the  development  of  new  Internet-enabled  solutions.

Recognizing  the  potential  impact  on  the learning market of the developments
being  made  in  Intranet  and  Internet environments, the Company commenced the
development  of  Solstra  in  1997 with BT Group PLC ("BT"), launching the first
version  of  the  product  in February 1998. In March 2000, the Company launched
easycando,  its  Internet  learning  portal.

Since  April  30, 1999, the Company has invested in capital expenditure totaling
GBP338,000 ($495,000) for edit suite equipment (since disposed), upgrades to its
accounting  system,  network  servers,  backup  system, power supplies, internal
telephone  system and fire alarm systems together with the routine upgrading and
provision  of  desktop and laptop computers and accessories as required.  During
the  year  ended  April  30,  2002,  investments  in  capital  expenditure  used
GBP137,000  ($200,000) of cash.  The Company continues to outsource a portion of
its  production  activity  and  consequently  the  equipment  now used comprises
network  hardware,  fiber optic cabling, desktop personal computers, laptops and
servers  required  to  support  the  ongoing  business.  Where  appropriate, the
Company  owns  its  capital equipment, and it endeavors to maintain a program of
upgrading  to ensure the cost-effective provision of desktop and laptop tools to
its  employees.  All  equipment  acquired for this purpose is industry-standard.
For  servers  to  support  its  Internet portal business, the Company constantly
reviews  the  buy/lease options available and has in the past considered leasing
the  most  cost-effective option and has therefore contracted with third parties
to  provide  these  items,  though  it  does  not  rule  out  the possibility of
purchasing  such  items  outright  in  the  future.  This equipment is typically
located  in  secure  co-location sites. During fiscal 2000, the Company invested
GBP71,000  in  capital  expenditure,  in  fiscal  2001  it  invested  a  further
GBP130,000  and  in  the fiscal year ended April 30, 2002, it invested a further
GBP137,000  ($200,000).


                                       14


<PAGE>

The  Company  intends  to  continue to invest in computer and other equipment to
support  its  business, but as of November 14, 2002, does not have any principle
capital  expenditures in progress.  The Company's premises at Arundel Road, West
Sussex,  are currently being offered for sale in order that the proceeds of sale
may  be  used  to enable the repayment of the Loan Stock Agreement and will also
provide  additional  working  capital.  The  sale  will  also  facilitate  the
relocation  of  the  business  to  an area where there is better access to local
transport  links  and to skilled resource pools.  This relocation will result in
the  incurrence  of rental expense for the leasing of approximately 4,000 square
feet  of  suitable  accommodation  at  commercial  rates.

RECENT  DEVELOPMENTS

In  March  2002,  the Company acquired the assets of Palm Teach Limited, a small
learning  content  production  company, in a stock transaction at a net value of
GBP53,000  ($78,000).  The three staff formerly employed were transferred to the
Company,  securing  their skills in the analysis of learning requirement, course
design  and  project  management  of  bespoke  software  development activities.

Subsequent  to  the year end, in May 2002, the Company completed the acquisition
of  C2W  limited,  a small UK based consultancy company specializing in resource
management, in a stock transaction at a net value of GBP29,000 ($45,000), though
the  three  personnel  associated  with  that  company  had been employed by the
Company  since  the  beginning  of  April  2002.  It  is  anticipated  that  the
acquisition will greatly assist the growth of the Company's knowledge management
capabilities, leveraging the contacts C2W has in the resource, environmental and
property  sectors.

In  April  2002, the Company had contracted with another private UK investor for
the  issue  of  a  total  of  7,646,154 Ordinary shares at a price of $0.065 per
Ordinary  share  for a total purchase price of GBP350,000 ($497,000), payable by
installments by the end of September 2002. In September 2002, it became apparent
that  the GBP350,000 would not be fully paid, but that only some GBP90,000 would
be  provided by the original source. Alternative investors were sought and found
for  the remaining GBP260,000 ($380,000) during October 2002. As at November 14,
2002,  GBP224,000  of  the  GBP260,000  had  been received, with the balance due
before  the  end  of  November  2002.

In  October  2002,  the  Company  completed a new investment round from existing
investors,  raising a further GBP150,000 ($230,000), represented by the issuance
of  a further 2.7 million (approximately) shares at a price of $0.085 per share,
at  market  rate.

Also in October 2002, the Company sought and was offered in principle a bridging
loan  facility  in  order  that  it could repay the balance under the Loan Stock
Agreement  2002,  which  fell due for repayment on the 28th July 2002.  The loan
was  not  repaid  on the due date due to a lack of available funds, but the loan
stockholder  agreed  to  defer  repayment  until the Company had either sold its
premises,  or  secured  additional  financing  to enable it to do so.  Under the
contractual  terms of the Loan Stock Agreement, 2002, interest is payable at 20%
per  annum  beyond  the contractual settlement date.  It is anticipated that the
necessary  paperwork  associated  with  the  new  bridging loan facility will be
completed  by  mid November 2002, at which time the current loan will be repaid.
The  basic  interest  rate of the new facility under consideration will be 16.5%
per  annum.  The  bridging  loan  will  be  secured  by  way  of a charge on the
premises,  and  is  due  for  repayment  after  twelve  months.

The Company's premises at Arundel Road, West Sussex, are currently being offered
for  sale in order that the proceeds of sale may be used to enable the repayment
of  the  Loan  Stock Agreement and also provide additional working capital.  The
sale  will also facilitate the relocation of the business to an area where there
is  better  access  to  local  transport  links  and  to skilled resource pools.

                                       15

<PAGE>



B.  BUSINESS  OVERVIEW.
----------------------

THE  INTERACTIVE  LEARNING  AND  COMMUNICATIONS  INDUSTRY

e-Learning  is  the  emerging  industry term for Internet-enabled and technology
distributed  education  and  training.  The  key  components  of  e-Learning are
content,  technology  and  services.

e-Learning  content  ranges from basic Hyper Text Markup Language ("HTML") pages
and  documents  to fully interactive events and simulations. It includes bespoke
content  development  and  off  the shelf courseware. There is currently a major
drive to web-enable existing content from various formats such as Instructor led
classes,  paper  based  materials,  CD  ROM's, and existing intellectual assets.

e-Learning  technologies  have  emerged  to  enable  the creation, distribution,
tracking  and  administration  of  training  and  learning  content.  e-Learning
technologies  also  encompass  compelling collaborative tools. The core piece of
e-Learning  infrastructure  is  known as the learning management system ("LMS").
The  LMS  supports  and  delivers  the  e-Learning  content  and can incorporate
assessment  and  competency  frameworks.  The LMS provides the ability to track,
manage  and  report  on  learning  activity  and  it  can  integrate  with other
enterprise  systems  such  as  Enterprise  Resource  Planning  ("ERP") and Human
Resources  applications.

The  Internet  allows  many  exciting  forms  of  communication  and  e-Learning
facilitates  multiple forms of collaboration between peers, instructors, mentors
and  experts.  Collaboration  can  be  self-paced  using  threaded  discussion
capabilities  and  email,  or  they  can  be  real-time using the live web-based
delivery  of  events and collaborative learning provided by leading suppliers of
such  technology.

e-Learning  services  are  available to support and improve the effectiveness of
e-Learning.  Consulting  services  serve to understand learning requirements, to
prepare  e-Learning  strategies and to ensure successful implementation. Content
development  services  are  available  to  convert  legacy  content  for optimal
delivery  over  the  Internet.  Hosting  services  are  available  to reduce the
technological  hurdles  to e-Learning. Service providers can host technology and
content  on an ASP model, removing any hardware or software requirements for the
organization.

THE  COMPANY'S  PRODUCTS

     The  Business  Setting

The  e-Learning  market has established itself as a major segment of the overall
learning  and  training  market.

According  to  the  International Data Corporation, as stated in their "European
Corporate  e-Learning Market Forecast and Analysis 2001-2002" published in 2002,
the  total spend by West European Corporations on e-Learning is expected to grow
from  $409  million  in 2001 to $3,246 million in 2006.  The majority - 52% - of
this  spend will be on e-Learning content, while 32% will be on related services
and  the  remaining  16%  on  e-Learning  infrastructure.


     The  e-Learning  Setting

The  Company  has  continued to expand its products and service range and is now
marketing  and  selling  a  complete  e-learning  solution including consulting,


                                       16


<PAGE>


e-learning  content  production,  content  brokerage  of  published  e-learning
content,  software  integration  services,  hosting and management of e-learning
systems.
The  main  objective  underpinning the increased product and service range is to
allow  the  Company  to  provide  customers with a complete solution to selected
business  issues, and to increase the total amount of revenue and profit derived
from  the  customer.
Following  the  acquisitions  in  March  and May 2002, in order to recognize and
manage the increased range of products and services the Company has re-organized
itself  with  effect  from  May  1,  2002  into   three  business  activities:

1.     Futuremedia Professional Services (FMPS) provides consulting services for
clients  to  develop e-learning strategies and solutions, conduct learning needs
analysis  and  migration  plans  from  existing  learning  delivery  method  to
e-learning.  FMPS  was  established around the acquisition of C2W Limited in May
2002.

2.     Futuremedia  Content  Studio  (FMCS)  designs  and  builds  customized
e-learning  content  to address client business needs such as knowledge transfer
to  support  the  launch  of a new product, deliver and track training to comply
with regulatory requirements.  FMCS was established around the asset purchase of
PalmTeach  Limited  in  March  2002.

3.  To  provide  the  total  resource  and  support to those clients to whom the
Company  is  providing  a  complete  e-learning solution based upon its Learning
Management  System, a combination of Futuremedia Content Brokerage (FMCB), which
operates  as  a  reseller  for  our  library  of  over  4,000  titles of generic
e-learning  content  from  companies  such  as  SkillSoft, SmartForce, NETg, and
Intellexis  International;  Futuremedia  Software Services (FMSS) which develops
and  supports  our  learning  management  system (Solstra) and provides software
integration  services to customers andFuturemedia Service Delivery (FMSD), which
provides  project  management, hosting and support services to our customers for
all  e-learning  solutions  hosted  and  managed  by  the  Company.

The  Company  is  promoting  and selling the increased product and service range
both  as  a  complete  solution  as  well  as  independent  modules.

NEW  PRODUCTS  AND  TECHNOLOGICAL  CHANGES

The  markets  for the Company's products and services are highly competitive and
subject  to  rapid change. The Company's success will depend upon its ability to
enhance  its  existing  products  and  services and to introduce new competitive
products  with  features  that  continue  to  meet  customer  requirements  and
differentiate  it  from  its competitors. The challenges of a competitive market
will be addressed to a significant extent by the partnership approach adopted by
the  Company.

A significant portion of the Company's business is built on an aggregation model
that  continually  attempts to bring to the solution the best available content,
technology and services from the best in class vendors. There is associated risk
in  this  strategy,  as a significant proportion of the Company's proposition is
based  on  the  strength  of  its  partnership structure, and the Company cannot
guarantee  that  it  will  be able to maintain the required ongoing relationship
with  its  partners.

As  new products are introduced, the Company must attempt to monitor closely the
range  of  its  products  to  be  replaced and to phase out their production and
distribution  in  a controlled manner.  There can be no assurance, however, that
there  will be sufficient financial resources available for this purpose or that


                                       17


<PAGE>



such  product  transitions  will be executed without adversely affecting overall
product sales or that the Company will be successful in identifying, developing,
and  marketing  new  products  or  in  enhancing  its  existing  products.

The Company continues to invest in the production of the Company's own products,
predominantly  for  business-to-business  markets.

The  Company will continue to address key business to business markets including
corporates  and  government.  The corporate market has been segmented vertically
based  on  a  number  of  market  filters.  Target  vertical  markets  include
pharmaceutical,  manufacturing  and  financial  services.

In  terms  of  geographic  market  scope, the direct sales effort of the Company
focuses on the UK and Europe. The Company is attempting to recruit re-sellers to
support  greater  business development across Europe, the US and the rest of the
world.  The  Company  is  also  committed  to broader global penetration through
existing  customers  and  positioning  in  specific  niche  markets.

The  Company  will  seek  to  leverage  partnership agreements into co-marketing
opportunities wherever possible. This will be particularly appropriate where the
Company  provides  a  re-seller  function  for  its  network  of  content  and
applications  providers  under  the  easycando  solution.

As  of  November 14, 2002, the Company employed three sales and marketing people
out  of  a  total  of  20  employees.

LICENSE  AGREEMENTS

In  addition  to  its  internally  generated products, the Company markets, as a
distributor, a number of products under license from several suppliers and under
varying  terms  of  exclusivity  and tenure.  While management is confident that
such  licensing  arrangements  will continue and, if considered in the Company's
best  interest, will be renewed, there can be no assurance that licenses will be
extended  on  terms  satisfactory  to the Company, if at all.  While the Company
believes  that  the failure to extend licensing arrangements with respect to one
or  a  small  number of products would not substantially affect the Company, the
failure  to  renew  a  significant  number of the present licenses could have an
adverse  effect  on  the  future  profitability  of  the  Company.

REVENUE  STREAMS

During  fiscal  2002, the Company derived approximately 5% of its gross revenues
from  its  interactive  production capability and approximately 95% of its gross
revenues  from  product and services sales in the UK, the rest of Europe and the
US.

The Company's revenues from its operations analyzed by geographic region were as
follows:


                               Year Ended April 30,
                  ------------------------------------------
                           2002          2001       2000
                  ------------------- --------- ------------
                          (GBP        (GBP       (GBP
                  ($000)  000)   %    000)   %   000)   %

United Kingdom     1,242  849   93.2  491   66.1  592   68.3
Rest of Europe         5    3    0.3  149   20.0   57    6.6
Rest of the World     86   59    6.5  103   13.9  218   25.1
                   ----- ----- ----- ----- ----- ----- -----
TOTALS             1,333  911  100.0  743  100.0  867  100.0
                   ----- ----- ----- ----- ----- ----- -----

                                       18


<PAGE>


The  Rest of the World consists predominantly of sales to the US. Certain orders
placed  by  UK  companies  have  been  for  products that will be used globally.


SEASONALITY

The  demand  for  the Company's products is generally expected to be stronger in
the  second  half  of the fiscal year (which ends on April 30) and weaker in the
first  half  due  to  seasonal buying patterns in the UK and the rest of Europe.

CUSTOMERS  AND  SUPPLIERS

The  Company markets its products primarily to commercial end users in a diverse
and  growing  range of industries, including financial institutions, fast-moving
consumer goods manufacturers, automobile companies and manufacturing, commercial
and  service  organizations,  mainly through its direct sales force. The Company
provides  technical  assistance  and support to purchasers of its products.  The
technical  assistance  involves  providing  answers  to  questions  ranging from
specifications  and  installation  to  availability  of supporting software.  In
fiscal  2002,  the  Company's two largest customers  accounted for 69% and 9% of
the  Company's  revenues,  respectively,  representing  an  aggregate  of 78% of
revenues (compared to 20% and 20% for an aggregate of 40% in fiscal 2001 and 30%
and  21%  for  an  aggregate  of  51%  in  2000).

The  sales process for the Company's products usually involves a team drawn from
sales,  marketing,  engineering  and  senior  management to provide planning and
product  customization  and to assure open communications and support throughout
the selling process and after a sale is made. The Company's marketing activities
include participation in trade shows, publication of articles in trade journals,
participation  in  industry  forums  and  distribution  of  sales  literature.

The  Company  provides  support  for  its products through its own support staff
operating  out  of  the  Company's  office  in  the  UK.
The Company has entered into contracts in the normal course of its business with
certain  of  its customers and suppliers, on some of which its financial results
are  materially  dependent.  The  Company  believes  that  it  has  complied and
continues  to  comply  in  all material respects with the terms, and that it has
performed  and  continued  to  perform  its  obligations in respect, of all such
contracts.

COMPETITION

e-learning  is  a  nascent  market  that  has  exhibited a huge growth in market
entrants  as  a  result  of  low  perceived  barriers  to  entry.  Although  the
competitive landscape remains fragmented there are clear signs of consolidation.
Market  leadership  is  still  not  clearly  defined, but significant merger and
acquisition  activity  is  occurring  and several vendors are beginning to build
prominent  brands  and  market  share.

Developments  in  the  market since April 30, 2000 have clearly demonstrated the
limited  viability  of  the  business to consumer e-learning opportunity at this
time. The Company remains wholly focused on the business to business opportunity
and  therefore  competition  specific  to  this  sphere  is  a critical concern.

Leading  e-Learning  companies  include  SmartForce, Skillsoft, NETg, Docent and
Saba  Software.  Major  consulting  companies  such  as  PricewaterhouseCoopers,

                                       19


<PAGE>



Accenture and KPMG are developing and integrating major e-learning solutions and
some are creating separate branded initiatives, e.g. Ernst & Young (Intellinex).
Global  technology  companies  such  as  IBM and Hewlett-Packard are moving into
e-learning  from  a major customer base in classroom based training. ERP vendors
are  adding  learning  management  system  modules  to  their overall solutions.
Content companies such as major publishers are developing e-learning strategies,
and  will  bring significant resources to this arena. These companies tend to be
more  established, better capitalized and have a larger market position than the
Company.  Because  such companies have greater financial and marketing resources
than  the  Company,  as  well  as  substantially larger research and development
facilities, they represent significant competition to the Company. Many of these
companies  at present focus mainly on the US marketplace, but some are beginning
to  build  a  European  and  global  presence,  with varying degrees of success.

The  Company  plans to differentiate itself by building on its existing presence
and  proven  record  in  specific vertical markets, and by developing a detailed
understanding  of  the  business  conditions and technology environment in those
industries.  The  Company also plans to broaden its product and service range to
address  specific markets, for example industry specific content aggregation and
technology  integration  to  meet  industry compliance requirements. The Company
expects  that  its  emphasis  on  a complete solution, incorporating technology,
content  and services will mitigate the risk associated with focus solely on one
segment  of  the  e-learning  market,  such  as  technology.

In  addition,  the  Company sells foreign-produced products, which are generally
purchased  from  EU  subsidiaries  of  foreign suppliers.  The ability to remain
competitive  with  respect  to  the  pricing of the imported components could be
adversely affected by increases in tariffs or duties, changes in trade treaties,
strikes  in  air or sea transportation, and possible future European legislation
with  respect  to  pricing  and import quotas on products from non-EU countries.
The  Company's  ability  to  be  competitive  in, or with, the sales of imported
components  could also be adversely affected by other government actions related
to,  among  other  things,  anti-dumping  legislation and international currency
fluctuations.  While  the  Company  does not believe that such factors adversely
impact its business at present, there can be no assurance that such factors will
not  materially  adversely  affect  the  Company  in  the  future.

INTELLECTUAL  PROPERTY

The  Company's  ability  to  compete  successfully will depend on its ability to
protect  its  proprietary  technology,  and  on  the  ability  of  the Company's
suppliers  to  protect the technology of the products distributed by the Company
on  their  behalf.  Although  the  Company  believes  that  its  technology  is
proprietary,  the  Company  has no patents with respect to its product design or
production  processes.

In choosing not to seek patent protection, the Company instead has relied on the
complexity  of  its technology, its trade secret protection policies, common law
trade  secret  laws,  copyrights,  and confidentiality and/or license agreements
entered  into  with  its  employees,  suppliers,  sales  agents,  customers  and
potential  customers.  As  part  of  its  trade  secret protection policies, the
Company  limits  access  to,  and  distribution  of,  its  software,  related
documentation  and  other  proprietary  information.  There can be no assurance,
however,  that  such  a  strategy  will  prevent  or deter others from using the
Company's  products to develop equivalent or superior products or technology, or
from  doing  so  independently.  Further,  there  can  be  no assurance that the
Company  will  seek  or  obtain  patent  protection  for  future  technological
developments,  nor  that  any patents that may be granted in the future would be
enforceable  or  would  provide  the  Company  with  meaningful  protection from
competitors.

The  "Solstra"  trade name is a registered trademark owned by BT and licensed to
the  Company.  The Company and BT have jointly registered the solstra.com domain


                                       20


<PAGE>


name  on  the  World Wide Web.  The Company has registered the futuremedia.co.uk
and  easycando.com  domain  names  on  the  World  Wide  Web.

The  Company  has  licenses to certain software on a normal commercial basis. It
uses  this  software  variously for its normal business purposes and for product
development.  Certain  elements  of the Company's products are dependant on such
licenses.  The  Company believes that it has complied and continues to comply in
all  material  respects  with  the  terms  of  all  such  licenses.


C.  ORGANIZATIONAL  STRUCTURE.
-----------------------------

The  Company  is  the principal operating business of the group. It also has the
following  wholly-owned  subsidiaries:

                   NAME                              COUNTRY  OF  INCORPORATION
                   ----                              --------------------------
                   Lasermedia  UK  Ltd               England
                   Lasermedia  International  Ltd.   England
                   Futuremedia  Interactive  Ltd.    England
                   Futuremedia  America  Inc.        United  States
                   Easycando.com  Ltd.               England
                   Futuremedia  (BVI)  Ltd             British  Virgin  Islands


D.  PROPERTY,  PLANT  AND  EQUIPMENT.
------------------------------------

The  Company's  main  office  is  located  in Arundel, West Sussex, England, and
consists  of  approximately  7,000  square  feet  of  office  space  located  on
approximately six acres of land.  The Company owns the freehold of the property,
which  is  subject  to  a  charge associated with the Loan Stock Agreement which
matured  in  July,  2002.  The  property is currently being offered for sale and
carries,  for  commercial  and/or residential use, approval from the appropriate
planning  authorities  for  an  extension  of the offices of approximately 5,800
square  feet,  which  is  valid  for  construction  to begin at any time through
September  2003,  and  the  conversion  of  the main premises into four separate
residential  properties,  valid  until  December  2006.

ITEM  5.  OPERATING AND FINANCIAL  REVIEW  AND  PROSPECTS
---------------------------------------------------------

The  following  Operating  and  Financial  Review  and  Prospects  contains
forward-looking statements, which involve risks and uncertainties. The Company's
actual  results  could  differ  materially  from  those  anticipated  in  these
forward-looking  statements  as a result of certain factors, including those set
forth  under  ''Risk  Factors''  in  Item  3.D.  and  elsewhere  in this Report.

A.  OPERATING  RESULTS.
----------------------

OVERVIEW

For  the  fiscal years ended April 30, 2000, 2001 and 2002, the Company reported
net  losses  of  GBP2,645,000,  GBP3,697,000  and  GBP2,012,000  ($2,944,000),
respectively, on revenues of GBP867,000, GBP743,000 and GBP911,000 ($1,333,000),

                                       21


<PAGE>


respectively.  As  a consequence of the Company's operating results, the Company
has  encountered  significant  cash  constraints  on  its operations for most of
fiscal  years  2000,  2001  and  2002.  Since  April  30,  2002, the Company has
continued  to  sustain  trading  losses,  with  a  consequent impact on its cash
position.

2002  COMPARED  WITH  2001

Revenues

The  Company  achieved  sales of GBP911,000 ($1,333,000) in the year ended April
30,  2002  an  increase of 22% when compared to GBP743,000 in the previous year.
The  improvement  in  revenues  has resulted from the successful transition away
from  CD-Rom  based  product  sales  following  implementation  of the Company's
strategy  to  focus on the provision of internet-based solutions. The success of
this strategy is demonstrated by the fact that in 2002 95% of the total revenues
came from the provision of e-learning products and services compared with 59% in
2001.  At  April  30,  2002,  the  Company  had  a backlog of customer orders of
approximately GBP1,122,000 ($1,642,000), compared with GBP1,429,000 at April 30,
2001,  the  2001  number  being higher as a result of the inclusion of the major
Consignia order covering a period of two years, which is therefore not renewable
until  March  2003.

Cost  of  Sales

The  Company's  cost  of  sales as a percentage of revenues decreased to 169% in
2002  from  241%  in  2001.  The  decrease  in  percentage  for the current year
reflects  not  only  the  increase  in revenues but also the reduction in actual
costs  year  on  year  of  14%  resulting from management's implementation of an
aggressive  cost  reduction  policy  in  the  latter  half  of fiscal year 2002.

Gross  Loss

Gross  loss as a percentage of revenues improved from (141)% in 2001 to (69)% in
2002.  Cost  of  sales  includes  a  significant  element  of  cost which may be
regarded  as  fixed  by  nature, since it represents the cost of permanent staff
whose  function is to provide the resources necessary to ensure the availability
and  effectiveness of the services offered by the Company to its customers.  The
reduction  to  a  degree  of these fixed costs as a result of the Company's cost
reduction  plans,  together with increased revenues, has resulted in the reduced
Gross  Margin  percentage  loss.

Operating  Expenses

Operating  expenses  reduced  by  49%  to  approximately  GBP1.4  million  ($2.1
million), or 154% of total revenues in 2002 from approximately GBP2.8 million or
372%  of  total  revenues  in  2001.  The decrease in actual expenditure in 2002
results  from  management's cost reduction policies implemented during the year,
mainly  as  a  result of reductions in staff made in April/May 2001 and again in
November  2001,  and  the  closure  of  the  office  in  London  resulting  in a
substantial  reduction  in  facilities  expense.

Interest  Income  and  Expense

Net  interest  income  for  2002  was GBP3,000 ($5,000) compared to GBP84,000 in
2001,  as  a  result  of  the  reduction  of  the  amount  of cash available for
investment.


Foreign  Currency  Gains/Losses

                                       22


<PAGE>


Financial  gains from exchange rate movements amounted to GBP13,000 ($19,000) in
2002  compared with a gain of GBP31,000 in 2001.  Gains arose primarily from the
marginal  strengthening  of  the  GBP  sterling  against  the US$ throughout the
fiscal  year,  which  was  lower  than  the  previous  year.

Income  Tax  Expense

There  was no tax charge in 2002 and in 2001.  The Company possesses significant
tax  losses  in  the  UK  that  are  available for offset against future profits
without  limit  of  time.  At  April  30,  2002,  potential  deferred tax assets
amounted  to  GBP4,142,000  ($6,060,000), of which GBPnil ($nil) was recognized,
compared  to  GBP3,592,000  of  which  GBPnil  was  recognized.


2001  COMPARED  WITH  2000

Revenues

The  Company  achieved  sales of GBP743,000 ($1,069,000) in the year ended April
30,  2001  a  reduction of 14% when compared to GBP867,000 in the previous year.
The  lower revenues have resulted from the continued decline in the CD-Rom based
delivery  medium,  underpinning  the  Company's  strategy to move away from that
business  and  to  re-focus  the business onto Internet-based solutions. The new
business  strategy  is  subject  to  different revenue recognition rules whereby
revenues  are  booked  over  the relevant subscription period.  As a consequence
there  was  a  significant  increase in order backlog, most of which the Company
expects  to  recognize  as revenue over an extended period of time. At April 30,
2001, the Company had a backlog of customer orders of approximately GBP1,429,000
($2,056,000),  compared  with  GBP149,000  at  April  30,  2000.

Cost  of  Sales

The  Company's  cost  of  sales as a percentage of revenues increased to 241% in
2001,  from  205%  in  2000.  The  increase  in  percentage for the current year
reflects  the  reduction in revenues, since the major part of the Company's cost
of  sales  in  2001  were  personnel  related.

Gross  Loss

Gross  loss  as a percentage of revenues increased from (105)% in 2000 to (141)%
in  2001,  due  primarily  to  the  reduced  revenues.

Operating  Expenses

Operating  expenses  increased  by  57%  to  approximately  GBP2.8 million ($4.0
million), or 372% of total revenues in 2001 from approximately GBP1.8 million or
203%  of  total  revenues  in  2000.  The  increase in actual expenditure in the
current  year  results from continued investments made by the Company in pursuit
of its new business direction and primarily comprises selling, marketing, legal,
professional  expenses  and  recruitment  fees.

Interest  Income  and  Expense

Interest  income  improved  to a net GBP84,000  ($121,000) in 2001 compared with
net  interest  expense  in  2000  of  GBP44,000,  as  a result of a reduction in
interest  expense  following  the  substantial reduction in long-term borrowings
made in the previous year, together with improved income from interest earned on
cash  deposits  held.



                                       23


<PAGE>



Foreign  Currency  Gains/Losses

Financial  gains from exchange rate movements amounted to GBP31,000 ($44,000) in
2001  compared with a gain of GBP71,000 in 2000.  Gains arose primarily from the
strengthening  of  the GBP sterling against the US$ throughout the  fiscal year,
but  were  lower  than  the  previous  year, when the Company completed more GBP
sterling/US$  transactions,  including  a  number  of  private  fundings.

Income  Tax  Expense

There  was no tax charge in 2001 and in 2000.  The Company possesses significant
tax  losses  in  the  UK  that  are  available for offset against future profits
without limit of time. At April 30, 2001, potential deferred tax assets amounted
to  GBP3,592,000  ($5,167,000),  of  which  GBPnil  was  recognized, compared to
GBP2,491,000  of  which GBP65,000 was recognized in expectation of profits to be
earned  for  the  year  to  April  30,  2001  at  the  end  of  April  2000.

The Company is not aware of governmental economic, fiscal, monetary or political
policies  or  factors  that have materially affected, or could materially affect
its  operations.


B.  LIQUIDITY AND  CAPITAL  RESOURCES.
--------------------------------------


INTERNAL  AND  EXTERNAL  SOURCES  OF  LIQUIDITY
During  July  1997,  additional  funding was secured by way of issue of Variable
Rate  Unsecured  Loan  Stock  2002  (the  "Loan  Stock") by Futuremedia (B.V.I.)
Limited,  a wholly owned subsidiary of Futuremedia PLC, to the value of $600,000
for  the  purpose  of  funding group capital investment in support of the agreed
business  plan.  The  Loan  Stock  was issued pursuant to a loan stock agreement
between  the  Company  and  Futuremedia  (B.V.I)  Limited  (the  "Loan  Stock
Agreement").  At  the  same  time,  warrants  granting  the  right to obtain one
Ordinary  Share for each $0.28125 of Loan Stock outstanding at a price per share
of  $0.28125  per  Ordinary  Share were issued.  The Loan Stock was repayable on
July  28,  2002  unless  the Loan Stockholder exercises, in part or in full, the
warrants  noted  above,  an  offer is made for the Company, or the Company sells
more  than 20% of its net assets.  The Loan Stockholder has given an undertaking
that,  should  an  offer  be  made  for  the Company, it will waive the right to
immediate  repayment  in  exchange  for  the  creation  of a legal charge on the
freehold  property  and  defer until the sale of the property is concluded.  The
proceeds  from  the  exercise  of  the  warrants  can  only be used to repay the
equivalent  amount  of Loan Stock.  Interest is payable on amounts drawn down at
commercial  rates.  At the discretion of the warrant holder, interest is payable
either  in  cash  or  in  warrants  aggregated to the principal sum advanced. In
January  2000,  711,111  of the outstanding warrants were exchanged for ordinary
shares  at  $0.28125  per  ordinary  share  for  a  total  value  of  GBP127,097
($200,000).  In  January, 2001, the warrantee requested that interest be paid in
cash  until  further  notice.  Consequently  the interest accrued for the period
from  January  2001 to date has been paid in cash, leaving a balance of warrants
outstanding  at  April  30,  2002  of GBP2,133,332.

The  loan  was  not repaid on the due date due to a lack of available funds, but
the  loan  stockholder  agreed  to defer repayment until the Company had secured
additional  financing to enable it to do so.  Under the contractual terms of the
loan,  interest  is  payable  at 20% per annum beyond the contractual settlement
date.  With  the  exception  of  the  rate of interest, all terms and conditions
remain  unchanged  during  the  extended operiod of the loan.  Subsequent to the
year  end,  in  October  2002, the Company sought and was offered in principle a
bridging  loan  facility  of  up  to GBP500,000 in order that it could repay the
balance  under  the  Loan  Stock  Agreement  2002 and provide additional working


                                       24


<PAGE>


capital.  It is anticipated that the necessary paperwork associated with the new
facility  will be completed by mid November 2002, at which time the current loan
will  be  repaid.  The basic interest rate of the new facility will be 16.5% per
annum.  The loan will be secured by way of a charge on the premises, and will be
due  for  repayment  after  twelve  months.

Since  its  initial public offering 1993, the Company has undertaken a series of
private  placements  to  fund  its  working  capital  and to allow investment in
product developments. Between January 1998 and April 2001, the Company issued an
aggregate  of  13,460,065  Ordinary Shares to approximately 20 non-US persons in
reliance  on  Regulation S, representing aggregate gross proceeds to the Company
of approximately GBP7.0 million $(10.2 million). During the year ended April 30,
2002,  the  Company  also  contracted  and  received  payment for the issue of a
further  7,979,333  shares  in  reliance of Regulation S, representing aggregate
gross  proceeds  of  GBP423,000  ($618,000). A further GBP350,000 ($512,000) was
contracted  in April 2002 for the issue of 7,646,154 Ordinary shares, payable in
instalments due before the end of September 2002.  In September, it became clear
that  the original investors subscribing to the GBP350,000 were not able to meet
their  commitment  in  full, and replacement new investors were found to take up
the  shortfall.  GBP280,000  of  the  GBP350,000  was  paid  by  the due date in
September,  and  the  remaining  GBP70,000  paid  in  November  2002.

Subsequent  to  the year end, in October, the Company completed a new investment
round  from  existing  investors  and  affiliates,  raising a further GBP150,000
($230,000), represented by the issuance of a further 2.7 million (approximately)
shares  at  a  market  rate  price  of  $0.085  per  share.

The  Company's  property at Arundel Road is currently being offered for sale and
carries,  for  commercial  and/or residential use, approval from the appropriate
planning  authorities  for  an  extension  of the offices of approximately 5,800
square  feet,  which  is  valid  for  construction  to begin at any time through
September  2003,  and  the  conversion  of  the main premises into four separate
residential  properties,  valid until December 2006.  It is anticipated that the
sale  proceeds  will  enable the repayment of the current loan facility and will
provide  further  working  capital.

At  November 14, 2002, the Company's cash resources and available borrowings are
insufficient to fund the current level of operations for the next twelve months.
As  stated  in  the auditor's opinion to the financial statements, these factors
raise  substantial  doubt  about  the  Company's  ability to continue as a going
concern.  Management  believes  that  the  steps  taken  to reduce its cost base
during  the  latter  part of the fiscal year ended April 30, 2002, together with
the  strong  forward  order  book  and  active  sales  prospects it is pursuing,
supported  by  the  recruitment of new sales staff in October and November 2002,
will enable the Company to return to profitable trading during the third quarter
of the fiscal year to April 30, 2003, and therefore has prepared these financial
statements  on  a  going  concern basis. The availability of bridging finance in
anticipation  of  the sale of the Company's premises at Arundel Road, Walberton,
West  Sussex  will  provide  funds  to  discharge  the balance on the Loan Stock
Agreement  and further working capital.  There is significant reliance therefore
on  the  generating  of  funds  through  profitable  trading.  If the Company is
unsuccessful  in  achieving its anticipated revenues in its third fiscal quarter
of  the  current  year, managment recognises that there will be a need to secure
additional  funding  through debt or equity capital before the end of the fiscal
year  to  April  30,  2003.

There  can  be  no assurance that the Company will be successful in implementing
these  plans.  The Company's financial statements do not include any adjustments
to  reflect the possible future effects on the recoverability and classification
of  assets or the amounts and classification of liabilities that may result from
the  outcome  of  this  uncertainty.


                                       25


<PAGE>



SOURCES  AND  AMOUNTS  OF  CASH  FLOWS

On  September  30,  2002, the latest date available at time of filing, the total
amount  of  cash and cash equivalents on hand was GBP381,000 ($587,000) compared
with  a total of cash and cash equivalents at April 30, 2002 of GBP445,000. This
reduction  primarily  represents losses incurred in the five months to September
30,  2002,  net  of  gross  investment  receipts  of  GBP280,000  ($431,000).

On  April  30,  2002,  the total amount of cash and cash equivalents on hand was
GBP445,000  ($651,000)  as compared to cash and cash equivalents of GBP2,547,000
as  at  April  30, 2001.  This  reduction primarily represents the effect of the
losses sustained in the year, offset by the funding initiative undertaken by the
Company  in April, 2002 and cash generated as a result of up-front payments from
clients  for  the  provision  of  the Company's services. The Company's ratio of
current  assets  to current liabilities stood at 0.6 at April 30, 2002, compared
with  1.6  at  April  30, 2001, the entire balance outstanding on the Loan Stock
being  current  as  at  April 30, 2002.  As at September 30, 2002 this ratio was
0.8.

Cash  balances  have been constrained primarily as a result of investment in new
products and capital assets and also operating losses.  This has resulted in the
Company  suffering  periods of severe constraints on its operations arising from
the  requirement  to  maintain its cash flow. The Company expects to continue to
experience  constraints  because  of  these  requirements.

As  of  April  30, 2002, the Company had no long-term obligations, following the
discharge  of the mortgage on its property and the Loan Stock Agreement becoming
current  with  its  maturity  in  July  2002.
At  April  30,  2002,  the  Company  had  no  material  commitment  for  capital
expenditure. As of November 14, 2002 the Company had no material commitments for
capital  expenditures.

C.  RESEARCH  AND  DEVELOPMENT,  PATENTS  AND  LICENSES,ETC.
-----------------------------------------------------------

COMPANY  SPONSORED  RESEARCH  AND  DEVELOPMENT

The Company is committed to appropriate ongoing product research and development
in  an  effort  to  continually upgrade, modify and improve its products to meet
changing  market  and consumer needs.  The Company has been a beta test site for
hardware  products  and software developed by a number of companies and has also
developed  software  and  hardware itself for internal purposes and for the open
market.  Research  and  development  work  is undertaken by the development team
whose  focus has been  on SolstraTM and easycando, supported by other members of
production  staff  as  required.

During the fiscal year ended April 30, 2002, a total of GBP311,000 ($455,000) of
research and development costs was expensed. During the fiscal years ended April
30,  2001  and  2000, GBP608,000 and GBP259,000, respectively, of research costs
were expensed.  The significant increase in the fiscal year ended April 30, 2001
reflects  the  end  of  the  research  and  development  project financed by BT,
amounting  to  GBP340,000 in the year ended April 30, 2000.  No liability arises
from  the  termination  or  this  arrangement.  An  average  of  four staff were
employed  on  research  and  development  activities in the year ended April 30,
2002.

STRATEGIC  RELATIONSHIPS

The  Company,  when  it determines it to be advantageous, enters into agreements
with  others  for  joint financing of products.  The Company believes that these
relationships  can  help  to  widen  the Company's product range.  The Company's
joint development of Solstra with BT is an example of this type of relationship.


                                       26


<PAGE>



The  Company  also  intends to develop commercial arrangements with providers of
on-line  learning  courses  for the re-sale of their products through easycando.
To  date,  the  Company  has  contracted  with  KnowledgePool  Ltd.  (England),
Intellexis  International  Ltd.  (London,  England),  SmartForce Ltd (UK), Xebec
McGraw-Hill,  (UK),  and  SkillSoft  (US).


D.  TREND  INFORMATION.
----------------------


At  September  30, 2002, the Company had a forward order book of customer orders
of  approximately  GBP914,000  ($1,408,000), compared with GBP1,122,000 at April
30, 2002. The decrease reflects delays in the closing of orders during the first
five  months  of  the  fiscal  year.


E.     RECENT  ACCOUNTING  PRONOUNCEMENTS
--     ----------------------------------

In  June 2001, the Financial Accounting Standards Board finalized FASB Statement
No.  141,  "Business Combinations" ("SFAS 141") and Statement No. 142, "Goodwill
and  Other  Intangible  Assets"  ("SFAS  142"). SFAS 141 requires the use of the
purchase  method of accounting and prohibits the use of the pooling-of-interests
method  of  accounting  for business combinations initiated after June 30, 2001.
SFAS  141  also  requires  that the Company recognize acquired intangible assets
apart  from  goodwill  if  they  meet  certain criteria. SFAS 141 applies to all
business  combinations  initiated  after June 30, 2001 and for purchase business
combinations  completed  on  or  after  July  1,  2001. Accordingly, the Company
accounted  for  the  acquisition  as described in Note 8 in accordance with SFAS
141.

SFAS  No. 142 addresses financial accounting and reporting for acquired goodwill
and  other intangible assets. This Statement changes the accounting for goodwill
from  an  amortization  method to an impairment-only method. The amortization of
goodwill,  including  goodwill recorded in past business combinations will cease
upon adoption of this Statement, which will begin with the Company's fiscal year
beginning  May  1,  2002. However, goodwill and intangible assets acquired after
June  30,  2001  will  be  subject  to  immediate adoption of the Statement. The
adoption  of  this  standard will not have a material effect on the consolidated
financial  statements.

In  August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets."  SFAS  No.  144  supersedes  SFAS  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be  Disposed  Of",  in  that  it  removes goodwill from its impairment scope and
allows  for  different approaches in cash flow estimation. However, SFAS No. 144
retains  the  fundamental  provisions  of  SFAS  No. 121 for (a) recognition and
measurement  of  long-lived  assets  to  be held and used and (b) measurement of
long-lived  assets  to be disposed of. SFAS No. 144 also supersedes the business
segment  concept  in  APB  Opinion  No.  30,  "Reporting  the  Results  of
Operations-Reporting  the  Effects  of  Disposal of a Segment of a Business, and
Extraordinary,  Unusual  and Infrequently Occurring Events and Transactions," in
that  it permits presentation of a component of an entity, whether classified as
held  for sale or disposed of, as a discontinued operation. However, SFAS No.144
retains  the requirement of APB Opinion No. 30 to report discontinued operations
separately  from  continuing  operations.  The  Company is required to adopt the
provision  of  SFAS  No.  144  beginning with its fiscal year that starts May 1,
2002.  The  Company  is  still  evaluating  the  effect  of  the standard on its
consolidated  financial  statements.

                                       27


<PAGE>




In  April  2002,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial Accounting Standards ("SFAS") No. 145, Rescission of FASB
Statements  No.  4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. This statement provides guidance on the classification of gains and
losses  from  the  extinguishment  of  debt  and  on  the accounting for certain
specified  lease  transactions.  The  adoption of this statement will not have a
material  impact  on  the  Company's consolidated financial position, results of
operations  or  cash  flows.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities ("SFAS No. 146"). SFAS No. 146 addresses significant
issues regarding the recognition, measurement, and reporting of costs associated
with  exit and disposal activities, including restructuring activities. SFAS No.
146  also  addresses  recognition  of  certain  costs  related  to terminating a
contract  that  is  not  a  capital  lease,  costs  to consolidate facilities or
relocate  employees,  and  termination  benefits  provided to employees that are
involuntarily  terminated under the terms of a one-time benefit arrangement that
is  not  an  ongoing  benefit arrangement or an individual deferred-compensation
contract.  SFAS  No.  146  is effective for exit or disposal activities that are
initiated  after  December  31, 2002. Given that SFAS No. 146 was issued in June
2002 and is not yet effective, the impact on the Company's financial position or
results  of  operations  from  adopting  SFAS  No.  146 has not been determined.


F.  CRITICAL  ACCOUNTING  POLICIES
----------------------------------


The  Company  considers  certain  accounting  policies  relating  to  revenue
recognition  and capitalization of research and development costs to be critical
to  its  business  operations.

Revenue  Recognition.  For  the year ended April 30, 2002, the major part of the
Company's  revenues,  95%,  derived  from the provision of e-learning facilities
materials  and  services under service contracts with clients over typically one
and two year periods.  All revenues, including once-off setup charges, and costs
associated  with  these  sales are recognized over the subscription period.  The
remaining  revenues derive from fixed price contracts which require the accurate
estimation of the cost and duration of each engagement.  The revenue and related
cost for each of these projects is recognized on percentage of completion, using
the time-to-completion method to measure the percent complete, with revisions to
estimates  reflected  in  the  period in which the changes become known.  If the
Company  does  not accurately estimate the resources required or does not manage
its  projects properly within the planned periods of time, future margins may be
adversely  affected.

Capitalized  software  research  and  development  costs.  Ongoing  changes  and
periodic  alterations  to  current  products that are actively being sold in the
marketplace  are  not  capitalized,  but  expensed  when  incurred.

G.  RELATED  PARTY  TRANSACTIONS
--------------------------------

On  March  9,  2000,  the  Company entered into a Finder's Agreement with Noesis
Capital  Corporation.  The  Agreement  contemplated  that  Noesis  would  make
introductions  on  behalf  of the Company to facilitate possible future business
transactions.  The  agreement  was  terminated on July 13, 2000. The Company has
made  no  payments  in  connection  with  the Finder's Agreement and it does not
expect  to  make  any  such  payments.  Mr.  N. Letschert, a former non-employee
director  of  the Company and Mr. C. Wit, a serving non-employee director of the
Company,  are  directors  of  Noesis  Capital  Corporation.


                                       28


<PAGE>



Since  its  initial public offering in 1993, the Company has undertaken a number
of  private  placements  to  fund its working capital and to allow investment in
product  developments.  These  private  placements  include  the  following
transactions  each  of  which  was  completed  in  reliance  on  Regulation  S:

-    In  June 1998, Profrigo N.V. purchased 2,000,000 Ordinary Shares at a price
     of  $1.00  per  share,  representing  an  aggregate  purchase price of $2.0
     million.  One  of the Company's non-employee directors, Mr. J. Vandamme, is
     also  a  director  of  Profrigo  N.V.

-    In  April  1999, the Company issued an aggregate of 454,547 Ordinary Shares
     at a price of $0.616 per share, representing an aggregate purchase price of
     approximately  $280,000.  The  following individuals and entities purchased
     the  number  of  Ordinary  Shares indicated in connection with this private
     placement: Noesis N.V. (123,377 shares); Profrigo N.V. (99,026 shares); Mr.
     M.  Johansson  (6,088  shares);  and  Ms.  M.  Blake , the spouse of Mr. M.
     Johansson (6,088 shares). Mr. Johansson is a director and executive officer
     of  the  Company.

-    In  July 1999, the Rennes Foundation purchased 1,153,845 Ordinary Shares at
     a  price  of  $0.65  per share, representing an aggregate purchase price of
     approximately  $750,000.

-    In  October  1999,  the  Company  issued an aggregate of 3,199,999 Ordinary
     Shares  at  a  price of $0.55 per share, representing an aggregate purchase
     price of approximately $1.8 million. The following individuals and entities
     purchased  the  number of Ordinary Shares indicated in connection with this
     private  placement:  the  Rennes Foundation (2,227,272 shares); Noesis N.V.
     (363,636  shares);  Profrigo  N.V.  (181,818  shares).

-    In February 2000, the Rennes Foundation purchased 1,666,667 Ordinary Shares
     at  a price of $3.00 per share, representing an aggregate purchase price of
     approximately  $5.0  million.  See  "Major  Shareholders".

-    In  July  2000, the Company completed an additional private placement under
     Regulation  S  pursuant  to which the Rennes Foundation purchased 1,944,444
     Ordinary  Shares  at  a  price of $1.80 per share for an aggregate purchase
     price  of  approximately  $3.5  million  in cash. See "Major Shareholders".

-    In  March  2002, the Company contracted and received the cash for the issue
     of  an  aggregate  of  4,702,410  Ordinary  Shares at a price of $0.083 per
     Ordinary  Share  representing  an aggregate purchase price of approximately
     $390,000.  The  following  individuals and entities purchased the number of
     Ordinary  Shares  indicated  in connection with this private placement: the
     Rennes  Foundation  (1,204,819  shares);  Noesis NV (301,205 shares); Mr. M
     Johansson (361,446 shares) and Mrs M Pillinger, wife of S Pillinger, a then
     Director  of  the  Company  (100,000  shares).

-    In  March  2002,  the  Company  contracted for the issue of an aggregate of
     759,700  Ordinary  Shares  at  a  market  price of $0.07 per Ordinary Share
     pursuant to the stock transaction for the acquisition of the assets of Palm
     Teach  Limited,  together  with  the issue of an aggregate 702,900 Ordinary
     shares  at  a  market  price  of  $0.07  per  Ordinary  share  to  four key
     individuals  on  their  joining  the Company. The following individuals and
     entities  received  the  number  of Ordinary Shares indicated in connection
     with  this  transaction:  Mr.  P Copeland as beneficial shareholder of Palm
     Teach  Limited  (759,700  shares);  Mr.  S  Pillinger  (209,450  shares).

-    In  April  2002, the Company contracted and received the cash for the issue
     of  3,276,923  Ordinary  shares  at  a  price  of $0.065 per Ordinary Share
     representing  an aggregate purchase price of approximately $213,000. At the

                                       29


<PAGE>



     same  time,  the following entity contracted for the purchase of the number
     of  Ordinary  Shares  indicated  in connection with this private placement:
     Silverdash  Limited  (7,646,154  shares).  In  September,  2002,  it became
     apparent that this GBP350,000 ($512,000) investment, payable in instalments
     by  the  end of September 2002, would not be fully paid, but that only some
     GBP90,000  would  be provided by the original source. Alternative investors
     were  sought  and  found  for  the  remaining  GBP260,000 ($380,000) during
     October  2002. At the time of filing, GBP224,000 of the GBP260,000 had been
     received,  with  the  balance  due  before  the  end  of  November  2002.

-    Also  in  April  2002,  the  Company  contracted  for  the issue of 803,046
     Ordinary  Shares  at  a  price  of  $0.07 per Ordinary Share under a Salary
     sacrifice arrangement, representing an aggregate purchase price of $56,000.
     The  following individual purchased the number of Ordinary Shares indicated
     in  connection  with this transaction: Mr. M Johansson (648,183 shares). At
     the same time, Mr. J Vandamme agreed to accept 102,000 Ordinary Shares at a
     price  of  $0.07  per  Ordinary Share in settlement of outstanding invoiced
     charges  for  work  done  for  the  Company.

-    Subsequent  to  the  year end, in October 2002, the Company completed a new
     investment  round from existing investors and affiliates, raising a further
     GBP150,000 ($230,000), represented by the issuance of a further 2.7 million
     (approximately)  ordinary  shares at a price of $0.085 per share, at market
     rate.  The  following  individuals/entities  purchased the number of shares
     indicated  in  connection  with  this  transaction:  Rennes  Foundation
     (1,176470,109  shares),  M  Johannson  (181,176  shares),  S Cohen (452,941
     shares),  J  Copeland  (452,941  shares)  and  S Copeland (452,941 shares).


H.  COMMITMENTS
---------------

The  Company  has  secured  the provision of its Internet Service Provider (ISP)
service requirements with Siemens UK Ltd. for a period of three years commencing
September  2001.  The  terms  of  the contract allow termination on three months
notice  after  the  completion  of  the  first year.  In April 2001, the Company
contracted  with  Consignia  Plc (UK) for the provision of a learning management
system  comprising  a hosted service together with learning content for a period
of  22  months  commencing  June  1,  2001.  The total value of the contract was
approximately  GBP1,000,000  ($1,438,600).

                                       30


<PAGE>


ITEM  6.  DIRECTORS, SENIOR MANAGEMENT  AND  EMPLOYEES
-------------------------------------------------------


A.  DIRECTORS  AND  SENIOR  MANAGEMENT.
--------------------------------------
The  Company's  directors  and  senior  management,  and  any  employees such as
scientists  or designers upon whose work the Company is dependent as of the date
of  this  Report  are  as  follows:

<TABLE>
<CAPTION>

<BTB>

<S>                       <C>          <C>          <C>

                                       DIRECTOR
NAME                       AGE          SINCE       POSITION  WITH  THE  COMPANY
---------------           -----        --------     ----------------------------
BOARD  MEMBERS:

David  Bailey(1)(2)        43            2002        Non-employee  Director from April  2002
Peter  Copeland  MBE       55            2002        Non-employee Director from April  2002
Mats  Johansson(3)         44            1996        CEO  Futuremedia  PLC  from December  2000
Rolf  Felix  Herter        39            2001        Non-employee  Director
Cornelis  Wit(1)(2)        56            1997        Non-employee  Director
Jan  Vandamme(1)(2)        43            1998        Non-employee  Director  and Chairman

SENIOR  MANAGEMENT:

Peter  Machin              53            -           Company  Secretary and Chief Accounting Officer
Stephen  Pillinger(4)      59            -           Director  (April  2002  to  July  2002)  and  Chief
                                                     Operating  Officer  since  April  2002  to  October
                                                     2002

</TABLE>

(1)  Member  of  the  Audit  Committee.
(2)  Member  of  the  Remuneration  Committee
(3)  Resigned  as  Director  January  2002,  re-appointed  April  2002
(4)  Resigned  as  Chief  Operating  Officer  October  31,  2002

Mr.  Johansson has served as Managing Director, Futuremedia eLearning since July
1998, and succeeded Mr. Agertoft as CEO in December 2000.  Mr. Machin has served
as  Company  Secretary  and  Chief  Accounting  Officer  since  April  1999.  On
September  25,  2001  Mr.  Herter was appointed to the Board of Directors of the
Company.  In  April 2002, Mr. D Bailey, Mr. S Pillinger and Mr. P. Copeland were
appointed  to  the board, replacing earlier resignations.  At the same time, Mr.
Vandamme  was  appointed  Chairman.  Mr.  Pillinger replaced Mr. Walker as Chief
Operating  Officer,  but  in  July  2002  resigned  from  the  board  effective
immediately,  and  from his position as Chief Operating Officer with effect from
the  end  of  October  2002,  but  will  continue  to  be  associated  with  the
professional  services  activity  under  contract.

David Bailey.  Mr. Bailey has formerly worked for both Ernst & Young and Coopers
&  Lybrand,  specialising in the turnaround market and business development, and
now  has  his  own independent consultancy business providing advice on business
growth  strategies  and  delivering  profitability  to  largely bank-led clients

Peter  Copeland.  Dr.  P  Copeland  MBE,  original  founder  of Futuremedia PLC,
rejoins  the  Board  in  a  non-executive  capacity  as  President,  actively
representing  and  promoting  the  company  in  all areas of the UK and European
e-learning  community.  Dr.  Copeland  is  a  recognised  pioneer of media-based
learning  in  Europe.  He  received  his Ph.D for research in the development of
interactive  media  and  holds  several  honorary  positions  in  the  field.


                                       31


<PAGE>



Rolf  F  Herter  Mr.  Herter  is  an  Attorney  at Law and a senior partner with
Dietrich Baumgartner & Partners, a Swiss Legal firm.  Mr. Herter is also a Board
member  of  the  Rennes  Foundation and the Jobelin Foundation, Swiss investment
funds.

Mats  Johansson  Mr.  Johansson  joined  Futuremedia  in  1996,  was promoted to
Managing  Director  in 1998, and appointed CEO in December 2000.  Previously Mr.
Johansson has held senior management positions at Studentlitteratur AB, American
Express  Inc.,  and  subsequently  co-founded  a  national  catalogue and retail
business  in  the  US.  Mr.  Johansson  has an MBA from Harvard Business School.

Jan  Vandamme.  Mr.  Vandamme  is  a  director  of Profrigo NV, a listed Belgian
investment fund, specializing in Internet related activities.  Mr. Vandamme also
holds  directorships  in  UCI Web USA OmniCom Systems USA and Didital Diagnostic
Imaging  SA,  Belgium.

Cornelis  F Wit. Mr. Wit is President, Corporate Finance at Noesis Capital Corp,
Florida,  USA,  an  international  investment  banking  firm. Until 1994, he was
President  and  CEO  of  DMV Inc. He has held senior positions in pharmaceutical
companies  in  South  America  and  Europe.  He holds directorships in Whitehall
Specialitites,  USA,  OmniCom  Systems,  USA,  UCI  Web,  USA,  IVC, Madrid, and
K.D.Pharma,  Germany.

Peter  Machin.  Mr.  Machin joined the Company in 1996 and holds a UK accounting
qualification  and has extensive experience of financial management in computing
services  providers  such  as  International  Computers  Ltd.

Mr.  Bailey  was  appointed  to  the  board  on  the  nomination of a private UK
investor.  Mr.  Wit  was  appointed to the Board on the nomination of Noesis NV.
Mr.  Vandamme  was  appointed  to  the  Board  on the nomination of Profrigo NV.




B.  COMPENSATION.
----------------

The  total  remuneration (excluding pension contributions) paid to the Company's
directors  and executive officers (a total of seven persons) for fiscal 2002 was
GBP332,000  ($486,000).

The  Company  may  reimburse non-employee directors for their costs and expenses
incurred  in  attending Board meetings and may enter into contracts for services
with  non-employee  directors.

In  October 1997, non-executive director Mr. Wit was granted options to purchase
5,000  Ordinary  shares at a price of $0.594 per Ordinary share, and in November
1998,  was  granted  options  to purchase a further 100,000 Ordinary Shares at a
price  of  $1.00  per Ordinary Share under the Unapproved Executive Share Option
Plan.  These  options  were cancelled in February 2002 and replaced with options
to  purchase  52,250 Ordinary Shares at a price of $0.10 per ordinary shares and
52,250  Ordinary  Shares  at $0.15 per Ordinary Share, which vested in July 2002
and  expire  at  the end of February 2010.  At the same time, further options to
purchase  150,000  Ordinary  Shares  at  $0.10  per  ordinary  share and 150,000
Ordinary  Shares  at  $0.15  per  Ordinary  Share  were  granted  to  Mr.  Wit.

In  November  1998,  non-executive  director Mr. Vandamme was granted options to
purchase  100,000 Ordinary Shares at a price of $1.00 per Ordinary Share.  These
options  were  cancelled  in February 2002 and replaced with options to purchase
50,000  Ordinary  Shares  at  a  price  of  $0.10 per ordinary shares and 50,000


                                       32


<PAGE>



Ordinary  Shares  at  $0.15  per  Ordinary  Share, which vested in July 2002 and
expire  at  the  end  of  February  2010.  At  the same time, further options to
purchase  250,000  Ordinary  Shares  at  $0.10  per  ordinary  share and 250,000
Ordinary  Shares  at  $0.15  per  Ordinary  Share  were granted to Mr. Vandamme.

In  February  2002,  a  total  of 745,000 options to purchase Ordinary Shares at
various  prices  ranging  from  $0.594  to  $3.00  per Ordinary Share previously
granted  to  Mr.  Johansson were cancelled and replaced with options to purchase
372,500  Ordinary  Shares  at  a  price of $0.10 per ordinary shares and 372,500
Ordinary  Shares  at  $0.15  per  Ordinary  Share, which vested in July 2002 and
expire  at the end of February 2012.  At the same time, a further grant was made
to  Mr.  Johansson  to  purchase 150,000 ordinary shares at a price of $0.10 per
Ordinary  Share  and  150,000  Ordinary  Shares at a price of $0.15 per Ordinary
Share  vesting  in  February and March 2003, which will expire in February 2010.

In  April  2002, Mr. Johansson agreed to sacrifice GBP31,433 ($45,990) of salary
over the period January 2002 to August 2002 in exchange for the issue of 648,183
Ordinary  Shares  at  a  value  of  $0.07  per  Ordinary  Share.

On taking up his post of Director of Operations in April 2002, Mr. Pillinger was
granted  options  to  purchase  105,002  Ordinary Shares at a price of $0.10 per
Ordinary  Share  and  210,004  Ordinary  Shares at a price of $0.15 per Ordinary
Share,  vesting  at the end of March 2003 and expiring at the end of March 2010.

At  November  14,  2002  none  of  the  above  options  had  been  exercised.


EMPLOYMENT  CONTRACTS

The Company has entered into employment agreements with all of its employees and
employee-directors,  subject  to  customary  terms  and  conditions.

The  employment  contract  with  Mr.  Johansson, which commenced on November 12,
1996,  is  a continuous full-time employment contract, was amended in April 2002
such  that  it  can  be  terminated  by  either party upon three months' written
notice.    The  employment  contract with Mr. Pillinger which commenced in April
2002  was  of  two  years' duration and could be terminated by either party upon
three  month's  written  notice.   In July 2002, Mr. Pillinger gave such notice,
and consequently his employment with Futuremedia terminated on October 31, 2002.
It  is  likely  that  his  services  in  support of the Futuremedia professional
services  activity  will continue under a different arrangement.  The employment
contract  with  Mr.  Machin,  which  commenced  in  July  1997, is  a continuous
full-time  employment contract that can be terminated by either party upon three
months'  written  notice.

                                       33


<PAGE>



C.  BOARD  PRACTICES.
--------------------

Directors  hold  office until removed by a resolution of the shareholders of the
Company,  removal  by  all of the members of the Board, resignation or death, or
until  the  expiration  of  their  terms.  The  Company's executive officers are
appointed  by,  and  serve  at  the  pleasure  of,  the  Board.

At every Annual General Meeting of the shareholders of the Company, the terms of
all  of  the  directors  expire.

Any  director  may  be  removed  from  the  Board by unanimous vote of the other
directors.

Under  section  303  of  the  Companies  Act  1985,  shareholders may remove any
director,  by  ordinary  resolution (subject to special notice of the resolution
being  given  to  the  director  and  the  right  of  the director to attend the
shareholder meeting where the vote will be cast) adopted by the affirmative vote
of  a  majority  of  the  shares  voting  at  an Annual or Extraordinary General
Meeting.

Mr.  Johansson has a service contract with the Company, which provides for three
months'  notice  of termination of employment or payment in lieu of notice. This
contract  is subject to English employment law, and on termination other than by
mutual  consent the employee may be entitled to additional compensation for loss
of  employment,  including without limitation statutory redundancy pay and other
compensation.

The  Audit Committee is responsible for, among other things: recommending to the
Board  of  Directors  the  nomination  of  the  Company's  independent  auditor;
reviewing  and monitoring the Company's financial reporting process and internal
control  systems; reviewing the Company's annual financial statements, the scope
of  the audit and the role and performance of the independent auditor; reviewing
the  independence  of  the  independent  auditors;  and  providing a channel for
communication  between  the  independent  auditor,  management  and the Board of
Directors.

The  Remuneration  Committee  is responsible for, among other things, reviewing,
monitoring  and approving the remuneration of the executive directors and senior
management  of  the  Company.


D.  EMPLOYEES.
-------------

At  November  14,  2002,  the  Company  employed  19 persons, one of whom was an
executive.  Of  the  remainder,  twelve  were engaged in technology delivery and
support,  three in sales and marketing and three in administrative and financial
matters.

As  of  April  30,  2002,  the  Company  employed  20  persons, two of whom were
executives.  Of  the  other  employees  as of April 30, 2002, 13 were engaged in
technology  delivery  and  support,  two  in  sales  and  marketing and three in
administrative  and  financial  matters.

As  of  April  30,  2001,  the  Company  employed  26  persons.

As  of  April  30,  2000,  the  Company  employed  35  persons.

In  addition, it is Company policy to employ contract staff from time to time to
support  specialized  production  requirements  and  to  increase its production
capacity  and  flexibility  and  to  reduce  lead  times.  The Company may offer


                                       34


<PAGE>



permanent  employment  to  individual contractors when management can reasonably
foresee  a  continuing  commercial requirement for the contractor's skills.  The
average  number of temporary employees during the year ending April 30, 2002 was
three.

None of the Company's employees is covered by a collective bargaining agreement.
All  of  the  Company's  employees are employed in the UK.  The Company believes
that  its  relations  with  its  employees  are  good.

The  Company's ability to achieve its business objectives is, in part, dependent
on its ability to recruit the specialist skills it requires, both on a permanent
and  a  contract  basis.

Management  of  the  Company  has  developed  a  collaborative style of decision
making, which they believe allows them to draw on the talent and skills of their
executive  personnel.  The  Company  normally carries out monthly reviews of its
operations,  including its profits and losses, sales, marketing, and production.
The  Company  has  introduced  incentives  to  the  staff through profit-related
bonuses,  merit-based  promotions  and issues of share options.    See "Employee
Profit  Sharing  and  Option  Plans."
                                       35


<PAGE>


E.  SHARE  OWNERSHIP.
--------------------

SHARE  OWNERSHIP

With respect to the share ownership in the Company of the officers and directors
of  the  Company,  see  the  disclosure  in  "Major  Shareholders".

EMPLOYEE  PROFIT-SHARING  AND  OPTION  PLANS

In  July  1993,  the Company adopted three employee profit share or share option
plans:  the  "Approved Executive Option Scheme," the "Unapproved Executive Share
Option  Scheme,"  and  the  "Employee  Share  Ownership  Plan".

Under the Company's "Approved Executive Share Option Scheme," options to acquire
the  Company's Ordinary Shares may be granted to all or selected employees.  Any
full-time  employee, other than a director, of the Company who is not within two
years  of  his  or her due date of retirement and who, within one year preceding
the  grant,  did  not hold more than 10% of the share capital of the Company, is
eligible to participate.  The exercise price of the options must be no less than
85%  of  the  fair market value of the Company's ADSs on the date of grant.  The
aggregate value of shares underlying the options granted to any employee may not
exceed  the  greater  of  GBP100,000  ($162,000)  or  four  times  earnings.

Under  the  Company's  "Unapproved  Executive  Share  Option Scheme," options to
acquire  Ordinary  Shares  may  be  granted  to  selected  full-time  employees,
including  directors,  based  on  their  performance.  Such  options may also be
granted  to  non-employee  directors.  The exercise price of the options granted
must  be  at or above the fair market value of the Company's ADSs.  The value of
options to be granted is not subject to any financial limit, although the number
of  shares  over  which  options  may  be  granted  is  subject  to  an  overall
restriction,  as  described  below.

In  August  1993,  options to purchase an aggregate of 45,186 Ordinary Shares at
$4.25  per Ordinary Share were granted to employees under the Approved Executive
Share Option Scheme.  In May 1995, options to purchase 44,647 Ordinary Shares at
$2.55  per Ordinary Share were granted to employees under the Approved Executive
Share  Option  Scheme.  In  February  1998, options to purchase 121,000 Ordinary
Shares  at  $0.90625  per  Ordinary  Share  were  granted to employees under the
Approved Share Option Scheme.  In July 2000, options to purchase 90,000 Ordinary
shares  at  $1.5938  per  Ordinary  Share  were granted under the Approved Share
Option  Scheme.  No  options  have  been  exercised under the Approved Executive
Share Option Scheme. Taking into consideration options that have lapsed prior to
exercise and upon termination of employment, options to purchase an aggregate of
2,616  Ordinary  Shares  at  $4.25  per  Ordinary  Share, options to purchase an
aggregate  of  3,907  Ordinary  Shares  at  $2.55 per Ordinary Share, options to
purchase  20,500  Ordinary  shares at $0.90625 per Ordinary Share and options to
purchase  13,500  Ordinary  shares  at  $1.5938  per Ordinary share respectively
remained  outstanding  and  unexercised  as  at  November  14,  2002.

                                       36


<PAGE>



The  following  options  have  been  issued  as  of November 14, 2002, under the
Company's  "Unapproved  Executive  Share  Option  Scheme."


  No of   Subscription     Date      Expiry     Exercisable when the
  Shares     Price      Exercisable   Date      Market Price at least equals
--------- ------------  ----------- ---------   ---------------------------

    5,000    $0.53       Current      Oct 2007   No Restriction
    5,000    $0.19       Current      Jan 2007   No Restriction
  100,000    $1.00       Current      Sep 2010   No Restriction
   69,750    $0.35       05/01/03     May 2011   No Restriction
   69,750    $0.35       11/01/03     May 2011   No Restriction
   69,750    $0.35       05/01/04     May 2011   No Restriction
   69,750    $0.35       11/01/04     May 2011   No Restriction
  100,000    $0.25       Current      Oct 2006   $1.00
    5,000    $0.19       Current      Sep 2010   No Restriction
    5,000    $0.59       Current      Sep 2010   No Restriction
  474,750    $0.15       07/01/02     Feb 2012   No Restriction
1,213,355    $0.15       03/01/03     Feb 2012   No Restriction
  474,750    $0.10       07/01/02     Feb 2012   No Restriction
1,369,390    $0.10       03/01/03     Feb 2012   No Restriction
   50,000    $0.09       10/16/03     Oct 2012   No Restriction
   50,000    $0.09       10/16/04     Oct 2012   No Restriction
   50,000    $0.09       10/16/05     Oct 2012   No Restriction
   25,000    $0.09       10/16/03     Oct 2012   See (1) below
   25,000    $0.09       10/16/04     Oct 2012   See (1) below
   25,000    $0.09       10/16/05     Oct 2012   See (1) below
   50,000    $0.09       10/16/03     Oct 2012   See (1) below
   50,000    $0.09       10/16/04     Oct 2012   See (1) below
   50,000    $0.09       10/16/05     Oct 2012   See (1) below
   66,667    $0.09       11/03/03     Nov 2012   No Restriction
   66,667    $0.09       11/03/04     Nov 2012   No Restriction
   66,666    $0.09       11/03/05     Nov 2012   No Restriction
   25,000    $0.09       11/03/03     Nov 2012   See (1) below
   25,000    $0.09       11/03/04     Nov 2012   See (1) below
   25,000    $0.09       11/03/05     Nov 2012   See (1) below
   50,000    $0.09       11/03/03     Nov 2012   See (1) below
   50,000    $0.09       11/03/04     Nov 2012   See (1) below
   50,000    $0.09       11/03/05     Nov 2012   See (1) below

---------
4,831,245
=========


(1)     Excercisable  provided that the grantee achieves specific personal sales
targets.

The  Company's  "Employee  Share Ownership Plan" (also known as the Approved Net
Profit  Sharing  Scheme)  was  terminated  with  effect from September 2000.  No
payments were due and no monies were set aside at the termination of the scheme.

                                       37


<PAGE>




ITEM  7.  MAJOR  SHAREHOLDERS  AND  RELATED  PARTY TRANSACTIONS.
----------------------------------------------------------------

A.  MAJOR  SHAREHOLDERS.
-----------------------

The  following  table  sets  forth certain information, to the extent that it is
known  to  the Company or can be ascertained from public filings, as of the date
of this Report with respect to the beneficial ownership of the Company's ADSs by
(i)  each  director, senior manager and key employee, and (ii) each person known
by  the  Company  to  own 5% or more of the Company's ADSs.  This information is
based  upon  information  received  from  or on behalf of the named individuals.


                                   Number  of
                                     Share
<TABLE>
<CAPTION>

<S>                 <C>                              <C>         <C>        <C>      <C>
                                                    Number of   Percentage   Number of
Name of Beneficial                                  ADSs        Benefically  share options
Owner*                                              Benefically Owned        Beneficially
                                                    Owned*                    owned(2)

Rennes Foundation   R Herter Board Representative           (1)  9,600,218     20.0  -
Jobelin Foundation  R Herter Board Representative           (1)    447,778      0.9  -

Profrigo NV         J Vandamme Board Representative         (1)  2,280,844      4.7

C Witt              Board Member                        404501         0.8        -
D Bailey            Board Member                       611,692         1.3        -
P Copeland          Board Member                     2,415,173         5.0        -
M Johansson         Board Member & C.E.O             2,110,846         4.3  300,000
J Vandamme          Board Member                       202,001         0.4  500,000

P Machin            CFO and Company Secretary          169,271         0.4  128,333

</TABLE>

*  For  purposes  of  US  securities  laws only, persons may be deemed to be the
beneficial  owners  of  securities  reflected in this table. It should be noted,
however,  that  the  meaning  of beneficial ownership is significantly different
under  English law, and no inference is intended, nor should it be construed, as
to  the  status  of  beneficial  ownership of these securities under the laws of
England.

     (1)  Beneficially  owned  by  entities  of  which  directors  or  executive
          officers  of  the  Company  are  also directors, executive officers or
          shareholders.  The  directors  and  executive  officers of the Company
          disclaim  beneficial  ownership  of  these  shares.

     (2)  Includes  options  to purchase Ordinary Shares granted pursuant to the
          Company's  share  option  plans at prices varying from $0.10 to $1.00.
          See  "Share  Ownership".

At November 14, 2002, the Rennes Foundation, a Swiss-based investment fund, held
a  total  of  9,600,218  shares in the Company, representing a holding of 18.9%.
During the last three years, it acquired 1,153,845 ordinary shares in July 1999,
2,227,272 ordinary shares in October 1999, 1,666,667 ordinary shares in February
2000,  1,944,444  ordinary  shares in July 2000 and 1,204,819 ordinary shares in
March 2002, 1,176,470 ordinary shares in October 2002 under Regulation S and has
also  acquired  a  further  226,701  on  the  open  market  in  the same period.



                                       38



<PAGE>




Except  for  the status as director(s) and/or officer(s) of certain of the major
shareholders  listed  above, to the knowledge of the Company the Company's major
shareholders  do  not  have  voting  rights  different  from other shareholders.
As  of  November  14,  2002, the Company had approximately eight shareholders of
record,  one  of whom acts as Depositary for the Company's ADR facility and is a
US  resident.  At November 14, 2002, the Depositary had approximately 60 holders
of  record  of  ADRs.  Based  on  information  received from the Depositary, the
Company  believes  that there are approximately 3,200 beneficial owners of ADRs.

There  are  no  arrangements,  known  to  the  Company,  which  may operate at a
subsequent  date  to  cause  a  change  in  control  of  the  Company.


B.  RELATED  PARTY  TRANSACTIONS

On  March  9,  2000,  the  Company entered into a Finder's Agreement with Noesis
Capital  Corporation.  The  Agreement  contemplated  that  Noesis  would  make
introductions  on  behalf  of the Company to facilitate possible future business
transactions.  The  agreement  was  terminated on July 13, 2000. The Company has
made  no  payments  in  connection  with  the Finder's Agreement and it does not
expect  to  make  any  such  payments.  Mr.  N. Letschert, a former non-employee
director  of  the Company and Mr. C. Wit, a serving non-employee director of the
Company,  are  directors  of  Noesis  Capital  Corporation.

Since  its  initial public offering in 1993, the Company has undertaken a number
of  private  placements  to  fund its working capital and to allow investment in
product  developments.  These  private  placements  include  the  following
transactions  each  of  which  was  completed  in  reliance  on  Regulation  S:

In  June  1998,  Profrigo N.V. purchased 2,000,000 Ordinary Shares at a price of
$1.00  per share, representing an aggregate purchase price of $2.0 million.  One
of  the Company's non-employee directors, Mr. J. Vandamme, is also a director of
Profrigo  N.V.

In  April  1999, the Company issued an aggregate of 454,547 Ordinary Shares at a
price  of  $0.616  per  share,  representing  an  aggregate  purchase  price  of
approximately  $280,000.  The  following  individuals and entities purchased the
number  of  Ordinary Shares indicated in connection with this private placement:
Noesis  N.V.  (123,377  shares); Profrigo N.V. (99,026 shares); Mr. M. Johansson
(6,088  shares);  and  Ms.  M.  Blake  ,  the  spouse of Mr. M. Johansson (6,088
shares).  Mr.  Johansson  is  a  director  and executive officer of the Company.

In  July  1999,  the  Rennes Foundation purchased 1,153,845 Ordinary Shares at a
price  of  $0.65  per  share,  representing  an  aggregate  purchase  price  of
approximately  $750,000.

In October 1999, the Company issued an aggregate of 3,199,999 Ordinary Shares at
a  price  of  $0.55  per  share,  representing  an  aggregate  purchase price of
approximately  $1.8  million.  The  following individuals and entities purchased
the  number  of  Ordinary  Shares  indicated  in  connection  with  this private
placement:  the  Rennes  Foundation  (2,227,272  shares);  Noesis  N.V. (363,636
shares);  Profrigo  N.V.  (181,818  shares).

In February 2000, the Rennes Foundation purchased 1,666,667 Ordinary Shares at a
price  of  $3.00  per  share,  representing  an  aggregate  purchase  price  of
approximately  $5.0  million.  See  "Major  Shareholders".



                                       39


<PAGE>




In  July  2000,  the  Company  completed  an  additional private placement under
Regulation  S  pursuant  to  which  the  Rennes  Foundation  purchased 1,944,444
Ordinary Shares at a price of $1.80 per share for an aggregate purchase price of
approximately  $3.5  million  in  cash.  See  "Major  Shareholders".

In  March 2002, the Company contracted and received the cash for the issue of an
aggregate  of  4,702,410 Ordinary Shares at a price of $0.083 per Ordinary Share
representing  an  aggregate  purchase  price  of  approximately  $390,000.  The
following  individuals  and  entities  purchased  the  number of Ordinary Shares
indicated  in  connection  with  this  private placement:  the Rennes Foundation
(1,204,819  shares);  Noesis  NV  (301,205  shares);  Mr.  M  Johansson (361,446
shares) and Mrs M Pillinger, wife of S Pillinger, a then Director of the Company
(100,000  shares).

In April 2002, the Company contracted for the issue of an aggregate of 1,462,600
Ordinary  Shares  at  a  price of $0.10 per Ordinary Share pursuant to the stock
transaction  acquisition  of  the  assets  of Palm Teach Limited.  The following
individuals  and  entities  received  the number of Ordinary Shares indicated in
connection  with  this transaction:  Mr. P Copeland as beneficial shareholder of
Palm  Teach  Limited  (759,700  shares);  Mr.  S  Pillinger  (209,450  shares).

Also  in  April 2002, the Company contracted and received the cash for the issue
of  3,276,923  Ordinary  shares  at  a  price  of  $0.065  per  Ordinary  Share
representing  an aggregate purchase price of approximately $213,000. At the same
time, the following entity contracted for the purchase of the number of Ordinary
Shares  indicated  in connection with this private placement: Silverdash Limited
(7,646,154  shares). In September, 2002, it became apparent that this GBP350,000
($512,000)  investment,  payable  in  instalments  by the end of September 2002,
would  not  be fully paid, but that only some GBP90,000 would be provided by the
original  source.  Alternative investors were sought and found for the remaining
GBP260,000  ($380,000) during October 2002. At the time of filing, GBP224,000 of
the  GBP260,000  had  been  received,  with  the  balance  due before the end of
November  2002.

Also  in  April  2002,  the Company contracted for the issue of 803,046 Ordinary
Shares  at  a  price  of  $0.07  per  Ordinary  Share  under  a Salary sacrifice
arrangement,  representing an aggregate purchase price of $56,000. The following
individual  purchased the number of Ordinary Shares indicated in connection with
this  transaction:  Mr.  M  Johansson (648,183 shares).  At the same time, Mr. J
Vandamme  agreed  to  accept  102,000  Ordinary  Shares  at a price of $0.07 per
Ordinary  Share  in settlement of outstanding invoiced charges for work done for
the  Company.

Subsequent  to  the  year  end,  in  October  2002,  the Company completed a new
investment  round  from  existing  investors  and  affiliates, raising a further
GBP150,000  ($230,000),  represented  by  the  issuance of a further 2.7 million
(approximately)  ordinary shares at a price of $0.085 per share, at market rate.
The  following  individuals/entities purchased the number of shares indicated in
connection  with  this  transaction:  Rennes  Foundation  (1,176,470  shares), M
Johannson  (181,176  shares),  S  Cohen  (452,941  shares),  J Copeland (452,941
shares)  and  S  Copeland  (452,941  shares).

C.  INTERESTS  OF  EXPERTS  AND  COUNSEL.
----------------------------------------

Not  Applicable

                                       40


<PAGE>


ITEM  8.  FINANCIAL  INFORMATION.
---------------------------------


A.  CONSOLIDATED  STATEMENTS  AND  OTHER  FINANCIAL  INFORMATION.
----------------------------------------------------------------

CONSOLIDATED  FINANCIAL  STATEMENTS

The  consolidated  Financial  Statements  and Other Financial Information of the
Company  are  listed  under  Item  18  in  this  Report.

LEGAL  PROCEEDINGS

The  Company  is  not  a  party  to  any  material  legal  proceedings.

DIVIDEND  POLICY

Holders  of  Futuremedia  ordinary  shares  may, by ordinary resolution, declare
dividends,  but may not declare dividends in excess of the amount recommended by
the  directors.  The  directors may also pay interim dividends.  No dividend may
be  paid  other  than out of profits available for distribution. Futuremedia has
not  in  the  past  declared  or  paid  any dividends to holders of its ordinary
shares,  and  there is no present intention to declare or pay any such dividend.


B.  SIGNIFICANT  CHANGES.
------------------------

Not  Applicable.




ITEM  9.  THE  OFFER  AND  THE  LISTING.
---------------------------------------

A.  OFFER  AND  LISTING  DETAILS.
--------------------------------

The Company's ADSs have traded since May 29, 1996, on the Nasdaq SmallCap Market
under  the  symbol  FMDAY.

The  Company's  warrants  were  traded  on  the Nasdaq SmallCap Market under the
symbol  FMDYW  from May 29, 1996 until June 25, 1997.  Since then they have been
quoted  on  the  OTC Bulletin Board. From August 19, 1993 until May 29, 1996 the
Company's  ADSs  and warrants traded on the Nasdaq National Market.  The Company
agreed  to  extend  the warrants issued on August 19, 1993, for a further twelve
months  to  August,  2003.

The  closing  bid  prices  of  the  Company's  securities  have  been within the
following  ranges  during the periods shown.  The quotations set forth below are
inter-dealer quotations, without retail mark-ups, mark-downs or commissions, and
do  not  necessarily  represent  actual  transactions.

(1)     The  five  most  recent  full  financial  years:

                                       41


<PAGE>


                                      ADS PRICE
                                      ---------
        YEAR ENDING APRIL 30,
                                     HIGH    LOW
                                    ------  -----
                                      $       $
                                    ------  ------
              1998                  1.781    0.250
              1999                  1.563    0.438
              2000                  3.844    0.469
              2001                        3.125    0.160
              2002                  0.38      0.05

                                    WARRANTS PRICE
                                    --------------
        YEAR ENDING APRIL 30,
                                     HIGH    LOW
                                    ------  -----
                                      $       $
                                    ------  ------
              1998                  0.031   0.031
              1999                  0.031   0.031
              2000                  0.031   0.031
              2001                        0.031   0.031
              2002                  0.031   0.031



 (2)     Each  full  financial  quarter  for  the two most recent full financial

ADSs: FMDAY                 High    Low
                            -----  -----
Year ended April 30
-------------------
2001     First quarter      3.125  1.313
         Second quarter     1.250  0.375
         Third quarter      0.563  0.188
         Fourth quarter     0.406  0.156
2002     First quarter      0.380  0.190
         Second quarter     0.250  0.060
         Third quarter      0.330  0.050
         Fourth quarter     0.160  0.070
2003     First quarter      0.120  0.070
         Second quarter     0.140  0.060

Warrants  FMDYW             High    Low
                            -----  -----
                            $       $
2001     First quarter      0.031  0.031
         Second quarter     0.031  0.031
         Third quarter      0.031  0.031
         Fourth quarter     0.031  0.031
2002     First quarter      0.031  0.031
         Second quarter     0.031  0.031
         Third quarter      0.031  0.031
         Fourth quarter     0.031  0.031
2003     First quarter      0.031  0.031
         Second quarter     0.031  0.031



                                       42


<PAGE>

(3)     Each  month  for  the  most  recent  six  months:


                                 ADS PRICE
                                ----------

                              HIGH        LOW
                             ------      -----
                                $          $
                             ------      -----
     October 2002             0.10       0.07
     September 2002           0.10       0.09
     August 2002              0.14        0.06
     July 2002                0.10        0.06
     June 2002                0.11        0.08
     May 2002                 0.13        0.10
     April 2002               0.16        0.08


                              WARRANTS PRICE
                             ----------------
                              HIGH       LOW
                             ------      -----
                                $          $
                             ------      -----
      October 2002           0.031       0.031
      September 2002         0.031       0.031
      August 2002            0.031       0.031
      July 2002              0.031         0.031
      June 2002              0.031       0.031
      May 2002               0.031         0.031
      April 2002             0.031       0.031


The  share  price  of  the  Ordinary  Shares  on  July  31, 2002, the end of the
Company's  first  fiscal quarter, was $0.07, the last reported sale price of the
Ordinary  Shares  on  November 14, 2002 on the Nasdaq SmallCap Market was $0.13.

B.  PLAN  OF  DISTRIBUTION.
--------------------------

Not  Applicable




C.  MARKETS.
-----------

The  Company's  ADSs  are  listed on the Nasdaq SmallCap Market under the symbol
"FMDAY".  The  Company's Warrants are traded on the OTC Bulletin Board under the
symbol  "FMDYW".


D.  SELLING  SHAREHOLDERS.
-------------------------

Not  Applicable


                                       43



<PAGE>




E.  DILUTION.
------------

Not  Applicable


F.  EXPENSES  OF  THE  ISSUE.
----------------------------

Not  Applicable


ITEM  10.  ADDITIONAL  INFORMATION
----------------------------------

A.  SHARE  CAPITAL.
------------------

Not  Applicable


B.  MEMORANDUM  AND  ARTICLES  OF  ASSOCIATION.
----------------------------------------------

Incorporated  by  reference to  the Company's Registration Statement on Form F-1
(Registration  No.  33-639941)  and by reference to Exhibit 3.1 to the Company's
Annual  Report  on  Form  20-F  for  the  year  ended  April  30,  2000.


C.  MATERIAL  CONTRACTS.
-----------------------

The  Company  has  secured  the provision of its Internet Service Provider (ISP)
service requirements with Siemens UK Ltd. for a period of three years commencing
September  2001.  The  terms  of  the contract allow termination on three months
notice  after  the  completion  of  the  first year.  In April 2001, the Company
contracted  with  Consignia  Plc (UK) for the provision of a learning management
system  comprising  a hosted service together with learning content for a period
of  22  months  commencing  June  1,  2001.  The total value of the contract was
approximately  GBP1,000,000  ($1,438,600).

D.  EXCHANGE  CONTROLS.
----------------------

There are currently no UK foreign exchange control restrictions on the import or
export  of  capital, including the availability of cash and cash equivalents for
use  by  the  Company,  or on payment of dividends on securities of the Company.

There  are  no  restrictions  under  the  Company's  Memorandum  and Articles of
Association or under English law that limit the right of non-resident or foreign
owners  to  hold  or  vote  the  Company's  securities.


E.  TAXATION.
------------

UNITED  KINGDOM  INCOME  TAX


                                       44



<PAGE>


The  following  discussion of taxation is intended only as a descriptive summary
and  it  does  not purport to be a complete technical analysis or listing of all
potential  tax  effects relevant to the Ordinary Shares or ADSs.  The statements
of United Kingdom and United States tax law set forth below are based (i) on the
laws  and the UK Inland Revenue practice and published Statements of Practice in
force  as  of  the date of this report; and (ii) assumes that each obligation in
the  deposit  agreement  among  the Company, the Depositary and the holders from
time  to  time of ADSs and any related agreement will be performed in accordance
with  its  terms.  The  statements  herein  are subject to any changes occurring
after  the  date  of  this  report  in  UK  or US law, or in the double taxation
conventions  between  the US and the UK with respect to income and capital gains
taxes  (the "Income Tax Convention") and with respect to estates and gifts taxes
(the  "Estate  Tax  Convention").

The  Company anticipates that if any cash dividends are paid by the Company, the
dividends  would  be  paid in pounds sterling.  As a result, fluctuations in the
exchange  rate between sterling and US dollars will affect the US dollar amounts
received  by  holders  of  ADSs  upon  conversion  by the Depositary of dividend
payments  into  US  dollars.

The  Company  does  not expect to pay cash dividends for the foreseeable future,
but  rather,  to  retain  earnings  to  finance  the  expansion of the business.

Up  to  April  5,  1999,  an individual shareholder resident in the UK is for UK
income  tax  purposes  treated  as having taxable income equal to the sum of the
dividend  paid  to  him  plus a tax credit equal to 1/4 of the amount of the net
dividend.  The  tax  credit  is available to be set against the individual's tax
liability  on  the  dividend, which for a shareholder within the lower and basic
tax  rate  bands  will  satisfy  this  tax  liability  on  UK  dividends, and in
appropriate  cases  may  be  refunded  to  him.

From April 6, 1999, the rate of tax credit has reduced to 10% and refunds of tax
credits are no longer possible.  However, an individual shareholder whose income
is  within the lower or basic tax rate bands will be liable to tax at 10% on his
individual  income.  As  such,  the  tax credit will continue to satisfy the tax
liability  on UK dividends.  For higher rate taxpayers, the dividend income will
be  liable  to  UK  tax  at 32.5% (which after relief for the reduced tax credit
leaves  the  tax  effect  unchanged  for  higher  rate  taxpayers).

Under  the  current Income Tax Convention, a US resident individual or corporate
holder  of  an  Ordinary  Share  or  ADS  who  or  which satisfied the following
conditions  (an  "Eligible  US  Holder"):

(i)  is  resident  in the US for the purposes of the Income Tax Convention (and,
     in  the  case  of  a  corporation,  not  also resident in the UK for UK tax
     purposes);

(ii) is  not  a corporation which, alone or together with one or more associated
     corporations,  controls,  directly or indirectly, 10% or more of the voting
     stock  of  the  Company;

(iii)  whose holding of the Ordinary Shares or ADSs is not effectively connected
     with  a permanent establishment in the UK through which such holder carries
     on  a  business  or  with  a  fixed  base  in the UK from which such holder
     performs  independent  personal  services;  and

(iv) under certain circumstances, is not an investment or holding company 25% or
     more  of  the capital of which is owned, directly or indirectly, by persons
     that  are  neither  individual  residents  nor  citizens  of  the  US, will
     generally  be  entitled under the current Income Tax Convention to receive,
     in addition to any dividend paid by the Company, an amount equal to the tax
     credit  available  to UK resident shareholders in respect of such dividend,
     but  subject  to  a withholding tax equal to 15% of the sum of the dividend
     paid  and  the  tax  credit.

                                       45


<PAGE>


For  example,  with  the  tax  credit  at the rate of 1/4 of the net dividend, a
dividend of GBP80.00 will entitle such a holder to receive, upon compliance with
the  refund  procedures  described below an additional payment of GBP5.00 (i.e.,
the  tax  credit  of GBP20.00 less withholding tax of GBP15.00).  The refund may
not be available in certain circumstances if the holder is exempt from US tax on
the  dividend  received.

Arrangements  have  been  made  by  the  Depositary  so that, subject to certain
exemptions, the tax credit will be refunded, net of the withholding tax, to a US
ADS  holder  if  the  ADS holder completes the declaration on the reverse of the
dividend  check  and presents the check for payment within three months from the
date  of  issue  of  the  check.  The  exceptions  include certain investment or
holding  companies.

ADS  holders  who  do  not  satisfy  the  foregoing requirements, and holders of
Ordinary  Shares,  must,  in  order to obtain a refund of tax credit (net of the
withholding  tax),  file  in  the manner and at the time described in US Revenue
Procedure  80-18,  1980-1  C.B. 623, and US Revenue Procedure 81-58, 1981-2 C.B.
678,  a claim for refund of tax credit identifying the dividends with respect to
which  the  tax  credit  was paid.  Claims for refund of tax credit must be made
within  six years of the UK year of assessment (the 12-month period ending April
5  in  each year) in which the related dividend was paid.  The first claim for a
refund  of tax credit is made by sending the appropriate UK form in duplicate to
the Director of the Internal Revenue Service Center with which the holder's last
federal  income  tax  return  was  filed.  Forms  may  be  obtained from the IRS
Assistant  Commissioner  (International),  950  L'Enfant  Plaza  South,  S.W.,
Washington,  DC  20024,  Attention: Taxpayers Service Division. Because a refund
claim  is  not  considered  made  until  the  UK  tax  authorities  receive  the
appropriate  form from the Internal Revenue Service, forms should be sent to the
Internal  Revenue  Service  well  before  the  end  of the applicable limitation
period.  Any claim for refund of tax credit by a US holder after the first claim
should  be  filed  directly  with the UK Inspector of Foreign Dividends, Lynwood
Road,  Thames  Ditton,  Surrey,  KT7  0DP,  England.

Dividends  (including  amounts  in  respect  of  the  tax credit and any amounts
withheld)  must  be  included in gross income by a US holder, and will generally
constitute  foreign source "passive" or "financial services" income for purposes
of  applying  the foreign tax credit limitations.  Such dividends will generally
not be eligible for the dividends received deduction allowed to US corporations.
Subject  to  certain  limitations,  the  applicable  UK  withholding tax will be
treated  as  a  foreign tax eligible for credit against such holder's US federal
income  tax.

UNITED  KINGDOM  TAXATION  ON  CAPITAL  GAINS
Under the current Income Tax Convention, the US and the UK each may, in general,
tax  capital gains in accordance with the provisions of its domestic law.  Under
current  UK law, residents of the US who are not resident or ordinarily resident
in  the  UK  will not be liable to UK capital gains tax on capital gains made on
the  disposal  of  their  ADSs  or Ordinary Shares unless those ADSs or Ordinary
Shares  are  held  in  connection with a trade carried on through a permanent UK
establishment.  A  US  holder  of an ADS or Ordinary Share will be liable for US
federal  income  tax on such gains to the same extent as on any other gains from
sales  of  stock.

UNITED  KINGDOM  INHERITANCE  TAX
Under  the  current  Estate  Tax  Convention, ADSs or Ordinary Shares held by an
individual  who  for the purpose of the convention is domiciled in the US and is
not  a  national  of  the  UK will not, provided any tax chargeable in the US is
paid,  be  subject  to  UK  inheritance  tax on the disposal of ADSs or Ordinary
Shares by way of gift or upon the individual's death unless the ADSs or Ordinary
Shares  are part of the business property of a permanent UK establishment of the
individual  or,  in  the  case  of  a  holder  who performs independent personal
services,  pertain  to a fixed base situated in the UK.  In the exceptional case
where  the ADSs or Ordinary Shares are subject both to UK inheritance tax and to

                                       46


<PAGE>


US  federal gift or estate tax, the Estate Tax Convention generally provides for
double  taxation  to  be  relieved  by  means  of  credit  relief.

UNITED  KINGDOM  STAMP  DUTY  AND  STAMP  DUTY  RESERVE  TAX
Transfer  of  ADSs  are  not subject to UK stamp duty provided that the transfer
instrument  is  not executed in, and at all times remains outside of, the UK  In
addition,  with  effect  from  July  1, 1996, stamp duty is not chargeable on an
instrument  where  the  transferee is a member of an electronic transfer system.
Under the Finance Act 1986, a stamp duty reserve tax ("SDRT") of 1.5% is payable
on  all  transfers  to  the  Depositary,  or its nominee, of Ordinary Shares for
inclusion in ADSs. Such SDRT is calculated on the purchase price or market value
of  the  Ordinary  Shares  so  transferred.


F.  DIVIDENDS  AND  PAYING  AGENTS.
----------------------------------

Not  Applicable


G.  STATEMENT  BY  EXPERTS.
--------------------------

Not  Applicable


H.  DOCUMENTS  ON  DISPLAY.
--------------------------

Copies of this Annual Report on Form 20-F, including the exhibits hereto, may be
inspected  without  charge  at  the  Commission's  principal office at 450 Fifth
Street, NW, Washington, D.C. 20549, and copies of all or any part thereof may be
obtained  from  the  Commission  upon  payment of certain fees prescribed by the
Commission.

I.  SUBSIDIARY  INFORMATION.
---------------------------

Not  Applicable


ITEM  11. QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK.
---------------------------------------------------------------------------


Not  applicable.





ITEM  12.  DESCRIPTION  OF  SECURITIES  OTHER  THAN  EQUITY SECURITIES.
-----------------------------------------------------------------------


Not  Applicable

                                       47


<PAGE>



                                 PART II
                                 -------

ITEM  13.  DEFAULTS,  DIVIDEND ARREARAGES AND DELINQUENCIES.
-----------------------------------------------------------

None.


ITEM  14.  MATERIAL  MODIFICATIONS  TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
--------------------------------------------------------------------------------
PROCEEDS.
---------

None.

ITEM  15.  CONTROLS  AND  PROCEDURES.
------------------------------------

15  a)  Not  applicable  as  reference  period  ended  prior to August 29, 2002.

15  b)  In  the  year  ended  April  30,  2002,  the  Company  did  not make any
significant changes in, nor take any corrective actions regarding, the Company's
internal  controls  or  other  factors  that  could  significantly  affect these
controls.  Management of the Company plans to conduct regular evaluations of the
Company's  disclosure  controls  and  procedures.


ITEM  16.  [RESERVED].
---------------------

                                       48


<PAGE>




                                    PART III
                                    --------


ITEM  17.  FINANCIAL  STATEMENTS.  ITEM  17.  FINANCIAL  STATEMENTS
--------------------------------

Not  Applicable


ITEM  18.  FINANCIAL  STATEMENTS.  ITEM  18.  FINANCIAL  STATEMENTS
--------------------------------

The  following  audited  consolidated  financial  statements,  together with the
independent  auditors'  reports, are filed as part of this Annual Report on Form
20-F.


<TABLE>
<CAPTION>

<S>                                                                       <C>

FINANCIAL  STATEMENTS

                                                                         Page
                                                                         ----


Report  of  Independent  Auditors                                          F1

Report of Previous Independent Auditors                                    F3

Audited Financial Statements


   Consolidated Balance Sheets at April 30, 2001 and 2000                  F5


   Consolidated Statements of Income for the fiscal years ended
   April 30, 2002, 2001 and 2000                                           F7


   Consolidated Statements of Changes in Shareholders' Equity for
   the fiscal years ended April 30, 2002, 2001 and 2000                    F8


   Consolidated Statements of Cash Flows for the fiscal years ended
   April 30, 2002, 2001 and 2000                                           F9

   Notes to Consolidated Financial Statements                             F10

Financial Statement Schedule


</TABLE>


All  other Schedules are omitted because they are not applicable or the required
information  is shown in the Consolidated Financial Statements or Notes thereto.

                                       49


<PAGE>


ITEM  19.  EXHIBITS.
-------------------


The  following  exhibits  are  filed as part of this Annual Report on Form 20-F.

Exhibit                Exhibit  Description
Number                 --------------------
-------

1.1  Memorandum  and  Articles  of  Association  of  the  Registrant, as amended
     (previously  filed  as  Exhibit  3.1 to the Company's Annual Report on Form
     20-F  for the year ended April 30, 2000 (the "2000 20-F"), and incorporated
     herein  by  reference).

2.1  Description  of  the  Registrant's  Ordinary  shares  (included  in  the
     Registrant's Memorandum and Articles of Association, as amended, previously
     filed  as  Exhibit  3.1  to 2000 20-F and incorporated herein by reference)

2.2  Form  of  Warrant  Agreement  (including  form  of Warrant Certificate), as
     amended  (previously  filed  as  Exhibit  4.3 to the Company's Registration
     Statement  on  Form  F-1  (File  No.  33-63994)  (the  "F-1  Registration
     Statement")  and  incorporated  herein  by  reference).

2.3  Form  of  Deposit  Agreement,  as  amended  (including  specimen  American
     Depositary Receipt), as amended (previously filed as Exhibit 4.5 to the F-1
     Registration  Statement  and  incorporated  herein  by  reference).

2.4  Form of Registration Rights Agreement (previously filed as Exhibit 10.17 to
     the  F-1  Registration  Statement  and  incorporated  herein by reference).

2.5  Loan  Stock  Agreement between the Registrant and Futuremedia (BVI) Limited
     (the  "Loan Stock Agreement") (previously filed as Exhibit 4.5 to 2000 20-F
     and  incorporated  herein  by  reference).

2.6  Form  of  Warrant  issued  in  connection  with  the  Loan  Stock Agreement
     (previously filed filed as Exhibit 4.6 to 2000 20-F and incorporated herein
     by  reference).

4.1  Blanket  Purchase  Order between Ford Motor Company Limited and Futuremedia
     Limited,  dated  May 19, 1986, and amendment dated July 1, 1991 (previously
     filed  as  Exhibit  10.7 to the F-1 Registration Statement and incorporated
     herein  by  reference).

4.2  License  Agreement  between  Ford  Motor  Company  Limited  and Futuremedia
     Limited,  dated  May 19, 1986, and amendment dated July 1, 1991 (previously
     filed  as  Exhibit  10.8  to  the  F-1  Registration  Statement  and herein
     incorporated  by  reference).

4.3  Approved  Executive  Share  Option  Scheme, as Amended (previously filed as
     Exhibit  99.1  to the Registrant's Registration Statement on Form S-8 filed
     April  12, 2000 (File No. 33 - 11828)(the "S-8 Registration Statement") and
     incorporated  herein  by  reference).

4.4  Unapproved  Executive Share Option Scheme (previously filed as Exhibit 99.2
     to  the  S-8 Registration Statement) and incorporated herein by reference).

4.5  Approved Net Profit Sharing Scheme, as Amended (previously filed as Exhibit
     10.20  to  the  F-1  Registration  Statement  and  incorporated  herein  by
     reference).

4.6  Incentive  Profit  Sharing Scheme (previously filed as Exhibit 10.6 to 2000
     20-F).

4.7  Amendment  dated  May  2, 1996 to Exhibit 10.1 (previously filed as exhibit
     10.22  to  the Company's Annual Report on Form 20F for the year ended April
     30,  1997  and  incorporated  herein  by  reference).

4.8  Agreement  dated  January  9,  1998  between  the  Registrant  and  British
     Telecommunications  PLC (previously filed as Exhibit 10.28 to the Company's


                                       50


<PAGE>


     Annual  Report  on  Form  20-F  for  the  year  ended  April  30,  1998 and
     incorporated  herein  by  reference).

4.11 Agreement  dated  September  17,  1999  between the Registrant and National
     Westminster Bank PLC (filed as Exhibit 10.30 to the Company's Annual Report
     on  Form  20-F  for  the  year  ended  April  30,  1999 (the "1999 20-F")).

4.12 Agreement  dated  May  1, 1999 between the Registrant and Mentor Management
     Consulting (previously filed as Exhibit 10.31 to 1999 20-F and incorporated
     herein  by  reference).

8.1  List  of Subsidiaries of the Registrant (previously filed as Exhibit 8.1 to
     the Company's Annual Report on Form 20-F for the year ended April 30, 2001,
     and  incorporated  herein  by  reference).

10.1 Consents  of  BDO  Stoy Hayward and Ernst & Young LLP, Independent Auditors
     (filed  herewith  -  see  pages  F2  and  F4  of  this  Report).

10.2 Chief  Executive  Officer  Certification.

10.3 Chief  Accounting  Officer  Certification.



                                       51


<PAGE>


                              SIGNATURES

The Registrant hereby certifies that it meets all of the requirements for filing
on Form 20-F and that it has duly caused and authorized the undersigned to sign
this Annual Report on its behalf.

                                   FUTUREMEDIA  PLC.
                                   (Registrant)

                                   By:     /s/  Mats  A  I  Johansson
                                   Name:   Mats  A  I  Johansson
                                   Title:  Chief  Executive  Officer  and
                                           Authorized  Signatory


Date:       14 November 2002.

                                       52


<PAGE>


                                 CERTIFICATIONS



I,  Mats  Johansson,  Chief  Executive Officer of Futuremedia Plc, certify that:

1.  I  have  reviewed  this  annual  report  on  Form  20-F  of Futuremedia Plc;

2.  Based  on  my  knowledge,  this  annual  report  does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not  misleading  with  respect to the period covered by this annual
report;

3.  Based  on  my  knowledge,  the  financial  statements,  and  other financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods  presented  in  this annual report.

Date:  14  November  2002

/s/  Mats  A  I  Johansson
--------------------------

Mats  A  I  Johansson

Chief  Executive  Officer

                                       53



<PAGE>

I,  Peter  Machin,  Chief  Accounting  Officer of Futuremedia Plc, certify that:

1.  I  have  reviewed  this  annual  report  on  Form  20-F  of Futuremedia Plc;

2.  Based  on  my  knowledge,  this  annual  report  does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not  misleading  with  respect to the period covered by this annual
report;

3.  Based  on  my  knowledge,  the  financial  statements,  and  other financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods  presented  in  this annual report.

Date:  14  November  2002

/s/  Peter  Machin
------------------
Peter  Machin

Chief  Accounting  Officer

                                       54


<PAGE>


FUTUREMEDIA  PLC  AND  SUBSIDIARIES
REPORT  OF  INDEPENDENT  AUDITORS

The  Board  of  Directors  and  Shareholders
Futuremedia  PLC

We  have  audited the accompanying consolidated balance sheet of Futuremedia PLC
as  of  April  30,  2002  and the related consolidated statements of operations,
stockholders'  equity,  and  cash flows for the year then ended. These financial
statements  are  the  responsibility  of  the  Company's  management.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audit.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements  are free of material misstatement. An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provides  a
reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all material respects, the financial position of Futuremedia PLC at
April  30,  2002,  and  the results of its operations and its cash flows for the
year  then  ended in conformity with accounting principles generally accepted in
the  United  States  of  America.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as  a  going  concern.  As  discussed  in Note 1 to the
financial statements, the Company has suffered recurring losses from operations,
has negative cashflows from operations and has a working capital deficiency that
raise  substantial  doubt  about  its  ability  to  continue as a going concern.
Management's  plans in regard to these matters are also described in Note 1. The
financial  statements  do not include any adjustments that might result from the
outcome  of  this  uncertainty.


/s/  BDO  Stoy  Hayward

London,  England

November  11,  2002


                                       F1


<PAGE>

CONSENT OF INDEPENDENT AUDITORS


We  hereby  consent  to  the  incorporation  by  reference  in  the Registration
Statement  (Form  S-8  No.  333-11828)  of  our  report dated November 11, 2002,
relating  to  the consolidated financial statements of Futuremedia PLC appearing
in  the  Company's Annual Report on Form 20-F for the year ended April 30, 2002.
Our  report contains an explanatory paragraph regarding the Company's ability to
continue  as  a  going  concern.

/s/  BDO  Stoy  Hayward
BDO  Stoy  Hayward
London,  England

November  14,  2002

                                      F2



<PAGE>



FUTUREMEDIA  PLC  AND  SUBSIDIARIES
REPORT  OF  INDEPENDENT  AUDITORS

The  Board  of  Directors  and  Shareholders
Futuremedia  PLC


We  have  audited  the consolidated balance sheet of Futuremedia PLC as at April
30,  2001  and  the  related  consolidated  statements  of  income,  changes  in
shareholders'  equity  and  cash  flows  for each of the two years in the period
ended  April  30,  2001.  These  financial  statements  and  schedule  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on  these  financial  statements  and  schedule  based  on  our audits.

We conducted our audits in accordance with United Kingdom auditing standards and
United  States  generally  accepted  standards.  Those standards require that we
plan  and  perform  the  audit  to obtain reasonable assurance about whether the
financial  statements  are  free  of  material  misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the overall financial statement presentation.  We believe our audits
provide  a  reasonable  basis  for  our  opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Futuremedia PLC at
April  30,  2001  and  the  consolidated  results  of  its  operations  and  its
consolidated  cash flows for each of the two years in the period ended April 30,
2001  in  conformity with accounting principles generally accepted in the United
States.  Also,  in  our  opinion, the related financial statement schedule, when
considered  in  relation  to  the  basic  financial statements taken as a whole,
presents  fairly  in  all  material  respects the information set forth therein.

The  accompanying  financial  statements  have  been  prepared  assuming  that
Futuremedia  will  continue  as  a  going  concern.  The  Company  has  incurred
recurring  operating  losses, has a working capital deficiency, and is dependent
upon  raising additional capital to continue operations.  These conditions raise
substantial  doubt  about  the Company's ability to continue as a going concern.
The  financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or amounts and
classification  of  liabilities  that  may  result  from  the  outcome  of  this
uncertainty.

                                       Ernst  &  Young  LLP



/s/  Ernst  &  Young  LLPSouthampton,  England
November  14,  2001




                                       F3


<PAGE>



CONSENT  OF  INDEPENDENT  AUDITORS

We consent to the incorporation by reference in the Registration Statement (Form
S-8  No.  333-11828) of Futuremedia PLC of our report dated November 14, 2001 on
the  consolidated  financial  statements  and  schedule  included in this Annual
Report  (Form  20-F)  for  the  year  ended  April  30,  2002.


                                             Ernst  &  Young  LLP


/s/  Ernst  &  Young  LLP
Southampton,  England
November  14,  2002

                                       F4




<PAGE>


FUTUREMEDIA  PLC  AND  SUBSIDIARIES
CONSOLIDATED  BALANCE  SHEETS

<TABLE>
<CAPTION>
<S>                                                    <C>    <C>    <C>

                                                                April 30,
                                                        --------------------------
                                                         2002    2002      2001
                                                         ----    ----      ----
                                                        ($'000) (GBP000) (GBP'000)
ASSETS

Current assets
 Cash and cash equivalents                                 651     445     2,547
 Accounts receivable, less allowance of GBP59,000
  ($86,000) in 2002 and GBP201,000 in 2001 for doubtful
   accounts                                                164     112       475
 Amounts recoverable on contracts                           22      15       133
 Other current assets                                        4       3        36
 Inventories -finished goods                                 3       2         3
 Prepaid expenses                                          575     393       444
                                                         -----   -----    ------
 Total current assets                                    1,419     970     3,638

 Property held for Sale                                  1,328     908       908

Property and equipment
   Land and buildings                                       86      59        59
   Audio visual and computer equipment                     606     414       280
   Office equipment                                        104      71        71
                                                         -----   -----    ------
                                                           796     544       410
Accumulated depreciation                                   565     386       243
                                                         -----   -----    ------
                                                           231     158       167
Other assets
Goodwill                                                    78      53         -
                                                         -----   -----    ------
Total assets                                             3,056   2,089     4,713
                                                         =====   =====    ======
</TABLE>

See  accompanying  notes  to  the  consolidated  financial  statements.

                                       F5


<PAGE>



FUTUREMEDIA  PLC  AND  SUBSIDIARIES
CONSOLIDATED  BALANCE  SHEETS

<TABLE>
<CAPTION>
<S>                                                           <C>       <C>       <C>
                                                                                   April 30,
                                                               ----------------------------
                                                                2002      2002      2001
                                                                ----      ----      ----
                                                               ($'000)  (GBP'000) (GBP'000)
LIABILITIES  AND  SHAREHOLDERS'  EQUITY


Current liabilities
 Fees received in advance                                        1,018       696       908
 Accounts payable                                                  287       196       662
 Other taxes and social security costs                             120        82       131
 Other accounts payable                                             28        19       126
 Other accrued expenses                                            174       119       381
 Convertible Loan                                                  600       410
                                                               -------    ------    ------
   Total current liabilities                                     2,227     1,522     2,208

Long-term debt less current portion                                  -         -       442
                                                               -------    ------    ------
   Total liabilities                                             2,227     1,522     2,650

Shareholders' equity
 Ordinary shares of 1 1/9p each
 Authorized - 75,000,000
 Issued and outstanding- 29,648,374 at April 30, 2002,
   29,648,374 at April 30, 2001                                    481       329       329
 Shares to be issued  10,346,979 at April 30, 2002 .               740       506         -
 Preference shares of 2p each
 Authorized - 2,000,000
 None issued                                                         -         -         -
 Additional paid-in capital                                     21,686    14,822    14,822
 Retained deficit                                              (21,980)  (15,023)  (13,011)

Other comprehensive loss - cumulative translation adjustment      (98)      (67)      (77)
                                                               -------    ------    ------
Total shareholders' equity                                        829       567     2,063
                                                               -------    ------    ------
Total liabilities and shareholders' equity                      3,056     2,089     4,713
                                                               =======    ======    ======
</TABLE>

See  accompanying  notes  to  the  consolidated  financial  statements.


                                       F6


<PAGE>


FUTUREMEDIA  PLC  AND  SUBSIDIARIES
CONSOLIDATED  STATEMENTS  OF  OPERATIONS


<TABLE>
<CAPTION>
<S>                            <C>           <C>          <C>          <C>
                                                Year  ended  April  30,
                                             ( in 000's except share data)
                                             -----------------------------
                                     2002          2002        2001         2000
                                     ----          ----        ----         ----
                                      $             GBP         GBP          GBP

Net sales                            1,333          911          743          867
Cost of sales                        2,247        1,536        1,789        1,776

Gross loss                            (914)        (625)      (1,046)        (909)

Operating expenses
   Sales and marketing                 241          165          558          329
   General and administrative        1,719        1,175        2,051        1,355
   Facilities expenses                  92           63          157           79

Total operating expenses             2,053        1,403        2,766        1,763

Operating loss .                    (2,967)      (2,028)      (3,812)      (2,672)

Interest income                         47           32          120           18
Interest expense                       (42)         (29)         (36)         (62)
Foreign currency gains                  19           13           31           71

Net loss                            (2,944)      (2,012)      (3,697)      (2,645)


Loss per share basic and
  diluted.                         (9.65)c      (6.60)p     (12.71)p     (11.17)p

Weighted average shares
  Outstanding                   30,501,619   30,501,619   29,098,429   23,675,761

</TABLE>

See accompanying notes to the consolidated financial statements.


                                       F7


<PAGE>



 FUTUREMEDIA  PLC  AND  SUBSIDIARIES
CONSOLIDATED  STATEMENTS  OF  CHANGES  IN  SHAREHOLDERS'  EQUITY

<TABLE>
<CAPTION>

<BTB>

<S>                                   <C>        <C>       <C>        <C>      <C>       <C>         <C>


                                       Number of  Share    Additional Shares            Cumulative    Total
                                       Ordinary  Capital     Paid-in  to be   Retained  Translation Shareholders
                                        Shares    Amount     Capital  Issued  Deficit   Adjustment    Equity
                                       ----------------------------------------------------------------------
                                                    GBP        GBP      GBP     GBP         GBP       GBP
                                                   '000       '000     '000    '000        '000      '000

At April 30, 1999                      20,684,522     230     7,707       -    (6,669)       (23)      1,245
Exchange  translation
adjustments                                     -       -         -       -         -        (13)        (13)
Net loss                                        -       -         -       -    (2,645)         -      (2,645)
Comprehensive  loss                                                                                   (2,658)
Issuance  of  shares  (net
of  issuance
costs  of  GBP178,000)                  6,731,630      75     4,546       -         -       4,621
                                       ----------------------------------------------------------------------
At April 30, 2000                             27,416,152     305    12,253       -    (9,314)        (36)     3,208
Exchange  translation
adjustments                                     -       -         -       -         -         (41)       (41)
Net loss                                        -       -         -       -    (3,697)          -     (3,697)
Comprehensive loss                                           (3,738)
Issuance of shares (net
 of  issuance
costs of  GBP69,000)                    2,232,222      24     2,569       -         -           -      2,593
                                       ----------------------------------------------------------------------
At April 30, 2001                      29,648,374     329    14,822       -   (13,011)        (77)     2,063
Exchange  translation
adjustments                                     -       -         -       -         -          10         10
Net loss                                        -       -         -       -    (2,012)          -     (2,012)
Comprehensive  loss                             -       -                      (2,002)
Shares  to  be  issued  (net
of  issuance costs
of GBP64,000)                          10,346,979       -         -     506         -                    506
                                       ----------------------------------------------------------------------
At April 30, 2002                      39,995,353     329    14,822     506   (15,023)        (67)       567
                                       ======================================================================

</TABLE>
See accompanying notes to the consolidated financial statements.


                                       F8


<PAGE>



FUTUREMEDIA  PLC  AND  SUBSIDIARIES
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
<TABLE>
<CAPTION>

<S>                                                    <C>      <C>      <C>      <C>
                                                            Year ended April 30,
                                                       2002       2002     2001    2000
                                                      ----------------------------------
                                                        GBP        GBP      GBP     GBP
                                                       '000       '000     '000    '000

Operating activities
Net loss                                               (2,944)  (2,012)  (3,697)  (2,645)
Adjustments to reconcile net loss to net cash used
 by operating activities
  Depreciation                                            215      147      111      111
  Shares issued for services                              137       94        -        -
  Loss/(profit) on disposal of fixed assets                (1)      (1)      16       (8)
  Amortization of deferred production costs                 -        -      109       83
  Accounts receivable                                     531      363     (236)      17
  Amounts recoverable on contracts                        173      118       (9)     158
  Other current assets                                     48       33       96       10
  Inventories                                               -        -        1        -
  Prepaid expenses                                         75       51     (365)     (38)
  Deferred production costs                                 -        -        -      (15)
  Fees received in advance  .                            (310)    (212)     903       (5)
  Accounts payable                                       (682)    (466)     389       94
  Other accounts payable                                 (156)    (107)      99        -
  Other taxes and social security costs                   (72)     (49)       7       19
  Other accrued liabilities                              (383)    (262)     (35)     345
  Deferred tax valuation allowance                          -        -       65        -
  Income taxes payable                                      -        -        -        -

                                                      --------  -------  -------  -------
Net cash used by operating activities                  (3,369)  (2,303)  (2,546)  (1,874)
                                                      --------  -------  -------  -------
Investing activities
Investing activities
Capital expenditures                                     (200)    (137)    (130)     (71)
Proceeds on disposal of fixed assets                        1        1        -       16

                                                      --------  -------  -------  -------
Net cash used by investing activities                    (199)    (136)    (130)     (55)
                                                      --------  -------  -------  -------

Financing activities
Proceeds of share issues                                  618      423    2,661    4,721
Share issue costs                                         (93)     (64)     (69)    (178)
Long-term debt (including current portion)                (47)     (32)      58     (435)
                                                      --------  -------  -------  -------
Net cash provided by financing activities                 478      327    2,650    4,108
                                                      --------  -------  -------  -------
Effects of exchange rate changes                           14       10      (39)      (2)
                                                      --------  -------  -------  -------
Net (decrease)/increase in cash and cash equivalents   (3,076)  (2,102)     (65)   2,177
Cash and cash equivalents at beginning of period        3,727    2,547    2,612      435
                                                      --------  -------  -------  -------
Cash and cash equivalents at end of period                651      445    2,547    2,612
                                                      ========  =======  =======  =======
Supplemental disclosure of cashflow information

Interest paid during the period                            43       29       36       62
                                                      ========  =======  =======  =======

Supplemental disclosure of non-cash transactions
Issuance of shares in acquisition                          78       53        -        -
Issuance of shares for services                           137       94        -        -

</TABLE>



See accompanying notes to the consolidated financial statements.

                                      F9


<PAGE>


FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

1.     SIGNIFICANT  ACCOUNTING  POLICIES

DESCRIPTION  OF  BUSINESS
Futuremedia  PLC  was incorporated in England in 1982 as Futuremedia Limited and
re-registered  as a public company in 1993.  The Company's principal activity is
the  provision of Internet and Intranet learning and communications products and
services.  Futuremedia  also  produces  learning  and communications material on
other  media,  such  as  CD-ROM.

PRINCIPLES  OF  CONSOLIDATION
The  consolidated  financial  statements include the financial statements of the
Company  and  all  its subsidiaries (together the "Company").  All inter-company
accounts  and  transactions  have  been  eliminated.

FINANCIAL  RESOURCES  AND  GOING  CONCERN
In  the  course of its operations the Company has sustained continuing operating
losses  which  have  resulted in the Company requiring short-term bank and other
loans  and  equity  and  loan  stock  finance  to  sustain  its  operations.

Since  its  initial public offering ("IPO"), the Company has incurred net losses
and  experienced negative cash flows from operating activities. Net losses since
its IPO have resulted in an accumulated deficit of GBP15,023,000 as of April 30,
2002.  At  November  14,  2002,  the  Company's  cash  resources  and  available
borrowings are insufficient to fund the current level of operations for the next
twelve months.  Management believes that the steps taken to reduce its cost base
during  the  latter  part of the fiscal year ended April 30, 2002, together with
the  strong  forward  order  book  and  active  sales  prospects it is pursuing,
supported  by  the  recruitment of new sales staff in October and November 2002,
will  enable the Company to return to eventual profitable trading, and therefore
has  prepared  these  financial  statements  on  a  going  concern  basis.  The
availability  of  bridging  finance in anticipation of the sale of the Company's
premises at Arundel Road, Walberton, West Sussex will provide funds to discharge
the  balance  on the Loan Stock Agreement and further working capital.  There is
significant  reliance  therefore  on  the generating of funds through profitable
trading.  If  the  Company is unsuccessful in achieving its anticipated revenues
in its third fiscal quarter of the current year, managment recognises that there
will  be  a  need  to  secure  additional funding through debt or equity capital
before  the  end  of  the  fiscal  year  to  April  30,  2003.

There  can  be  no assurance that the Company will be successful in implementing
these  plans.  The Company's financial statements do not include any adjustments
to  reflect  the  possible  future  effects  on
the  recoverability  and  classification  of  assets  or  the  amounts  and
classification  of  liabilities  that  may  result  from  the  outcaome  of this
uncertainty.
                                      F10


<PAGE>



FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

1.     SIGNIFICANT  ACCOUNTING  POLICIES  -(CONTINUED)


ESTIMATES
The preparation of financial statements in conformity with US generally accepted
accounting principles requires management to make estimates and assumptions that
affect  the reported amounts of certain assets and liabilities and disclosure of
contingent  assets  and  liabilities at the date of financial statements and the
reported  amounts  of revenues and expenses during the reporting period.  Actual
results  could  differ  from  those  estimates.  Management  believes  that  the
estimates  are  reasonable.

CONVENIENCE  TRANSLATIONS
Translation  of the financial statements at April 30, 2002 and for the year then
ended  from  sterling into US dollars is for informational purposes only and has
been  made  at  the  April  30,  2002  Noon  Buying  Rate of GBP1.00 to $1.4631.

CASH  AND  CASH  EQUIVALENTS
Cash and cash equivalents represent cash and short-term deposits with maturities
of  less  than  three  months  at  inception.

INVENTORIES
Inventories  are  stated  at  the  lower of cost, determined on the basis of the
first  in,  first  out  method,  and  market  value.

PROPERTY  AND  EQUIPMENT
Property  and  equipment  is  carried  at  cost.  Depreciation  is  charged on a
straight-line  basis to costs and expensed over the expected useful lives of the
assets.  Depreciation  is  provided  at  the  following  annual  rates:

Freehold buildings                            2%
Freehold land                                Nil
Property improvements                               20%
Audio  visual  and  computer  equipment
       Long-term                             15%
       Mid-term                              20%
       Short-term                            33%
Office equipment                             20%


Leasehold  improvements  are amortized over the shorter of their estimated lives
and  the  non-cancelable  term  of  the  lease.

Freehold  land  and  buildings  are  held  for  sale  at  the lower of cost less
depreciation  and  fair  value  less  cost  to  sell.

The  freehold  buildings  have  not  been depreciated since they were put on the
market.

                                      F11


<PAGE>



FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

1.     SIGNIFICANT  ACCOUNTING  POLICIES  -(CONTINUED)

NET  SALES
Net  sales  represent the value of goods and services delivered, excluding value
added  tax.  Generic  or bespoke product revenues are recognized on the basis of
goods  delivered  or  the  value  of  work completed, and are invoiced either on
delivery  or  on the achievement of agreed milestones.  Consultancy revenues are
recognized and invoiced as they are delivered.  Service contract revenues, which
usually  comprise  initial  setup  fees, product customisation to the customer's
specification,  the  provision  of learning materials together with license fees
and  hosting  fees,  are aggregated and recognized evenly over the period of the
license  agreement.  Invoicing  for  such  contracts  may be periodic during the
license  period  or,  more  usually,  will  be  invoiced  as a single payment in
advance.

 Contracts for the supply of products to the customer's specification which take
several  months  to produce are deemed long term contracts.  Profit on long-term
contracts  is  taken  as  the  work  is  carried out if the final outcome can be
assessed  with  reasonable  certainty.  The  profit  included is calculated on a
percentage-of-completion  basis to reflect the proportion of work carried out at
the  year-end,  by  recording  sales  and  related  costs  as  contract activity
progresses.  Sales  are  calculated  as  that proportion of total contract value
that  costs  incurred  to date relate to total expected costs for that contract.
Revenues derived from variations on contracts are recognized only when they have
been  accepted by the customer.  Amounts not billable at the balance sheet date,
which  are  billable  either  at  agreed  dates  or on the achievement of agreed
benchmarks,  are  shown separately on the balance sheet.  Full provision is made
for  losses  on  all  contracts  in  the  year in which they are first foreseen.


PENSIONS
The  Group  operates  a  number  of  defined  contribution  pension  plans.
Contributions  are  charged  to income as they become payable in accordance with
the  rules  of  the  plans.


RESEARCH  AND  DEVELOPMENT
Expenditure  on  research  and  development  is written off as incurred, unless,
where  it  is  deemed  appropriate  and meets the relevant criteria, development
expenditure  is  carried  forward  in  the  balance sheet as deferred production
costs.  For  the  years  ended April 30, 2000, 2001 and 2002 the amounts written
off  were  GBP259,000, GBP608,000 and GBP311,000 ($455,000), respectively.  None
of  the  expenditure  in  the  year  to  April  2002  was capitalized, since the
expenditure was incurred on routine/periodic alterations to the current product.

DEFERRED  PRODUCTION  COSTS
Costs  incurred  in  the  production of new titles, the future recoverability of
which can reasonably be regarded as assured, are deferred until marketing of the
title  commences.  These  costs  include  product  design  and  development  and
comprise direct labor and certain overheads and the cost of materials.  Deferred
production  costs  are  amortized  in line with the expected future sales of the
title  to  a  maximum of three years.  Deferred costs are regularly reviewed for
impairment  and,  as  appropriate, their amortization is accelerated or they are
expensed.

                                      F12


<PAGE>


FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

1.     SIGNIFICANT  ACCOUNTING  POLICIES  -(CONTINUED)

FOREIGN  CURRENCY  TRANSLATION

Transactions  in  non-functional  currencies are recorded at the rates ruling at
the  date  of  the transactions.  Gains and losses resulting from non-functional
currency translations, and the remeasurement of non-functional currency balances
are  included  in  the  determination  of net income in the period in which they
occur,  in accordance with the requirements of Statement of Financial Accounting
Standards  No.  52,  "Foreign  Currency  Translation."

Assets  and  liabilities of overseas subsidiaries are translated at the exchange
rate in effect at the year end.  Income statement accounts are translated at the
average  rate  of  exchange prevailing during the year.  Translation adjustments
arising  from  the  use  of  differing  exchange rates from period to period are
included  in  a  separate  component  of  shareholder's  equity.

LONG-LIVED  ASSETS
Long  lived  assets  are  evaluated  for  impairment  when  events or changes in
circumstances  indicate  that  the  carrying  amount  of  an  asset  may  not be
recoverable  through the estimated undiscounted future cash flows resulting from
the  use  of  these  assets, when any such impairment exists, the related assets
will  be  written  down  to  fair  value.

EARNINGS  PER  SHARE
Earnings  per  share  figures  have been calculated using the method required by
Statement  of  Financial  Standards  No.  128  "Earnings  per Share".  Under the
provisions of SFAS No. 128, basic net earnings per share is computed by dividing
the net earnings available to common shareholders for the period by the weighted
average  number  of  shares of common stock outstanding during the period, which
included shares to be issued.  The calculation of diluted net earnings per share
gives  effect  to common stock equivalents, however, potential common shares are
excluded  if  their  effect  is  anti-dilutive.  The calculation also excludes a
total of 2,987,572 warrants to purchase an equivalent number of Ordinary shares,
together  with  4,499,274  options to purchase Ordinary shares outstanding as at
April  30,  2002  under  the  Company's  Executive Approved and Unapproved Share
Option  Schemes.

INCOME  TAXES
The  Company  accounts  for  income taxes using the liability method required by
statement  of  Financial  Accounting  Standards  No. 109, "Accounting for Income
Taxes."  Deferred  income  taxes  reflect  the  net
tax  effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax
purposes.    Valuation  allowances  are  established  when  necessary  to reduce
deferred  tax  assets  to  the  amount  expected  to  be  realized.


                                      F13


<PAGE>



FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

1.     SIGNIFICANT  ACCOUNTING  POLICIES  -(CONTINUED)

ADVERTISING  COSTS

All  advertising  costs  incurred in the promotion of the Company's products and
services  are expensed as incurred.  Advertising costs were GBP9,000, GBP65,000,
and  GBP16,000  for  the  years  ended  April  30,  2000,2001  and  2002.


2.     LOANS

The  aggregate  amount  of  bank  loans  (secured)  was  as  follows:

                                          April 30,
                                    --------------------
                                      2002       2001
                                      ----       ----
                                          (GBP'000)
Bank loan accounts:     Long term          -           22
                                    ---------   ---------
                                           -           22


The  bank  loan  was  repaid  in  November,  2001.

Interest  was charged at 2.0% over base rate during the period May 1, 2001 until
the  loan  was  repaid  in  November  2001.
The  aggregate  amount  of  unsecured  loans  were  as  follows:-

<TABLE>
<CAPTION>
<BTB>
<S>                                                          <C>         <C>
                                                                April 30,
                                                             ---------------
                                                                       2002       2001
                                                             ----       ----
                                                                 (GBP'000)
   Convertible Variable Rate Unsecured Loan Stock 2002          410        420
                                                           --------   --------
                                                                410        420
                                                           ========   ========


</TABLE>

During  July  1997,  additional  funding was secured by way of issue of Variable
Rate  Unsecured  Loan Stock 2002 by Futuremedia (B.V.I.) Limited, a wholly owned
subsidiary  of  Futuremedia  PLC,  amounting  to  GBP381,000  ($600,000) for the
purpose  of  funding  group capital investment in support of the agreed business
plan. At the same time, warrants granting the right to obtain one Ordinary Share
for each $0.28125 of Loan Stock outstanding at a price per share of $0.28125 per
Ordinary  Share  were  issued.    In February 2000, 711,111 ordinary shares were
issued  in  exchange  for  the  same  number  of warrants at the agreed value of
$0.28125 per ordinary share.  The proceeds from the exercise of the warrants can
only  be  used  to  repay  the  equivalent  amount  of  Loan  Stock.  Under  the
arrangement, there remains a further GBP254,000 ($400,000) available to be drawn
down at the Company's sole option.  Interest is payable on amounts drawn down at
commercial  rates.  At  April  30,  2002,  the  interest  rate  was  6.0%.

The loan was due for repayment in July, 2002, but was not repaid on the due date
due  to  a  lack  of  available  funds, but the loan stockholder agreed to defer
repayment  until  the  Company  had  secured

                                      F14


<PAGE>



FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

2.     LOANS  -  (CONTINUED)



additional  financing to enable it to do so.  Under the contractual terms of the
loan,  interest  is  payable  at 20% per annum beyond the contractual settlement
date.  Subsequent  to  the year end, in October 2002, the Company sought and was
offered  in principle a bridging loan facility of up to GBP500,000 in order that
it  could  repay  the  balance  under  the Loan Stock Agreement 2002 and provide
additional  working  capital.  It  is  anticipated  that the necessary paperwork
associated  with  the  new  facility  will be completed by mid November 2002, at
which  time the current loan will be repaid.  The basic interest rate of the new
facility  will  be 16.5% per annum.  The loan will be secured by way of a charge
on  the  premises,  and  will  be  due  for  repayment  after  twelve  months.

FAIR  VALUES  OF  FINANCIAL  INSTRUMENTS

<TABLE>
<CAPTION>
<S>                                    <C>  <C>  <C>    <C>

                                                        April 30
                                    ----------------------------------------------
                                            2002                      2001
                                    ---------------------    ---------------------
                                    Carrying      Fair       Carrying      Fair
                                      Value       Value        Value       Value
                                    ---------   ---------    ---------   ---------
                                    (GBP'000)   (GBP'000)    (GBP'000)   (GBP'000)
Cash and cash equivalents           .  445         445         2,547       2,547
Floating rate long-term . . . . . . .  410         410              442         442

</TABLE>

The carrying value of these financial instruments approximates fair value due to
the  short  period  until  maturity.





3.     INCOME  TAXES

Deferred  income  taxes reflect the net effects of temporary differences between
the  carrying amounts of assets and liabilities for financial reporting purposes
and  the  amounts  used  for income tax purposes.  Significant components of the
Group's  deferred  tax  liabilities  and  assets  are  as  follows:

                                               April 30,
                                          ------------------
                                          2002          2001
                                          ----          ----
                                               (GBP'000)

Book over tax depreciation                    97          64
Operating losses carried forward           4,005       3,424
Other differences and tax benefits of
 exceptional pension charge                   40         104
                                          --------   -------
                                           4,142       3,592
Less: valuation allowance                 (4,142)     (3,592)
                                          --------   -------
Net deferred tax assets                        -           -
                                          ========   =======
                                      F15



<PAGE>



FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

3.     INCOME  TAXES  -  (CONTINUED)

There  is  no  time  limit  for  the utilization of the operating losses carried
forward  (tax  value  GBP4,005,000)  which are specific to certain companies and
cannot  be  relieved  against  profits  in  other  Group  companies.

For  financial  reporting  purposes,  loss  before  income  taxes  includes  the
following  components:


<TABLE>
<CAPTION>
                   Year ended April 30,
                -------------------------
                  2002    2001      2000
                  ----    ----      ----
                       (GBP'000)
<S>             <C>      <C>      <C>

United Kingdom  (1,985)  (3,664)  (2,613)
Overseas           (27)     (33)     (32)
                -------  -------  -------
                (2,012)  (3,697)  (2,645)

</TABLE>

The  reconciliation  of  income tax computed at the UK statutory tax rate to the
effective  rate  is:
<TABLE>
<CAPTION>




<S>                          <C>                    <C>        <C>      <C>        <C>    <C>
                                                              Year ended April 30,
                                           ----------------------------------------------------
                                                   2002                2001           2000
                                           (GBP'000)     %    (GBP'000)      %   (GBP'000)  %
Statutory rate                               (604)     (30.0)  (1,110)     (30.0)  (793)  (30.0)
Unrelievable UK tax losses                    550       27.3    1,094       29.6    781    29.5
Non deductible expenses                        54        2.7        -          -      -       -
Other sundry items                              -          -       16        0.4     12     0.5
                                           --------  -------- ---------   -------  -----  ------
                                                -          -        -          -      -       -
</TABLE>

It  is  anticipated that no charge to taxation will arise on the repatriation of
overseas  retained earnings to the United Kingdom due to the relevant double tax
treaties  between the United Kingdom and the United States where the Group has a
presence.


                                      F16


<PAGE>





FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS


4.     LEASE  COMMITMENTS

OPERATING  AND  CAPITAL  AGREEMENTS

The  future  minimum  rental  payments  under non-cancelable operating leases at
April  30,  2002  are:

                          Motor
                        Vehicles
                          and
                        Equipment
                        ---------
                        (GBP'000)
2003                           9
2004                           2
2005                                 1
2006                          --
                        ---------
2007                          --
                        ---------

Rental  expense  was  GBP40, GBP105 and GBP71for the years ended April 30, 2000,
2001  and  2002.

5.     RELATED  PARTY  TRANSACTIONS

On  March  9,  2000,  the  Company entered into a Finder's Agreement with Noesis
Capital  Corporation.  The  Agreement  contemplated  that  Noesis  would  make
introductions  on  behalf  of the Company to facilitate possible future business
transactions.  The  agreement  was  terminated on July 13, 2000. The Company has
made  no  payments  in  connection  with  the Finder's Agreement and it does not
expect  to  make  any  such  payments.

6.     SEGMENT  INFORMATION,  EXPORT  SALES  AND  MAJOR  CUSTOMERS

The  Group  currently  operates  in one principal industry segment, the training
market.  The  Group's sales were divided by geographical location of customer as
follows:

                            Year ended April 30,
                      ---------------------------------
                      2002          2001           2000
                      ----          ----           ----
                                  (GBP'000)
United Kingdom            849          491          592
Rest of Europe              3          149           57
Rest of the World          59          103          218
                      -------     --------     --------
                          911          743          867
                      =======     ========     ========

During  the  year  ended April 30, 2002, one customer accounted for 69% of sales
and another for 9% of sales; during the year ended April 30, 2001, two customers
each  accounted for 20%  of sales; and during the year ended April 30, 2000, one
customer  accounted  for  30%  and  another  for  21%  of  sales.

                                      F17


<PAGE>

FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

6.     SEGMENT  INFORMATION,  EXPORT  SALES  AND  MAJOR  CUSTOMERS - (CONTINUED)

At  April  30, 2002 the major customers identified above accounted for 8% of the
amounts  receivable,  23%  in  2001  and  13%  in  2001.

Information  about  the  Group's  operations  by  geographic area is as follows:

                                   United   Rest  of   Eliminations Consolidated
                                  Kingdom  the World  ------------- ------------
                                 --------- ---------
YEAR ENDED APRIL 30, 2002                         (GBP'000)

Net  sales
     Customers                       911          -          -         911
                                  -------  ---------  ---------  ----------
     Total                           911          -          -         911
                                  =======  =========  =========  ==========
Operating loss                    (2,028)         -          -      (2,028)

Net interest income and foreign
currency gains and losses             45        (29)         -          16
                                  -------  ---------  ---------  ----------
Loss before income taxes          (1,983)       (29)         -      (2,012)
                                  =======  =========  =========  ==========
Identifiable assets                2,089        255       (255)      2,089

YEAR  ENDED  APRIL  30,  2001

Net  sales
     Customers                       743          -          -         743
                                  -------  ---------  ---------  ----------
     Total                           743          -          -         743
                                  =======  =========  =========  ==========

Operating loss                    (3,812)         -          -      (3,812)

Net interest expense and foreign
currency gains and losses            148        (33)         -         115
                                  -------  ---------  ---------  ----------
Loss before income taxes          (3,664)       (33)         -      (3,697)
                                  =======  =========  =========  ==========
Identifiable assets                4,947        287       (287)      4,947
                                  =======  =========  =========  ==========
YEAR  ENDED  APRIL  30,  2000

Net  sales
      Customers                     867          -          -          867
                                  -------  ---------  ---------  ----------
      Total                         867          -          -          867

Operating loss                   (2,672)         -          -       (2,672)
                                  =======  =========  =========  ==========
Net interest expense and foreign
currency gains and losses            59        (32)          -          27
                                  -------  ---------  ---------  ----------
Loss before income taxes         (2,613)       (32)          -      (2,645)
                                  =======  =========  =========  ==========
Identifiable assets               4,437        269        (269)      4,437
                                  =======  =========  =========  ==========

Inter-company  sales  between  geographic  areas  are accounted for at cost plus
handling  and other similar expenses.  Identifiable assets are those used in the
Group's  operation  in  each  area.




                                      F18


<PAGE>




FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

7.     PENSION  PLANS

The  Group  operates various defined contribution pension plans on behalf of the
directors  and  other  staff.  Contributions  payable  are  charged to income as
incurred.  Contributions  by  the  Group  are  determined in accordance with the
rules  of  the  pension  plans.  Contributions aggregated GBP43,000 ($63,000) in
2002,  GBP51,000  in  2001, and GBP46,000 in 2000.  The Group has no obligations
in  respect  of  post  retirement  benefits  other  than the pension obligations
described  above.

8.     ACQUISITION  OF  ASSETS  AND  BUSINESS

The  Company  acquired,  on March 1, 2002, the assets and business of Palm Teach
Limited  for  a  total  consideration of GBP53 ($78)  The consideration of GBP53
represents  the  fair  value  of  the 759,700 shares issued to the shareholders.
As  of  the  year end, a substantial portion of the purchase price of the assets
and liabilities of Palm Teach limited is recorded as Goodwill, however, a formal
purchase  price  allocation  has  not  been  finalized.  The  Company expects to
finalize  this  in  2003  fiscal  year.

9.     INTANGIBLE  ASSETS  AND  GOODWILL


                                 Year ended April 30,
                               -----------------------
                               2002      2001     2000
                               ----      ----     ----
Cost                                  (GBP'000)
At May 1                          264       1,523   1,508
Additions                          53           -      15
Amounts written off                 -      (1,259)      -
                               ------     -------- ------
At April 30                       317         264   1,523
                               ------     -------- ------
Amortization
At May 1                          264       1,414   1,331
Charge for year                     -         109      83

Amounts written off                 -      (1,259)      -
                               ------     -------- ------
At April 30                       264         264   1,414
                               ------     -------- ------
Net book amount at April 30       53            0     109
                               ======     ======== ======


The  addition in the current year is the goodwill resulting from the acquisition
described  in  Note 8.  As the acquisition was completed after June 30, 2001, no
amortisation  of  goodwill  was  necessary  in  accordance  with  SFAS  142.

                                      F19


<PAGE>

FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS


10.     PROPERTY  PLANT  AND  EQUIPMENT



<TABLE>
<CAPTION>

<S>                                  <C>     <C>       <C>     <C>     <C>     <C>

                                                         April 30,
                                    --------------------------------------------------
                                              2002                       2001
                                    ------------------------    ----------------------
                                    Cost  Depreciation  Net      Cost Depreciation Net

                                                         (GBP'000)

Property improvements . . . . . . .     59      59         -      59      59       -
Audio visual and computer equipment
  Long-term . . . . . . . . . . . . .    -       -         -       -       -       -
  Mid-term. . . . . . . . . . . . . .   78      69         9      78      53      25
  Short-term. . . . . . . . . . . . .  336     237        99     202     116      86
Office equipment. . . . . . . . . .     71      21        50      71      15      56
                                     -----   -----     -----   -----  ------   -----
                                       544     386        15     410     243     167
                                     =====   =====     =====   =====  ======   =====

</TABLE>

The  net  book value includes no amounts in respect of assets held under capital
leases.

Freehold land and buildings at a carrying value of GBP908, ($1,328) are held for
sale at the lower of cost less depreciation and fair value less costs to sell at
April  30,  2002.  In  March  2001, the Company committed to a plan to sell it's
premises.  From  that  time  there have been several offers made and attempts to
finalize  the contractual sale of the premises, but for various reasons, none of
these  arrangements  were  finalized.  The  Company  is still actively seeking a
purchaser.

11.     INTEREST  EXPENSE

                                                      Year ended April 30,
                                                      --------------------
                                                   2002        2001        2000
                                                   ----        ----        ----
                                                             (GBP'000)
                                Loan interest        29          36          62
                                                   ----        ----        ----
                                                     29          36          62
                                                   ====        ====        ====

12.     CHANGES  IN  SHAREHOLDER  EQUITY

In  July  2000,  the  Company  completed  an  additional private placement under
Regulation  S  pursuant  to  which  the  Rennes  Foundation  purchased 1,944,444
Ordinary Shares and another non-US investor purchased 277,778 Ordinary shares at
a price of $1.80 per Share for an aggregate purchase price of approximately $4.0
million  in  cash

Also  in  July  2000, an option to purchase 10,000 ordinary shares at a price of
$0.50  per  ordinary share under the Company's Unapproved Executive Share Option
Plan  was  exercised  by  an  employee  of  the  Company.

In March 2002, the Company contracted for the issue of and received the cash for
an  aggregate  of  4,702,410  Ordinary  Shares at a price of $0.083 per Ordinary
Share  representing  an  aggregate  purchase  price  of  approximately $390,000.

                                      F20


<PAGE>




FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

12.     CHANGES  IN  SHAREHOLDER  EQUITY  -  (CONTINUED)


Also  in  March  2002,  the  Company contracted for the issue of an aggregate of
759,700  Ordinary  Shares at a market price of $0.07 per Ordinary Share pursuant
to  the  stock  transaction  for  the  acquisition  of  the assets of Palm Teach
Limited,  together  with  the issue of an aggregate 702,900 Ordinary shares at a
market  price  of  $0.07  per  Ordinary  share  to four key individuals on their
joining  the  Company.

Also  in  April  2002,  the Company contracted for the issue of and received the
cash  for  3,276,923  Ordinary  shares  at  a price of $0.065 per Ordinary Share
representing  an  aggregate  purchase  price  of  approximately  $213,000.

Also  in  April  2002,  the Company contracted for the issue of 803,046 Ordinary
Shares  at  a  price  of  $0.07  per  Ordinary  Share  under  a Salary sacrifice
arrangement,  representing  an aggregate purchase price of $56,000.  At the same
time,  a  further 102,000 Ordinary Shares at a price of $0.07 per Ordinary Share
were  agreed to be issued in settlement of outstanding invoiced charges for work
done  for  the  Company.

At April 30, 2002 there were 854,240 warrants outstanding for the purchase of an
equivalent  number  of Ordinary shares, issued in August 1993,at the time of the
Company's  initial  float, which were due to expire in August 2002.  The Company
decided  to extend these warrants for a further twelve months until August 2003.
Persuant  to  the  Loan  Stock Agreement, 2002, as at April 30, 2002. there were
2,133,332  warrants  outstanding  for  the  purchase  of an equivalent number of
Ordinary  shares.

13.     EMPLOYEE  PROFIT-SHARING  AND  OPTION  PLANS

In  July  1993, the Company adopted three employee profits share or share option
schemes,  as  follows.

Under the Company's "Approved Executive Share Option Scheme", options to acquire
the  Company's Ordinary Shares may be granted to all or selected employees.  Any
full  time employee, other than a director, of the Company who is not within two
years  of  his or her due date for retirement and who, within one year preceding
the  grant,  did  not hold more than 10% of the share capital of the Company, is
eligible to participate.  The exercise price of the options must be no less than
85%  of  the  fair market value of the Company's ADSs on the date of grant.  The
value  of  shares  underlying the options granted to any employee may not exceed
the  greater  of  100,000  ($162,000)  or  four  times  earnings.  An  option
generally  becomes  exercisable  three  years  after  the  date  on which it was
granted,  and  may not be exercised more than ten years after the date of grant.
In  certain  circumstances,  an  option  will  be exercisable after the death or
termination  of  the  employment of the option holder.  No UK income tax will be
payable,  even  if the options are granted at a discount to market value, either
at  the  time  of  the  grant or the exercise of the options, although there are
certain conditions that must be satisfied concerning the timing of any exercise.
UK  capital  gains tax may be payable at the time of the ultimate disposition of
the  underlying  shares.

The  Company's  "Employee  Share  Ownership Plan"(also known as the Approved Net
Profit  Sharing  Scheme) provided for the establishment of a trust, to be funded
by  payments  from the Company.  The funds in the trust were required to be used
to  subscribe  for  shares  from  the  Company,  which  would  then


                                      F21


<PAGE>





FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

13.     EMPLOYEE  PROFIT-SHARING  AND  OPTION  PLANS  -  (CONTINUED)


have  been  allocated  to  individual  employees.  The  maximum  amount that was
permitted  be  allocated  to an individual employee per annum was the greater of
GBP3,000  or  10% of salary, up to a maximum of GBP8,000.  As of September 2000,
this  scheme  was  terminated  and  the  Trust  dissolved.  No  monies  had been
allocated  nor  shares  purchased.


Under  the  Company's "Unapproved Executive Share Option Scheme", options may be
granted  to  selected  full-time  employees, including directors, based on their
performance.  The  exercise  price  of  the options granted must be at least the
fair  market value of the Company's ADSs.  The value of options to be granted is
not subject to any financial limit, although the number of shares over which the
options  may  be  granted  is  subject  to  an  overall  restriction.

In  addition  to  the foregoing, the Company maintains a net profit sharing plan
(the  "Employee  Profit  Share Scheme" or the "Incentive Profit Sharing Scheme")
pursuant  to  which  cash  may  be paid to employees out of the Company's annual
profits.  No  such  distributions were made in the years ended April 30, 2001 or
2000.  Pursuant  to  an  agreement with the underwriter of the Company's initial
public  offering,  the  aggregate  value of the cash that may be issued annually
under  the  Employee  Profit  Share  Scheme will not exceed 10% of the Company's
pre-tax  profits, and, based on the Company's performance, may be limited to 10%
of  the  Company's  post-tax  profits.

Determinations  as  to the granting of options to employee-directors are made by
the  Remuneration  Committee.
Under  the Approved Executive Share Option Scheme, 2,616 options are outstanding
at  an exercise price of $4.25 and may be exercised until August 19, 2003, 3,907
options are outstanding at an exercise price of $2.55 and may be exercised until
August 19, 2003, 20,500 options are outstanding at an exercise price of $0.90625
and  may  be exercised until January 16, 2008 and 13,500 options are outstanding
at  an  exercise  price  of  $1.5938  and  may be exercised until July 25, 2010.






                                      F22


<PAGE>


FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

13.     EMPLOYEE  PROFIT-SHARING  AND  OPTION  PLANS  -  (CONTINUED)

A  summary of the options outstanding under the Company's "Approved Share Option
Scheme"  as  at  April  30,  2002  is  as  follows:




                                        Number of Shares    Weighted
                                         Under Option     Average  Option
                                       -----------------  Price Per Share
                                                         -----------------
Outstanding April 30,1999                     83,421          $1.3154
Options forfeited                            (36,459)         $1.1708
                                      ---------------
Outstanding April 30,2000                     46,962          $1.4277
Options granted                               90,000          $1.5938
Options forfeited                            (58,574)            $1.5741
                                      ---------------
Outstanding April 30,2001                     78,388             $1.5090
Options forfeited                            (37,865)            $1.4767
                                      ---------------
Outstanding April 30, 2002                    40,523             $1.5096
                                      ===============


The following options have been issued under the Company's "Unapproved Executive
Share  Option  Scheme",  and  were  outstanding  as  at  April  30,  2002.







                                                       Exercisable when the
Date            No. of     Subscription     Date       Market Price at least
Granted         Share         Price      Exercisable
------------  ---------    ------------  --------      --------------------
Sep 07, 2000      5,000         0.19     Current       No Restriction
Sep 07, 2000      5,000         0.59     Current       No Restriction
Sep 07, 2000    100,000        $1.00     Current       No Restriction
May 01, 2001     69,750        $0.35     05/01/03      No Restriction
May 01, 2001     69,750        $0.35     11/01/03      No Restriction
May 01, 2001     69,750        $0.35     05/01/04      No Restriction
May 01, 2001     69,750        $0.35     11/01/04      No Restriction
Oct 27, 1996    100,000        $0.25     Current         $ 1.00
Jan 17, 1997      5,000        $0.19     Current       No Restriction
Oct 30, 1997      5,000        $0.19     Current       No Restriction
Feb 14, 2002    474,750        $0.15     07/01/02      No Restriction
Feb 14, 2002  1,441,359        $0.15     03/01/03      No Restriction
Feb 14, 2002    474,750        $0.10     07/01/02      No Restriction
Feb 14, 2002  1,568,892        $0.10     03/01/03      No Restriction
              ---------
              4,458,751
              =========

The  Company  accounts  for options granted under these plans in accordance with
the  provisions  of  APB  No.  25.

                                      F23


<PAGE>



FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

13.     EMPLOYEE  PROFIT-SHARING  AND  OPTION  PLANS  -  (CONTINUED)

In  February, 2002, 1,075,000 existing options to purchase ordinary shares under
the  Unapproved  Executive  Share  Option Scheme at prices varying from $0.59 to
$3.00  per  Ordinary  share were cancelled and replaced with options to purchase
556,417  Ordinary shares at $0.10 per Ordinary share and 518,083 Ordinary shares
at  $0.15  per Ordinary share, vesting between July 2002 and March 2003, and are
now accounted for as variable options. There is an immaterial difference between
the  exercise  price  of  the  variable  options  and  the  trading price of the
Company's  stock at the year end, therefore no compensation expense was recorded
in  the  current  fiscal  year.

A  summary  of  the  options  outstanding  under the Company's "Unapproved Share
Option  Scheme"  as  at  April  30,  2001  is  as  follows:

                                      Number of       Weighted
                                       Shares      Average Option
                                     Under Option  Price Per Share
                                     -------------  ---------------
Outstanding at April 30, 1999           1,535,000          $0.81
Options granted                           484,000          $0.87
Options lapsed                           (225,000)         $0.79
Outstanding at April 30, 2000           1,794,000          $0.83
                                     -------------
Option granted                          1,010,001          $1.41
Options lapsed                           (280,667)         $1.47
Options exercised                         (10,000)         $0.50
                                     -------------
Outstanding at April 30, 2001             2,513,334          $0.99

Options  granted                        4,742,251         $0.165
Options  lapsed  and  cancelled        (2,796,834)        $0.9056
                                     -------------
Outstanding at April 30, 2001           4,458,751         $0.1605
                                     =============


No  share  options  were  granted at market price in the year to April 30, 2002.
313,338  share  options were granted at market price in the year ended April 30,
2001.

No  share options were granted at below market price in the year ended April 30,
2002.  The  weighted average fair value of options granted at below market price
in  the year ended April 30, 2001 was GBP0.60 ($0.86). The weighted average fair
value of options granted above market price in the year ended April 30, 2002 was
GBP0.04  ($0.06), 2001 GBP0.28. The determination of the fair value of all stock
options  granted  in  2002, 2001 and 2000 was calculated using the Black Scholes
method  based  on  (i)  risk-free interest rates of 3.84% (2001: 5.25% and 2000:
5.25%), (ii) expected option lives of 3 to 5 years (weighted average 3.3 years),
(iii)  dividend yield of 0% and iv) a volatility of 0.318 (2001: 1.276 and 2000:
0.919).



                                      F24



<PAGE>



FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS


13.     EMPLOYEE  PROFIT-SHARING  AND  OPTION  PLANS  -  (CONTINUED)


The  following table summarizes the pro-forma consolidated results of operations
of  the  company  had  the  fair value based method of SFAS No. 123 been used in
accounting  for  stock  options.






                                         Year  ended  April  30
                                         ----------------------
                                    2002     2002     2001     2000
                                    ----     ----     ----     ----
                                  ($'000) (GBP'000) (GBP'000) (GBP'000)

Net loss as reported              (2,944)  (2,012)  (3,697)   (2,645)

Pro-forma                         (3,009)  (2,056)  (3,892)   (2,808)

                                    $        GBP      GBP       GBP
Net loss per share as reported    (0.10)    (0.07)  (0.13)     (0.11)

Pro-forma                         (0.10)    (0.07)   (0.13)   (0.12)


14.     NEW  ACCOUNTING  PRONOUNCEMENTS

In  June 2001, the Financial Accounting Standards Board finalized FASB Statement
No.  141,  "Business Combinations" ("SFAS 141") and Statement No. 142, "Goodwill
and  Other  Intangible  Assets"  ("SFAS  142"). SFAS 141 requires the use of the
purchase  method of accounting and prohibits the use of the pooling-of-interests
method  of  accounting  for business combinations initiated after June 30, 2001.
SFAS  141  also  requires that the Company recognized acquired intangible assets
apart  from  goodwill  if  they  meet  certain criteria. SFAS 141 applies to all
business  combinations  initiated  after June 30, 2001 and for purchase business
combinations  completed  on  or  after  July  1,  2001. Accordingly, the Company
accounted  for  the  acquisition  as described in Note 8 in accordance with SFAS
141.

SFAS  No. 142 addresses financial accounting and reporting for acquired goodwill
and  other intangible assets. This Statement changes the accounting for goodwill
from  an  amortization  method to an impairment-only method. The amortization of
goodwill,  including  goodwill recorded in past business combinations will cease
upon adoption of this Statement, which will begin with the Company's fiscal year
beginning  May  1,  2002. However, goodwill and intangible assets acquired after
June  30,  2001  will  be  subject  to  immediate adoption of the Statement. The
adoption  of  this  standard will not have a material effect on the consolidated
financial  statements.

In  August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets."  SFAS  No.  144  supersedes  SFAS  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be  Disposed  Of",  in  that  it  removes  goodwill  from  its  impairment

                                      F25


<PAGE>




FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

14.  NEW  ACCOUNTING  PRONOUNCEMENTS  -  (CONTINUED)


scope and allows for different approaches in cash flow estimation. However, SFAS
No.  144  retains the fundamental provisions of SFAS No. 121 for (a) recognition
and  measurement of long-lived assets to be held and used and (b) measurement of
long-lived  assets  to be disposed of. SFAS No. 144 also supersedes the business
segment  concept  in  APB  Opinion  No.  30,  "Reporting  the  Results  of
Operations-Reporting  the  Effects  of  Disposal of a Segment of a Business, and
Extraordinary,  Unusual  and Infrequently Occurring Events and Transactions," in
that  it permits presentation of a component of an entity, whether classified as
held  for sale or disposed of, as a discontinued operation. However, SFAS No.144
retains  the requirement of APB Opinion No. 30 to report discontinued operations
separately  from  continuing  operations.  The  Company is required to adopt the
provision  of  SFAS  No.  144  beginning with its fiscal year that starts May 1,
2002.  The  Company  is  still  evaluating  the  effect  of  the standard on its
consolidated  financial  statements.

In  April  2002,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial Accounting Standards ("SFAS") No. 145, Rescission of FASB
Statements  No.  4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. This statement provides guidance on the classification of gains and
losses  from  the  extinguishment  of  debt  and  on  the accounting for certain
specified  lease  transactions.  The  adoption of this statement will not have a
material  impact  on  the  Company's consolidated financial position, results of
operations  or  cash  flows.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities ("SFAS No. 146"). SFAS No. 146 addresses significant
issues regarding the recognition, measurement, and reporting of costs associated
with  exit and disposal activities, including restructuring activities. SFAS No.
146  also  addresses  recognition  of  certain  costs  related  to terminating a
contract  that  is  not  a  capital  lease,  costs  to consolidate facilities or
relocate  employees,  and  termination  benefits  provided to employees that are
involuntarily  terminated under the terms of a one-time benefit arrangement that
is  not  an  ongoing  benefit arrangement or an individual deferred-compensation
contract.  SFAS  No.  146  is effective for exit or disposal activities that are
initiated  after  December  31, 2002. Given that SFAS No. 146 was issued in June
2002 and is not yet effective, the impact on the Company's financial position or
results  of  operations  from  adopting  SFAS  No.  146 has not been determined.

15.  COMMITMENTS

The  Company  has  secured  the provision of its Internet Service Provider (ISP)
service requirements with Siemens UK Ltd. for a period of three years commencing
September  2001.  The  terms  of  the contract allow termination on three months
notice  after  the  completion  of  the  first year.  In April 2001, the Company
contracted  with  Consignia  Plc (UK) for the provision of a learning management
system  comprising  a hosted service together with learning content for a period
of  22  months  commencing  June  1,  2001.  The total value of the contract was
approximately  GBP1,000,000  ($1,438,600).



                                      F26
























FUTUREMEDIA  PLC  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

16.     SUBSEQUENT  EVENTS


Subsequent  to  the year end, in May 2002, the Company completed the acquisition
of  C2W  limited,  a small UK based consultancy company specializing in resource
management,  in  an all-paper transaction at a net value of GBP29,000 ($45,000),
though  the  three  personnel  associated with that company had been employed by
Futuremedia  since  the  beginning  of  April  2002.  It is anticipated that the
acquisition will greatly assist the growth of the Company's knowledge management
capabilities, leveraging the contacts C2W has in the resource, environmental and
property  sectors.

In  April  2002, the Company had contracted with another private UK investor for
the  issue  of  a  total  of  7,646,154 Ordinary shares at a price of $0.065 per
Ordinary  share  for a total purchase price of GBP350,000 ($497,000), payable by
instalment  by  the  end  of  September 2002.  No provision has been made in the
financial  reports  in  respect  of this agreement.  Subsequent to the year end,
this  investor  defaulted on a substantial part of this commitment.  Alternative
investors  were  found to replace the defaulted amounts, and the full investment
was  completed  in  November,  2002.

In  October  2002,  the  Company  completed a new investment round from existing
investors  and  affiliates, raising a further GBP150,000 ($230,000), represented
by  the  issuance  of a further 2.7 million (approximately) shares at a price of
$0.085  per  share,  at  market  rate.



17.  PREPAID EXPENSES


Prepaid  expenses  for  the  year  ended  April  30, 2002 of GBP393 includes the
forward purchase of learning materials in respect of existing customer contracts
of  GBP276,  together  with  prepaid  expenses  for  hosting  services, dues and
subscriptions,  insurances  and  salary  sacrifices  aggregating  GBP117.

Prepaid  expenses  for  the  year  ended  April  30, 2001 of GBP444 included the
forward purchase of learning materials of GBP386, together with prepaid expenses
for  hosting  services,  office  rent,  insurances,  dues  and subscriptions and
leasing  cost  aggregating  GBP58.

                                      F27


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