Genetix Group plc
Queensway 
New Milton 
Hampshire 
BH25 5NN
United Kingdom
Tel +44 (0) 1425 624600  
Fax +44 (0) 1425 624700
www.genetix.com
Genetix Group plc Annual Report and Accounts 2002
Genetix Group plc
Annual Report and Accounts
for the year ended 31 December 2002 01 Highlights
02 Chairman’s statement
03 Key events of 2002
04 Science in focus
06 Chief executive’s review
08 Financial review
10 Directors and company secretary
11 Scientific Advisory Board and Advisers
12 Directors’ report
17 Directors’ remuneration report
22 Independent auditors’ report
23 Consolidated profit and loss account
24 Consolidated and company balance sheets
25 Consolidated cash flow statement
26 Consolidated statement of total recognised gains and losses
26 Reconciliation of movements in consolidated shareholders’ funds
27 Notes to the accounts
38 Notice of Annual General Meeting
40 5 year summary
Genetix is a leading developer of automated solutions for 
the understanding of systems biology
We aim to:
– enable scientists to work at the cutting edge of genomics,
proteomics, cell biology and high-throughput screening
– build on our close links with leading scientific groups 
around the world
– create cost effective and profitable solutions based on 
our platform of innovative technologies 99 00 01 02
3.2
3.6
2.6
2.3
98
2.0
0.3
0.5
0.8
1.2
1.5
99 00 01 02
7.3
10.7
12.4
12.6
98
5.2
Highlights
Genetix Group plc
Annual Report and Accounts
Highlights
01
A year of progress despite tough market conditions
– Sustained profitability and cash generation
– Strategic investment in sales and marketing
– Continued focus and investment in R&D
– Prestigious LINK grant awarded for protein mapping research
– Cash balance of £20.9m (after share re-purchase of £1.4m)
Turnover (£m) Profit before tax (£m)
(excluding exceptionals and goodwill)
R&D expenditure Chairman’s statement
John Morgan
Genetix Group plc
Annual Report and Accounts
Chairman’s statement
02
Genetix achieved a turnover of £12.6 
million in 2002, slightly higher than that
reported for the previous year, despite
difficult trading conditions. Profit before 
tax was £2.0 million compared to £2.2
million last year, the reduction largely being
attributable to increasing investment in 
key areas of the business. We believe 
that Genetix has emerged as a stronger
company with a blend of know-how,
products and technologies that will keep it
at the forefront in providing our customers
with solutions for systems biology in the
years ahead. We remain financially strong
and able to invest in opportunities that add
value to the business.
During the year we have been preparing 
for the future through intense R&D activity, 
sales recruitment and new product sales.
The R&D team focused on developing our
new range of scanners, liquid handling
capability, wellplate handling and new
proteomics techniques for measuring
protein-protein interactions. In sales, we
expanded our teams in the US, UK and
Germany and established our new base in
Boston, at the heart of the biotechnology
region on the East Coast of the US. New
products were successfully introduced and
feedback has been encouraging, particularly
for our scanning and benchtop
microarraying instruments.
In July, our growing position in proteomics
was strengthened by the award of a 
research grant to develop and build a 
verified human protein-protein interaction
map in collaboration with the Medical
Research Council’s Human Genome
Mapping Project Resource Centre. 
This highly prestigious award recognises 
our expertise in this field and we look
forward to working closely with our
academic partners in helping to advance 
the medical benefits that this knowledge 
will provide. 
In December 2002, Peter Jensen replaced
James Cochrane as a non-executive 
director. Peter is a former chairman of
SmithKline Beecham’s European Consumer
Healthcare operations and his extensive and
broad experience will be of great benefit 
to Genetix.
Notwithstanding unpredictable market
conditions, Genetix continues to operate 
from a position of strength from which 
to grow the business. This, together with 
a programme of new initiatives aimed 
at increasing sales, means that Genetix
faces the future with confidence.
John Morgan
Chairman
“We believe that Genetix
has emerged as a stronger
company with a blend 
of know-how, products
and technologies that 
will keep it at the forefront
in providing our customers
with solutions for systems
biology in the years ahead.” Key events of 2002
Genetix Group plc
Annual Report and Accounts
Key events of 2002
03
During the year we have been preparing for the future through 
intense R&D activity, sales recruitment and new product sales. 
Successful year for R&D
In December 2001, Genetix acquired the rights to manufacture
and market a range of high quality scanners. In less than twelve
months, we have taken the design concepts and developed a
first-class confocal laser scanner which we believe is competitive
with the current leading products in the market. We have already
made initial sales to several key customers – a real success story
for our multi-disciplined R&D team.
New Boston office
The opening of our new Boston office confirms our commitment
to the US market and represents the first major step in our plans
to expand operations on the East coast. The office is located
close to one of the main biotech centres in the US, including
some of our most important customers. 
Expansion of sales team
During the year, we invested a significant amount of time 
in strategically expanding our sales team in key market areas. 
We are now better represented and able to compete more
effectively. We intend to strengthen the team further during
2003 and improve our network of distributors. 
Award of LINK grant
The award of the LINK grant, one of the largest granted in 
the UK, recognises our increasing expertise in the field of
proteomics and cell biology. This technology is fundamental to
the understanding of disease and ultimately, in discovering new
drug targets. The project will last for three years and complement
our other work in proteomics. Science in focus
Genetix Group plc
Annual Report and Accounts
Science in focus
04
Genetix operates in four areas of science whose ultimate objective is to improve the
understanding, diagnosis and treatment of disease. Genetix has developed a range 
of instruments and consumables for automating systems biology as illustrated below:
GENOMICS
Gene identification
PROTEOMICS CELL BIOLOGY
Gene function and 
validation
Structure and function 
of proteins
Structure and function 
of cells
Genetix has a range of
instrumentation and
consumables, plus in-house
scientists capable of identifying
genes through to studying gene
expression in healthy and
diseased tissue. This is an
important stage in validating
gene-based drug targets.
Genetix has developed systems
to identify proteins and how
they interact with other
proteins. The LINK project will
advance the understanding of
protein interactions and enable
scientists to target drugs more
specifically, reducing the chance
of side effects.
Genetix has developed its first
products for this market by
applying its experience in
genomics and proteomics.
Genetix systems are able to
reduce bottlenecks in target
validation using high-
throughput techniques to
introduce DNA into cells. Genetix Group plc
Annual Report and Accounts
Science in focus
05
HTS
(High-throughput screening)
Drug development 
and diagnostics
New and 
better treatment 
and diagnostics 
HTS is a key link in the chain of
industrialised drug discovery. It is
the process by which batches of
compounds are tested for binding
or activity against biological target
molecules. A key bottleneck in
these campaigns is the production
of enough protein to test – 
Genetix is developing systems 
to overcome this limitation.
Understanding disease
Identifying and validating drug targets
Drug development Chief executive’s review
Mark Reid
Genetix Group plc
Annual Report and Accounts
Chief executive’s review
06
Introduction
Over the last two years, the biotechnology
industry has undergone a period of
volatility, marked by industry consolidation,
cutbacks in expenditure and a perception
that new technologies have failed to deliver
the promised breakthroughs in drug
discovery. This has led to funding difficulties
being experienced by many loss-making
companies. As a provider of equipment,
consumables and services to this industry,
Genetix has proactively managed the
business during the downturn in market
conditions and we have worked hard in
2002 to balance our objectives of increasing
market share, strengthening our sales 
force, and raising R&D spending, while
maintaining profitability and cash flow. 
We achieved a creditable performance in
the face of challenging market conditions
and remain one of the few consistently
profitable companies in our field.
Now that the initial euphoria of the Human
Genome Project has subsided, the focus is
on using this knowledge to develop new,
improved drugs. We believe that a broad
range of biological techniques will be
required to achieve this and have been
developing a range of modular technologies
to help our customers solve a variety of
complex scientific and technical problems.
In the short-term we are inevitably affected
by the changing structure in our markets
but overall, we believe that Genetix has the
technical and financial strength to remain
an important player in the next phase,
capitalising on the genome sequences 
to develop profitable therapies.
The award of the LINK grant was extremely
prestigious for Genetix and it demonstrated
that we are at the cutting edge of new
technologies. Our work on proteomics 
will help researchers better understand the
structure and function of proteins, a key 
step in the design of new gene-based
pharmaceuticals. New work underway on 
the automation of cell biology will further
broaden our technology offering by removing
the protein production bottleneck. As we
improve our marketing, we believe that
Genetix will become better known as one 
of the leading specialists capable of solving
problems within systems biology, using its
portfolio of technologies.
Performance review
Turnover rose to £12.6 million in 2002,
despite reduced capital expenditure on
instrumentation by academic groups and
biotechnology and pharmaceutical
companies, with sales of consumables and
services up 15% compared to 2001. Profit
before tax (before goodwill) was down by
11% largely due to the cost of building the
sales force and a 32% increase in R&D
expenditure. Both of these investments were
vital to position the company for long-term
growth by improving market reach and
expanding our technology and product range.
Like many companies encountering difficult
market conditions, we have had to balance
the twin aims of short-term profitability
against the longer-term investment required
to grow the business. It is vital that we focus
on the latter.
The Group remains both profitable and 
cash generative.
“We achieved a creditable
performance in the face
of challenging market
conditions and remain
one of the few consistently
profitable companies in
our field.” Genetix Group plc
Annual Report and Accounts
Chief executive’s review
07
Sales and marketing
During the year we doubled the direct sales
team operating in the US, UK and
Germany. In addition we:
– opened a new US office in Boston;
– moved our German sales office from
Heidelberg to Munich; and
– appointed new distributors in Australia,
Italy and the Czech Republic.
Product launches
During 2002, the main focus was on
developing and launching our new
microarray scanner, improving our benchtop
microarraying instrument and refining our
high-throughput stacking technology which
is used on many of our existing products.
Several new proteomics products were
developed and these will be formally
launched in 2003. The main product
initiatives were:
– aQuire scanner, developed throughout
the year and launched in the last quarter
of 2002, this highly sensitive and cost-
effective instrument enables Genetix to
offer a complete solution for producing
and analysing microarrays;
– QArrayMini, now includes a number of
new features which extend the product
into new markets;
– stacking systems, new improved modular
design that can enhance the throughput
of Genetix instruments;
– aliQuot, prototype of new automatic 
micro-dispensing filler which has potential
applications across a variety of areas
including pharmaceuticals;
– liquid handling, developed for the QBot
and adaptable to other Genetix platforms;
– several customised products were made 
for customers using novel techniques,
enhancing our knowledge of specialist
applications.
Research and development
This was a year of investment in R&D.
Expenditure rose by 32% to £1.5 million
(£1.4 million after LINK grant recovery), 
with 26% of the workforce now in this area.
Proportionately, gross R&D expenditure
represented just over 12% of sales and is
expected to remain around this level in the
short-term. The Group’s links with academic
institutions remain strong and our reputation
for developing novel solutions for systems
biology is growing, as evidenced by a
number of special projects undertaken during
the year. The team’s skills base broadened
significantly, particularly in the field of
proteomics, imaging and data handling.
Our growing position in proteomics was
strengthened by the award of the LINK
grant. The collaboration is aimed at enabling
the mapping of all human protein-protein
interactions to be undertaken with a high
degree of accuracy and in considerably less
time than is currently possible, helping to
bring forward the medical benefits of this
knowledge. We have built our first prototype
instrument and are about to start the first
phase of detailed testing with MRC early 
in 2003. 
Acquisitions 
Although the primary focus of the Group 
is development by organic growth, we are
in a strong position to take advantage of
opportunities for acquisition which will 
be evaluated as they occur.
Outlook
Throughout 2002 we experienced
unpredictable trading with significant
variations in order placement. The market
remains unchanged and given the current
macroeconomic uncertainties, we do not
anticipate an early improvement in trading.
The actions taken in 2002 will put Genetix
in a stronger position when the economic
climate eventually improves and we will
continue to focus on our strategy of growth
in anticipation of these medium-term
opportunities. We remain cautious about
prospects for 2003 but positive about the
longer-term and the variety of opportunities
in our areas of interest.
Mark Reid
Chief Executive
Objectives for 2003
– Focus on marketing and improve global market
presence, particularly in US
– Further expansion of proteomics product range and
launch of new cell biology products
– Progress LINK project with Medical Research Council Financial review
Gary Corsi
Genetix Group plc
Annual Report and Accounts
Financial review
08
Results
Group turnover was up 1% at 
£12.6 million (2001: £12.4 million);
Instrumentation accounted for 72% 
(2001: 75%) and Consumables and
Services 28% (2001: 25%) of total sales.
The growth in turnover was achieved by 
a strong performance from consumables
and services which grew 15% over the
year; instrumentation sales were 3% 
lower than 2001.
The Group’s gross margin was 50%
compared to 46% in 2001 reflecting 
tight control of direct costs and a
favourable exchange gain on US 
dollar forward contracts. 
Gross R&D expenditure increased by 
32% to £1.5 million (2001: £1.2 million);
after taking credit for LINK grant recoveries
of £0.1 million, the net spend was 
£1.4 million.
Sales and administrative expenses
(excluding goodwill) increased as a
percentage of sales mainly due to the costs
of expanding the sales force in the US, 
UK and Germany. Overall, the Group’s
operating margin was 12% (excluding
goodwill), compared to 13% in 2001.
Included within operating expenses are
goodwill amortisation costs of £0.4 million
(2001: £0.4 million).
Net interest receivable was £0.8 million 
(2001: £1.0 million), a significant 
reduction compared to 2001 due 
to lower interest rates.
The Group’s effective tax rate was 30.0%
(2001: 33.7%) and will be maintained at
this rate for 2003 because of the ongoing
benefit of the UK government’s R&D tax
credit scheme.
Earnings per share were 1.76p (2001:
1.91p) based on a weighted average of
77,445,689 shares in issue during 2002.
Adjusted earnings per share (excluding
goodwill) were 2.23p (2001: 2.38p).
Staff numbers remained broadly the 
same as last year and we now employ 
103 people worldwide.
Cash flow
The Group generated cash of £2.1 million
(before financing items, including exchange
gains); after financing the share buy-back
of £1.4 million, cash increased by £0.7
million to end the year at £20.9 million
(2001: £20.2 million). 
Cash from operating activities was £1.2
million reflecting an increase in working
capital requirements compared to 2001; 
stock levels fell by £0.3m; debtors increased
by £0.5 million primarily reflecting higher
sales in the last quarter of 2002 compared
to the same period last year. Overall,
working capital represented 15% of sales.
The Group paid tax of £0.4 million but
received tax refunds of £0.4 million, leaving
the net position neutral (2001: £1.1 million
tax paid).
“The Group generated
cash of £2.1 million
(before financing 
items, including 
exchange gains).” Consumables 
and services 28%
Instrumentation 72%
Genetix Group plc
Annual Report and Accounts
Financial review
09
Capital expenditure was £0.4 million 
(2001: £0.8 million) of which £0.1 
million was on patents.
Following the passing of a Special
Resolution at an Extraordinary General
Meeting, the Company purchased and
cancelled 4,850,000 ordinary shares of 
50p at an average price of 28p.
Exchange rates
The results of the Group’s US and German
subsidiaries were translated into sterling at
average exchange rates of £/$ 1.5089 and
£/w 1.5895 respectively; the balance sheets
were translated at the year end exchange
rates of £/$ 1.6099 and £/w 1.5342.
Gary Corsi
Finance Director
Turnover by geographic destination
Turnover by type
UK 12%
Rest of World 17%
North America 52%
Rest of 
Europe 19% Directors and company secretary
Genetix Group plc
Annual Report and Accounts
Directors and company secretary
10
1
1  John Morgan, non-executive chairman*
Aged 47, currently executive chairman of construction group
Morgan Sindall plc. 
2  Mark Reid, chief executive
Aged 47, founded Genetix in 1991, formerly with KPMG, London.
Currently non-executive director of Plastic Injection Limited, a
supplier to the Group.
3  Gary Corsi, finance director
Aged 45, former finance director of speciality chemicals group Inspec
Group plc.
4  Dr Julian Burke, scientific director
Aged 50, founded Genpak in 1993, former reader at the University
of Sussex, specialising in biochemistry and molecular neurobiology. 
5  Dr James Hill, non-executive director*
Aged 57, former head of strategic product development and senior
vice-president of corporate affairs of SmithKline Beecham until the
merger with Glaxo Wellcome plc in December 2000. Currently non-
executive director of Oxford Glycosciences plc and Diplema plc. 
6  Peter Jensen, non-executive director*
Aged 52, former chairman of SmithKline Beecham’s European
Consumer Healthcare operations before being appointed president 
of Worldwide Supply Operations. Currently chairman of European
Business Forum Limited and a non-executive director of Domino
Printing Sciences plc.
7  Simon Hedger, company secretary
Aged 47, former company secretary and executive committee
member of News Communications & Media plc.
*Member of Audit Committee and Remuneration 
Committee
23 4
56 7 Scientific Advisory Board and Advisers
Genetix Group plc
Annual Report and Accounts
Scientific Advisory Board and Advisers
11
Scientific Advisory Board 
Professor Eric Davidson 
Currently Norman Chandler Professor of Cell Biology, Division of
Biology, California Institute of Technology, USA.
Dr Roger Bumgarner 
Research scientist at the Department of Molecular Biology, University
of Washington, Seattle, USA.
Dr Rod Wing 
Director of Arizona Genomics Institute, Arizona, USA.
Dr Sue Richards
Marketing director of Genetix Limited, former brand manager at Life
Technologies Limited and Research Fellow at the Cancer Research
Campaign Beaston Institute.
Dr Julian Burke
See opposite.
Advisers 
Financial adviser and stockbroker
WestLB Panmure Limited, Woolgate Exchange 
25 Basinghall Street, London  EC2V 5HA 
Auditors
Deloitte & Touche, Mountbatten House, 1 Grosvenor Square
Southampton  SO15 2BZ
Solicitors
Olswang, 90 High Holborn, London  WC1V 6XX
Registered office
Queensway, New Milton, Hampshire  BH25 5NN
Bankers
Barclays Bank plc, PO Box 612, Ocean Way, Southampton
SO14 2ZP
HSBC Bank plc, 15-17 Cumberland Place, Southampton
SO15 2UY
Registrars
Lloyds TSB Registrars, The Causeway, Worthing
West Sussex  BN99 6DA
Company number
4024856
Company website 
www.genetix.com Directors’ report
Genetix Group plc
Annual Report and Accounts
Directors’ report
12
The directors submit their annual report together with the audited financial statements of the Company for the year ended 31 December 2002.
Reviews of the Company’s and the Group’s activities are given in the chairman’s statement on page 2, the chief executive’s review on pages
6 and 7 and the financial review on pages 8 and 9 which are to be regarded as part of this report. The presentation of information before
goodwill amortisation has been shown because the directors consider that this gives a useful indication of underlying performance.
Principal activities
The principal activity of the parent Company and its trading subsidiaries is the design, development, manufacture and marketing of
automated systems, services and consumables for genomic and proteomic research throughout the world. 
Results and dividends
The audited financial statements for the year ended 31 December 2002 are set out on pages 23 to 37. Profit on ordinary activities after
taxation was £1.4 million (2001: £1.5 million). The directors do not recommend the payment of a dividend (2001: £nil).
Research and development
The development of new technology is an integral part of the Group’s business and the Group continues to carry out research and
development in response to market needs and demand from the scientific community. All such costs are written off to the profit and 
loss account as incurred.
Purchase of own shares
At the Extraordinary General Meeting held on 17 September 2002, the Company was given authority to purchase its own shares. At that
time the directors believed that it would be desirable to have flexibility to make such purchases in appropriate circumstances, such purchases
only being made to improve earnings per share for shareholders retaining their shares. In accordance with this policy, during the year the
Company purchased for cancellation 4,850,000 of its own ordinary shares for an aggregate sum of £1,359,500 (excluding expenses). 
This number of shares represented 6.25% of the issued share capital. Renewal of the authority will be sought from shareholders at the
forthcoming Annual General Meeting. Details of this resolution are set out in the explanatory notes on page 39.
The Board
The directors who served throughout the year, except as noted, were as follows:
M A Reid
G S Corsi
Dr J F Burke
J C Morgan
Dr J F Hill 
J M T Cochrane (retired on 31 December 2002)
P S Jensen (appointed on 23 December 2002)
J C Morgan and Dr J F Burke retire in accordance with the Articles of Association and being eligible offer themselves for re-appointment.
P S Jensen will retire in accordance with the Articles of Association and being eligible offers himself for election.
No director has a service contract of more than one year’s duration.
Directors’ and officers’ liability insurance cover is in place. 
Directors’ interests in shares
The directors who held office at 31 December 2002 had the following beneficial interests in the Company’s shares:
31 December 31 December 
2002 2001
M A Reid 42,551,267 42,434,987
G S Corsi 295,508 295,508
Dr J F Burke 1,506,766 1,759,088
J C Morgan 5,000,000 5,000,000
Dr J F Hill 18,796 nil
J M T Cochrane 18,796 nil
P S Jensen nil nil Directors’ report continued
Genetix Group plc
Annual Report and Accounts
Directors’ report
13
Full details of directors’ interests in approved and unapproved share options, other option agreements and savings related share options are
disclosed in the directors’ remuneration report on page 17.
Notes:
1 The beneficial holdings include holdings of spouses.
2 During the period 31 December 2002 to 24 February 2003 (being one month before the date of the notice of the Annual General
Meeting) there were no directors’ share dealings.
Substantial shareholdings
Other than the holdings detailed under directors and their interests above, as at 24 February 2003 the Board was not aware of any member
who had a notifiable interest of 3% or more of the share capital of the Company.
Changes in fixed assets
The changes in fixed assets of the Group during the year are set out in notes 10 to 12 on pages 31 and 32 of the accounts.
Corporate governance
In accordance with the Principles of Good Governance and Code of Best Practice (“Combined Code”) the Board has carried out a review 
of the Group’s compliance for the year ended 31 December 2002. The Board believes that good corporate governance is fundamental to
the successful management of the Company. This section of the directors’ report describes how the Company has applied the principles set
out in Section 1 of the Combined Code annexed to the Listing Rules.
Board structure
The Company is controlled through the Board of directors which comprises three executive and three non-executive directors. The Board meets
regularly, reviewing reports on the financial and operating performance against business targets and Group objectives. An Audit Committee and
Remuneration Committee are in place and are chaired by Mr Jensen and Dr Hill respectively. The Audit Committee meets formally at least twice
per year and monitors the adequacy of the Group’s internal financial controls, accounting policies and practices and the form and content of
financial reports and statements. It also provides the mechanism by which the Group’s external auditors report to the Board. The Remuneration
Committee meets on an ad hoc basis throughout the year as and when required. The directors’ remuneration report is provided on pages 17 to
21. Each committee operates within defined terms of reference. There is a formal schedule of matters specifically reserved for the Board’s decision,
and procedures are in place which allow directors to take independent professional advice in the furtherance of their duties. 
All directors have access to the advice and services of the company secretary.
Although the directors possess a wealth of diverse business experience they attend relevant training courses as appropriate.
There are two non-executive directors on the Board who are of varied business backgrounds who individually and collectively exercise
independence and bring a diversity of business perspective. 
Notwithstanding Dr Hill’s interest in share options granted on appointment disclosed on page 20, the Board considers that, particularly in
view of the relatively small size of that interest, Dr Hill is independent of management and free from business and other relationships that
could interfere with his independent judgement.
Mr Morgan has an interest in the Company amounting to approximately 6.9% of the issued share capital and accordingly would not be
regarded as an “independent” non-executive director by the definition employed in the Combined Code. It is the view of the Board that
this does not lessen the value of his contribution on the main Board nor as a member of Board committees.
The Board has identified Dr Hill as the senior independent non-executive director for the purposes of the Combined Code.
Non-executive directors appointments are for an initial fixed period of one year and are reviewed thereafter on an annual basis.
The Combined Code requires that directors should be subject to re-election at intervals of not more than three years and this requirement 
is reflected within the Company’s Articles of Association. 
Compliance
The directors consider that, other than the following exceptions, the Company has complied with the provisions set out in section 1 of 
the Combined Code throughout the period. In view of the relatively small size of the Board there is no present intention to appoint a
nomination committee, such matters being dealt with by the main Board (A.5.1). A remuneration committee has been established which
while consisting exclusively of non-executive directors, all members may not be regarded as “independent” by the definition employed 
in the Combined Code (B.2.2), as explained above. Directors’ report continued
Genetix Group plc
Annual Report and Accounts
Directors’ report
14
Relations with shareholders
The Company acknowledges the importance of a dialogue with its institutional shareholders. The Company makes presentations to 
them and communicates regularly throughout the year. All shareholders have an opportunity to discuss the Group’s development and
performance at the Annual General Meeting.
Accountability and audit
Within the chairman’s statement on page 2 and the detailed review of the Company’s performance in the chief executive’s review on pages
6 and 7, and the financial review on pages 8 and 9, the directors seek to present a balanced and understandable assessment of the
Company’s financial position and prospects. The directors’ responsibility for the financial statements is described on page 15.
Internal control
The Combined Code introduced a requirement that the Board’s review of internal controls extends to all controls, including financial and
operational controls, compliance and risk management. Guidelines for directors on this requirement were published in September 1999
(“the Turnbull Guidelines”). The Board confirms that the procedures necessary to implement the guidelines have been established for 
the whole year up to the date of approval of the annual report and accounts.
The Board is responsible for the Group’s systems of internal controls and for reviewing its effectiveness. Such systems are designed to
manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance
against material misstatements or loss. Such systems have been designed to meet the Group’s particular needs and circumstances and the
risks to which it is exposed.
The key procedures that have been established to provide effective internal controls are:
Risk assessment 
As part of the Company’s compliance with the Turnbull Guidelines, there is an ongoing process for identifying, evaluating and managing
risks and a system of risk assessment has been established. The assessments designed to identify strategic, financial, compliance and
operational risks across all areas of the Company’s business are systematically reviewed by the executive management having regard 
to changes to the Group’s business environment. The results of this exercise are formally reported to the Board.
Control environment
The Board sets overall risk management policy for the Group which is delegated to the executive management. The Group has taken the
opportunity in adopting the Turnbull guidance, to underpin the principles of total quality management to more effectively manage the
business and embed internal controls and risk management further into the operations of the business. Given the relatively small size of 
the Group, the senior management is able to demonstrate through its own actions, commitment to best business practices. In terms of 
the Group approval framework, there are procedures for expenditure matters including the authorisation of investments and capital
expenditure. The Group has in place an organisational structure with defined lines of responsibility and delegations of authority. Upon
joining the Company employees undergo a thorough induction programme and receive a staff handbook. 
Information and communication
The Group’s procedures include a comprehensive system for reporting financial and non-financial information to the Board. This includes the
preparation and review of annual business plans and periodic strategic reviews which are submitted to the Board, the comprehensive review
of the business at each Board meeting, the monthly meeting of the management committee and the regular review of risk assessments and
strategic risk. From time to time the Board receives presentations from management about key areas of the Group’s operations.
Control procedures
Accounting policies and practices are disseminated throughout the Group. Measures taken include comprehensive signing-off approvals,
physical controls, segregation of duties, reviews by management and external auditors. Operational procedures are under continual
development having particular regard to changes in the law and regulations and managers’ handbooks are updated accordingly. 
Monitoring process
There are clear procedures for monitoring the system of internal controls:
The chief executive and members of the management team regularly review the results of the risk assessment exercise. The impact and
likelihood are re-evaluated and priorities reported to the Board and where appropriate, corrective action taken. 
Each half-year the finance director carries out an internal self-certification of accounting functions requiring staff to actively evaluate
ongoing compliance with financial control disciplines. Directors’ report continued
Genetix Group plc
Annual Report and Accounts
Directors’ report
15
The audit committee has formal terms of reference which includes the review of internal control procedures and the Group’s risk
management programme.
The Board considers that given the relative small size of the Group and the quality of financial controls, the appointment of an internal
auditor is not merited.
Corporate responsibility
The Company has formulated its approach to the ABI’s guidelines on corporate responsibility within the Turnbull process. These matters
have been reviewed as part of the Company’s ongoing risk assessment process and as a consequence, the significance of social,
environmental and ethical (SEE) matters to the business of the Company is now regularly reviewed. Through this process the Board 
receives adequate information to make an assessment of such matters and in this context no significant risks have been identified. 
In view of the relatively small size of the Company and the absence of heavy industry within its manufacturing processes, the environmental
footprint of the Company is not significant. Notwithstanding this, the Company is committed to embracing sound environmental policies
and practices. An environmental policy has been issued to all staff and key suppliers. A framework has been established allocating
responsibilities for the implementation of the policy and enabling the performance of the Company in adhering to its policy to be
monitored. The Company has also developed codes of conduct which have been incorporated within staff handbooks which include
sections codifying the Company’s position on promoting high standards of integrity and ethics in business conduct and encouraging
diversity in the work place. The Company’s principal operations are located within a single light manufacturing unit in the UK and is not
exposed to the same risks associated with human rights faced by companies who operate in developing countries. It is believed that the
Company’s exposure to risks arising from SEE matters are principally reputational and that there are real business advantages to enhancing
and protecting the reputation of the Company in terms of attracting and retaining talented staff and enhancing its profile with an
increasingly demanding customer base.
The Company recognises that business activities have an influence on the community and accepts that it has a duty to carry out these in a
responsible manner. In addition, the Company seeks to support education in its field of operations by engaging sandwich students during
their industrial year, work experience assignments and educational visits.
While the Company has complied with its policies and procedures for managing risks arising from SEE matters it is the intention to develop
those relating to the environment further in the ensuing year.
These disclosures have been compiled in conjunction with the risk assessment exercise carried out in December 2002 and verified as part of
that process.
In view of the relatively small size of the Company and the need to manage risks proportional to their significance, there is no present
intention to introduce any remuneration incentive relating to the handling of SEE risks or training of directors on such matters. 
Going concern
After making enquires, the directors have a reasonable expectation that the Group has adequate resources to continue operating for the
foreseeable future. For this reason, the going concern basis continues to be adopted in preparing the financial statements.
Statement of directors’ responsibilities
United Kingdom company law requires the directors to prepare financial statements for each financial year which give a true and fair view
of the state of affairs of the Company and of the Group and of the profit or loss for that period.
In preparing those financial statements, the directors are required to:
– select suitable accounting policies and then apply them consistently;
– make judgements and estimates that are reasonable and prudent;
– state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the
financial statements; and
– prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will
continue in business.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial
position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 1985. They are also
responsible for the Group’s system of internal financial control, for safeguarding the assets of the Group and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities. Directors’ report continued
Genetix Group plc
Annual Report and Accounts
Directors’ report
16
Supplier payment policy
It is the Group’s policy to pay suppliers in accordance with their agreed terms and conditions. Such terms and conditions are agreed with 
the supplier in advance and the Group aims to comply with such terms once satisfactory performance is achieved. At 31 December 2002
average creditors age was 41 days (2001: 48 days).
Employment of disabled persons
In considering applications for employment from disabled people, the Company seeks to ensure that fair consideration is given to the
abilities and aptitudes while having regard to the requirements of the job for which he or she has applied. Employees who become unable
to carry out the job for which they are employed are given individual consideration and depending on the nature, severity and duration of
the disability, may be considered for alternative work.
Health, safety and the environment
The Group is committed to the maintenance of high standards of practice concerning the health and safety of its employees. The Group
recognises its legal obligations in this respect and compliance with such obligations and a number of policies on such matters are monitored
through a health and safety committee. The Company is sensitive to the needs of the environment. Such matters are considered in the
context of the Company’s environmental policy which is described within that section dealing with corporate responsibility. 
Employee involvement
The Company is committed to a policy of developing employee involvement and awareness on matters of concern to all employees
throughout the Group, information being disseminated through formal and informal meetings, written communications and notices. 
Consultation procedures exist with staff covering such matters as health and safety and other areas connected with their employment.
The Company has established discretionary and sharesave share option schemes with the objective of giving employees an opportunity 
to invest in the future of the Company, encouraging a sense of involvement and aligning employees interests with those of shareholders.
Charitable and political donations
No charitable donations or political donations were made during the year.
AGM
The notice describing the ordinary and special business at the Company’s third Annual General Meeting to be held on Friday 25 April 2003
is set out on page 38. Details of the special business are set out on page 39. Biographical details of directors submitting themselves for
election are set out on page 10.
Auditors
A resolution proposing that Deloitte & Touche, chartered accountants, be re-appointed as auditors and authorising the directors to
determine their remuneration will be put to the members at the Annual General Meeting.
By order of the Board
S C Hedger
Secretary
4 March 2003 Directors’ remuneration report
Genetix Group plc
Annual Report and Accounts
Directors’ remuneration report
17
Introduction
This report has been prepared in accordance with the Directors’ Remuneration Report Regulations 2002 which introduced new statutory
requirements for the disclosure of directors’ remuneration in respect of periods ending on or after 31 December 2002. The report also meets
the relevant requirements of the Listing Rules of the Financial Services Authority and describes how the board has applied the Principles of
Good Governance relating to directors’ remuneration. As required by the Regulations, a resolution to approve the report will be proposed 
at the Annual General Meeting of the Company at which the financial statements will be approved.
The Regulations require the auditors to report to the Company’s members on the “auditable part” of the directors’ remuneration report 
and to state whether in their opinion, that part of the report has been properly prepared in accordance with the Companies Act 1985 (as
amended by the Regulations). The report has therefore, been divided into separate sections for unaudited and audited information.
Unaudited information
Remuneration committee
The membership of the remuneration committee (“the Committee”) is wholly made up of non-executive directors namely Dr Hill
(chairman), Mr Morgan and from his appointment on 23 December 2002, Mr Jensen. During the year prior to his retirement from the
Board on 31 December 2002, Mr Cochrane was also a member of the Committee. Members of the Committee are in attendance at the
Company’s Annual General Meetings. The Committee is a committee of the Board and has been established with formal terms of reference
approved by the Board. The Committee has authority to determine the remuneration, benefits and employment conditions for executive
directors and in this connection the Committee meets as required and sets the policy for the administration of the Company’s approved 
and unapproved share option schemes. The chief executive and company secretary attend meetings of the Committee at its invitation.
Remuneration policy
The Committee seeks to put into place remuneration packages which will enable the Company to motivate, attract and retain executive
directors of sufficient calibre to contribute to the development of the business and the Group’s progress. In developing remuneration policy
and fixing remuneration, consideration is given to remuneration packages of executive directors in groups of a comparable size. As part of
this process the Company both participates in, and subscribes to, relevant independent survey reports. The current remuneration policy,
which is applied equally to all executive directors, has regard to the early stage in the Group’s development. As the Group grows in size 
and complexity the Committee will consider the introduction of broader remuneration packages. The relative importance of the component
parts of the remuneration packages will be determined as the Group grows, until that time the focus of relating the remuneration packages
to performance is performance related share options as described in this report. The Committee has also resolved to keep the merits of
establishing a performance related bonus scheme under review. The chief executive advises the Committee on other executive directors’
remuneration and on individual performance. The Committee having regard to the global nature of the Group’s markets will, on a case by
case basis, be mindful of the specific demands of the job market in a particular country or region should the Group’s development require
the international recruitment of senior executives. No director is involved in determining their own remuneration. The Committee’s present
policy is to offer executive directors six month rolling contracts being comfortably in accordance with best practice. The main Board has
established the policy for directors’ fees, within the limits provided for by the Articles of Association, having regard to the need to attract
non-executive directors of sufficient calibre to provide strategic drive and vision for the Group’s ongoing development. In appropriate
circumstances, non-executive directors will be offered shares in lieu of a proportion of their fee entitlement. 
Basic salary
The basic salary for each executive director is established by the Committee and is reviewed on an annual basis in accordance with the
terms of their service contracts. Such reviews will take into account the responsibilities and experience of each individual and have regard 
to appropriate sources of data including independent surveys on similar positions held in comparable companies. Reviews would also take
place in the event of major organisational change.
Benefits in kind
At the date of this report directors do not receive benefits-in-kind. The Committee will keep this matter under review as the Group develops.
Annual bonus
The Committee will continue to review the merits of establishing an annual bonus scheme based on annual and longer-term performance
measures of the Group as it develops. Such a scheme would include measurable and quantitative criteria related to financial performance 
of the Group. In exceptional circumstances, the Committee would consider the payment of a special bonus where an individual director’s
performance merits an award outside the annual bonus scheme.
Compensation for loss of office
During the financial period under review no payment has been made to a former director as compensation for loss of office. The duty to
mitigate will be taken into consideration as appropriate when determining any severance payment. Directors’ remuneration report continued
Genetix Group plc
Annual Report and Accounts
Directors’ remuneration report
18
Sums paid to third parties in respect of directors’ services
During the financial period under review no payment was made to a third party in respect of directors’ services. 
Pensions
At the date of this report there are no pension arrangements in force provided by the Company for directors. The Committee will continue
to keep this under review as the Group develops.
Service contracts
Details of service contracts for executive directors who served during the financial year can be summarised as follows: 
Date of commencement Unexpired term
M A Reid 01/10/00 6 months
G S Corsi 01/08/00 6 months
Dr J F Burke 01/07/01 6 months
Each contract is for a six month rolling term and subject to a six month notice period. 
No fixed contractual sum is payable on termination. Other than in cases of gross misconduct and protracted ill-health provided for in their
individual service contracts, all executive directors would at present have an expectation of a termination payment not exceeding six months
salary in the event of the early termination of their service contract by the Company. No termination payments have been made to former
directors. Non-executive directors’ appointments are subject to letters of appointment which provide for the appointment to be reviewed on
an annual basis at the time of their respective anniversary of appointment, prior to that time either party may terminate the appointment by
giving not less than three months notice. The commencement dates for non-executive directors’ current appointments are as follows:
J C Morgan  11/10/02
P S Jensen   23/12/02
Dr J F Hill   05/02/03
All directorships are subject to the overriding provisions of the Company’s Articles of Association and the requirement to seek re-election by
shareholders at General Meetings at required intervals. 
The Company recognises that its executive directors may be invited to become non-executive directors of other companies and that
exposure to such non-executive duties can broaden a director’s experience to the benefit of the Company. Each case is considered on 
its own merits.
Share options
The Company believes that share ownership by executive directors and other senior and key staff establishes a firm link between their
personal interests and those of the shareholders. The executive directors are eligible to participate in the Company’s approved and
unapproved share option schemes which were established in October 2000. It is intended that the granting of the options is phased over
the life of the schemes. The Committee has, following discussions with its advisers, formulated an eligibility policy for executive directors
which spreads the potential grant of options throughout the ten year life of the schemes. At present the maximum value of options under
this policy which maybe awarded to executive directors would be subject to a ceiling of options to the value, at the time of grant, equating
to four times salary with a maximum value of one times salary in any one year. Options granted pre-flotation are excluded from the
calculations. In considering the recruitment needs of the Board in the future, the Committee will have regard to the specific demands of 
the job market at the time and in special cases, having particular regard to internationally based positions, consider the acceleration of such
option awards in appropriate circumstances.
Option awards are normally considered by the Committee following the publication of annual results and if appropriate, granted during a
42 day period following the announcement of those results. Other than on recruitment, option awards outside these time frames would not
normally take place unless exceptional circumstances prevail. 
Super options which would be subject to more demanding performance conditions maybe granted on a case-by-case basis to deal with
specific business needs such as recruitment. These options would also be subject to a maximum ceiling of four times salary during the life 
of the schemes and a maximum value of one times salary in any one year. As in the case with ordinary options, the Committee will have
regard to the specific demands of the job market and consider the acceleration of such option awards in appropriate circumstances. Directors’ remuneration report continued
Genetix Group plc
Annual Report and Accounts
Directors’ remuneration report
19
The first tranche of options which were granted to executive directors and other key staff immediately before admission to trade on the
London Stock Exchange were not subject to performance criteria. The grant of these options was considered a necessary step to attract and
retain staff during a significant period in the Company’s development. Options granted subsequently are subject to performance criteria
which were chosen after discussions with the Company’s advisers as being appropriate for the Company without a clearly identifiable peer
group at its early stage of development. The vesting of such options is stepped in proportion to the increased performance of the Company.
The performance target is the percentage growth in adjusted EPS (adjusted for exceptional, extraordinary items and goodwill) of the
Company during the performance period of three years to exceed the aggregate percentage growth in RPI during the period by a minimum
of 9% in aggregate in which case 50% of the option will vest. Percentage growth of 12% and 15% is required before 75% or 100%
respectively vest. If the performance conditions are not achieved in the initial three year period, the performance period will be extended 
to five years and in such circumstances the performance target is increased proportionally to reflect the additional time available. If the
performance condition is not met within five years, the options will lapse. Methods of reviewing whether these performance conditions
have been met are, in view of their simplicity, largely mechanistic in nature and will at the appropriate time of potential vesting of options
be examined in conjunction with the Company’s advisers. 
Performance graph
The following graph shows the Company’s performance, measured by total shareholder return, compared with the performance of the
Techmark All-share Index also measured by total shareholders return. The Company forms part of this index and in the absence of a direct
peer group is regarded as appropriate for comparative purposes. 
Return index since flotation in November 2000 for TechMark All-share Index as at 31 December 2002
2001 2002
0
20
40
60
80
100
120
140
GENETIX – TOTAL RETURN INDEX
FTSE TECHMARK ALL-SHARE (£) – TOTAL RETURN INDEX Source: DATASTREAM     Directors’ remuneration report continued
Genetix Group plc
Annual Report and Accounts
Directors’ remuneration report
20
Audited information
Directors’ share options
Options granted to directors under the Genetix Group plc (Approved) and (Unapproved) 2000 Share Option Schemes, other option
agreements and the Sharesave Scheme 2000 are set out as follows:
At 1 Jan At 31 Dec Exercise
Note 2002 Granted Lapsed 2002 price Normal exercise period
M A Reid
Executive (unapproved) 1 66,667 –– 66,667 150p 24 Nov 2003 – 23 Nov 2010
Executive (unapproved) 2 – 97,744 – 97,744 66.5p 5 Mar 2005 – 4 Mar 2012
66,667 97,744 – 164,411
G S Corsi
Executive (approved) 1 20,000 –– 20,000 150p 24 Nov 2003 – 23 Nov 2010
Executive (unapproved) 1 46,667 –– 46,667 150p 24 Nov 2003 – 23 Nov 2010
Executive (unapproved) 2 – 97,744 – 97,744 66.5p 5 Mar 2005 – 4 Mar 2012
Sharesave – 17,757 – 17,757 53.5p 1 Jun 2005 – 1 Dec 2005
Sharesave 3 (8,072) – (8,072) – 120p
74,739 115,501 (8,072) 182,168
Dr J F Burke 
Options 1 66,667 –– 66,667 150p 11 Nov 2003 – 10 Nov 2010
Executive (approved) 2 – 45,112 – 45,112 66.5p 5 Mar 2005 – 4 Mar 2012
Executive (unapproved) 2 – 52,632 – 52,632 66.5p 5 Mar 2005 – 4 Mar 2012
Sharesave – 17,757 – 17,757 53.5p 1 Jun 2005 – 1 Dec 2005
Sharesave 3 7,627 – (7,627) – 127p
74,294 115,501 (7,627) 182,168
Dr J F Hill
Options 4 13,856 –– 13,856 216.5p 4 Feb 2002 – 7 Mar 2011
J M T Cochrane
Options 4 13,856 –– 13,856 216.5p 4 Feb 2002 – 7 Mar 2011
Notes:
1 Share options granted prior to flotation with no performance conditions. (At this time Dr Burke, while a director, was not an employee
and as a consequence options were not granted under the rules of the Company’s share option schemes but with reference to a
separate option deed all principal terms being based on those contained within the Company’s schemes.) 
2 Share options granted subject to standard performance conditions as set out in policy statement on share options. If the performance
condition is not achieved within the required time scale, the share options will lapse prior to the expiry date. There has been no variation
in the performance conditions. The normal exercise period shown on the above table ends with the expiry date of the options.
3 Sharesave options lapsed on cancellation for Mr Corsi and Dr Burke on 12 March 2002 and 7 March 2002 respectively. 
4 Share options granted to non-executive directors at time of their initial appointment and not subject to performance conditions.
5 No variation has taken place in the terms and conditions of any share option since its grant.
6 Other than Mr Reid (as a substantial shareholder), all executive directors are entitled to participate in the Company’s Sharesave scheme.
7 The market price of the ordinary shares covered by these options as at 31 December 2002 was 33p. During the financial year the
highest and lowest market prices were 74.0p and 28.5p respectively.  Directors’ remuneration report continued
Genetix Group plc
Annual Report and Accounts
Directors’ remuneration report
21
Individual remuneration packages for the year ended 31 December 2002
Salary Fees 2002 2001
£000 £000 £000 £000
Executive directors
M A Reid 79 – 79 77
G S Corsi 63 – 63 61
Dr J F Burke 68 – 68 66
Non-executive directors
J C Morgan – 20 20 20
Dr J F Hill – 24 24 9
J M T Cochrane (retired 31/12/02) – 24 24 9
P S Jensen (appointed 23/12/02) –– – –
Aggregate remuneration 210 68 278 242
Notes:
1 The annual review of each executive director’s salary takes place on 31 March in accordance with their individual service contracts. 
2 Directors’ fees payable to non-executive directors are reviewed at the time of review of an individual director’s appointment which in
each case takes place on the anniversary of their appointment. 
3 The figures for fees also include, where relevant, the value of shares in the Company received in lieu of fees. In the case of Dr Hill and
Mr Cochrane, they each received 18,796 shares in the Company having elected to take a proportion of their fee entitlement in lieu of
fees. At the time their shares where allocated the market price of the Company’s shares was 66.5p.
4 Mr Jensen is entitled to receive fees of £25,000 per annum, a proportion of which maybe taken in the form of shares in the Company. 
By order of the Board
S C Hedger
Secretary
4 March 2003 Independent auditors’ report
to the members of Genetix Group plc
Genetix Group plc
Annual Report and Accounts
Independent auditors’ report 
to the members of Genetix Group plc
22
We have audited the financial statements of Genetix Group plc for the year ended 31 December 2002 which comprise the consolidated profit
and loss account, the consolidated and Company balance sheets, the consolidated cash flow statement, the consolidated statement of total
recognised gains and losses and the related notes 1 to 23, together with the reconciliation of movements in consolidated shareholders’ funds.
These financial statements have been prepared under the accounting policies set out therein. We have also audited the information in the part
of the directors’ remuneration report that is described as having been audited.
This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an
auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone 
other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As described in the statement of directors’ responsibilities, the Company’s directors are responsible for the preparation of the financial
statements in accordance with applicable United Kingdom law and accounting standards. They are also responsible for the preparation of
the other information contained in the annual report including the directors’ remuneration report. Our responsibility is to audit the financial
statements and the part of the directors’ remuneration report described as having been audited in accordance with relevant United Kingdom
legal and regulatory requirements, auditing standards, and the Listing Rules of the Financial Services Authority.
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and the part 
of the directors’ remuneration report described as having been audited have been properly prepared in accordance with the Companies Act 1985.
We also report if, in our opinion, the directors’ report is not consistent with the financial statements, if the Company has not kept proper
accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law or 
the Listing Rules regarding directors’ remuneration and transactions with the Company and other members of the Group is not disclosed.
We review whether the corporate governance statement reflects the Company's compliance with the seven provisions of the Combined Code
specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to consider
whether the Board's statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group's corporate
governance procedures or its risk and control procedures.
We read the directors’ report and the other information contained in the annual report for the above year as described in the contents section
including the unaudited part of the directors’ remuneration report and consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the financial statements.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom auditing standards issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the part of the directors’
remuneration report described as having been audited. It also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements and of whether the accounting policies are appropriate to the circumstances of
the Company and the Group, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to
provide us with sufficient evidence to give reasonable assurance that the financial statements and the part of the directors’ remuneration
report described as having been audited are free from material misstatement, whether caused by fraud or other irregularity or error. In
forming our opinion, we also evaluated the overall adequacy of the presentation of information in the financial statements and the part 
of the directors’ remuneration report described as having been audited.
Opinion
In our opinion:
– The financial statements give a true and fair view of the state of affairs of the Company and the Group as at 31 December 2002 and 
of the profit of the Group for the year then ended; and
– The financial statements and part of the directors’ remuneration report described as having been audited have been properly prepared 
in accordance with the Companies Act 1985.
Deloitte & Touche Chartered accountants and Registered auditors
Southampton
4 March 2003
Neither an audit nor a review provides assurance on the maintenance and integrity of the website, including controls used to achieve this, and in
particular whether any changes may have occurred to the financial information since first published. These matters are the responsibility of the
directors but no control procedures can provide absolute assurance in this area. 
Legislation in the United Kingdom governing the preparation and dissemination of financial information differs from legislation in other jurisdictions. Consolidated profit and loss account
for the year ended 31 December 2002
Genetix Group plc
Annual Report and Accounts
Consolidated profit and loss account
23
Before Total Total
goodwill Goodwill 2002 2001
Note £000 £000 £000 £000
Turnover – continuing operations 2 12,572 – 12,572 12,419
Cost of sales (6,255) – (6,255) (6,742)
Gross profit 6,317 – 6,317 5,677
Research & development (1,448) – (1,448) (1,179)
Sales & administrative expenses (3,356) – (3,356) (2,893)
Amortisation of goodwill 10 – (362) (362) (362)
Total administrative expenses (4,804) (362) (5,166) (4,434)
Operating profit – continuing operations 3 1,513 (362) 1,151 1,243
Net interest receivable 6 799 – 799 990
Profit on ordinary activities before taxation 2,312 (362) 1,950 2,233
Tax on profit on ordinary activities 7 (585) – (585) (752)
Profit for the financial year 18 1,727 (362) 1,365 1,481
Earnings per share 9 2.23p (0.47p) 1.76p 1.91p
Diluted earnings per share 9 2.11p (0.44p) 1.67p 1.85p Consolidated and company balance sheets
at 31 December 2002
Genetix Group plc
Annual Report and Accounts
Consolidated and company balance sheets
24
Group Company 
2002 2001 2002 2001
Note £000 £000 £000 £000
Fixed assets
Intangible assets 10 6,826 7,190 – –
Tangible assets 11 2,329 2,348 – –
Investments 12 1 3 37,232 37,232
9,156 9,541 37,232 37,232
Current assets
Stocks 13 1,522 1,777 – –
Debtors 14 2,255 1,776 16 93
Cash at bank and in hand 20,867 20,142 19,315 18,680
24,644 23,695 19,331 18,773
Creditors: amounts falling due within one year 15 (2,654) (2,325) (1,108) (1,268)
Net current assets 21,990 21,370 18,223 17,505
Total assets less current liabilities 31,146 30,911 55,455 54,737
Provisions for liabilities and charges 16 (401) (158) – –
Net assets 30,745 30,753 55,455 54,737
Capital and reserves
Share capital 17 36,349 38,422 36,349 38,422
Shares to be issued 17 – 1,000 – 1,000
Share premium account 18 16,376 15,707 16,376 15,707
Capital redemption reserve 18 2,425 – 2,425 –
Merger reserve 18 (29,686) (29,686) – –
Profit and loss account 18 5,281 5,310 305 (392)
Equity shareholders' funds 30,745 30,753 55,455 54,737
Approved by the Board on 4 March 2003
M A Reid G S Corsi
Director Director Consolidated cash flow statement
for the year ended 31 December 2002
Genetix Group plc
Annual Report and Accounts
Consolidated cash flow statement
25
2002 2001
Note £000 £000
Net cash inflow from operating activities 19a 1,234 2,136
Returns on investments and servicing of finance
Interest received 808 1,010
Interest paid (9) (20)
799 990
Taxation
Corporation tax refund 364 –
Corporation tax paid (351) (1,102)
13 (1,102)
Capital expenditure and financial investment
Purchase of tangible fixed assets (289) (364)
Purchase of intangible fixed assets (61) (394)
Sale of tangible fixed assets – 894
(350) 136
Acquisitions 
Purchase of subsidiary undertakings – (67)
– (67)
Net cash inflow before use of liquid resources and financing 1,696 2,093
Financing
Issue of share capital (net of expenses) 21 4
Share capital re-purchased (including expenses) (1,366) –
Decrease in debt – (1,699)
Net cash outflow from financing (1,345) (1,695)
Increase in cash 19b,c 351 398 Consolidated statement of total recognised gains and losses
for the year ended 31 December 2002
Genetix Group plc
Annual Report and Accounts
Consolidated statement of total recognised gains and losses
Reconciliation of movements in consolidated shareholders’ funds
26
2002 2001
£000 £000
Profit for the financial year 1,365 1,481
Currency translation differences on foreign currency net investments (28) 3
Total recognised gains and losses for the year 1,337 1,484
Reconciliation of movements in consolidated shareholders’ funds
for the year ended 31 December 2002
2002 2001
£000 £000
Profit for the financial year 1,365 1,481
Currency translation differences (28) 3
Share capital issued (net of costs) 21 4
Share capital re-purchased (including fees) (1,366) –
Net movement in shareholders’ funds (8) 1,488
Opening shareholders' funds 30,753 29,265
Closing shareholders' funds 30,745 30,753 Notes to the accounts
for the year ended 31 December 2002
Genetix Group plc
Annual Report and Accounts
Notes to the accounts
27
1 Principal accounting policies
The financial statements have been prepared under the historical cost convention in accordance with applicable UK accounting standards.
Basis of consolidation 
The consolidated financial statements include the accounts of the Company and all its subsidiaries.
Acquisitions
On the acquisition of a business, fair values are attributed to the Group’s share of the separable net assets. Where the cost of acquisition
exceeds the fair values attributable to such assets, the difference is treated as purchased goodwill. The results and cash flows relating to
the acquired business are included in the consolidated profit and loss account and the consolidated cash flow statement from the date 
of acquisition.
Business combinations meeting the requirements of FRS 6 “Mergers and Acquisitions” and the Companies Act 1985 are treated as
mergers within the consolidated accounts. 
Intangible assets - goodwill
For acquisitions of a business following the implementation of FRS 10 “Goodwill and Intangible Assets”, purchased goodwill is
capitalised in the year in which it arises and amortised over its estimated useful life of 20 years. The directors regard 20 years as 
a reasonable maximum for the estimated useful life of goodwill since it is difficult to make projections exceeding this period.
Intangible assets - patents and licences
Patents and licenses are valued at cost on acquisition and are depreciated in equal annual instalments over their estimated useful lives 
of four to ten years.
Tangible fixed assets
Depreciation is provided in equal annual instalments in order to write off the cost of each asset over its estimated useful life at the
following rates:
Freehold property 2% per annum
Plant and machinery 25-50% per annum
Motor vehicles 25% per annum
Fixtures and fittings 25% per annum
Freehold land is not depreciated.
Investments
Investments held as fixed assets are stated at cost less provision for any impairment in value.
Stocks
Stocks and work-in-progress are stated at the lower of cost and net realisable value, after making allowance for obsolete and slow
moving items.
Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax 
rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax, or 
a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing
differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in
which they are included in financial statements. Deferred tax assets and liabilities are not discounted.
Turnover
Turnover represents amounts derived from the provision of goods and services to external customers which fall within the Group's
ordinary activities after deduction of trade discounts and value added tax. The turnover and operating profit is attributable to the
principal activities of the Company and Group.
Pension costs
The Group administers a stakeholder pension scheme for its UK employees and contributes to a 401K insurance scheme for its 
US employees. Notes to the accounts continued
for the year ended 31 December 2002
Genetix Group plc
Annual Report and Accounts
Notes to the accounts
28
1 Principal accounting policies continued
Foreign currency
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date.
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Adjustments resulting from exchange
fluctuations have been reflected in the profit and loss account.
The financial statements of foreign subsidiaries are translated into sterling at the closing rates of exchange for each period. The profit
and loss accounts of foreign subsidiaries are translated into sterling at the average rate of exchange for each period. The differences
arising on translation are taken directly to reserves.
The Group uses derivative financial instruments solely to reduce exposure to foreign exchange risk.
Government grants
Government grants relating to tangible fixed assets are treated as deferred income and released to the profit and loss account over the
expected useful lives of the assets concerned. Other grants are credited to the profit and loss account as the related expenditure is incurred.
Research and development
Research and development expenditure is charged to the profit and loss account as incurred.
Product warranties
Provision is made for the anticipated cost of expected claims against product warranties on products sold. 
2 Turnover
In the opinion of the directors, the Group operates only one class of business, namely the provision of instrumentation, consumables
and services for genomic and proteomic research. Turnover can be analysed as follows:
2002 2001
£000 £000
By geographic destination
UK 1,487 1,228
Rest of Europe 2,402 2,783
North America 6,565 5,883
Rest of World 2,118 2,525
12,572 12,419
The majority of turnover was generated in the United Kingdom with the exception of Genetix Reagents Inc., segmental disclosure of
which would be prejudicial to the business in the United States.
3 Operating profit
2002 2001
£000 £000
Operating profit is stated after charging/(crediting):
Depreciation of owned assets 304 192
Amortisation of goodwill 362 362
Amortisation of patents and licences 63 14
Loss/(profit) on disposal of fixed assets 2 (49)
Auditors’ remuneration:
services as auditors 36 33
tax compliance services 8 7
tax advisory services 55 49
consulting services – 55
Research and development (including salaries) 1,561 1,179
R&D LINK grant recovery (113) –
(Gain)/loss on foreign currency transactions (374) 61
Auditors’ remuneration paid by the Company in respect of services as auditors was £18,000 (2001: £14,000). Notes to the accounts continued
for the year ended 31 December 2002
Genetix Group plc
Annual Report and Accounts
Notes to the accounts
29
4 Employee costs and numbers
Group
2002 2001
£000 £000
Costs (including directors)
Wages and salaries 3,157 2,620
Social security costs 303 254
Pension costs 27 –
3,487 2,874
2002 2001
No. No.
Average number employed
Sales and marketing 23 19
Research and development 28 26
Production and technical support 32 34
Administration 16 15
Laboratory 8 7
107 101
5 Directors’ remuneration
The tables relating to directors’ remuneration and share options are included in the audited part of the directors’ remuneration report on
pages 20 and 21.
6 Net interest receivable
2002 2001
£000 £000
Interest receivable 808 1,010
Interest payable
Other (9) (20)
799 990
7 Tax on profit on ordinary activities
2002 2001
£000 £000
Current tax
UK corporation tax 502 752
Adjustments in respect of prior years (252) –
250 752
Foreign tax 44 –
Total current tax 294 752
Deferred tax
Origination and reversal of timing differences (note 16) (8) –
Adjustments in respect of prior years 299 –
Total deferred tax 291 –
Total tax on profit on ordinary activities 585 752 Notes to the accounts continued
for the year ended 31 December 2002
Genetix Group plc
Annual Report and Accounts
Notes to the accounts
30
7 Tax on profit on ordinary activities continued
The tax assessed for the year is lower than that resulting from applying the standard rate of corporation tax in the UK of 30% 
(2001: 30%). The differences are explained below:
2002 2001
% %
Standard tax rate for year as a percentage of profits 30 30
Effects of:
Expenses not deductible for tax purposes 7 7
Capital allowances in excess of depreciation 1 (2)
Movement in short term timing differences (1) 1
Other – 1
Research and development tax credits (9) (2)
Prior period adjustments (13) (1)
Current tax rate for year as a percentage of profits 15 34
Financial Reporting Standard 19 “Deferred Taxation” has been adopted during the year giving rise to an immaterial current year tax
charge relating to prior years of £36,000.
8 Profit for year attributable to Genetix Group plc
As permitted by section 230 of the Companies Act 1985, the profit and loss of the parent Company is not individually presented as part
of these accounts. The parent Company's profit for the period ended 31 December 2002 was £2,063,000 (2001: £174,000).
9 Earnings per share
2002 2001
£000 £000
Profit for the financial year before amortisation of goodwill 1,727 1,843
Amortisation of goodwill (362) (362)
Profit for the financial year 1,365 1,481
No. 000 No. 000
Basic weighted average number of shares 77,446 77,511
Dilutive effect of share options 4,213 2,568
Diluted weighted average number of shares 81,659 80,079
Pence Pence
Earnings per share before amortisation of goodwill 2.23p 2.38p
Diluted earnings per share before amortisation of goodwill 2.11p 2.30p
Earnings per share 1.76p 1.91p
Diluted earnings per share 1.67p 1.85p
Earnings are calculated as profit after taxation for the year. Earnings per share before amortisation of goodwill has been shown because
the directors consider that this gives a useful indication of underlying performance. Notes to the accounts continued
for the year ended 31 December 2002
Genetix Group plc
Annual Report and Accounts
Notes to the accounts
31
10 Intangible fixed assets
Patents
Goodwill & licences Total
Group £000 £000 £000
Cost
At 1 January 2002 7,231 428 7,659
Additions – 61 61
At 31 December 2002 7,231 489 7,720
Amortisation
At 1 January 2002 451 18 469
Charge for the year 362 63 425
At 31 December 2002 813 81 894
Net book value
At 31 December 2002 6,418 408 6,826
At 31 December 2001 6,780 410 7,190
11 Tangible fixed assets Freehold Office 
land & Plant & Motor fixtures &
buildings machinery vehicles fittings Total
Group £000 £000 £000 £000 £000
Cost
At 1 January 2002 2,025 453 58 225 2,761
Additions – 227 40 22 289
Disposals ––– (4) (4)
Exchange adjustment ––– (2) (2)
At 31 December 2002 2,025 680 98 241 3,044
Depreciation
At 1 January 2002 60 211 20 122 413
Charge for the year 40 203 22 39 304
Disposals ––– (2) (2)
At 31 December 2002 100 414 42 159 715
Net book value
At 31 December 2002 1,925 266 56 82 2,329
At 31 December 2001 1,965 242 38 103 2,348 Notes to the accounts continued
for the year ended 31 December 2002
Genetix Group plc
Annual Report and Accounts
Notes to the accounts
32
12 Investments
Group Company
2002 2001 2002 2001
£000 £000 £000 £000
Cost and net book value
Listed investments 1 3 – –
Investment in subsidiary undertakings – – 37,232 37,232
At 31 December 2002 1 3 37,232 37,232
Details of the subsidiary companies are as follows:
Subsidiary Percentage of 
undertaking Country of incorporation Principal activity equity shares held
Genetix Limited United Kingdom Manufacture and sale of robotics and consumable products 100%
Genescreen Limited United Kingdom Provision of biological services 100%
Genpak Limited United Kingdom Dormant 100%
Genetix Reagents Inc. USA Manufacture and sale of reagents in North America 100%
Genetix USA Inc. USA Marketing company for North America 100%
Genetix GmbH Germany Marketing company for Germany, Austria, Switzerland 100%
As at 31 December 2002, the activities of Genetix Reagents Inc were merged with Genetix USA Inc. 
13 Stocks
Group
2002 2001
£000 £000
Raw materials 921 1,053
Work in progress 15 42
Finished goods 586 682
1,522 1,777
14 Debtors
Group Company
2002 2001 2002 2001
£000 £000 £000 £000
Trade debtors 1,949 1,633 – –
Amounts due from subsidiary undertakings – – – 19
Other debtors 184 47 – 72
Prepayments 122 96 16 2
2,255 1,776 16 93
15 Creditors: amounts falling due within one year
Group Company
2002 2001 2002 2001
£000 £000 £000 £000
Trade creditors 770 888 – –
Amounts owed to related undertakings (note 21) 100 124 – –
Amounts owed to subsidiary undertakings (note 21) – – 908 1,146
Taxation and social security 79 79 – –
Other creditors 120 171 – –
Corporation tax 767 460 80 –
Accruals and deferred income 818 603 120 122
2,654 2,325 1,108 1,268 Notes to the accounts continued
for the year ended 31 December 2002
Genetix Group plc
Annual Report and Accounts
Notes to the accounts
33
16 Provisions for liabilities and charges
Product Deferred Group
warranties taxation 2002
£000 £000 £000
At 1 January 2002 158 – 158
Utilised during year (49) – (49)
Profit and loss charge 1 291 292
At 31 December 2002 110 291 401
Product warranties
A provision has been recognised for expected claims against product warranties on products sold during the year. It is expected that
most of this expenditure will be incurred in the next financial year.
Deferred taxation 
Deferred taxation has been provided in the financial statements as follows:
Group Company
2002 2001 2002 2001
£000 £000 £000 £000
Accelerated capital allowances 326 – – –
Other timing differences (35) – – –
291 – – –
17 Share capital
During the year a total of 704,259 ordinary shares of 50p (nominal value £352,130) were issued: 37,592 issued at 66.5p per share
related to non-cash compensation paid to Dr J Hill and J Cochrane; 666,667 issued at 150p per share pursuant to the sale and purchase
agreement dated 5 October 2000 between the Company and the shareholders of Genpak for further consideration shares.
In December 2002, a total of 4,850,000 ordinary shares of 50p (nominal value £2,425,000) were purchased on the market; 1,000,000
ordinary shares at a price of 32p and 3,850,000 at 27p, costing a total of £1,359,500 plus expenses of £6,798. These shares have been
cancelled and the value shown in the capital redemption reserve (note 18). 
2002 2001
£000 £000
Authorised share capital:
130,000,000 ordinary shares of 50p each 65,000 65,000
Issued share capital:
72,698,688 (2001: 76,844,429) ordinary shares of 50p each 36,349 38,422 Notes to the accounts continued
for the year ended 31 December 2002
Genetix Group plc
Annual Report and Accounts
Notes to the accounts
34
17 Share capital continued
Under the Company’s Executive Approved and Unapproved 2000 Share Option Schemes, directors and employees held options at 
31 December 2002 for 3,299,103 unissued ordinary shares as follows:
At 1 Jan At 31 Dec Exercise
Scheme 2002 Granted Exercised Lapsed 2002 price Normal exercise period
Approved 553,996 –– (57,332) 496,664 150p 24 Nov 2003 – 23 Nov 2010
Approved 97,890 –– (20,583) 77,307 158.5p 1 Aug 2004 – 31 Jul 2011
Approved 36,585 –– – 36,585 82p 26 Oct 2004 – 25 Oct 2011
Approved – 413,659 – (32,006) 381,653 66.5p 5 Mar 2005 – 4 Mar 2012
Approved – 234,684 – (30,000) 204,684 50p 30 Jul 2005 – 29 Jul 2012
Unapproved 723,336 –– (50,000) 673,336 150p 24 Nov 2003 – 23 Nov 2010
Unapproved 26,814 –– (7,098) 19,716 158.5p 1 Aug 2004 – 31 Jul 2011
Unapproved 85,366 –– – 85,366 82p 26 Oct 2004 – 25 Oct 2011
Unapproved – 1,135,956 – (42,164) 1,093,792 66.5p 5 Mar 2005 – 4 Mar 2012
Unapproved – 60,000 –– 60,000 50p 30 Jul 2005 – 29 Jul 2012
Unapproved – 170,000 –– 170,000 50p 9 Sep 2005 – 8 Sep 2012
1,523,987 2,014,299 – (239,183) 3,299,103
Under the Company’s Approved Sharesave Scheme, directors and employees held options at 31 December 2002 for 398,828 unissued
ordinary shares as follows:
At 1 Jan At 31 Dec Exercise 
Scheme 2002 Granted Exercised Lapsed 2002 price Normal exercise period
Sharesave 134,122 –– (117,657) 16,465 120p 1 Feb 2004 – 1 Aug 2004
Sharesave 29,249 –– (25,874) 3,375 120p 1 Feb 2006 – 1 Aug 2006
Sharesave 57,869 –– (54,818) 3,051 127p 1 Nov 2004 – 1 May 2005
Sharesave 3,401 –– – 3,401 127p 1 Nov 2006 – 1 May 2007
Sharesave – 344,756 – (34,088) 310,668 53.5p 1 Jun 2005 – 1 Dec 2005
Sharesave – 61,868 –– 61,868 53.5p 1 Jun 2007 – 1 Dec 2007
224,641 406,624 – (232,437) 398,828
Under other option agreements, certain directors and employees held options at 31 December 2001 for 980,903 unissued ordinary
shares as follows:
At 1 Jan At 31 Dec Exercise
Date of grant 2002 Granted Exercised 2002 price Normal exercise period
4 Oct 2000 886,524 –– 886,524 67.68p 29 Nov 2000 – 3 Oct 2010
11 Nov 2000 66,667 –– 66,667 150p 11 Nov 2003 – 10 Nov 2010
8 Mar 2001 27,712 –– 27,712 216.5p 4 Feb 2002 – 7 Mar 2011
980,903 –– 980,903
The share price at 31 December 2002 was 33.0p. The range during the year was 28.5p – 74.0p. Notes to the accounts continued
for the year ended 31 December 2002
Genetix Group plc
Annual Report and Accounts
Notes to the accounts
35
18 Reserves
Share Capital Profit
premium redemption Merger & loss 
account reserve reserve account Total
Group £000 £000 £000 £000 £000
At 1 January 2002 15,707 – (29,686) 5,310 (8,669)
Retained profit for the financial year ––– 1,365 1,365
Premium on new share issue 669 ––– 669
Cancellation of shares (note 17) – 2,425 – (1,360) 1,065
Cancellation expenses (note 17) ––– (6) (6)
Currency translation differences ––– (28) (28)
At 31 December 2002 16,376 2,425 (29,686 5,281 (5,604)
Share Capital Profit
premium redemption Merger & loss 
account reserve reserve account Total
Company £000 £000 £000 £000 £000
At 1 January 2002 15,707 –– (392) 15,315
Retained profit for the financial year ––– 2,063 2,063
Premium on new share issue 669 ––– 669
Cancellation of shares (note 17) – 2,425 – (1,360) 1,065
Cancellation expenses (note 17) ––– (6) (6)
At 31 December 2002 16,376 2,425 – 305 19,106
19 Notes to the cash flow statement
a)  Reconciliation of operating profit to net cash inflow from operating activities
Group
2002 2001
£000 £000
Operating profit 1,151 1,243
Depreciation 304 192
Amortisation 425 376
Loss/(profit) on sale of fixed assets 2 (49)
Decrease/(increase) in stocks 255 (725)
(Increase)/decrease in debtors (479) 1,096
Decrease in creditors (50) (58)
Exchange (gain)/loss on foreign currency (374)  61
Net cash inflow from operating activities 1,234 2,136 Notes to the accounts continued
for the year ended 31 December 2002
Genetix Group plc
Annual Report and Accounts
Notes to the accounts
36
19 Notes to the cash flow statement continued
b)  Analysis of changes in net funds
At At 
1 January Cash Exchange 31 December
2002 flow movement 2002
£000 £000 £000 £000
Cash at bank and in hand 20,142 351 374 20,867
20,142 351 374 20,867
c)  Reconciliation of net cash flow to movement in net funds
Group
2002 2001
£000 £000
Increase in cash in the year 351 398
Cash outflow from decrease in debt – 1,699
Change in net funds resulting from cash flows 351 2,097
Translation difference 374  (61)
Movement in net funds in the year 725 2,036
Net funds at 1 January 2002 20,142 18,106
Net funds at 31 December 2002 20,867 20,142
20 Capital commitments
There were no capital commitments as at 31 December 2002 or 31 December 2001.
21 Related party transactions
During the year, intercompany trading on normal commercial terms between Genetix Limited and Plastic Injection Limited, a company
owned 50% by M A Reid and 25% by J C Morgan, directors, amounted to sales of £nil (2001: £9,551) and purchases of £563,016
(2001: £708,180). Rent received for storage space was charged to Plastic Injection Limited of £nil (2001: £1,098). Amounts owed to
Plastic Injection Limited at the year end of £100,307 (2001: £123,822) are included within creditors (note 15).
In accordance with the exemptions from disclosure under Financial Reporting Standard 8, transactions with Group companies are not
disclosed as these are eliminated on consolidation.
22 Derivatives and other financial instruments
The Group’s financial instruments comprise cash and various non-derivative financial instruments such as trade debtors and trade
creditors. As permitted by Financial Reporting Standard 13 “Derivatives and other financial instruments: Disclosures” (“FRS 13”), 
short-term debtors and creditors have been excluded from all FRS 13 disclosures.
The main risks arising from financial instruments of the Group are interest risk, foreign exchange risk and liquidity risk. The Group’s
policies in respect of the management of these risks are as follows:
Interest risk: The Group finances its operations through a mixture of retained earnings, cash balances and receipts from share issues. 
The majority of the Group’s cash is invested with the Bank of Scotland currently earning interest at base rate. Notes to the accounts continued
for the year ended 31 December 2002
Genetix Group plc
Annual Report and Accounts
Notes to the accounts
37
22 Derivatives and other financial instruments continued
Foreign exchange risk: The Group does not engage in speculative transactions and its policy is to minimise its exposure to exchange rate
fluctuations by using forward contracts. Exchange exposure is reviewed on at least a quarterly basis and cover taken based on expected
cash flows within the next 12 months. The Group translates overseas profits and net assets in accordance with the accounting policy in
note 1. Translation differences are dealt with through the Group’s statement of total recognised gains and losses. At 31 December 2002,
the Group was committed to forward exchange contracts totalling US $4,937,000 at an average rate of 1.5088, all maturing before 
31 December 2003, with an unrecognised gain of £205,858 (2001: £247,479 gain, recognised in 2002).
Liquidity risk: None
The interest rate risk profile of the Group’s financial assets and liabilities is as follows:
Financial assets
Total Total
Sterling US $ Euro   2002 Sterling US $ Euro 2001 
£000 £000 £000 £000 £000 £000 £000 £000
Fixed rate 19,185 –– 19,185 18,680 202 107 18,989
Floating rate 1,150 427 45 1,622 457 552 115 1,124
Non-interest bearing 5 55 – 60 11 11 7 29
20,340 482 45 20,867 19,148 765 229 20,142
Disclosed as:
Cash at bank and in hand 20,867 20,142
Weighted average 
interest rate 3.93% 0.82% 2.28% 3.86% 5.14% 3.07% 1.73% 5.03%
There were no financial liabilities as at 31 December 2002 or 31 December 2001.
The main functional currencies of the Group are sterling, the US dollar and the euro. Currency exposures comprise the cash balances of
the Group that are not denominated in the functional currency of the operating unit involved, after the effects of forward contracts. As
at 31 December 2002, these exposures were as follows:
Currency profile
Total Total
Sterling US $ Euro 2002 Sterling US $ Euro 2001
£000 £000 £000 £000 £000 £000 £000 £000
Functional currencies:
Sterling –– 45 45 –– 223 223
US $ ––– – ––––
Euro ––– – ––––
–– 45 45 –– 223 223
In the opinion of the Board, the fair value of the Group’s financial assets is equal to the book value. Interest on floating rate assets and
liabilities is based upon the relevant national inter bank rates.
23 Ultimate controlling party
M A Reid, director and chief executive, is the ultimate controlling party of the Company. Notice of Annual General Meeting
Genetix Group plc
Annual Report and Accounts
Notice of Annual General Meeting
38
Notice is hereby given that the third Annual General Meeting of the Company will be held at the offices of WestLB Panmure Limited, 
Woolgate Exchange, 25 Basinghall Street, London EC2V 5HA at 11.30am on Friday 25 April 2003 for the transaction of the following business:
Ordinary business
1 To receive and adopt the accounts, the directors’ report, and the auditors’ report for the year ended 31 December 2002.
2 To approve the directors’ remuneration report for the year ended 31 December 2002.
To re-appoint the following directors retiring in accordance with the Company’s Articles of Association.
3 Mr J C Morgan.
4 Dr J F Burke. 
5 To elect Mr P S Jensen as a director of the Company in accordance with the Articles of Association.
6 To re-appoint Deloitte & Touche as auditors and authorise the directors to determine their remuneration.
Special business
To consider and, if thought fit, pass resolution 7 as an ordinary resolution and resolutions 8 and 9 as special resolutions.
7 That the Board be and it is hereby generally and unconditionally authorised to exercise all powers of the Company to allot relevant
securities (within the meaning of Section 80 of the Companies Act 1985) up to an aggregate nominal amount of £14,455,865 provided
that this authority is in substitution for any existing authorities conferred on the directors pursuant to section 80 of the said Act and
(unless previously revoked or varied by the Company in general meeting) shall expire at the conclusion of the next Annual General
Meeting of the Company save that the Company may before such expiry make an offer or agreement which would or might require
relevant securities to be allotted after such expiry and the Board may allot relevant securities in pursuance of such an offer or agreement
as if the authority conferred hereby had not expired.
8 That subject to the passing of the previous resolution the Board be and it is hereby empowered pursuant to Section 95 of the Companies Act
1985 to allot equity securities (within the meaning of Section 94 of the said Act) for cash pursuant to the authority conferred by the previous
resolution as if sub-section (1) of Section 89 of the said Act did not apply to any such allotment provided that this power shall be in addition
to any existing powers conferred on the directors pursuant to section 95 of the said Act and shall be limited to:
(i) the allotment of equity securities in connection with a rights issue or open offer or otherwise in favour of ordinary shareholders
where the equity securities respectively attributable to the interests of all ordinary shareholders are proportionate (as nearly as may
be) to the respective numbers of ordinary shares held by them subject to such exclusions as the directors may deem fit to deal with
fractional entitlements or with legal or practical problems arising in any overseas territory or with the requirements of any regulatory
body or stock exchange; and
(ii) the allotment (otherwise than pursuant to sub-paragraph 8(i) above) of equity securities up to an aggregate nominal value of
£1,817,467
and shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution save that the
Company may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry
and the Board may allot equity securities in pursuance of such an offer or agreement as if the power conferred hereby had not expired.
9 That the Company be and is hereby unconditionally and generally authorised in accordance with section 166 of the Companies Act
1985 (the “Act”) to make market purchases (as defined in Section 163 of the Act) of a maximum of 4,000,000 ordinary shares of 50p
each in the capital of the Company on such terms and in such manner as the directors may, from time to time, determine provided that:
(i) the minimum price which may be paid for each share is 1p;
(ii) the maximum price which may be paid for each share is an amount equal to 105 per cent. of the average of the middle market
quotations for an ordinary share of the Company as derived from the London Stock Exchange Daily Official List for the five business
days immediately preceding the day on which such share is contracted to be purchased; and
(iii) this authority shall expire at the conclusion of the next Annual General Meeting of the Company or if earlier on 30 September 2004
unless such authority is renewed prior to such time, provided that the Company may make a contract to purchase ordinary shares
under the authority conferred prior to the expiry of such authority which will or may be executed wholly or partly after the expiry 
of such authority and may make a purchase of ordinary shares pursuant to any such contract as if such authority had not expired. 
By order of the Board
Registered office
S C Hedger Queensway, New Milton, Hants  BH25 5NN
Secretary Registered in England and Wales
24 March 2003 Registered Number 4024856 Genetix Group plc
Annual Report and Accounts
Notice of Annual General Meeting
39
Notice of Annual General Meeting continued
Notes to the notice of the Annual General Meeting
1 A member entitled to attend and vote at the meeting is also entitled to appoint one or more proxies to attend and, on a poll, vote
instead of him. The proxy need not be a member of the Company. 
2 A form of proxy is enclosed with this notice. To be effective, the instrument appointing a proxy (together with any power of attorney or
other authority under which it is executed or a duly certified copy of such power) must be sent to the Company’s registrars, Lloyds TSB
Registrars, The Causeway, Goring-by-Sea, Worthing, West Sussex, BN99 6ZL, not less than 48 hours before the time for holding the
meeting or adjourned meeting as the case may be. A corporation may execute a proxy under its common seal or by the hand of a duly
authorised officer or other agent. Completion and return of the form of proxy will not preclude shareholders from attending and voting
in person at the meeting.
3 In accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, only those members entered on the register of
members of the Company as at 6.00pm on 23 April 2003 shall be entitled to attend or vote at the meeting in respect of the number 
of shares registered in their name at that time. Changes to entries on the register of members after 6.00pm on 23 April 2003 shall be
disregarded in determining the rights of any person to attend or vote at the meeting.
4 The register of directors’ shareholdings and transactions will be available for reference at the commencement and remain open until the
conclusion of the Annual General Meeting.
Explanatory notes
Directors’ remuneration report – resolution 2
The Directors’ Remuneration Report Regulations 2002 (‘the Regulations’) came into force on 1 August 2002 and it is a requirement of the
Regulations that all quoted companies produce a Board-approved report on directors’ remuneration for financial years ending 31 December
2002. This report is set out on pages 17 to 21 of the annual report and accounts. It is a further requirement of the Regulations that at the
general meeting of the company before which the company’s annual accounts for the financial year are laid, an ordinary resolution be put
to shareholders seeking approval for the remuneration report.
Authority to allot shares – resolution 7
This resolution set out in the notice of the Annual General Meeting will be proposed to give the directors a new and unconditional
authority, for the purposes of Section 80 of the Act, to allot relevant securities up to an aggregate nominal amount of £14,455,865. 
This amount is the maximum authority recommended by the ABI guidelines and approximates to one-third of the existing issued ordinary
share capital of the Company, together with the relevant securities which may be issued pursuant to outstanding options. There is no
present intention of exercising this authority.
Disapplication of pre-emption rights – resolution 8
Section 89 of the Act grants existing members pre-emption rights i.e. it provides that on the allotment of new shares for cash must first be
offered to existing members in proportion to the number of shares already held by such members. The directors believe that it is in the best
interests of the Company that the Board should have limited power to allot part of the Company’s authorised but unissued equity share
capital for cash without first having to offer such shares to existing shareholders. There is no present intention of using these powers. 
The power if granted will relate to allotments of equity securities having an aggregate nominal value not exceeding £1,817,467, being
approximately 5 per cent. of the existing issued ordinary share capital of the Company.
General authority to buy back shares – resolution 9
The directors of Genetix seek authority to purchase up to 4,000,000 ordinary shares (representing approximately 5.5 per cent. of the
current issued ordinary share capital of the Company). The maximum price per share which may be paid on any exercise of this authority
will not exceed 105 per cent. of the average of the middle market quotations for an ordinary share of the Company for the five business
days immediately preceding the date on which such share is contracted to be purchased. The minimum price will be 1p per ordinary share.
This authority is a renewal of the authority previously granted on 17 September 2002.
The directors do not intend to exercise the Company’s power to purchase its own shares other than in circumstances where, in the light of market
conditions prevailing at the time, they consider this to be in the shareholders’ best interests and where this would result in an increase in earnings
per share. In deciding whether or not to exercise this authority, the directors will continue to take into account other investment opportunities
including acquisitions. The Company would use its distributable reserves to effect the purchase of the ordinary shares. Any ordinary share
purchased by the Company pursuant to this authority will be cancelled and the number of ordinary shares in issue will be reduced accordingly.
The authority, if granted, will expire on the earlier of the conclusion of the next Annual General Meeting or 30 September 2004.
On 23 March 2003, being the latest practicable date prior to the publication of this document, there were options outstanding over
4,993,434 ordinary shares, such options having been granted under the rules of the Genetix Executive and Sharesave Options Schemes or
otherwise. In total these represent approximately 6.9 per cent. of the Company’s issued share capital as at 23 March 2003 and would
represent approximately 7.3 per cent. of the adjusted issued share capital if the full proposed authority to buy back shares was used. Genetix Group plc
Annual Report and Accounts
5 year summary
40
5 year summary
2002 2001 2000 1999 1998
£000 £000 £000 £000 £000
Profit & loss
Turnover 12,572 12,419 10,730 7,334 5,228
Operating profit* 1,513 1,605 3,502 3,145 1,992
Exceptional items – – (676) ––
Goodwill (362) (362) (88) (1) –
Net interest receivable 799 990 132 58 22
Profit before tax 1,950 2,233 2,870 3,202 2,014
Taxation (585) (752) (967) (1,013) (625)
Profit after tax 1,365 1,481 1,903 2,189 1,389
Minority interest – –– 2 –
Profit for financial year 1,365 1,481 1,903 2,191 1,389
Dividends – – (2,150) (300) (167)
Retained profit/(loss) 1,365 1,481 (247) 1,891 1,222
Operating margin 12% 13% 33% 43% 38%
Adjusted earnings per share 2.23p 2.38p 4.17p 3.71p 2.35p
Balance sheet
Fixed assets 9,156 9,541 10,130 975 943
Working capital 1,890 1,688 2,072 856 506
Net cash 20,867 20,142 18,106 3,100 1,463
Taxation (1,019) (460) (810) (783) (625)
Other (149) (158) (233) (70) (100)
Net assets 30,745 30,753 29,265 4,078 2,187
Cash flow
Cash from operations 1,234 2,136 1,636 2,594 1,641
Net interest 799 990 132 58 22
Tax rebate/(paid) 13 (1,102) (1,139) (855) (236)
Capital expenditure (350) (758) (2,140) (75) (68)
Acquisitions and disposals – 827 (882) – 4
Equity dividends paid – – (2,150) (300) (167)
Cash flow before financing 1,696 2,093 (4,543) 1,422 1,196
Issue of shares 21 4 19,299 ––
Re-purchase of shares (1,366) ––––
(Decrease)/increase in debt – (1,699) 1,354 (22) (27)
Increase in cash 351 398 16,110 1,400 1,169
* before exceptional items and goodwill. 01 Highlights
02 Chairman’s statement
03 Key events of 2002
04 Science in focus
06 Chief executive’s review
08 Financial review
10 Directors and company secretary
11 Scientific Advisory Board and Advisers
12 Directors’ report
17 Directors’ remuneration report
22 Independent auditors’ report
23 Consolidated profit and loss account
24 Consolidated and company balance sheets
25 Consolidated cash flow statement
26 Consolidated statement of total recognised gains and losses
26 Reconciliation of movements in consolidated shareholders’ funds
27 Notes to the accounts
38 Notice of Annual General Meeting
40 5 year summary
Genetix is a leading developer of automated solutions for 
the understanding of systems biology
We aim to:
– enable scientists to work at the cutting edge of genomics,
proteomics, cell biology and high-throughput screening
– build on our close links with leading scientific groups 
around the world
– create cost effective and profitable solutions based on 
our platform of innovative technologies Genetix Group plc
Queensway 
New Milton 
Hampshire 
BH25 5NN
United Kingdom
Tel +44 (0) 1425 624600  
Fax +44 (0) 1425 624700
www.genetix.com
Genetix Group plc Annual Report and Accounts 2002
Genetix Group plc
Annual Report and Accounts
for the year ended 31 December 2002