<PAGE>

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 20-F

(Mark One)
/ / Registration statement pursuant to Section 12(b) or 12(g) of the Securities
    Exchange Act of 1934

or

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934 FOR THE FISCAL YEAR ENDED MARCH 31, 2001

or

/ / Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 for the transition period from       to      .
                                               ------  ------

                         Commission file number: 0-30846

                               GEMINI GENOMICS PLC
             (Exact Name of Registrant as Specified in Its Charter)

                                ENGLAND AND WALES
                 (Jurisdiction of Incorporation or Organization)

                          162 SCIENCE PARK, MILTON ROAD
                           CAMBRIDGE CB4 0GH, ENGLAND
                               (44)(1223) 435-300
                    (Address of Principal Executive Offices)

                          -----------------------------

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

Securities registered or to be registered pursuant to Section 12(g) of the Act:

    TITLE OF EACH CLASS               NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------------------------- -----------------------------------------
  Ordinary Shares, nominal                       Nasdaq National Market*
   value (pound)0.05 each
    ("Ordinary Shares")

  American Depositary Shares,                     Nasdaq National Market
each representing 2 Ordinary
        Shares ("ADSs")

------------------
*    Not for trading but only in connection with the registration of the ADSs
pursuant to the requirements of the Securities and Exchange Commission

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

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.

     Ordinary Shares                                          64,742,260

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

           (1) X                                              (2) X

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

      Item 17                                          Item 18 X
              ----                                             -


<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                <C>
Item 1.  Identity of Directors, Senior Management and Advisors.........................................2

Item 2.  Offer Statistics and Expected Timetable.......................................................2

Item 3.  Key Information...............................................................................2

Item 4.  Information on the Company...................................................................14

Item 5.  Operating and Financial Review and Prospects.................................................39

Item 6.  Directors, Senior Management and Employees...................................................45

Item 7.  Major Shareholders and Related Party Transactions............................................57

Item 8.  Financial Information........................................................................58

Item 9.  The Offer and Listing........................................................................58

Item 10.  Additional Information......................................................................59

Item 11.  Quantitative and Qualitative Disclosures About Market Risk..................................75

Item 12.  Description of Securities Other than Equity Securities......................................77

Item 13.  Defaults, Dividend Arrearages and Delinquencies.............................................78

Item 14.  Material Modifications to the Rights of Security Holders and Use of Proceeds................78

Item 15.  [Reserved]..................................................................................79

Item 16.  [Reserved]..................................................................................79

Item 17.  Financial Statements........................................................................80

Item 18.  Financial Statements........................................................................80

Item 19.  Exhibits....................................................................................80
</TABLE>


      We have registered the trademark "Gemini Research" together with our
Gemini Research logo in the United States and the United Kingdom. The name
"Eurona" is registered as a Swedish trademark. We have filed trademark
registrations for "Gemini Genomics" and our Gemini Genomics logo in the
United States, the United Kingdom and the European Union. All other
trademarks, service marks or trade names referred to in this annual report
are the property of their respective owners.


                                       1

<PAGE>


                                     PART I

ITEM 1.           IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

         Not Applicable.

ITEM 2.           OFFER STATISTICS AND EXPECTED TIMETABLE

         Not Applicable.

ITEM 3.           KEY INFORMATION

SELECTED CONSOLIDATED FINANCIAL DATA

         The following table contains our selected consolidated statement of
operations information for the years ended March 31, 1997, 1998, 1999, 2000
and 2001. We have derived our selected consolidated statement of operations
information for the years ended March 31, 1999, 2000 and 2001 from our
audited consolidated financial statements included in this annual report. We
have derived our selected consolidated statement of operations information
for the years ended March 31, 1997 and 1998 from our audited consolidated
financial statements not included in this annual report. Our historical
results are not necessarily indicative of our future results.

<TABLE>
<CAPTION>
                                                                         YEAR ENDED MARCH 31,
                                                      ---------------------------------------------------------
 CONSOLIDATED STATEMENT OF OPERATIONS INFORMATION:       1997       1998        1999        2000        2001
----------------------------------------------------  ---------  ----------  ----------  ----------  ----------
                                                           (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S>                                                   <C>        <C>         <C>         <C>         <C>
Revenue.............................................       $ -         $ -        $198        $164     $ 1,579
Total costs and expenses............................     3,296       7,899      10,892      15,554      23,456
                                                      ---------  ----------  ----------  ----------  ----------
Loss from operations................................    (3,296)     (7,899)    (10,694)    (15,390)    (21,877)
Foreign currency gain...............................         -           -           -           -       4,472
Interest income.....................................        18         164         269         478       3,841
Interest expense....................................      (185)       (388)       (320)       (493)       (477)
                                                      ---------  ----------  ----------  ----------  ----------
Net loss before taxation............................    (3,463)     (8,123)    (10,745)    (15,405)    (14,041)
                                                      ---------  ----------  ----------  ----------  ----------
Taxation credit.....................................         -           -           -           -         880
                                                      ---------  ----------  ----------  ----------  ----------
Net loss ...........................................   $(3,463)    $(8,123)   $(10,745)   $(15,405)   $(13,161)
                                                      ---------  ----------  ----------  ----------  ----------
Net loss per share--basic and diluted...............    $(1.58)     $(0.41)     $(0.54)     $(0.73)     $(0.22)
Net loss per ADS--basic and diluted.................    $(3.16)     $(0.82)     $(1.08)     $(1.46)     $(0.44)
Shares used in calculation of net loss per
share and per ADS...................................  2,197,260  20,000,000  20,000,000  21,182,195  60,140,117
</TABLE>


                                      -2-

<PAGE>


         The following table contains our selected consolidated balance sheet
information as of March 31, 1997, 1998, 1999, 2000 and 2001. We have derived
our selected consolidated balance sheet information as of March 31, 2000 and
2001 from our audited consolidated financial statements included in this
annual report. We have derived our selected consolidated balance sheet
information as of March 31, 1997, 1998 and 1999 from our audited consolidated
financial statements not included in this annual report.

<TABLE>
<CAPTION>
                                                                    AS OF MARCH 31,
                                               -----------------------------------------------------------
   CONSOLIDATED BALANCE SHEET INFORMATION:         1997        1998       1999        2000        2001
---------------------------------------------- ----------- ----------- ----------- ----------- -----------
                                                                    (IN THOUSANDS)
<S>                                            <C>         <C>         <C>         <C>         <C>
Cash and cash equivalents....................      $2,158        $724     $12,165     $13,414     $79,576
Working capital..............................         387      (1,903)      7,343       6,985      74,314
Total assets.................................       3,316       2,735      14,766      22,236      92,460
Long-term obligations, less current portion..         765       1,281         636       2,987       1,862
Total shareholders' equity (deficit).........         740      (1,488)      8,806      11,888      81,355
Ordinary share capital.......................      $   16     $ 1,646      $1,646     $ 4,192     $ 5,238
</TABLE>

         We have prepared our consolidated financial statements in accordance
with U.S. generally accepted accounting principles. Our selected consolidated
financial information for the year ended March 31, 2000 reflects our
acquisition of Eurona Medical AB in December 1999. We accounted for this
acquisition as a purchase. You should read Note 11 to our consolidated
financial statements for additional financial information about this
acquisition.

EXCHANGE RATE INFORMATION

         We prepare the financial statements of our operating subsidiaries
using the currency of the country in which the subsidiary is incorporated and
then translate them into British pounds, our functional currency, for the
preparation of our consolidated financial statements. We then translate our
consolidated financial statements into U.S. dollars, our reporting currency.
The table below provides, for the periods indicated, the period-end, average,
high and low exchange rates between the British pound and the U.S. dollar
(expressed in U.S. dollars per British pound), based on the noon buying rate.
The average rates for each period reflect the average of the noon buying
rates on the last business day of each month during the relevant period. We
have provided these rates for your convenience and they are not the exchange
rates we used to prepare our consolidated financial statements included in
this annual report.

         The table below provides, for the periods indicated, the high, low,
average and period-end exchange rates between the British pound and the U.S.
dollar (expressed in dollars per pound) based on the noon buying rates. The
average rates for each period reflect the average of the noon buying rates on
the last business day of each month during the relevant period. On May 18,
2001, the noon buying rate was (pound)1.00=$1.433.

<TABLE>
<CAPTION>
           YEAR ENDED MARCH 31,                 HIGH          LOW       AVERAGE RATE  END OF PERIOD
------------------------------------------  ------------  ------------  ------------  ------------
                                                        (U.S. DOLLARS PER BRITISH POUND)
<S>                                         <C>           <C>           <C>            <S>

2001......................................      1.598         1.400         1.479         1.419
2000......................................      1.677         1.552         1.608         1.592
1999......................................      1.722         1.598         1.653         1.614
1998......................................      1.704         1.578         1.647         1.677
1997......................................      1.695         1.495         1.599         1.645
</TABLE>


                                      -3-

<PAGE>


         The table below sets forth the high and low exchange rates between
the British pound and the U.S. dollar (expressed in dollars per pound), for
the six months ending April 30, 2001 and for the current month.

<TABLE>
<CAPTION>
                                                  HIGH             LOW
                                            ---------------   -------------
                                            (U.S. DOLLARS PER BRITISH POUND)
<S>                                         <C>               <C>
2001
May (through May 18).......................       1.440           1.418
April......................................       1.447           1.420
March......................................       1.473           1.419
February...................................       1.478           1.439
January....................................       1.505           1.457
2000
December...................................       1.496           1.437
November...................................       1.448           1.400
</TABLE>

         There are currently no U.K. foreign exchange control restrictions on
remittances of dividends on our ordinary shares or the ADSs or on the conduct
of our operations.

RISK FACTORS

         Except for the historical information presented, some statements in
this report are forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act. These
forward-looking statements are subject to a number of risks and uncertainties
that could cause our actual results to differ materially from the results,
performance or achievements expressed or implied by such statements. These
statements are based on our current expectations and projections about future
events, but actual results may differ materially. These risks and
uncertainties include, but are not limited to, the risks set forth below.

RISKS RELATED TO OUR BUSINESS

WE HAVE GENERATED ONLY MODEST REVENUES TO DATE AND EXPECT TO INCUR LOSSES FOR
THE FORESEEABLE FUTURE, WHICH COULD CAUSE THE VALUE OF OUR ADSS TO DECLINE.

         Since our inception, we have generated only modest revenues. Our
expenses have exceeded our revenues in each of the years since our inception.
If our gene discovery program does not lead to the discovery of disease genes
for use in developing marketable drugs or diagnostics, we will not have
licensable products and will not generate significant revenues or become
profitable. We incurred net losses of $13.2 million in the year ended March
31, 2001 and $15.4 million in the year ended March 31, 2000. As of March 31,
2001, our accumulated deficit was $51.4 million. We expect to continue to
experience significant operating losses in the future as we continue our
research and development efforts. Our future losses could cause the market
value of our ADSs to decline.

WE MAY NEED ADDITIONAL CAPITAL IN THE FUTURE TO SUPPORT OUR GROWTH, AND IF WE
DO NOT HAVE AVAILABLE FINANCING WE COULD HAVE TO CURTAIL OUR OPERATIONS OR
ENTER INTO UNFAVORABLE AGREEMENTS.

         We believe that our current cash resources and funds available to us
through existing financing arrangements, will be sufficient to meet our
requirements for at least 12 months.


                                      -4-

<PAGE>


Substantially all of our current cash resources were derived from a public
offering of our ADSs in July 2000. We are not currently generating sufficient
revenues to fund our ongoing operations and, even if we use all of our cash
resources, we still might not be able to generate sufficient revenues to fund
our ongoing cash requirements. During the year ended March 31, 2001, we used
$9.9 million in our operating activities and $2.3 million in our investing
activities. We intend to increase the growth in our business, and anticipate
our cash requirements will continue to increase. We have $3.0 million
available under a line of credit, which we anticipate will largely cover our
currently planned capital expenditure requirements for scientific and
information technology equipment for the next 12 months. Changes in our
research and development programs or other changes affecting our operating
expenses could, however, alter the timing and amount of our expenditures and
when we would require additional funding. If we require additional funding,
it might not be available to us on favorable terms or at all. If we cannot
obtain adequate funding, we could be required to (1) curtail our operations
significantly or (2) obtain funds by entering into agreements on less
favorable terms than we could have obtained if we had adequate funds and/or
which require us to relinquish rights which we otherwise might have been able
to retain.

IF WE DO NOT FIND ANY GENES OF COMMERCIAL INTEREST, WE WILL NOT GENERATE
SIGNIFICANT ADDITIONAL REVENUES AND WILL NOT BECOME PROFITABLE.

         We focus our gene discovery approach on the search for genes that
affect common human diseases, many of which are affected by several different
genes and other factors. Scientific understanding about which genes cause
common diseases is limited. To be successful, we must not only discover genes
that are related to these diseases, we must also discover genes that might be
suitable candidates for the development of drugs or diagnostics. Even if we
successfully identify disease genes, if we do not find genes with
commercially viable uses we will not generate significant additional revenues
and will not become profitable.

IF WE CANNOT SECURE AND MAINTAIN OUR INTELLECTUAL PROPERTY RIGHTS, WE MAY NOT
BE ABLE TO REALIZE THE VALUE OF OUR GENE DISCOVERIES.

         We intend to continue to seek patent protection for our discoveries
of specific links between certain genes and diseases. The patentability of
genetic information is, however, uncertain, and involves complex legal and
factual questions and has recently been the subject of much controversy. We
base our patent applications on the discovery of a relationship between a
gene or a gene fragment and a disease rather than on the discovery of a gene
alone. Currently, this satisfies the utility or industrial applicability
requirements of patent law in most jurisdictions. We have currently filed 48
patent applications worldwide based on our discoveries. Our patent
applications have resulted in six granted patents in the United States, two
granted patents in Australia and three granted patents in New Zealand.
Patents on any of our pending or future patent applications, however, might
not be granted to us, and the scope of any of our issued patents might not be
broad enough to meaningfully protect us. If we are unable to patent our gene
discoveries, we will not be able to license our discoveries and will not
generate any revenues from them. Further, patents have only been issued to us
in certain countries and third parties can make, use and sell products using
our patented gene discoveries in any country where we do not have patent
protection.


                                      -5-

<PAGE>


         Our ability to successfully license our gene discoveries will also
partly depend on whether third parties have pre-existing patent or other
rights which preclude or limit us from fully licensing and marketing these
gene discoveries. Our competitors may obtain patent protection or other
intellectual property rights that would limit our ability to license our gene
discoveries for commercialization in drugs or diagnostics.

         We may become involved in disputes in the future about the ownership
of rights to any technology or intellectual property developed by us or based
on our gene discoveries. These and other possible disagreements could lead to
delays in or, if determined adversely to us, prevent the commercialization of
some of our gene discoveries or require or result in litigation or
arbitration, which could be time-consuming and expensive.

EVEN IF WE FIND GENES OF COMMERCIAL INTEREST, WE MUST LICENSE THEM ON
COMMERCIALLY FAVORABLE TERMS OR OUR FUTURE REVENUES COULD BE LOWER THAN WE
ANTICIPATE.

         As part of our commercial strategy, we intend to enter into
licensing agreements with our customers for the development and
commercialization of drugs and diagnostics using our gene discoveries. Even
if we discover genes of commercial interest and secure intellectual property
protection for those discoveries, we will still have to negotiate licensing
agreements with pharmaceutical, biotechnology or diagnostic companies. Our
ability to negotiate commercially favorable terms will depend on a wide
variety of factors, many of which will not be within our control. The
prevailing level of competition and the value a potential customer attaches
to the prospects of our gene discovery, scientific approach and technology
compared to others are among the factors that will influence the terms of our
licensing agreements. Because our scientific approach and technology are
relatively new, the value that our customers will place on our gene
discoveries or that we will receive in any future licensing agreements
between our customers and us is uncertain. Accordingly, we might not be able
to license our gene discoveries on commercially favorable terms, which could
cause our future revenues to be lower than we anticipate.

IF OUR CUSTOMERS DO NOT SUCCESSFULLY DEVELOP OR COMMERCIALIZE DRUGS OR
DIAGNOSTICS USING OUR GENE DISCOVERIES, WE WILL NOT GENERATE ANY SIGNIFICANT
REVENUES FROM THOSE DISCOVERIES.

         We intend to enter into license agreements with our customers for
our gene discoveries and expect that these license agreements will provide us
with milestone payments upon reaching specified product development stages
and royalty payments based on ultimate product sales. Accordingly, we need
our customers to successfully develop products based on our gene discoveries
to generate revenues. To successfully develop products, our customers will
have to conduct clinical trials, obtain required regulatory approvals and
successfully manufacture, introduce and market those products.

         There are a number of risks inherent in the development of drugs or
diagnostics based on our gene discoveries. These products could be
ineffective or toxic. These products, if safe and effective, could be
difficult or uneconomical to manufacture or to market, or others could market
superior or equivalent products.

         We expect that the licensing agreements we enter into will give our
customers significant discretion in deciding whether to pursue further
development of any products based on our gene discoveries. We will also not
be able to control the amount and timing of resources


                                      -6-

<PAGE>


our customers will devote to their development programs or potential
products. In addition, we might not recognize revenues from those milestone
or royalty payments for a number of years, if ever. If our customers do not
successfully develop or commercialize products based on our gene discoveries,
we will not generate any significant revenues from our discoveries.

IF OUR CUSTOMERS DO NOT SECURE AND MAINTAIN ALL NECESSARY REGULATORY
APPROVALS TO SELL DRUGS AND DIAGNOSTICS BASED ON OUR GENE DISCOVERIES, SALES
OF THOSE PRODUCTS WILL NOT BE POSSIBLE AND THEY WILL NOT PROVIDE US WITH ANY
ROYALTY REVENUES.

         Our customers will require the necessary regulatory approvals from
the U.S. Food and Drug Administration and national health authorities in
other countries to manufacture and market any drugs and diagnostics they
develop based on our gene discoveries. These agencies impose substantial
requirements, and obtaining these approvals typically takes a number of years
depending on the type, complexity and novelty of the product. Because the
drugs or diagnostics resulting from our gene discoveries might involve the
application of new technologies or a new therapeutic or diagnostic approach,
substantial additional review could be required. This could cause significant
delays or excessive costs for our customers in their efforts to secure
necessary approvals. Because of this, our customers could decide not to
pursue the required approvals or might not obtain the required approvals in a
timely manner or at all, even if they decide to pursue them. Our customers'
manufacturing and marketing activities will also be subject to continuing
regulatory review, even after they obtain all required regulatory approvals.
If previously unknown problems with a product, manufacturer or facility are
discovered, restrictions could be placed on the product or manufacturer,
including withdrawal of the product from the market. If our customers fail to
obtain or maintain the required regulatory approvals, sales of the affected
product based on our gene discovery would not be possible and we would not
generate any royalty revenues and could lose remaining milestone payments.

IF WE DO NOT HAVE ACCESS TO THIRD PARTY TECHNOLOGIES, OUR GENE DISCOVERY
PROCESS COULD BE MORE EXPENSIVE AND TIME CONSUMING.

         The cost and speed of our gene discovery process currently depends
on our technology alliances, which give us access to sophisticated gene
sequence information, technology and equipment. If we do not access these
technologies through our technology alliances, our disease gene discovery
process could become more expensive and time consuming. Although we have
entered into a number of agreements with our technology collaborators to gain
access to these technologies and equipment for our projects covered by those
agreements, these projects could be terminated prior to their successful
completion. We also might not be able to enter into additional technology
alliances that we will require in order to support our other gene discovery
programs.

WE DEPEND UPON THIRD PARTIES FOR CLINICAL DATA COLLECTION AND THE EXTRACTION
AND STORAGE OF GENETIC MATERIAL, AND IF WE DO NOT HAVE ADEQUATE ACCESS TO
THOSE DATA AND MATERIALS, WE MIGHT NOT HAVE THE RESOURCES WE NEED TO CONTINUE
OUR GENE DISCOVERY PROGRAM.

         We depend upon third parties for the collection of extensive and
detailed proprietary clinical data and the collection and storage of large
quantities of genetic material (including DNA) and other biological samples.
Apart from our operations in Newfoundland, Canada, where we have established
a subsidiary for the collection of clinical data, we obtain all of our
clinical data and related genetic samples from our clinical collaborators.
Although we have


                                      -7-

<PAGE>

entered into a number of agreements with our clinical collaborators for the
collection of this information, we might not continue to have adequate access
to the clinical data and the genetic material and other biological samples we
need to support our ongoing gene discovery programs. Our agreements with our
clinical collaborators typically are renewable, but individual collaborators
could decide not to renew their agreements. While these agreements typically
provide that data collected in the past will remain our property, we might
not be able to effectively enforce those terms in the jurisdiction of the
collaborator and enforcing those terms could be very time-consuming and
expensive.

         In addition, the cost of entering new clinical collaborations is
increasing because of the increased commercial interest in genomics. While we
believe that the group of collaborators that we have established over the
last few years is one of our competitive advantages, we also recognize that
adding future clinical collaborators may be more competitive and expensive.

         If we are not able to continue to obtain clinical data and
biological samples, we might not have the resources we need to continue our
gene discovery program.

THE PERFORMANCE OF OUR COMPUTER SYSTEMS IS CRITICAL TO OUR BUSINESS, AND IF
WE EXPERIENCE SYSTEM FAILURES, OUR GENE DISCOVERY PROGRAM COULD BE HINDERED.

         The performance of our computer systems is critical to our ability
to identify and determine the specific function of genes. We have proprietary
rights to the clinical data that we collect through our clinical
collaborators and to genetic information derived from that clinical data. We
access other genetic information from our technology collaborators.
Increasing amounts of genetic data (as opposed to clinical data) are
available in the public domain. Accordingly, our computer systems must
effectively handle large amounts of proprietary and non-proprietary
information. The performance of our computer systems may impact whether we
discover a disease gene, or how quickly we make a discovery.

         We attain and store data using sophisticated computer software and
systems, which may contain undetected errors or failures. We may not succeed
in upgrading our databases or other technologies or integrating our current
technology with other new or existing technologies. To the degree we depend
on third party suppliers of technology, those suppliers might not provide
useful services or their technologies might not function as anticipated or be
successfully integrated with our own technology.

OUR COMPETITORS COULD MAKE FASTER OR MORE EFFECTIVE DISCOVERIES THAN WE DO,
WHICH COULD PREVENT US FROM SUCCESSFULLY LICENSING OUR DISEASE GENE
DISCOVERIES.

         There is intense competition among organizations attempting to
identify genes related to human health and disease. We compete in these areas
with biotechnology and diagnostic companies, academic and research
institutions and public funded agencies. For example, deCode Genetics,
Genset, Myriad Genetics, Millennium Pharmaceuticals and Oxagen all use an
approach that is similar to ours based on the study of human populations to
discover disease genes. Some of these companies collect data from families
with a particular disease or access historical medical records and match
information in these records with information obtained from DNA samples. A
number of these companies have already identified disease genes. In addition,
numerous pharmaceutical companies, including GlaxoSmithKline, have developed
genomic research programs to identify genes affecting specific diseases,
either alone or in


                                      -8-

<PAGE>


partnership with some of our competitors. A number of companies including
Celera Genomics (a division of Applera Corporation), CuraGen, Human Genome
Sciences and Incyte Pharmaceuticals are involved in identifying genes using
gene sequencing technologies and equipment and other technologies which also
may be complementary to our approach. Some of our technology collaborators,
including Celera Genomics and CuraGen, may also be potential competitors to
us. Competition among all of these entities attempting to identify genes
related to human health and disease is intense and is expected to increase.
To compete in our industry, we will need to demonstrate that our approach,
technologies and capabilities are superior to those of our competitors. Many
of our competitors have substantially greater capital resources, research and
development budgets, scientific and other facilities and human resources than
we do. These competitors may discover disease genes before us or which are
more effective than those discovered by us, either of which could prevent us
from successfully licensing a disease gene discovery. We also face
competition from these and other entities in gaining access to clinical
collaborators.

CONSOLIDATION AND OTHER TRENDS WITHIN THE PHARMACEUTICAL AND DIAGNOSTIC
INDUSTRIES COULD LIMIT THE AMOUNT OUR CUSTOMERS WILL SPEND FOR OUR DISEASE
GENE DISCOVERIES, WHICH COULD CAUSE OUR FUTURE REVENUES TO BE LOWER THAN WE
ANTICIPATE.

         We expect that our customers will primarily be from the
pharmaceutical and diagnostic industries and that reductions and delays in
research and development expenditures by companies in these industries will
adversely affect us. In addition, mergers and consolidation in the
pharmaceutical and diagnostics industries will reduce the potential number of
our customers and could limit competition among these customers for our
disease gene discoveries and the amount our customers are willing to pay for
our disease gene discoveries. If any of these events occurred, we could
generate less revenues than we anticipate.

OUR RESEARCH, FINDINGS, PRODUCTS BASED ON OUR DISCOVERIES OR OUR TECHNOLOGIES
COULD BECOME OBSOLETE, WHICH COULD MAKE OUR GENE DISCOVERIES UNMARKETABLE.

         The genomics field has changed rapidly and significantly. We expect
that this will continue. Our future success will depend in large part on our
ability to maintain a competitive position in the genomics field. Rapid
technological developments by us or others could make our research
techniques, findings and products based on our discoveries or our
technologies obsolete. Less expensive or more effective drug discoveries and
drug discovery technologies, including drugs and technologies that may be
unrelated to genomics, could also make our gene discoveries obsolete and
unmarketable. We may not be able to make the enhancements to our technology
necessary to compete successfully with newly emerging technologies.

IF THE VALIDITY OF THE CONSENTS FROM OUR VOLUNTEERS OR OUR CLINICAL
COLLABORATORS' VOLUNTEERS IS SUCCESSFULLY CHALLENGED, WE COULD BE FORCED TO
STOP USING SOME OF OUR CLINICAL OR GENETIC RESOURCES, WHICH COULD HINDER OUR
GENE DISCOVERY PROGRAMS.

         We have attempted to ensure that all clinical data and genetic and
other biological samples that we receive from our Canadian subsidiary and our
clinical collaborators have been collected from volunteers who have provided
our collaborators or us with appropriate consents for the data and samples to
be used for purposes which extend to cover our gene discovery program and
other activities. In addition, we have attempted to ensure that data and
samples that have been collected by our clinical collaborators are provided
to us on an anonymous basis.


                                      -9-

<PAGE>

We have also attempted to ensure that the volunteers from whom our data and
samples are collected do not retain or have conferred on them any proprietary
or commercial rights to the data or samples or any discoveries derived from
them. Our clinical collaborators are based in a number of different countries
(the United Kingdom, Sweden, China and Australia), and we also collect data
through our Canadian subsidiary. While we believe that one of our advantages
is the number of different ethnic groups we have information about in our
clinical database, the fact that our data and samples come from and are
collected by entities based in different countries results in complex legal
questions regarding the adequacy of consents and the status of genetic
material under a large number of different legal systems. The consents
obtained in any particular country could be challenged in the future, and
those consents may prove invalid, unlawful or otherwise inadequate for our
purposes. Any findings against us or our clinical collaborators could deny us
access to or force us to stop using some of our clinical or genetic resources
which could hinder our gene discovery programs. Also, we could become
involved in legal challenges which could consume a substantial proportion of
our management and financial resources.

IF HEWLETT PACKARD INTERNATIONAL BANK, ONE OF OUR CREDIT PROVIDERS, IS
GRANTED THE FURTHER WARRANTS THAT WE MAY ISSUE, OR IF OUR DIRECTORS, OFFICERS
OR EMPLOYEES EXERCISE SHARE OPTIONS UNDER ONE OF OUR SHARE OPTION SCHEMES, WE
MAY BE REQUIRED TO RECORD CHARGES IN OUR STATEMENT OF OPERATIONS WHICH WOULD
CAUSE A DECREASE IN OUR FINANCIAL RESULTS AND COULD CAUSE THE MARKET VALUE OF
THE ADSs TO DECLINE.

         As part of a line of credit with Hewlett Packard International Bank,
we have issued warrants to purchase 40,000 ordinary shares, each at an
exercise price of (pound)0.05 ($0.07) per ordinary share, and, in the event
that we draw further funds, we have agreed to issue warrants to purchase up
to an additional 80,000 ordinary shares, each at an exercise price of
(pound)0.05 ($0.07) per ordinary share. If these warrants are granted, any
excess of the market value of the ordinary shares compared to the exercise
price of the warrants will result in a corresponding charge to our statement
of operations. If certain share options issued to U.K. directors, officers
and employees are exercised, we will be liable under current U.K. legislation
to pay a national insurance charge on the difference between the market value
of the ordinary shares on the date of exercise and the exercise price of the
share options exercised. Either of these events would cause a decrease in our
financial results and could cause the market value of the ADSs to decline.

CURRENCY FLUCTUATIONS COULD CAUSE A DECREASE IN OUR FINANCIAL RESULTS.

         We are subject to risks of currency fluctuation. Substantially all
of our business is currently conducted in currencies other than the U.S.
dollar, principally the British pound and, to a lesser extent, the Swedish
krona. We prepare the financial statements of our operating subsidiaries
using the currency of the country in which the subsidiary is incorporated and
then translate them into British pounds, our functional currency, for the
preparation of our consolidated financial statements. We then translate our
consolidated financial statements into U.S. dollars, our reporting currency.
We have translated (1) our revenues and expenses into U.S. dollars at the
average exchange rate during the relevant period and (2) our assets and
liabilities into U.S. dollars at the exchange rate at the end of the relevant
period. Our translation of British pound amounts into U.S. dollars gives us
foreign currency translation gains or losses which we include as a component
of our shareholders' equity. Fluctuations in the rate of exchange of the


                                     -10-

<PAGE>

British pound, as well as the Swedish krona, relative to the U.S. dollar will
affect period-to-period comparisons of our reported results. Accordingly, our
results will be subject to exchange rate fluctuations which could lead to
losses that cause a decrease in our financial results in any year.

OUR GENE DISCOVERIES MAY TAKE A LONG TIME TO LICENSE, WHICH COULD CAUSE US TO
SPEND CONSIDERABLE RESOURCES ON UNSUCCESSFUL EFFORTS.

         Our ability to license our gene discoveries will depend on our
customers' belief that we can help their drug discovery efforts proceed more
rapidly. We expect that licensing our gene discoveries will take a long time
because we will need to educate potential customers and convince these
companies of the benefits of our gene discoveries. In addition, each license
agreement will involve the negotiation of unique terms. We may expend
substantial funds and management effort and still may not reach an agreement.
In addition, the actual and proposed consolidations of pharmaceutical
companies have affected and may in the future affect the timing and progress
of our licensing efforts.

WE MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT OUR ACQUISITION AND INVESTMENT
STRATEGY, WHICH COULD LEAD TO OUR GROWTH BEING SLOWER THAN WE ANTICIPATE.

         We expect to selectively make acquisitions of, or significant
investments in, complementary companies and technologies. To date, we have
made one major acquisition (Eurona in December 1999), which we believe we
have successfully integrated. Our acquisition strategy depends on the
availability of suitable acquisition candidates, financing on acceptable
terms and our ability to comply with the restrictions contained in our debt
agreements, if any. In addition, growth by acquisition involves risks,
including integrating the operations, disparate technologies and personnel of
acquired companies, managing geographically dispersed operations and the
potential loss of key employees, customers and strategic partners of acquired
companies. We may not successfully integrate any acquired businesses or
technologies and may not achieve anticipated revenue and cost benefits. We
expect that pursuing our acquisition strategy will be expensive, time
consuming and may strain our resources. If we cannot successfully implement
this strategy, our growth could be slower than we anticipate. In addition, we
may be required to amortize significant amounts of goodwill and other
intangible assets in connection with future acquisitions, which could cause a
decrease in our financial results and the market price of our ADSs.

ADVERSE ETHICAL OR SIMILAR CONCERNS RELATING TO THE USE OF GENETIC
INFORMATION COULD LEAD TO RESTRICTIONS OR REGULATIONS THAT HINDER OUR
COLLECTION OF CLINICAL DATA OR REDUCE THE POTENTIAL MARKET FOR OUR PRODUCTS.

         The collection of genetic samples and genetic testing has already
raised concerns regarding confidentiality and the appropriate uses of the
resulting information. The subject of human medical research, especially
genetic research, has dramatically captured public attention and has caused
governmental and public policy reviews. As a result, governmental authorities
may decide to restrict or regulate the use of genetic information or prohibit
testing for a genetic predisposition to certain conditions, particularly for
those that have no known cure. Any restriction or regulation could hinder our
collection of clinical data or reduce the potential markets for our products.


                                      -11-

<PAGE>

IF WE CANNOT CONTINUE TO ATTRACT AND RETAIN HIGHLY-SKILLED PERSONNEL, OUR
GENE DISCOVERY PROGRAM AND THE GROWTH OF OUR BUSINESS MIGHT NOT PROCEED AS
RAPIDLY AS WE INTEND.

         We depend on our ability to identify, attract, hire, train, retain
and motivate highly-skilled personnel, in particular scientific, medical and
technical personnel, for our future success. Competition for highly skilled
personnel is intense, and we might not continue to attract and retain these
employees. If we cannot continue to attract and retain the personnel we
require, we might not be able to pursue our gene discovery program or expand
our business as rapidly as we intend.

IF WE LOSE ANY OF OUR DATA OR CLINICAL SAMPLES, OUR GENE DISCOVERY EFFORTS
COULD BE DELAYED OR PREVENTED.

         Although we have taken steps to ensure the security of our data and
clinical genetic material and others samples by using multiple storage sites,
that security could be compromised by a natural or man-made disaster or
deliberate interference with storage sites. The loss of any of our data or
clinical samples could delay or even prevent one or more of our gene
discovery programs.

RISKS RELATING TO HOLDING OUR ADSs

OUR SHARE PRICE HAS BEEN HIGHLY VOLATILE.

         The stock market in general, and the market for stocks of technology
related companies in particular, has experienced extreme price and volume
fluctuations. These broad market and industry fluctuations may continue to
adversely affect the market price of our ADSs, irrespective of our actual
operating performance. Additional factors which could influence the market
price of our ADSs include statements and claims made by us and other
participants in our industry, academic and research institutions and public
officials.

CONCENTRATION OF OWNERSHIP AMONG OUR EXISTING EXECUTIVE OFFICERS, DIRECTORS
AND PRINCIPAL SHAREHOLDERS COULD PREVENT A CHANGE OF OUR MANAGEMENT OR A
BUSINESS COMBINATION, EVEN IF IT WOULD BE BENEFICIAL TO OUR OTHER
SHAREHOLDERS.

         Our directors, entities affiliated with our directors and our
executive officers beneficially own, in the aggregate, approximately 36.1% of
our outstanding ordinary shares. Accordingly, these persons, acting together,
have the ability to substantially influence all matters submitted to our
shareholders for approval, including the election and removal of directors
and any merger, consolidation or sale of all or substantially all of our
assets. These persons also have the ability to control our management and
affairs. Accordingly, this concentration of ownership could have the effect
of delaying, deferring or preventing a change in control, impeding a merger,
consolidation, takeover or other business combination involving us or
discouraging a potential acquirer from making a tender offer or otherwise
attempting to obtain control of our business, even if that transaction would
be beneficial to other shareholders.

WE HAVE NO INTENTION TO PAY DIVIDENDS ON OUR SHARES.

         We have never declared or paid any cash dividends on our shares. We
currently intend to retain our future earnings to finance the expansion of
our business, and you may never receive any dividends on our shares.


                                      -12-

<PAGE>


IF YOU HOLD SHARES THROUGH ADSs, YOU MAY HAVE LESS ACCESS TO INFORMATION
ABOUT OUR COMPANY AND LESS OPPORTUNITY TO EXERCISE YOUR RIGHTS AS A
SHAREHOLDER.

         There are risks associated with holding our shares through ADSs
because we are a public limited company organized under the laws of England
and Wales. We are subject to the Companies Act 1985 of England and Wales and
to our charter documents, which are known in the United Kingdom as our
memorandum and articles of association. The depositary appears in our records
as the owner of all of our ordinary shares represented by the ADSs and your
rights as a holder of ADSs are contained in the deposit agreement. Your
rights as a holder of ADSs differ in various ways from a shareholder's
rights, and you may be affected in other ways, including:

         -        you may not be entitled to vote;

         -        you may not be able to participate in rights offerings or
                  dividend alternatives;

         -        you may not receive copies of reports and may have to go to
                  the office of the depositary to inspect any reports issued;

         -        the deposit agreement may be amended by us and the depositary,
                  or may be  terminated by us or the depositary, without your
                  consent in a manner that could prejudice your rights; and

         -        the deposit agreement limits our obligations and liabilities
                  and those of the depositary.

         IT IS POSSIBLE THAT WE MAY BECOME A PASSIVE FOREIGN INVESTMENT
COMPANY FOR U.S. FEDERAL INCOME TAX PURPOSES, WHICH COULD RESULT IN NEGATIVE
TAX CONSEQUENCES TO YOU.

         Based upon an analysis of our current assets and income and the way
we intend to operate our business in future years, we do not believe we will
be treated as a passive foreign investment company, commonly referred to as a
PFIC, for U.S. federal income tax purposes for the current or any future
taxable year. Our belief that we are not a PFIC and our expectation that we
will not become a PFIC in the future are based on our current and planned
business activities, including our ability to conclude certain contracts on
terms that are agreeable to us. In the event that we fail to conclude those
contracts on a timely basis, or at all, it is likely that we would be a PFIC
for the taxable year ending March 31, 2002 and possibly for future taxable
years. This conclusion is a factual determination made annually and could
change. In addition, a number of the factors that will be relevant to the
determination as to whether we are a PFIC will depend on circumstances that
may not be within our control. Because the valuation and composition of our
(1) assets (including goodwill, the amount of which will depend, in part, on
the market value of our ordinary shares, which is subject to change) and (2)
income, from time to time, will determine whether we will be treated as a
PFIC, we cannot assure U.S. investors that we will not become a PFIC in the
current or any future taxable years. In addition, under certain attribution
rules, if we own 25% or more of any corporation's value, we will be treated
as owning our proportionate share of that corporation's assets and earning
our proportionate share of that corporation's income. If we become a PFIC in
any taxable year, a U.S. investor would suffer adverse U.S. federal income
tax consequences which we describe in more detail in "Item 10. Additional
Information -- Taxation -- Passive foreign investment company
considerations."


                                      -13-

<PAGE>


We urge U.S. investors to consult their own tax advisors about the
application of the PFIC rules in their particular circumstances.

ITEM 4.           INFORMATION ON THE COMPANY

OVERVIEW

         We are a clinical genomics company that uses clinical and medical
information as a starting point to identify relationships between genes and
human health and disease. We expect that our discoveries will provide us with
licensable products that pharmaceutical and diagnostic companies will use in
drug discovery and/or gene-based diagnostic applications. We already have
comprehensive and diverse clinical and genetic resources collected by or for
us by our clinical collaborators and our Canadian subsidiary, Newfound
Genomics, from human volunteers and databases and other biological
information management and analysis (or bioinformatic) systems as well as the
additional resources provided by our technology collaborators, which include
Celera Genomics (a division of Applera Corporation), Qiagen Genomics, Large
Scale Proteomics, CuraGen, Sequenom, Rosetta Inpharmatics and Genmab.

OUR HISTORY AND DEVELOPMENT

         We are a public limited company organized under the laws of England
and Wales in accordance with the provisions of the Companies Act of 1985. Our
legal name is Gemini Genomics plc. Gemini International Holdings Limited, our
predecessor company, was incorporated in September 1995 and, until its
acquisition by Gemini Genomics plc in December 1997, was the holding company
of our group of companies. Our address is 162 Science Park, Milton Road,
Cambridge, CB4 0GH, England. Our telephone number is (+44) (1223) 435-300.
Our web site is http://www.gemini-genomics.com. The information found on our
web site is not incorporated by reference into this annual report nor do we
intend it to be, and you should not treat it as forming a part of this annual
report.

         We founded Gemini International Holdings Limited, a wholly-owned
subsidiary, in September 1995 and acquired it in December 1997. We accounted
for the acquisition as a combination under common control. We changed our
name from Gemini Holdings plc to Gemini Genomics plc in March 2000.

         We operate several subsidiaries in the United States, the United
Kingdom, Sweden and Canada. To date, we have completed one major acquisition.
In December 1999, we acquired all of the ordinary shares of, and assumed all
the liabilities of, Eurona Medical AB in Sweden in exchange for 1,820,180
Preferred Ordinary Shares (since converted into ordinary shares) and a
nominal cash payment. We accounted for the acquisition using the purchase
method.

         Our capital expenditures totaled $1.1 million, $0.7 million and $2.3
million in the years ended March 31, 1999, 2000 and 2001, respectively. In
each period, these expenditures consisted principally of the purchase of
laboratory equipment and information technology. In the year ended March 31,
2001, refurbishment of new facilities amounted to $0.4 million. We have
largely financed capital expenditures through capital lease arrangements,
which totaled $1.4 million, $4.0 million and $0.7 million in the years ended
March 31, 1999, 2000 and 2001, respectively. We expect to incur broadly
similar levels of capital expenditures to those in the years ended March 31,


                                      -14-

<PAGE>

1999 and 2000 in the current fiscal year, spread across all our locations,
primarily to support the ongoing need to purchase laboratory equipment and
information technology. We anticipate financing these expenditures, as far as
possible, through capital lease arrangements. We are still refurbishing our
facilities in Newfoundland, Canada and expect to complete this refurbishment
by June 2001 at a total cost of approximately $0.2 million.

BUSINESS OVERVIEW

         We are a clinical genomics company which means that we identify
relationships between human genes and human health and disease. We use
clinical and medical information as the starting point in our search for
genes relevant to diseases, or disease genes. We believe that the collection
and analysis of both detailed clinical and genetic data relating to the
presence or risk of disease is more effective in discovering these disease
genes than analyzing genetic data alone. We expect that discoveries arising
from our research will provide us with products which we can license to
pharmaceutical, diagnostic, genomics and biotechnology companies for drug
discovery and/or gene-based diagnostic applications. As current efforts by
others to determine the identity and location of all human genes (which we
refer to as mapping the human genome) nears completion, the objective of
genomics is shifting from determining the order, or sequence, of genes to
understanding the role of genes in human health and disease. We believe that
we are well-positioned to take advantage of the opportunities created by the
mapping of the human genome due to our disease gene discovery process and the
clinical data and samples we have already collected, as well as the
additional resources provided by our technology collaborators. Our technology
collaborators include Celera Genomics (a division of Applera Corporation),
Qiagen Genomics, Large Scale Proteomics, CuraGen, Sequenom, Rosetta
Inpharmatics and Genmab.

         We focus on identifying disease genes through a three-step process:

         -        our network of clinical collaborators and our Canadian
                  subsidiary collect extensive, high quality clinical
                  measurements and related genetic and other biological samples
                  from human volunteers from a number of different groups,
                  comprising twin populations, disease-affected populations,
                  geographically isolated populations and patients in clinical
                  trials. Generally, we have the exclusive right to use this
                  clinical and biological data for commercial purposes and have
                  proprietary rights to any genetic and other information
                  derived from these resources. We also obtain genetic
                  information from the growing amount available in the public
                  domain and from our technology alliances;

         -        we integrate this data into our databases and other biological
                  information management and analysis, or bioinformatic,
                  systems, as well as technologies we access through alliances,
                  in order to identify relationships between clinical
                  measurements that are used to define a disease and genes or
                  proteins; and

         -        we verify our findings by using clinical and genetic data from
                  our different clinical populations to efficiently confirm our
                  discoveries.

         We believe that the comprehensive and diverse nature of our clinical
and genetic resources gives us a significant competitive advantage. Our
acquisition of Eurona Medical AB (subsequently renamed Gemini Genomics AB), a
Swedish genomics company, and our


                                      -15-

<PAGE>


establishment of Newfound Genomics in Canada have significantly expanded our
access to clinical and genetic resources. Because our clinical and genetic
information would be time consuming and expensive to replicate, we believe
this resource makes us an attractive collaborator for companies possessing
complementary technologies which enable us to discover disease genes more
rapidly.

         We are a development stage company. Since inception, we have
incurred significant losses and, as of March 31, 2001, we had an accumulated
deficit of $51.4 million. Since inception, we have received modest amounts of
revenues, comprising royalty receipts from the licensing of our first disease
gene patent for use in diagnostic applications, service fees from a gene
validation program and payments in relation to two non-exclusive agreements
with CuraGen focused on the discovery of genes that affect diabetes, obesity
and osteoarthritis. We expect that we will derive our future revenues
primarily from the licensing of disease gene and protein discoveries for drug
discovery and diagnostic applications and, to a lesser extent, from the
provision of gene validation services.

OUR BUSINESS STRATEGY

         Our goal is to become the leading clinical genomics company by using
our comprehensive clinical and genetic resources, together with our databases
and bioinformatic systems, to discover disease genes and proteins and
generate revenues from licensing our discoveries to the pharmaceutical and
diagnostics industries for use in the development of drugs and diagnostics.

         In order to achieve this goal we intend to:

         -        CONCENTRATE ON IDENTIFYING DISEASE GENES AND PROTEINS
                  APPLICABLE TO THE TREATMENT OR DIAGNOSIS OF COMMON HUMAN
                  DISEASES. Our primary objective is to identify genes and
                  proteins that can lead to the development of drugs or
                  diagnostics for common human diseases such as cardiovascular
                  disease, diabetes, osteoporosis and central nervous system
                  disorders. This objective ensures that our products are
                  targeted at the largest potential drug and diagnostics
                  markets. We have already licensed an osteoporosis disease gene
                  patent to both Affymetrix and Axis-Shield for the development
                  of their respective gene-based diagnostic tools, based on
                  which Axis-Shield has already launched a diagnostic product.

         -        EXPAND OUR GENETIC AND PROPRIETARY CLINICAL AND BIOLOGICAL
                  RESOURCES. We have developed one of the most comprehensive and
                  diverse collections of clinical information and biological
                  samples in the world. We already have clinical information and
                  biological samples from a number of different groups,
                  comprising twin populations, disease-affected populations,
                  patients in clinical trials and a geographically isolated
                  population, from countries including the United Kingdom,
                  Sweden, China, Australia and Canada. We intend to continue to
                  expand our clinical resources. Our planned expansion will
                  increase the number of ethnic groups represented in our data
                  resources and the number of diseases about which we can
                  extract information. We believe these expanded resources will
                  enable us to maintain a significant competitive advantage by
                  ensuring that we are a preferred partner of pharmaceutical,
                  biotechnology and


                                      -16-

<PAGE>


                  diagnostic companies for the discovery of drug targets and
                  gene-based diagnostics.

         -        ENHANCE OUR INFORMATION TECHNOLOGY AND BIOINFORMATIC SYSTEMS.
                  In addition to the information that we collect from our
                  clinical collaborators and our technology alliances, we also
                  access the rapidly growing amount of genetic data available in
                  the public domain through the Internet. As a result, our
                  ability to collect, manage, screen, integrate and analyze
                  these growing information resources is becoming increasingly
                  important.

         -        MAXIMIZE OUR REVENUES FROM THE COMMERCIALIZATION OF OUR
                  DISCOVERIES BY RETAINING CONTROL OVER OUR GENE DISCOVERY
                  PROCESS. Our sophisticated databases and other bioinformatic
                  systems help us to maximize our revenues by enabling us to
                  analyze our own data and retain and refine our disease gene
                  discoveries for later-stage licensing rather than entering
                  into early stage collaborations with pharmaceutical companies.
                  Typically, pharmaceutical companies enter early stage
                  collaborations by funding initial research in exchange for a
                  significant share of future revenues and often exclusive use
                  of the discovered gene for a particular disease and
                  restrictions on other uses of the discovered gene. Retaining
                  control over our disease gene discovery process maximizes our
                  ability to eventually generate multiple and higher value
                  revenue streams from licensing one or more disease genes for
                  use in multiple disease and/or product areas. In addition,
                  this control allows us to use our biological samples and
                  clinical data to enter into alliances with pharmaceutical and
                  biotechnology companies for other discovery processes such as
                  novel protein discovery.

         -        PURSUE ADDITIONAL STRATEGIC INVESTMENTS, ACQUISITIONS AND
                  PARTNERSHIPS THAT ALLOW US TO ENHANCE REVENUES. We intend to
                  pursue additional strategic investments and acquisitions. We
                  will target opportunities to acquire complementary
                  technologies in order to broaden and enhance our product
                  offerings and increase our revenues. While we regularly
                  evaluate strategic investment, acquisition and partnership
                  candidates, we do not have any present agreements or
                  commitments for any of them. Any of these agreements or
                  commitments could require us to expend considerable financial
                  resources. We also intend to pursue strategic partnerships and
                  alliances with other genomics and biotechnology companies with
                  technologies that will enable us to conduct our gene discovery
                  process more rapidly. We have technology alliances with Celera
                  Genomics, Qiagen Genomics, Large Scale Proteomics, CuraGen,
                  Sequenom, Rosetta Inpharmatics and Genmab for this purpose.

THE GEMINI APPROACH

         OUR SCIENTIFIC STRATEGY

         As a clinical genomics company we focus on clinical and medical
information as the starting point in our search for disease relevant genes.
We believe that collecting and analyzing detailed clinical and genetic data
relating to the presence or risk of disease is more effective in discovering
disease relevant genes than focusing on genetic data alone. This is because
clinical data also allows us to identify individuals who are, or show risk
traits of becoming, affected by


                                      -17-

<PAGE>

disease and their relevant clinical measurements. This information allows us
to conduct a more focused search of genetic data by looking for genes and
variations from one individual to another in a single nucleotide of the DNA
sequence, which we refer to as SNPs, that are shared by individuals affected by
some disease or with risk traits in common. Our scientific goal is to
identify the specific function of genes and SNPs that relate to common human
diseases. We do this by analyzing extensive, high quality clinical
measurements and genetic samples of volunteers. Our clinical collaborators
collect and provide to us on an anonymous basis clinical measurements and
genetic samples from different groups of volunteers: twins, disease-affected
individuals and participants in drug trials. In addition, our Canadian
subsidiary collects samples from a geographically isolated population.

         We integrate the clinical measurements and genetic information
derived from these samples into our databases. Our in-house software
engineers and scientists have customized these databases using computer-aided
software engineering systems. We then use these databases and our biological
information management and analysis (which is also known as bioinformatic)
systems to:

         -        analyze our clinical and genetic data;

         -        find associations between genes and common diseases; and

         -        verify our findings using data from a separate volunteer
                  group.

         An example of this process was our collaboration with Kyowa Hakko
Kogyo. In this collaboration we analyzed a gene Kyowa Hakko Kogyo had
identified in an animal model as related to a number of age-related diseases,
such as osteoporosis, emphysema and skin aging. We were able to identify
common SNPs in the human form of the gene and found that one end of the gene
is associated with diabetes and obesity risk factors while the other end of
the gene is associated with osteoporosis. Kyowa Hakko Kogyo was then able to
file a patent application covering the use of the gene for the diagnosis,
treatment and prediction of response to treatment of these two diseases.

         OUR CLINICAL RESOURCES AND OUR TECHNOLOGY PLATFORM

         OUR CLINICAL RESOURCES

         We have access to clinical data and genetic samples from several
million people recruited by our clinical collaborators and our Canadian
subsidiary in various parts of the world, including the United Kingdom,
Sweden, Australia, Canada and China. These resources include information from
long-term studies which, in some instances, have been collected over a 20
year period. For our current research programs, we have selected and are
presently analyzing DNA samples and clinical data on almost 40,000 twins and
disease-affected individuals. This analysis has yielded approximately nine
and one-half million clinical and genetic measurements, which we expect to
increase rapidly as we continue analyzing our existing data and as our
clinical resources expand. We believe the size, diversity and quality of our
clinical collaborations and resources would be both very expensive and time
consuming to replicate.

         Our clinical collaborators and our Canadian subsidiary collect
clinical measurements and genetic samples from volunteers, and our clinical
collaborators provide us with this information on an anonymous basis.
Together with our clinical collaborators, we select the clinical parameters
(which are also called phenotypes) to measure from volunteers and agree


                                      -18-

<PAGE>

upon the use of standard protocols and other procedures. For example, twins
undergo testing on hundreds of phenotypes through a comprehensive medical
examination involving several hours of biochemical, physical and
physiological tests, including X-rays, magnetic resonance imaging (MRI) scans
and a test yielding precise data on bone density and fat mass. The extent of
clinical measurements taken from disease-affected individuals depends upon
the disease concerned. Blood, urine and DNA samples are collected, analyzed
and stored for all volunteers. Serum is extracted from the blood and analyzed
to provide information on a wide spectrum of hormones and proteins. We
maintain these biological samples in cold storage in the event that we or our
technology collaborators or customers require additional data on phenotypes
we do not already track. By managing a program of repeat visits of volunteers
with our clinical collaborators and Canadian subsidiary, we also have access
to studies that evaluate the same clinical measurements throughout a range of
ages in the same individuals.

         Although our agreements with our clinical collaborators are each
individually negotiated, in general we provide funding for the collection of
clinical measurements and genetic and other biological samples, the transfer
of these resources to us and in some cases further analysis of these
measurements and samples by our collaborators. Our funding is provided either
on a per sample or per volunteer basis or is provided on a total project
basis with a pre-agreed budget. In all cases, our funding is directed towards
the delivery to us of agreed information and samples. In general, we retain
exclusive commercial rights to the clinical data and samples obtained for us
by our clinical collaborators. Our agreements with our clinical collaborators
also specify the research program that will be performed.

         We significantly increased our collection of clinical samples and
our ability to access further clinical data through our acquisition of Eurona
and through our establishment of Newfound Genomics. Based in Sweden, Eurona
has entered into clinical collaborations with university and medical
institutions that provide access to several million tissue samples and
genetic materials from volunteers affected by a range of diseases. Newfound
Genomics is currently collecting clinical data and genetic samples from a
geographically isolated population.

         We focus on taking clinical measurements relevant to common human
diseases in which pharmaceutical companies are looking for drug targets.
These disease groups are summarized below:

         -        Bone: OSTEOPOROSIS, OSTEOMALACIA

         -        Cardiovascular: HYPERTENSION, DYSLIPIDAEMIA, CARDIAC FUNCTION,
                  ATHEROSCLEROSIS

         -        Central Nervous System Disorders: ANXIETY AND DEPRESSION,
                  COGNITION, ALZHEIMER'S DISEASE, SCHIZOPHRENIA

         -        Dermatology: PSORIASIS, NAEVI AND MELANOMA

         -        Haematology: THROMBOSIS, COAGULATION, HAEMOGLOBINOPATHY

         -        Immune: AUTOIMMUNE DISEASES, ECZEMA

         -        Metabolic: DIABETES, OBESITY, LIVER DISEASE, THYROID DISEASE

         -        Oncology: FAMILIAL CANCERS


                                      -19-

<PAGE>


         -        Respiratory: ALLERGY, ASTHMA, PULMONARY DYSFUNCTION, CHRONIC
                  OBSTRUCTIVE PULMONARY DISEASE

         -        Rheumatology: OSTEOARTHRITIS, RHEUMATOID ARTHRITIS, RAYNAUD'S
                  DISEASE

         OUR DIVERSE POPULATIONS

         We have gathered data on a number of different population groups,
including twins, disease-affected individuals, patients in drug trials and a
geographically isolated population. We are continually expanding our access
to populations to increase the number of ethnic groups represented in our
data resources and the number of diseases about which we can extract
information in order to broaden the applications and markets for our products.

         OUR TWIN POPULATIONS

         Twins, whether identical or non-identical, are valuable for studying
human disease because they are siblings of the same age who share, to a
considerable extent, the same environmental influences. Analyzing twins
allows us to eliminate age as a potential factor when evaluating clinical
differences between two siblings. For example, in considering two sisters
with a five year age difference, the older sister might have a higher
cholesterol measurement than the younger sister. However, unless a follow-up
study on the younger sister is conducted five years later, age cannot be
eliminated as a factor when evaluating whether the difference in cholesterol
level is genetic or age-related. Using twins reduces the complicating effects
of age and provides a very useful method of looking for the genetic
contribution to the clinical differences in measuring the risk of disease.

         Identical twins share the same genes whereas non-identical twins
share on average half their genes. A comparison of the similarities and
differences existing between identical and non-identical twins allows us to
measure the contribution of the genetic influence on a clinical measurement
and also how the environment may modify this genetic effect. Because
identical twins share the same genes, any difference in clinical measurements
must be due to environmental differences. For example, we have used this
approach to identify and quantify important environmental effects on fat
distribution, including the effects of smoking, alcohol consumption and
estrogen replacement. Because the genetic differences between pairs of
non-identical twins are comparable to those between other sibling pairs but
without the age difference, we can study the relationship between these
genetic differences and various clinical measurements. We use this approach
to identify the gene or genes involved in determining a clinical measurement
and confirming a disease gene association.

         The twins selected for study are representative of the general
population and are not selected for any particular disease. With these twins,
we analyze a large number of clinical measurements that relate to the risk of
disease. By analyzing genes and clinical measurements related to the risk of
a broad range of diseases in thousands of twins, we are able to look for
genes that play a role in different common diseases, including cardiovascular
disease, diabetes and central nervous system disorders.

         The table below summarizes our principal clinical collaborations,
which provide us with data and samples on twins.


                                      -20-

<PAGE>


<TABLE>
<CAPTION>
CLINICAL COLLABORATOR                                   DESCRIPTION
-----------------------------------------------------   --------------------------------------------------
<S>                                                     <C>
Twin Research Unit, St.  Thomas'  Hospital,  London,    Twins undergo a four to six hour  assessment  and
England.                                                in some cases have a follow-up  assessment two to
                                                        four years later.
Institute  of Bone and Joint  Research,  Royal North    This   collaborator   performs  a  very   similar
Shore Hospital, Sydney, Australia                       assessment  to St.  Thomas'  Hospital,  but  also
                                                        includes heart scan measurements.
Program for Population Genetics, School of Public       This collaborator collects clinical data similar to
Health, Harvard University, United States               St. Thomas' Hospital on 5,000 identical and
(conducted through First Anqing Hospital, Anhui         non-identical Chinese twin pairs.
Province, China)
</TABLE>

         In general, we retain exclusive commercial rights to the clinical
data and samples obtained for us by our clinical collaborators conducting
research on our twin populations.

         OUR DISEASE-AFFECTED POPULATIONS

         Our clinical collaborators collect data on disease-affected
individuals, including siblings, families and unrelated populations that
suffer from the same disease, including participants in drug trials. We can
analyze this data to identify genetic variations that occur frequently within
the group. This approach is particularly useful for us to explore further
discoveries made in our twin populations and for diseases for which there are
no known measurable risk factors, such as schizophrenia and dementia, and are
not amenable to analysis using our twin approach.

         The table below summarizes our principal clinical collaborations,
which provide us with data on disease-affected individuals.

<TABLE>
<CAPTION>
CLINICAL COLLABORATOR                                               DISEASE GROUP
-----------------------------------------------------------------   -------------------------------------
<S>                                                                 <C>
Twin Research Unit, St. Thomas' Hospital, London, England           Osteoporosis
Queensland Institute of Medical Research, Brisbane, Australia       Depression and Anxiety
Professor Hans Lithell, Department of Geriatrics, University of     Cardiac and Metabolic Disease
Uppsala, Sweden
Department of Neuroscience and Psychiatry, University of            Depression and Schizophrenia
Uppsala, Sweden
Division of Molecular Toxicology, Karolinska Institute and          Drug Metabolism
Huddinge Hospital, Stockholm, Sweden
Department of Pathology and Cytology, Central Hospital, Falun,      Oncology
Sweden
Free University, Amsterdam                                          Anxiety and depression
</TABLE>

         In general, we retain exclusive commercial rights to the clinical
data and samples obtained for us by our clinical collaborators conducting
research on our populations of disease-affected individuals, even after
termination of the agreements we have with them.

         GEOGRAPHICALLY ISOLATED POPULATIONS

         Isolated populations, sometimes due to geographical isolation, are
populations, which have grown out of an initially small number of people who
settled together. Over time these


                                      -21-

<PAGE>


populations tend to have higher incidences of certain diseases. The higher
incidences of these diseases and the lower level of other background genetic
variations make these populations particularly useful in discovering the
genes affecting such diseases. We can confirm our discoveries in isolated
populations, which may not be representative of wider populations, by using
data and samples from our twin and disease-affected populations.

         Our Canadian subsidiary gives us access to clinical and genetic
information on a geographically isolated population in Newfoundland, Canada,
where there tends to be very large families with well-defined family origins
and with higher than normal incidences of a number of diseases. We will
continue to explore opportunities to gain access to other isolated
populations.

         CLINICAL DATA COLLECTION

         We collect most of our clinical measurements and genetic and other
biological samples through a number of relationships with clinical
collaborators, and we collect the remainder from our Canadian subsidiary.
Each relationship with our clinical collaborators is governed by an agreement
that generally provides for the collection and delivery of DNA, blood and
urine samples and clinical measurements. We have attempted to ensure that all
clinical data and genetic and other biological samples that we receive from
our clinical collaborators have been collected from volunteers on an
anonymous basis and with appropriate consents for purposes which extend to
cover our gene discovery programs and other activities. We have also sought
to ensure that the volunteers from whom our data and samples are collected by
both our clinical collaborators and our Canadian subsidiary do not retain or
have conferred upon them any proprietary or commercial rights to the data or
samples or any discoveries derived from them. Our clinical collaborators' and
Canadian subsidiary's collection of measurements and samples from our
volunteers, and their consents, occur as part of a study that is reviewed by
the institutional review board or ethics committee that supervises the
hospital or clinic where the collections are taken. In certain studies, an
independent review board is consulted.

         Each clinical collaborator assesses volunteers according to standard
protocols and procedures, which we have approved. We ensure high standards of
compliance with these procedures by regularly conducting audits at randomly
selected locations. Our clinical data management staff oversees the integrity
and accuracy of data collected. Duplicate copies of all data are maintained
at one or more additional sites. We believe that our careful attention to
maintaining high standards of compliance with our standard operating
procedures is a valuable aid in ensuring the quality of our clinical data and
genetic samples.

         In all instances, our clinical collaborators are permitted and
encouraged to undertake their own research on data collected and (subject to
obtaining our consent) to publish such research. In general, all commercial
rights arising from any such research belong to us, or we have the first
option to commercialize such research.

         OUR INFORMATION TECHNOLOGY AND DATA AND SAMPLE MANAGEMENT

         All aspects of our biological sample and clinical data management
and our statistical analysis of these samples and data are performed through
our:

         -        databases, which store our clinical and genetic
                  information; and


                                      -22-

<PAGE>


         -        other biological information management and analysis (or
                  bioinformatic) systems, which allow us to analyze and
                  interpret our clinical and genetic data through the use of
                  sophisticated algorithms.

         These integrated systems are critical to our gene discovery programs
and enable us to perform rapid statistical analysis on large volumes of
clinical and genetic data. We have a team of nine bioinformatics specialists
and seven software engineers to further develop these systems.

         ANALYSIS AND STORAGE OF BIOLOGICAL SAMPLES

         We check and log all biological samples supplied to us by our
clinical collaborators into a database, which is integrated into our sample
management system. Once samples have been labeled with individual bar-code
identifiers, they are stored for genetic screening. We randomly check our DNA
samples in storage for purity and remove any contaminated samples from the
system. Genetic screening consists of analyzing standard genetic markers on
the DNA obtained from each human subject. These markers consist of DNA
sequences at known locations in the human genome that vary between
individuals. We enter the variant DNA sequence data for each individual into
the database, which integrates it with clinical measurements taken on the
same subject. We analyze samples using robotic systems and use bar-coding to
enable the database to track the sample through the automated analysis
process and to ensure continued access to biological samples in case we also
need to analyze proteins and other non-genetic markers that may relate to
diseases.

         BIOINFORMATICS AND STATISTICAL ANALYSIS

         Bioinformatics is the use of computers and sophisticated algorithms
to store, analyze and interpret large volumes of biological data. This is an
essential tool that helps us effectively utilize our pool of clinical and
genetic data, including gene sequence, protein and other genetic information
accessed from both public and private databases. We have developed an
in-house bioinformatics capability that enables us to exploit the data on the
rapidly growing databases within our gene discovery programs. This in-house
capability allows us to minimize the extent to which we need to rely upon
other companies for analytical technologies.

         Statistical analysis is an important component of our gene discovery
approach. We use several complementary statistical tools to quantify the
effect of genetic variation on human physiology and disease. We test common
SNPs in genes of interest for associations with diseases, phenotypes or drug
responses. We take any associations we find as evidence that the polymorphism
is either:

         -        related to the relevant disease, phenotype or drug
                  response; or

         -        located closely on the same gene to a polymorphism that is
                  related to the relevant disease, phenotype or drug response.

         We attempt to replicate our findings in our other populations to
confirm any associations that we identify.

OUR PRODUCT OFFERINGS


                                      -23-

<PAGE>


         We analyze human clinical and genetic information from a number of
human populations in order to identify the role of genes, SNPs and proteins
in common human diseases. We have identified over 100 chromosomal regions
that, based on our analysis, we believe harbor disease genes. We believe that
identifying disease genes in-house is preferable to entering early stage
collaborations with pharmaceutical companies, which typically are secured by
genomics or other biotechnology companies to fund early stage research in
return for giving the pharmaceutical company a significant share of future
revenues and often exclusive use of the discovered gene for a particular
disease and restrictions on other uses of the discovered gene. We retain
control over our disease gene discovery process to maximize our ability to
generate multiple revenue streams from licensing one or more disease genes
for use in multiple disease and/or product areas.

         LICENSING OF NOVEL GENE DISCOVERIES AND ASSOCIATIONS

         Our principal product offering is the discovery of a disease gene
(which we call a novel gene discovery), which can form the basis of a drug
discovery program undertaken by a pharmaceutical company in a specified
disease area or the development of a diagnostic tool. A novel gene
association is the discovery of a disease gene as well as factors that imply
that a gene-based drug or diagnostic could be developed to interfere with the
pathway affected by the disease gene. Our patent applications are based on
the association of a particular gene with a clinical risk trait for a common
disease. We have already successfully licensed our patent for the
osteoporosis disease gene, COL1A1, as the first major osteoporosis genetic
diagnostic, to both Affymetrix and Axis-Shield.

         For each disease gene patent we receive, we anticipate granting
licenses to develop drugs and diagnostics in a particular disease area. By
doing this, we will retain control over the disease gene and the right to
license it for applications in other disease areas. In addition we may
restrict the use of those products, such as the format of a diagnostic kit,
as in our agreements with Affymetrix and Axis-Shield, or, in the case of a
drug, the drug target which the drug may use.

         LICENSING OF NOVEL PROTEIN DISCOVERIES

         We can also use our large repository of clinical samples to discover
proteins that genes produce (which we call a novel protein discovery) which
are also of therapeutic and diagnostic value. We intend to use our clinical
population data to discover proteins that are associated with common diseases
and can be used as drug targets in drug development. We have already entered
into an agreement with Large Scale Biology, a company with protein discovery
and identification technology, to identify proteins that are susceptible to
environmental influences and are associated with particular disease risk
factors. While we have not yet licensed any novel protein discoveries, we
expect that a number of these proteins will be suitable drug targets that can
be licensed in the same way as disease genes, with broadly similar patent
rights.

         When licensing a gene or protein discovery, we expect to receive
up-front fees, milestone payments and product royalties. Milestone payments
typically are paid over five to seven years upon the occurrence of specific
events, or milestones, as a product based on a licensed discovery advances
through the drug or diagnostic discovery and development process. These payments
depend on the success of the development program. Accordingly, we will seek to
ensure that development rights revert to us if a development program does not
proceed on the


                                      -24-

<PAGE>


agreed timetable. Product royalties typically are a percentage of the
revenues derived from the sales of products using a licensed discovery and
often specify minimum annual payments.

         GENE VALIDATION SERVICES

         Although not our prime focus, when we are approached by another
company seeking access to our clinical resources and expertise, we may
perform candidate gene and polymorphism testing and validation services.
Under this service model, we verify associations between disease states and
the candidate target genes provided by our customers. In this field, any
resulting intellectual property rights remain with the customer.

SALES AND MARKETING

         Our customers and potential customers are primarily a limited number
of pharmaceutical, biotechnology and diagnostics companies. Typically, our
sales process is highly technical and is undertaken over an extended period.
We have a business development team with extensive technical and commercial
experience that contacts potential customers through various methods,
including direct approaches using industry knowledge, promotional activities
and presentations at industry conferences. We also involve technical, legal,
intellectual property and finance staff in the negotiation of licensing
arrangements. Under the agreements with some of our technology collaborators,
we have established joint commercialization committees, comprised of both our
members and those of our technology collaborators.

COMMERCIAL RELATIONSHIPS

         In connection with the development and licensing of our products, we
have entered into a number of commercial relationships with other genomics,
pharmaceutical, diagnostic and biotechnology companies. These relationships
encompass:

         -        TECHNOLOGY ALLIANCES WITH OTHER GENOMICS AND BIOTECHNOLOGY
                  COMPANIES TO HELP US DISCOVER NOVEL GENES, GENE ASSOCIATIONS
                  OR PROTEINS MORE RAPIDLY. Through these alliances, we
                  contribute clinical data and gain access to sophisticated
                  technologies in order to co-discover with our technology
                  collaborator a novel gene, gene association or protein. The
                  goal of these alliances is to jointly discover a product more
                  rapidly than either of us could alone for patenting and then
                  licensing to pharmaceutical or diagnostic companies for the
                  further development of drugs or diagnostics. We have already
                  entered into technology alliances with Celera Genomics, Qiagen
                  Genomics, Large Scale Proteomics, CuraGen, Sequenom, Rosetta
                  Inpharmatics and Genmab. Although each of our technology
                  alliances has been individually negotiated, we and our
                  technology collaborator typically each are responsible for a
                  portion of the costs of the research involved and each
                  receives a percentage of the revenues generated by the
                  licensing of our discoveries.

         -        GENE LICENSING OF OUR PATENTS ON DISEASE GENES TO
                  PHARMACEUTICAL AND DIAGNOSTIC COMPANIES. When licensing a gene
                  or secreted protein discovery, we expect to typically receive
                  up-front fees, milestone payments and product royalties. In
                  some circumstances, our clinical collaborators may receive a


                                      -25-

<PAGE>


                  portion of these royalties. We have already successfully
                  licensed the patent for our osteoporosis disease gene, COL1A1,
                  as the first major osteoporosis genetic diagnostic to both
                  Affymetrix and Axis-Shield. Although these two licenses were
                  each granted on individually negotiated terms, in general they
                  provide for up-front fees and milestone payments as well as
                  product royalties payable to us based on a percentage of total
                  sales of products using our patents, with minimum annual
                  payments specified. Axis-Shield has already launched its first
                  diagnostic product using our osteoporosis disease gene patent.
                  With respect to our COL1A1 patent, we share our net revenues
                  with the University of Aberdeen.

         -        GENE VALIDATION SERVICES. We have performed gene validation
                  services for Kyowa Hakko Kogyo, which has filed a patent
                  application with respect to the genetic region we were
                  retained to analyze. We performed these services in exchange
                  for a fee. We have no rights to the patent they filed.

         The table below summarizes our current commercial relationships.

<TABLE>
<CAPTION>
COMPANY                 PRODUCT AREA                   DESCRIPTION
----------------------  -----------------------------  ---------------------------
<S>                     <C>                            <C>
Celera Genomics         Novel gene discoveries         Celera provides gene
                                                       sequence, SNP and gene
                                                       identification technologies
                                                       for gene discoveries within
                                                       regions chosen by us.

Qiagen Genomics         Novel gene associations        We provide our integrated
                                                       clinical genetic technology
                                                       platform and Qiagen
                                                       Genomics provides DNA
                                                       analysis using its
                                                       proprietary mass
                                                       spectrometry technology to
                                                       identify novel gene
                                                       associations in obesity.

Large Scale
Proteomics              Novel protein discoveries      We provide our sample
                                                       resources and associated
                                                       clinical data and Large
                                                       Scale Proteomics provides
                                                       proprietary gene discovery
                                                       technology to identify the
                                                       link between novel proteins
                                                       and diseases.

CuraGen                 Novel gene associations and    We provide our sample
                        drug target identification     resources and associated
                                                       clinical data and CuraGen provides
                                                       its technology including
                                                       thousands of SNPs in
                                                       protein-coding regions that
                                                       may have associations with
                                                       disease.

                        Drug target identification     We apply CuraGen's
                                                       proteomic technology to
                                                       rapidly ascertain the
                                                       proteins related to disease
                                                       associated genes.

                        Novel gene associations and    We provide access to sample
                        drug target identification     resources and associated
                                                       clinical data in diabetes,
                                                       obesity and osteoarthritis
                                                       for which we have received
                                                       a payment. CuraGen provides
                                                       research funding to support
                                                       genotyping and analysis in
                                                       those clinical areas.

Sequenom                Novel gene associations        We provide our sample
                                                       resources, associated
                                                       clinical data and
                                                       bioinformatics


                                      -26-

<PAGE>


                                                       expertise. Sequenom
                                                       provides automated assay
                                                       design and validation of
                                                       these samples, including up
                                                       to 240,000 SNPs from the
                                                       public domain. We work
                                                       together to identify
                                                       particular SNPs associated
                                                       with specific diseases.

Rosetta Inpharmatics    Novel gene associations        Rosetta Inpharmatics
                                                       performs analyses of RNA
                                                       collected from our clinical
                                                       populations to identify
                                                       associations between the
                                                       most active genes and the
                                                       risk or presence of common
                                                       diseases.

Genmab                  Antibody therapeutics          Novel drug targets we
                                                       identify will be combined
                                                       with Genmab's fully human
                                                       antibody technology to
                                                       create and develop new
                                                       antibody therapeutics.

Affymetrix              Gene licensing                 We have granted Affymetrix
                                                       a worldwide license under
                                                       the COL1A1 patent to
                                                       develop a diagnostic assay
                                                       based upon their
                                                       proprietary technology.

Axis-Shield             Gene licensing                 We have granted Axis-Shield
                                                       a worldwide license under
                                                       the COL1A1 patent to
                                                       develop a diagnostic assay
                                                       based upon their
                                                       proprietary technology.
</TABLE>

         COMMERCIAL AGREEMENTS

         We enter into various commercial agreements with third parties,
including technology alliances, license agreements and services agreements.
The purpose of our technology alliances with third parties is to jointly
discover disease genes or novel gene associations more rapidly. We expect
that our technology alliances will assist us in discovering disease genes,
novel gene associations and novel proteins that can be licensed and thereby
generate future revenues. Under each of these agreements, there are
provisions that govern how we will share in those revenues with our
technology collaborators.

         CELERA GENOMICS. In September 1999, we entered into a research
collaboration agreement with Celera Genomics to jointly discover genes and
SNPs and other genetic variations in specially selected regions of the human
genome. Under the non-exclusive agreement, we provide clinical data and
samples and Celera Genomics provides information about the DNA sequence and
SNPs relevant to the selected regions. We will jointly own with Celera
Genomics any intellectual property rights to any disease genes or disease
related SNPs discovered and will share with Celera Genomics revenues received
from licensing discoveries to third parties, after the reimbursement of some
agreed costs. The agreement has a term of two years and may be terminated by
either of us if there is a material breach by the other that is not cured.

         QIAGEN GENOMICS. In September 1998, we entered into a research
collaboration agreement with Qiagen Genomics (formerly Rapigene) to identify
genes and genetic variations


                                      -27-

<PAGE>


related to obesity. Under the non-exclusive agreement, each of us is
responsible for our own costs, although we will reimburse Qiagen Genomics for
some agreed out-of-pocket costs. We will jointly own with Qiagen Genomics any
intellectual property rights to any discoveries and will grant various
licenses to each other governing the terms on which those discoveries will be
commercialized. The agreement had an initial term of 12 months, which could
be and has been extended by mutual agreement, and may be terminated by either
of us if there is a material breach by the other that is not cured.

         LARGE SCALE PROTEOMICS. In February 1999, we entered into a
collaboration agreement with Large Scale Proteomics (formerly Large Scale
Biology) to identify drug targets by analyzing proteins and their
relationship to indicators of diseases. Under the agreement, we provide
samples and use our clinical data from selected identical twin pairs and
Large Scale Proteomics conducts protein analysis. The agreement is exclusive
with respect to the use of Large Scale Proteomics' technology on identical
twins only, and non-exclusive with respect to our use of other proteomics
technologies. We are each responsible for our own costs. Large Scale
Proteomics has the initial right to file and maintain patent applications
relating to discovered drug targets; if Large Scale Proteomics does not file
and maintain such applications, those rights revert to us. Each of us is
required to make payments to the other following the commercialization of our
patents and patent rights under the agreement. The agreement terminates when
no further payments are required to be made to either of us. The agreement
may be terminated following notice given within 120 days of the conclusion of
the joint research program of its decision not to proceed, or either of us
may terminate the agreement if there is a material breach by the other that
is not cured or in the event the other is insolvent or in liquidation.

         CURAGEN. In March 2000, we entered into a research collaboration
agreement with CuraGen to discover relationships between SNPs and human
disease. Under this non-exclusive agreement, we provide clinical data and DNA
samples and CuraGen provides SNPs and the genetic analysis of our clinical
samples. We will jointly own with CuraGen any intellectual property rights
arising from any discoveries, and will grant various licenses to each other
that govern the terms on which those discoveries will be commercialized. We
are each responsible for our own costs, however we have agreed to reimburse
CuraGen a portion of the costs incurred in the genetic analysis of our
clinical samples and we will share with CuraGen any costs of using third
parties. We will share with CuraGen revenues arising from licenses granted
under the agreement. The agreement has an initial term of two years and
continues indefinitely unless CuraGen fails to deliver a sufficient quantity
of SNPs and we terminate it. Either of us may terminate the agreement if
there is a material breach by the other that is not cured.

         In October 2000, we entered into a drug target discovery
collaboration with CuraGen, which includes the application of CuraGen's
proteomic technology for the purpose of rapidly ascertaining the proteins
related to disease-associated genes. This collaboration will allow the
identification of potential therapeutic intervention points by examining
interactions between proteins within biochemical pathways. We anticipate that
this collaborative research will enable us and CuraGen to identify key
targets for drug discovery. We will jointly own intellectual property arising
from this collaboration with CuraGen. We have not incurred material costs
under the agreement to date, and we do not expect to incur material cost
reimbursement in future years. No minimum funding commitment is defined in
the agreement. We will share


                                      -28-

<PAGE>

with CuraGen revenues arising from the agreement. The agreement is for an
initial term of two years.

         In March 2001, we entered into two further non-exclusive agreements
with CuraGen focused on diabetes, obesity and osteoarthritis. Under both of
these agreements we have provided DNA samples and, under one of the
agreements, we will provide genotyping and analysis services. We will own the
intellectual property rights arising from any discoveries and have granted an
exclusive, indefinite worldwide license to CuraGen to commercially exploit
the results. We received a payment from CuraGen of approximately $1.5
million. CuraGen will provide research funding to support our genotyping and
analysis which may generate additional revenues for us over the next three
years. Either of us may terminate the agreement if there is a material breach
by the other that is not cured.

         SEQUENOM. In March 2000, we entered into a collaboration with
Sequenom to discover relationships between SNPs and human diseases, including
disease risk traits. Under the non-exclusive agreement, we provide clinical
data and DNA samples and Sequenom provides SNPs and the genetic analysis of
our clinical samples. We will jointly own with Sequenom any intellectual
property rights arising from any discoveries and will share with Sequenom
revenues from the licensing of those discoveries after the reimbursement of
some agreed costs. The agreement has an initial term of two years and either
of us may terminate the agreement if there is a material breach by the other
that is not cured.

         ROSETTA INPHARMATICS. In November 2000, we entered into a discovery
partnership with Rosetta Inpharmatics to identify and characterize sets of
genes associated with common human diseases. This research will initially
focus on the analysis of RNA collected from our clinical populations to
identify associations between the most active genes and the risk or presence
of common diseases, which will result in tens of thousands of genes being
screened over the course of the collaboration. We will fund our contributions
and Rosetta Inpharmatics will fund its contributions and we will jointly own
any intellectual property arising out of the collaboration with Rosetta
Inpharmatics. We intend to commercialize the results of this collaboration by
licensing the rights to third parties interested in the development of
gene-based therapeutics and diagnostic products.

         GENMAB. In December 2000, we entered into a collaboration with
Genmab to develop new antibody therapeutic products. The collaboration will
utilize novel disease targets that we discover along with Genmab's fully
human antibody technology to create and develop new products. The
collaboration will focus on several therapeutic areas, including
osteoporosis, cardiovascular disease, diabetes and obesity. We will fund our
contributions and Genmab will fund its contributions and we will jointly own
intellectual property arising from this collaboration with Genmab.

         In addition to the agreements described above, we have also granted
two licenses to use our osteoporosis disease gene COL1A1.

         AFFYMETRIX. In June 1999, we granted a license to Affymetrix to use
our patents and patent applications relating to the COL1A1 disease gene for
use in probe array diagnostics in exchange for license fees and royalty
payments. We have generated revenues of $150,000 to date pursuant to the
grant of this license and may receive further license fees of up to $750,000
with potential additional royalty payments. Affymetrix is required to use
reasonable efforts to


                                      -29-

<PAGE>

commercialize licensed products; if it does not we may make the license
non-exclusive. The license terminates upon the expiration of all of our
relevant patents unless we terminate it earlier because of a material breach
by Affymetrix that has not been cured.

         AXIS-SHIELD. In March 1999, we granted a license to Axis-Shield to
use our patents and patent applications relating to the COL1A1 disease gene
for use in commercial assay diagnostics in exchange for a license fee and
royalty payments. In December 2000, Axis-Shield launched a new research assay
product for osteoporosis using our COL1A1 disease gene, and we agreed to
expand their existing license to encompass all remaining unlicensed formats.
We have generated revenues of $152,000 to date from the grant of this license
and subsequent milestone payments and may receive additional royalty
payments. The license terminates upon the expiration of all our relevant
patents unless either of us terminates it earlier because of a material
breach by the other that has not been cured, the other is insolvent or in
liquidation. We may terminate the license if Axis-Shield has not paid any
royalties within 90 days of their being due.

         We have also performed gene validation services pursuant to a
services agreement we entered into with Kyowa Hakko Kogyo in December 1998
and completed during the year ended March 31, 2000. Under the services
agreement, we performed research on a gene provided by Kyowa Hakko Kogyo and
generated aggregate revenues of $184,000 pursuant to this agreement.

CLINICAL COLLABORATIONS

         We have entered into clinical collaborations with a number of
medical, educational, research and scientific institutions in order to
collect the clinical data and genetic and other biological samples we use in
our gene discovery program. Although our agreements with our clinical
collaborators are each individually negotiated, in general we provide funding
for the collection of clinical measurements and genetic and other biological
samples, the transfer of these resources to us and in some cases further
analysis of these measurements and samples by our collaborators. Our funding
is provided either on a per sample or per volunteer basis or is provided on a
total project basis with a pre-agreed budget. In all cases, our funding is
directed towards the delivery to us of agreed information and samples. For
the year ended March 31, 2001, the aggregate cost of our clinical
collaborations amounted to approximately $4.1 million. We expect that the
expense of our current clinical collaborations will remain relatively stable,
but that we will incur additional expenses by entering into further clinical
collaborations. In general, we retain exclusive commercial rights to the
clinical data and samples obtained for us by our clinical collaborators. Our
agreements with our clinical collaborators also specify the research program
that will be performed.

         QUEENSLAND INSTITUTE OF MEDICAL RESEARCH. In March 1998, we entered
into a joint venture agreement with the Council of the Queensland Institute
of Medical Research. Under the agreement, the Queensland Institute grants us
an exclusive license to use clinical measurements on approximately 10,000
twin and sibling pairs of human volunteers and genetic and other biological
samples and we must make agreed payments and give the results of our genetic
analysis of biological samples to the Queensland Institute. We have the right
to all intellectual property rights arising from the research, although the
Queensland Institute has retained some non-commercial rights and is entitled
to specified royalty payments relating to any resulting


                                      -30-

<PAGE>


intellectual property. Either of us may terminate the agreement if there is a
material breach by the other that is not cured or in the event the other is
insolvent or being liquidated.

         PROGRAM FOR POPULATION STUDIES, SCHOOL OF PUBLIC HEALTH, HARVARD
UNIVERSITY. In December 1997, we entered into a sponsored research agreement
with the President and Fellows of Harvard College. Under the agreement,
Harvard College grants us a non-exclusive license to use clinical samples and
measurements from 5,000 sets of twins and we make scheduled payments to
Harvard College. Harvard College retains all intellectual property rights
arising from its research and we retain all intellectual property rights
arising from our research using the data and samples collected (but not using
further research on them by Harvard College employees). We also have an
exclusive one-year option to negotiate an exclusive worldwide license
agreement for any patent obtained by Harvard College from the research. The
initial term of the agreement is until December 2001, and either of us may
terminate the agreement with notice or if there is a material breach by the
other that is not cured or circumstances beyond either of our control
preclude the research.

         DIVISION OF MOLECULAR TOXICOLOGY, THE KAROLINSKA INSTITUTE AND
HUDDINGE UNIVERSITY HOSPITAL. In June 1999, we entered into a research
collaboration agreement with Prof. Leif Bertilsson, Division of Clinical
Pharmacology at Karolinska Institutet - Huddinge University Hospital, and
Prof. Magnus Ingelman-Sundberg, Division of Molecular Toxicology at
Karolinska Institutet. Under the agreement, Karolinska Institutet provides us
with clinical data and genetic and other biological samples and we provide
funding, the genetic analysis of samples and return of identifiable DNA
samples, and the storage and updating of information from human volunteers.
Karolinska Institutet retains the right to use the data and samples it
provides us for its own research studies. Any intellectual property arising
from the research belongs to the party that discovers it. If Karolinska
Institutet discovers any intellectual property, we have a right of first
offer and a right of first refusal to acquire an exclusive license to the
rights from the discovery, although we must successfully negotiate a license
agreement within four months of exercising that right or negotiations may be
terminated. The initial term of this agreement is for three years, and we may
extend this term by two years. Either of us may terminate the agreement if
there is a material breach by the other that is not cured.

         DEPARTMENT OF PATHOLOGY AND CYTOLOGY, CENTRAL HOSPITAL. In December
1998, we entered into an agreement with the Department of Pathology and
Cytology, Central Hospital in Falun, Sweden. Under the agreement, Central
Hospital provides us with clinical data and genetic and other biological
samples and we provide the genetic analysis of samples and return of
identifiable DNA samples, and the storage and updating of information from
human volunteers. Central Hospital retains the right to use the data and
samples it provides us for its own research studies. In addition, we train
the staff of the Central Hospital in conducting the research and reimburse
the Central Hospital for reasonable costs incurred under the agreement. The
agreement is for a term of five years.

         DEPARTMENT OF NEUROSCIENCE AND PSYCHIATRY, UNIVERSITY OF UPPSALA. In
February 1999, we entered into a research collaboration agreement with the
Department of Neuroscience and Psychiatry, University of Uppsala. Under the
agreement, the Department of Neuroscience and Psychiatry provides us with
clinical data and genetic and other biological samples and we provide
funding, the genetic analysis of samples and return of identifiable DNA
samples, and the storage and updating of information from human volunteers.
The Department of


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<PAGE>

Neuroscience and Psychiatry retains the right to use the data and samples it
provides for its own research. We have the right to all intellectual property
arising from the research program. We also have the right of first refusal to
license any intellectual property arising from the Department of Neuroscience
and Psychiatry's internal research on identifiable DNA samples returned by
us, although we must successfully negotiate a license agreement within six
months of exercising that right or negotiations may be terminated. The
agreement has a term of three years, which we may extend for an additional
two years. Either of us may terminate the agreement if there is a material
breach by the other that is not cured and the agreement will terminate
immediately if a court declares us bankrupt.

         DEPARTMENT OF GERIATRICS, UNIVERSITY OF UPPSALA. In December 1996,
we entered into a research collaboration agreement with the Uppsala
Hypertension Genomic Research Program under the supervision of Dr. Hans
Lithell. Under the agreement, the Uppsala Hypertension Genomic Research
Program grants us a non-exclusive license to use specified clinical data and
genetic and other biological samples and we provide funding, the genetic
analysis of samples and the storage and updating of information from human
volunteers. We have the right of first refusal to license all intellectual
property rights arising from the research program, although we must
successfully negotiate a license agreement within six months of exercising
that right or negotiations may be terminated. The agreement has a term of
five years.

         TWIN RESEARCH UNIT, ST. THOMAS' HOSPITAL. In March 1996, we entered
into a license agreement with Dr. Timothy Spector, Twin Research Unit, St.
Thomas' Hospital. Under the agreement, Dr. Spector has granted us an
exclusive worldwide license to use specified clinical data and genetic and
other biological samples that Dr. Spector has obtained from twin volunteers
for commercial purposes in exchange for agreed payments. We may utilize
clinical and other information and data collected by Dr. Spector that was
funded by grants from the Wellcome Trust to the extent they have been
published or are lawfully in the public domain even though this data and
information is excluded from the license between Dr. Spector and us. Dr.
Spector has rights to use any materials licensed to us for non-commercial
purposes incidental to medical practice and science. We have the right to
undertake research on the samples and data collected and to retain and
commercialize this research. The agreement continues unless terminated by
either of us if there is a material breach by the other that is not cured.
From January 1998, we entered into sequential annual collaborative agreements
with the Twin Research Unit, St. Thomas' Hospital under which the Twin
Research Unit provides us with clinical data and genetic and other biological
samples from human volunteers and we must make agreed payments of a fee for
each human volunteer. The current annual agreement expires on July 31, 2001.

         INSTITUTE OF BONE AND JOINT RESEARCH, ROYAL NORTH SHORE HOSPITAL. We
extended an initial agreement of December 1997 in January 2000, when we entered
into a collaboration and license agreement with the Institute of Bone and Joint
Research and a related service level agreement with Prof. Philip Sambrook. Under
the agreements, the Institute of Bone and Joint Research has granted us an
exclusive worldwide license to use clinical data and genetic and other
biological samples it has collected from twin volunteers in return for our
payment of agreed fees and provision of advice and information. We acquire all
intellectual property rights in any inventions and information arising from the
study, although Prof. Sambrook has retained some rights to use any materials
licensed to us for non-commercial research. The collaboration and license
agreement has an initial term of two years, which we may extend annually by
prior


                                      -32-

<PAGE>

notice, unless either of us terminates it if there is a material breach by
the other that is not cured or in the event the other is insolvent or stops
paying its debts.

         FREE UNIVERSITY, AMSTERDAM. In February 2001, we entered into a
research collaboration agreement with the Free University of Amsterdam. Under
the agreement, we have rights to examine and commercialize discoveries
arising from data and DNA samples collected over the last ten years from the
Free University of Amsterdam, in relation to anxiety and depression.

INTELLECTUAL PROPERTY

         We regard our intellectual property as vital to the success of our
business. To protect our rights in this area, we rely on a combination of
patents, confidentiality agreements with our employees, collaborators and
others, and restricted physical access to our clinical data and technology
platforms, which we maintain as trade secrets.

         A growing number of companies, research and academic institutions,
government and government-sponsored entities and other organizations are
attempting to identify and patent genes and gene fragments. Patent
applications that claim these discoveries must provide sufficient information
regarding the uses of the gene or gene fragments to satisfy the utility or
industrial applicability requirements of patent law. Because our discoveries
are based on the discovery of disease genes and gene fragments, we believe
that our patent applications satisfy the utility or industrial applicability
requirements of most jurisdictions.

         As the result of our discoveries of associations between genes and
clinical measurements that relate to disease risk or the disease itself, we
have filed, and will file, patents for the following claims:

         -        kits, reagents and articles of manufacture used in the
                  diagnosis of predisposition to disease through testing for the
                  presence of a gene;

         -        kits, reagents and articles of manufacture used in the
                  diagnosis of a disease through testing for the presence of one
                  or more SNPs at specified positions within a gene; and

         -        a database of risk trait information and methods of using the
                  database to identify a correlation between risk traits and
                  genetic information.

         Where there is evidence to support a patent claim, we will also
patent the diagnosis of a response to, or the side effects from, a drug used
to treat the disease by identifying the gene affected. We have also filed
patent applications relating to research tools that we have discovered.

         We have currently filed 48 patent applications worldwide based on
our discoveries. Our patent applications have resulted in six granted patents
in the United States, two granted patents in Australia and three granted
patents in New Zealand. All of our patents have a term of 20 years from the
date of filing the patent application. Our granted patents will all expire in
2017. Our patents are:


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<PAGE>


         -        Diagnosis of predisposition to osteoporosis (U.S. Patent No.
                  5,922,542; Australian Letters Patent No. 718326; New Zealand
                  Letters Patent No. 331489): claims methods, polymer chain
                  reaction primers and kits for use of a particular variation in
                  the Type 1 collagen to diagnose osteoporosis. The University
                  of Aberdeen conducted the research on which these patents are
                  based and is entitled to 50% of the net profits on
                  commercialization of the patents. We are also awaiting patent
                  grants in other countries.

         -        Detection of polymorphisms in the TGF-(beta)1 promoter (U.S.
                  Patent No. 5,998,137; Australian Letters Patent No. 723751):
                  claims methods, polymer chain reaction primers and kits for
                  diagnosing and identifying a number of variations in a gene
                  which control blood levels of the TGF-(beta)1 protein and
                  predict increased disposition or susceptibility to
                  osteoporosis, atherosclerosis, cancer and immune disorders.
                  These patents also cover the use of the particular gene
                  variation and selection of drugs that have their effect
                  through acting on that gene. We are awaiting patent grants in
                  other countries.

         -        Vitamin D receptor gene polymorphisms and osteoarthritis (U.S.
                  Patent No. 5,939,260; New Zealand Letters Patent No. 332365):
                  claims the use of a particular variation in the vitamin D
                  receptor gene as a predictor of osteoarthritis with diagnostic
                  potential in selecting "at risk" groups for therapy. We are
                  awaiting patent grants in other countries.

         -        Diagnostic method and apparatus based on polymorphism in an
                  IL-6 gene (U.S. Patent No. 6,066,450; New Zealand Letters
                  Patent No. 332702): claims methods for identifying
                  predisposition to osteoporosis based on variations in the
                  Interleukin-6 (IL-6) gene and their relationship to bone
                  mineral density, the main risk factor for osteoporotic
                  fracture. The patent also claims therapeutic applications of
                  the invention. This patent was based on research from the
                  University of Aberdeen, which is entitled to 50% of the net
                  profits on commercialization. We are awaiting patent grants in
                  other countries.

         -        U.S. Patent No. 6,156,510 claims methods for diagnosing
                  hypertension and for identifying predisposition to
                  hypertension based on the presence or absence in the
                  glucocorticoid receptor gene of a microsatellite.
                  Microsatellites are repeat sequences of DNA that are used as
                  markers on the genome. The patent also claims methods for
                  treating hypertension based on the microsatellite.

         -        U.S. Patent No. 6,218,524 claims reagents for detecting
                  polymorphisms in the microsomal triglyceride transfer protein
                  which are correlated with levels of low density lipoprotein,
                  an undesirable type of cholesterol. This patent's reagents can
                  be used as the basis for developing a diagnostic kit that
                  would allow physicians to identify patients with a
                  predisposition to elevated levels of this type of cholesterol
                  and related cardiovascular disease.

         We have other patent applications pending in the United States, Europe
and other jurisdictions that cover:

         -        associations between other genes and common diseases;


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<PAGE>


         -        a method of determining one or more variations in a gene that
                  encodes a protein and how this may effect a drug treatment;
                  and

         -        methods for the determination of gene variations.

         We also rely upon trade secret protection for our confidential and
proprietary information. We believe we have developed proprietary technology
for use in gene discovery, including proprietary software for the capture,
storage and analysis of DNA, protein and clinical information and integrated
bioinformatic systems. In addition, we have developed databases of
proprietary clinical and biological information that are updated on an
ongoing basis. We have taken measures to secure and protect this data.
Although we require employees, academic and clinical collaborators and
consultants to enter into confidentiality agreements, our proprietary
information could be disclosed or others could develop substantially
equivalent proprietary information and techniques and we might not be able to
meaningfully protect our trade secrets.

         Our academic and clinical collaborators have certain rights to
publish data and information in which we have rights. We believe that the
limitations on publication of data developed by our clinical collaborators
contained in our agreements with them will be sufficient to permit us to
apply for patent protection.

COMPETITION

         The genomics industry is relatively new and the potential rewards it
offers have generated substantial interest. To capture these potential
rewards, many entities have entered the genomics industry. Although we
believe that our clinical resources are among the most comprehensive across
the broadest range of disease areas, we currently compete with a number of
companies performing similar activities in more targeted areas.

         A number of companies are involved in discovering genes using human
populations, which is similar to our approach. These companies include deCode
Genetics, Genset, Myriad Genetics, Millennium Pharmaceuticals and Oxagen.
Some of these companies collect data from siblings or large families affected
with disease, including families affected with rare forms of genetic disease
or families from geographically isolated populations, which typically require
replication in general population samples. A number of companies, such as
Celera Genomics, CuraGen, Human Genome Sciences, Incyte Pharmaceuticals and
Millennium Pharmaceuticals, are involved in discovering genes using gene
sequencing technologies and equipment and other technologies. We believe our
clinical focus and clinical resources will enable us to effectively compete
in our market and that many of our competitors' approaches are complementary
to our own. Accordingly, we view many of our competitors also as potential
collaborators and customers.

GOVERNMENT REGULATION

         Government regulation in the United States, the European Union and
other countries significantly affects the collection and use of the DNA
samples used in our research programs as well as in the development and
commercialization by our customers of drugs and diagnostics based on our gene
discoveries.

         We obtain DNA samples through our clinical collaborators and from our
Canadian subsidiary. The collection of genetic samples and genetic testing has
already raised concerns


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<PAGE>


regarding confidentiality and the appropriate uses of the resulting
information. For these reasons, governmental authorities may decide to
restrict or regulate the use of genetic information or prohibit testing for a
genetic predisposition to certain conditions, particularly for those that
have no known cure. The programs of our clinical collaborators and our
Canadian subsidiary are subject to the review of procedures by the ethics
committees of the institutions associated with these collaborators. These
ethics committees are typically subject to national or local regulations. In
general, these regulations follow International Committee on Harmonization
guidelines for good clinical practice regarding the conduct of clinical
research programs and require (1) informing the volunteers in those programs
of the risks of the procedures to be performed as part of the program; and
(2) obtaining consent to participate in the program from all volunteers.

         The relevant ethics committees approve the protocols and other
operating procedures to be followed in the programs and require the
volunteers' consent to the intended use of the samples and the protection of
the individual identities of the volunteers. Our ability to continue to
collect samples and data, therefore, depends on our clinical collaborators'
and our Canadian subsidiary's ability to continue obtaining ethics committee
approvals.

         Our ultimate commercial success will depend on the ability of our
customers to successfully develop and market products based on our
discoveries. Our customers will require the approval of the U.S. Food and
Drug Administration and similar regulatory authorities in other countries to
manufacture and market in those countries any drugs and diagnostics they
develop based on our discoveries. The United States, most European countries
and other countries impose high standards of review by their regulatory
authorities before drugs or diagnostics are approved for use. The regulatory
authorities typically require evidence of the product's safety and usefulness
from pre-clinical and clinical studies showing the effects and side effects
of the product before they will grant approval. This process typically takes
a number of years depending on the type, complexity and novelty of the
product. These authorities also typically demand ongoing oversight of the
product for safety and usefulness after it has been approved and is marketed.
In addition, the United States and most European countries have strict
regulations which control the testing, manufacturing, labeling, marketing,
supplying, and selling of drugs and diagnostics.

ORGANIZATIONAL STRUCTURE

         We are the parent company of four operating subsidiaries, all of
which we wholly own. Our operating subsidiaries and their respective
countries of incorporation are: (1) Gemini Genomics (UK) Limited (England);
(2) Gemini Genomics AB (Sweden); (3) Gemini Genomics Inc. (the United States)
and (4) Newfound Genomics Inc. (Canada).

PROPERTY, PLANTS AND EQUIPMENT

         We currently lease a facility of approximately 19,600 square feet in
Boston, Massachusetts, for our North American headquarters. This facility
also serves as the base of our business development and investor relations
activities. The lease expires in December 2010. We also lease approximately
12,600 square feet in two premises in Cambridge, England, for use as our U.K.
headquarters and as the base of our clinical analysis, research and
development and support activities. The space is held under two leases that
expire in December 2002 and June 2010. Additionally, we lease approximately
20,300 square feet of mixed laboratory and


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<PAGE>

office space in Uppsala, Sweden, primarily to support our gene research and
gene validation activities. The space is held under four leases that expire
in September 2002. To cope with our anticipated increasing space requirement,
we have entered into an agreement to enter a new lease for 35,600 square feet
of premises being constructed in Cambridge, England with effect from May
2002. This lease will expire in May 2022, and we anticipate vacating our
existing 12,600 square feet of space in Cambridge, England, on possession of
the newly-constructed premises. We own freehold premises of 5,850 square feet
in St. John's, Newfoundland, of mixed laboratory and office space to support
clinical collection in the province.

ITEM 5.           OPERATING AND FINANCIAL REVIEW AND PROSPECTS

OVERVIEW

         We are a clinical genomics company that identifies relationships
between human genes and common human diseases. Since commencing operations in
1995, we have focused on creating and developing our clinical information and
genetic sample resources together with our bioinformatics, information
technology and laboratory capabilities.

         We are a development stage company. Since inception, we have
incurred significant losses and, as of March 31, 2001, we had an accumulated
deficit of $51.4 million. As we continue to develop our business, we
anticipate that we will incur additional losses. We also expect that the cash
required to support our operating activities will continue to increase as we
expand our clinical resources and acquire further complementary technologies.

         Since inception, we have received modest amounts of revenues,
comprising royalty and milestone payments from the licensing of our first
disease gene patent for use in diagnostic applications, fees in relation to
agreements with CuraGen and service fees from a gene validation program. We
expect that we will derive our future revenues primarily from the licensing
of disease gene and protein discoveries for drug discovery and diagnostic
applications and, to a lesser extent, from the provision of gene validation
services. We expect to generate greater revenues from licensing our
discoveries to pharmaceutical companies for drug development programs than
from licensing for diagnostic applications. When licensing a gene or protein
discovery, we expect that we will receive milestone payments and product
royalties. Milestone payments are typically paid over five to seven years
upon the occurrence of specific events, or milestones, as our product is used
in the drug discovery or diagnostics process. These payments are dependent
upon the success of the development program. Accordingly, we intend to ensure
that rights to development revert to us if a development program does not
proceed on the agreed timetable. Product royalties would typically give us a
percent of the revenues derived from the sales of products using our
discoveries and often specify minimum annual payments. We do not anticipate
significant future revenues from the provision of gene validation services.

         We have entered into a number of clinical collaborations with
academic and other institutions to acquire the commercial rights to gene
discoveries arising from the clinical data and samples they collect. We have
also sought to capitalize on our expanding data resources and bioinformatics
and other technological capabilities by entering into collaborations with
providers of complementary technologies in order to discover disease genes
more rapidly. For example, we have established technology alliances with
Celera Genomics (a division of Applera Corporation), Qiagen Genomics, Large
Scale Proteomics, CuraGen, Sequenom, Rosetta Inpharmatics and Genmab.


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<PAGE>

         In December 1999, we acquired Eurona Medical AB, a Swedish genomics
company. We paid $4.9 million for Eurona, in the form of 1,820,180 newly
issued preferred ordinary shares, $19,000 in cash, and $186,000 in direct
costs relating to the acquisition. We have successfully restructured Eurona
to focus on gene discovery and have fully integrated it with our operations.
As a result of this acquisition, we significantly expanded our access to
clinical and genetic resources which enables us to conduct our gene discovery
process more rapidly. In addition we streamlined our combined operations and
reduced our total number of employees, significantly reducing our overall
operating expenses, and therefore, our cash requirements. Following the
Eurona acquisition, our existing shareholders provided us with $11.1 million
in cash by subscribing for new preferred ordinary shares in a rights offering.

         In June 2000, we incorporated Newfound Genomics in Newfoundland,
Canada, now a wholly-owned subsidiary. In collaboration with local parties,
we established a local facility and commenced clinical and genetic data
collection from the geographically isolated population in Newfoundland, where
there tend to be very large families with well-defined family origins and
with higher than normal incidences of a number of diseases.

         In July 2000, we completed an initial public offering of our
ordinary shares, in the form of ADSs, and in August 2000, our underwriters
exercised their option to purchase additional shares to cover over-allotments
in connection with the initial public offering. In total, we received net
proceeds of approximately $86.2 million from the sale of 13,800,000 ordinary
shares. Since inception, we have raised $127.1 million of equity from our
shareholders, net of expenses.

         We expect our costs to increase as we continue to grow. A
significant portion of our historical cost has been related to our clinical
collaborators, and we expect this to continue. We pay our clinical
collaborators for recruitment of volunteers, performance of clinical
measurements, collection and storage of clinical samples and certain analysis
of the clinical data. We record the costs of our clinical collaborations as
research and development costs. We expect that an increasing proportion of
our costs will reflect our investment in new technologies to analyze our
growing data resources and to increase the speed of our gene discovery
process. We also expect to incur charges relating to the future exercise of
warrants and share options, which we are currently unable to quantify. In the
year ended March 31, 2001, we incurred $1.9 million of share option based
compensation charges and as of March 31, 2001 had a deferred compensation
balance of $1.5 million. Amortization of this balance will be approximately
$1.5 million for the year ending March 31, 2002, and there will be no
amortization for this balance in the year ended March 31, 2003.

         We have a limited history of operations, and we anticipate that our
quarterly results of operations will fluctuate for the foreseeable future due
to several factors, including the timing and extent to which we secure
further commercial relationships and the timing and extent of our research
and development efforts. Our limited operating history and the fast pace of
developments in the genomics sector make it difficult for us to accurately
predict our future operations.

OPERATING RESULTS

YEAR ENDED MARCH 31, 2001 COMPARED TO THE YEAR ENDED MARCH 31,2000


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<PAGE>


         REVENUES. Revenues increased by $1,415,000 to $1,579,000 in the year
ended March 31, 2001 from $164,000 in the year ended March 31, 2000. The
increase in revenue resulted primarily from payments received under two
non-exclusive agreements with CuraGen, which commenced during the year ended
March 31, 2001.

         RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
increased by $3.1 million to $13.0 million in the year ended March 31, 2001
from $9.9 million in the year ended March 31, 2000. These expenses primarily
relate to our clinical collaborators and, to a lesser extent, salaries for
research and development personnel, external scientific advisors and
laboratory costs. The increase in spending primarily reflects an increase in
the number of research personnel as well as our accelerated clinical and
research efforts in a number of gene and target discovery activities.

         MARKETING, GENERAL AND ADMINISTRATIVE EXPENSES. Marketing, general
and administrative expenses increased by $4.1 million to $9.4 million in the
year ended March 31, 2001 from $5.3 million in the year ended March 31, 2000.
These expenses consisted primarily of employment and facilities costs and
other expenses incurred by our business development, information technology,
finance and various support functions. The increase reflects investment in
business development and intellectual property management activities and our
increased infrastructure resulting from the expansion of our business. We
refurbished and opened our new U.S. headquarters during the year ended March
31, 2001.

         INTEREST EXPENSE (NET). Net interest income increased by $3,379,000
to $3,364,000 in the year ended March 31, 2001 from a net interest expense of
$15,000 in the year ended March 31, 2000. Interest income increased by
$3,363,000 to $3,841,000 in the year ended March 31, 2000 from $478,000 in
the year ended March 31, 2000 due to higher balances of interest bearing cash
deposits. Interest payable decreased by $16,000 to $477,000 in the year ended
March 31, 2001 from $493,000 in the year ended March 31, 2000 due to changes
in our capital lease obligations.

         FOREIGN CURRENCY GAIN. Foreign currency gain increased by $4.5
million to $4.5 million in the year ended March 31, 2001. We had no foreign
currency gain or loss in the year ended March 31, 2000. This $4.5 million
gain arose from the difference between translating our U.S. dollar cash
proceeds from our initial public offering into British pounds, our functional
currency, at receipt and translating the remaining U.S. dollar donominated cash
balances into British pounds at March 31, 2001.

         TAXES. Our taxation credit increased by $880,000 to $880,000 in the
year ended March 31, 2001. We had no taxation credit in the year ended March
31, 2000. This $880,000 increase arose from a change in U.K. corporation tax
law with effect from April 1, 2000 allowing companies engaged in research and
development and which meet certain criteria to surrender ongoing corporation
tax losses in return for a cash refund of employee and payroll taxes.

YEAR ENDED MARCH 31, 2000 COMPARED TO THE YEAR ENDED MARCH 31, 1999

         REVENUES. Revenues decreased by $34,000 to $164,000 in the year
ended March 31, 2000 from $198,000 in the year ended March 31, 1999. This
decrease related both to the completion of a gene validation program during
the year and reflects the fact that revenues were received for a lesser
amount of work than in the previous year.


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<PAGE>

         RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
increased by $0.5 million to $9.9 million in the year ended March 31, 2000
from $9.4 million in the year ended March 31, 1999. These expenses primarily
relate to our clinical collaborators and, to a lesser extent, salaries for
research and development personnel, external scientific advisors and
laboratory costs. The increase reflected costs of $0.5 million incurred in
order to streamline the analysis of genetic samples taken from volunteers in
China by establishing a gene analysis center at the Anhui Meizhong Institute
of Biomedical Sciences and Environmental Health.

         MARKETING, GENERAL AND ADMINISTRATIVE EXPENSES. Marketing, general
and administrative expenses increased by $3.8 million to $5.3 million in the
year ended March 31, 2000 from $1.5 million in the year ended March 31, 1999.
These expenses consisted primarily of employment and facilities costs and
other expenses incurred by our business development, information technology,
finance and various support functions. This increase included $2.2 million of
additional costs relating to our increased sales and marketing activities,
which primarily consisted of additional personnel, travel and material costs
incurred in business development and administrative functions. Also included
in the increase is a $1.3 million charge relating to the issuance of 500,000
preferred ordinary shares under agreements reached in the period with a
number of ex-employees and approximately $0.3 million related to share option
compensation.

         INTEREST EXPENSE (NET). Net interest expense decreased by $36,000 to
$15,000 in the year ended March 31, 2000 from $51,000 in the year ended March
31, 1999. Interest income increased by $209,000 to $478,000 in the year ended
March 31, 2000 from $269,000 in the year ended March 31, 1999 due to higher
balances of interest bearing cash deposits. Interest payable increased by
$173,000 to $493,000 in the year ended March 31, 2000 from $320,000 in the
year ended March 31, 1999 due to increased capital lease obligations and the
inclusion of a charge relating to the issuance of warrants to a debt provider.

         TAXES.  We had no taxation charge or credit in either of the years
ended March 31, 2000 or 1999.

IMPACT OF INFLATION

         The impact of inflation and changing prices on our operations was
not significant during the periods presented.

FOREIGN CURRENCY RATE FLUCTUATIONS

         The functional currency of our operating subsidiaries are British
pounds, U.S. dollars, Swedish kronor and Canadian dollars. In accordance with
SFAS No. 52, Foreign Currency Translation, we translate other currencies to
British pounds for balance sheet accounts using the exchange rate in effect
at the balance sheet date and for revenues and expense accounts at the
average exchange rate during the period. The effects of translation are
recorded as a separate component of shareholders' equity. We translate our
consolidated financial statements from British pounds, our functional
currency, to U.S. dollars, for reporting purposes. Fluctuations in the rate
of exchange of the British pound relative to the U.S. dollar will affect
period-to-period comparisons of our reported results.


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<PAGE>


         During the year ended March 31, 2001, our foreign currency gains
amounted to $4.5 million. No gains or losses were recorded during prior
years. Our foreign currency gain arose from the foreign currency effects of
translating the funds received from our initial public offering in U.S.
dollars into British pounds, our functional currency.

         We have not taken any action to reduce our exposure to changes in
foreign currency exchange rates, such as options or futures contracts, either
with respect to any individual transactions or in general.

RECENT ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, Accounting for Derivative Instruments. This statement changes the
previous definition of derivative, which focused on freestanding contracts
such as options and forwards, including futures and swaps, expanding it to
include embedded derivatives and many commodity contracts. Under the
statement, every derivative is recorded in the balance sheet as either an
asset or a liability measured at its fair value. The statement requires that
changes in the derivatives fair value be recognized currently in earnings
unless specific hedge accounting criteria are met. SFAS No. 133 is effective
for fiscal years beginning after June 15, 2000. We do not anticipate that the
adoption of SFAS No. 133 will have a material impact on our financial
position or results of operations in future accounting periods.

LIQUIDITY AND CAPITAL RESOURCES

         We have financed our operations since inception primarily through
the private placement of equity securities. Since inception, we have raised
$127.1 million of equity from our shareholders, net of issuance costs. In
addition, we have entered into a number of capital lease agreements totaling
$8.7 million to finance the acquisition of our scientific and computer
equipment. As of March 31, 2001, we have made capital repayments on these
leases totaling $4.9 million.

         As of March 31, 2001 we had cash and cash equivalents of $79.6
million compared to cash and cash equivalents of $13.4 million at March 31,
2000. This increase reflects receipt of the net offering proceeds from the
initial public offering of our ordinary shares, in the form of ADSs, in July
2000. As of March 31, 2000, we had cash and cash equivalents of $13.4 million
compared to cash and cash equivalents of $12.2 million at March 31, 1999.
This increase reflects receipts of the proceeds from our equity financing
completed in March 1999 and December 1999. Our funds are invested in U.S.
dollars and British pounds, in liquidity funds and short-term deposits, with
periods varying from one day to one year, with a variety of institutions.

         We expect our cash and cash equivalents, together with our
operational and interest income earned, to be sufficient to fund our
operations for at least the next 12 months. The adequacy of our available
funds will depend on many factors, including scientific progress in our
research and development programs, the magnitude of those programs, our
commitments to existing and new clinical collaborators, our ability to
establish commercial and licensing arrangements, our capital expenditures,
market developments and any future acquisitions. Accordingly, we may require
additional funds and may attempt to raise additional funds through


                                      -41-

<PAGE>


equity or debt financings, collaborative agreements with commercial partners
or from other sources.

         In February 2000, we established a $5.0 million line of credit for
capital equipment financings with Hewlett Packard International Bank. We have
drawn a total of $1.3 million against this line of credit. Interest is
repayable quarterly at 11.0% per annum over the four- year period of the
lease, which has a capital repayment holiday for the first 18 month period.
We have no commitments for any additional financings. In connection with
entering into this line of credit, we have granted Hewlett Packard
International Bank warrants to purchase 40,000 ordinary shares and have
agreed to grant them additional warrants to purchase up to 80,000 additional
ordinary shares in the event that we draw further against this line of
credit. Hewlett Packard International Bank has until February 21, 2003 to
exercise its outstanding warrants and may do so by providing us with notice
of its intention to exercise the warrants as well as by paying an exercise
price of (pound)0.05 ($0.07) per ordinary share. Any excess of the market
value over the exercise price of the ordinary shares will have an adverse
impact on our statement of operations. In February 2001, we undertook a sale
and leaseback transaction with Investec. We sold scientific and information
technology equipment we recently acquired for $0.7 million and have entered
into a three-year lease arrangement. No gain or loss was recognized on this
transaction. Repayments are quarterly and interest is payable at 9.8% per
annum.

         Our capital expenditures totaled $1.1 million, $0.7 million and $2.3
million, in the years ended March 31, 1999, 2000 and 2001, respectively. In
each period these expenditures consisted principally of the purchase of
laboratory equipment, information technology and refurbishing our premises.

         In the year ended March 31, 2001, we signed a ten-year operating
lease for approximately 19,600 square feet of office space in Boston,
Massachusetts at a cost of $648,000 per year. We have approval from the
landlords to sublet half of this space. The landlords required a stand-by
letter of credit amounting to $1,127,000 to secure the lease. This letter of
credit is supported by a charge over an equivalent amount held in an
interest-bearing bank account shown as restricted cash in our consolidated
balance sheet.

         As of March 31, 2001 we were still completing the refurbishment of
our freehold premises in Newfoundland, Canada. We expect the refurbishment to
be completed by June 2001, at a total cost of around $0.2 million, which we
expect to finance from our existing cash resources.

TREND INFORMATION

         Our total expenses increased by $7.9 million to $23.5 million in the
year ended March 31, 2001 from $15.6 million in the year ended March 31,
2000. This increase arose from accelerated activity in our research programs
and costs associated with building our business development and support
functions, which have both occurred following our initial public offering in
July 2000. We expect this trend of increasing activity to continue in the
current fiscal year and, together with the full-year effect of the
expenditure related to the enlarged organization, to cause a further increase
in our level of total expenses.

         In the continuing absence of significant revenues, there will be an
increase in our loss from operations and a decrease in our current level of
cash resources.


                                      -42-

<PAGE>


ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

DIRECTORS AND EXECUTIVE OFFICERS

         The following table provides information regarding our directors and
executive officers as of March 31, 2001:

<TABLE>
<CAPTION>


NAME                             AGE    POSITION
------------------------------   ---    ----------------------------------------
<S>                              <C>    <C>
Michael Fitzgerald............    43    Non-Executive Chairman of the Board of
                                        Directors(1)
Paul Kelly....................    41    Executive Director, President and Chief
                                        Executive Officer
Sir Walter Bodmer.............    65    Non-Executive Director(2)
Jeremy Ingall.................    40    Non-Executive Director(1)
Roberto Rosenkranz............    51    Non-Executive Director(1)(2)
Rosalind Bergemann............    35    Executive Vice President, Global Human
                                        Resources
Howard Christley..............    43    Executive Vice President, Medical
Roger Dickinson...............    48    Executive Vice President, Legal and
                                        Corporate Affairs
Patrick Kleyn.................    35    Executive Vice President, Science
Tony Ratcliffe................    37    Executive Vice President, Finance
Zahed Subhan..................    43    Executive Vice President, Business
                                        Development
M.C. Sullivan.................    50    Executive Vice President, Corporate
                                        Communications and Bioethics
</TABLE>

---------------------
(1)   Member of the remuneration committee.
(2)   Member of the audit committee.

MICHAEL FITZGERALD, LL.B., LL.M., CO-FOUNDER AND NON-EXECUTIVE CHAIRMAN. Mr.
Fitzgerald, qualified as a barrister in England in 1979 and since then has
specialized in the provision of international banking and corporate legal
services to clients in Australia, the United States and the United Kingdom.
He spent seven years acting as an in-house banking counsel, including a
four-year period as special projects counsel, with the Hongkong Bank of
Australia Limited in Sydney, Australia. Since 1987, he has acted as a
consultant to and director of a number of public and private companies. He is
admitted as a barrister and solicitor in Victoria and a solicitor in New
South Wales.

PAUL KELLY, M.B.B.S., M.D., FRACP, CO-FOUNDER, EXECUTIVE DIRECTOR, PRESIDENT
AND CHIEF EXECUTIVE OFFICER. Dr. Kelly is one of our co-founders and has
served as our Chief Executive Officer since January 1997. He originally
trained in medicine at the University of New South Wales, Sydney, Australia,
where he received his Bachelor of Medicine and Bachelor of Surgery degrees in
1983. He then trained as a physician, specializing in endocrinology, at St.
Vincent's Hospital, Sydney, and received his Fellowship of the Royal
Australasian College of Physicians in 1990. He was awarded a Doctorate in
Medicine from the University of New South Wales in 1990, with his thesis on
the genetics of osteoporosis. He has held academic positions at the Faculty
of Medicine of the University of New South Wales and has published over 90
scientific papers and has contributed to a number of books and other
publications, particularly in the genetic epidemiology of osteoporosis,
obesity and insulin resistance syndrome. He is the co-inventor of a patent
relating to vitamin-D receptor alleles and osteoporosis susceptibility.

SIR WALTER BODMER, PH.D., FRCPATH, FRS, NON-EXECUTIVE DIRECTOR. Sir Walter
Bodmer currently serves as the Principal of Hertford College, Oxford. He has
served as Director General of the Imperial Cancer Research Fund, President of
the Human Genome organization and


                                      -43-

<PAGE>


President of the British Association for the Advancement of Science and of
the Royal Statistical Society.

JEREMY INGALL, NON-EXECUTIVE DIRECTOR. Mr. Ingall studied finance, accounting
and economics at the University of New South Wales and has seventeen years
experience in investment banking and venture capital. He was formerly the
Managing Director of Flinders Capital Limited, a private investment banking
firm based in Australia engaged in investing in and advising emerging growth
companies. Previously, Mr. Ingall was a director and senior executive of
several investment banking firms, including the Hongkong Bank of Australia.
He is currently a director of a number of private and public companies.

ROBERTO ROSENKRANZ, A.B., PH.D., M.B.A., NON-EXECUTIVE DIRECTOR. Dr.
Rosenkranz, who has 18 years of experience in the pharmaceutical sector, is
currently the President and Chief Executive Officer of Roxro Ventures LLC,
Menlo Park, California, a pharmaceutical and biopharmaceutical consulting
group. Dr. Rosenkranz had a dual career at Syntex Corporation in science and
business, holding positions in pharmacology, new product development, sales,
marketing and business development. Following the acquisition of Syntex by
Hoffman La Roche, he was Director of Business Operations for Roche
laboratories. Most recently he was President and Chief Operating Officer of
Scios Inc. Dr. Rosenkranz holds a Ph.D. in Pharmacology and Toxicology, has
extensive experience in academic research and has held a number of special
scientific and business appointments. He has published over 70 scientific
papers and holds six patents.

ROSALIND BERGEMANN, FRSA, BSOCSC, M.B.A., M.PSY., PH.D., EXECUTIVE VICE
PRESIDENT, GLOBAL HUMAN RESOURCES. Dr. Bergemann started her career in
administration and finance, but decided to specialize in human resources
within the health care industry in 1989. In 1992 she was appointed as
Consulting Director within Health Care Services Management, an international
management consultancy, advising on human resources and strategy to health
care and clinical research organizations in Europe, North America, Canada,
Australasia and Africa. Dr. Bergemann returned to the United Kingdom to take
up the position of Head of Group Reward & Benefits Strategy for the Thomas
Cook Group, before joining Gemini Genomics in December 2000.

HOWARD CHRISTLEY, M.A., M.B.B.S., FFPM(RCP(UK)), DIP. PHARM. MED., EXECUTIVE
VICE PRESIDENT, MEDICAL. Dr. Christley trained in medicine at Cambridge
University and at Guy's Hospital, London. Following an internship in
pathology he moved into the pharmaceutical industry and has held positions in
clinical research in Europe and in the United States, at Marion Merrell Dow,
Warner Lambert, Syntex/Roche and Novartis. Whilst at Novartis Pharma,
Switzerland, he had overall worldwide responsibility for clinical research
operations and the management of internal and external clinical monitoring
staff. He was instrumental in establishing clinical trial set up and
monitoring processes that maximized clinical data quality, maximized
recruitment speed and optimized study costs within the newly merged Novartis
company.

ROGER DICKINSON, LL.B., M.B.L., EXECUTIVE VICE PRESIDENT, LEGAL AND CORPORATE
AFFAIRS. Mr. Dickinson is a lawyer with 20 years experience in commercial and
intellectual property law, starting his career with the British Technology
Group. As Group Company Secretary of Domino Printing Sciences and Anglian
Water he has also had responsibility for various general


                                      -44-

<PAGE>

management functions. He was involved in taking Domino through an initial
public offering and its subsequent expansion around the world.

PATRICK KLEYN, PH.D., EXECUTIVE VICE PRESIDENT, SCIENCE. Dr. Kleyn joined
Gemini from Millennium Pharmaceuticals. Dr. Kleyn spent five years at
Millennium, initially as the first positional cloning scientist and Project
Leader responsible for the positional cloning of the obesity gene, "tubby".
Dr. Kleyn's subsequent roles at Millennium included Director of Positional
Cloning and Technology Development and later Director of Genomics at
Millennium Predictive Medicine, Millennium's diagnostics and pharmacogenomics
subsidiary. Dr. Kleyn's 13 years of experience in the fields of human
genetics and genomics includes a Ph.D. in Human Genetics from the University
College London and postdoctoral work in Dr. Conrad Gilliam's laboratory at
Columbia University, New York. Dr. Kleyn received his B.A. and M.A. from
Cambridge University, England.

TONY RATCLIFFE, B.SC., A.C.A., M.B.A., EXECUTIVE VICE PRESIDENT, FINANCE.
After qualifying as a Chartered Accountant with KPMG, Mr. Ratcliffe held
various senior financial management positions within the biotechnology
sector. With the Agricultural Genetics Company, then Celsis International and
most recently working directly with Dr. Chris Evans OBE, a European
biotechnology entrepreneur, he has gained significant experience within
rapidly growing global companies, both private and public. He has an M.B.A.
from Heriot-Watt University, Edinburgh.

ZAHED SUBHAN, PH.D., LL.B., M.B.A., EXECUTIVE VICE PRESIDENT, BUSINESS
DEVELOPMENT. Dr. Subhan has previously held senior research, marketing and
business development positions at Sanofi, Glaxo Wellcome and DuPont Merck. At
DuPont Merck, Dr. Subhan was Director of Marketing and Business Development.
His biopharmaceutical company experience includes the publicly traded U.S.
drug delivery specialist company, Penwest Pharmaceuticals. Dr. Subhan holds a
Ph.D. in Neuropharmacology and postgraduate degrees in Business
Administration and Law. In his various business development and licensing
related positions, Dr. Subhan has been responsible for entering into
cooperative agreements with several major pharmaceutical and
biopharmaceutical companies, including SmithKline Beecham, Lundbeck, Biovail,
Merck and Zeneca.

M.C. SULLIVAN, RN, M.T.S., J.D., EXECUTIVE VICE PRESIDENT, CORPORATE
COMMUNICATIONS AND BIOETHICS. Ms. Sullivan most recently served as the
Executive Vice President of Midwest Bioethics Center, a private consulting
and educational agency specializing in health care ethics and law to health
care professionals and institutions and has been Associate Dean at the
University of Southern Europe in Monaco. Ms. Sullivan holds a Juris Doctor
degree from the Massachusetts School of Law, as well as a Master of
Theological Studies degree in ethics from Harvard University.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

         The aggregate compensation we paid (including benefits in kind and
pension contributions), to all of our directors and executive officers
(twelve persons), as a group, for services in all capacities for the year
ended March 31, 2001 totaled $1,577,000. In addition, during the year ended
March 31, 2001, we granted to all of our directors and executive officers
options to purchase a total of 2,978,046 ordinary shares in aggregate, at an
average exercise price of $5.92 per share.


                                      -45-

<PAGE>

         We operate a defined contribution group personal pension scheme for
substantially all of our employees in the United Kingdom, contribute to a
state scheme and a defined contribution scheme for our employees in Sweden
and operate a 401(k) pension plan for substantially all of our employees in
the United States. In the year ended March 31, 2001, we made pension
contributions totaling $47,000 in relation to our directors and executive
officers.

LIMITATION ON LIABILITY AND INDEMNIFICATION

         Section 310(1) of the Companies Act 1985 prohibits a company from
exempting or indemnifying its officers (including directors) and auditors
against liability for acts of negligence, default, breach of duty or breach
of trust in relation to the company of which by virtue of the rule of law
they may be guilty. However, as permitted under English law, our articles of
association provide that we shall indemnify every director or other officer
and the auditors out of our assets against any liability incurred by him in
defending any proceedings (civil or criminal) in which the court or other
deciding body:

         -        grants judgment in his favor;

         -        acquits him;

         -        disposes of the proceedings without any finding or admission
                  of any material guilt or breach of duty or breach of trust on
                  his part; or

         -        grants him relief.

         We also have a policy of directors' and officers' liability
insurance that insures directors and officers against the cost of defense,
settlement or payment of a judgment under certain circumstances.

OUR BOARD OF DIRECTORS

         Under our articles of association, we may have no fewer than two
directors but have no limit to the maximum number of directors. Our board
currently consists of five directors, including three independent
non-executive directors and one affiliated non-executive director. Our
directors serve until they resign or are removed. There is no term limit for
our directors nor must our directors mandatorily retire due to age.

EMPLOYMENT AND SERVICES AGREEMENTS

         We have entered into employment agreements with our executive
director and each of our executive officers and service agreements with each
of our non-executive directors. The employment agreements with our executive
director and officers provide, among other things, that they will provide
their services to us on a full time basis. These employment agreements
contain non-compete provisions that restrict them from being involved in, for
the period of their employment and for twelve months after, any business that
competes against us. Each of these employment agreements also contains an
express obligation to maintain confidentiality in respect of our
technological and commercial secrets. We may terminate these employment
agreements, as may our executive director and executive officers, by
providing the specified notice that ranges from three to 18 months. Unless we
terminate the employment of our executive director or executive officers
without providing the specified notice, none of our


                                      -46-

<PAGE>


employment agreements provide for compensation payable upon early
termination. Our service agreements with our non-executive directors contain
confidentiality provisions. Our service agreement with Michael Fitzgerald has
a fixed term until October 2002 and may be terminated with six months notice
thereafter. Our service agreement with our other non-executive directors have
notice periods of between 30 days and 18 months. We have no other employment
agreements with any of our directors.

COMMITTEES OF OUR BOARD OF DIRECTORS

         THE AUDIT COMMITTEE meets at least twice a year. It has the
responsibility of, among other things, reviewing our annual and interim
financial statements and our accounting policies and financial controls. The
independent auditors attend meetings of the audit committee and report on
matters arising from their audit work. The audit committee consists of three
independent non-executive directors, Jeremy Ingall, Sir Walter Bodmer and
Roberto Rosenkranz.

         THE REMUNERATION COMMITTEE meets at least once a year. It makes
recommendations to our board on our framework of executive compensation and
its cost and it determines, on behalf of our board, specific remuneration
packages for each of the executive directors (directors who are executive
officers) and executive officers, including pension rights and any
compensation payments. Also, the remuneration committee makes recommendations
to our board in connection with our share option plans. The remuneration
committee consists of three non-executive directors, Michael Fitzgerald,
Jeremy Ingall and Roberto Rosenkranz.

EMPLOYEES

         As of March 31, 2001, we employed 126 persons. University degrees
are held by 106 employees, and, of these, 42 have additional advanced
qualifications (including 23 doctorate degrees). We have 53 employees engaged
in gene discovery and research and development, 26 in clinical-related
functions, 20 in bioinformatics and information technology, four in business
development and intellectual property and 23 in human resources, finance and
other administrative functions. Our success will depend in large part on our
ability to attract and retain employees. We face competition for employees
from other companies, research and academic institutions, government entities
and other organizations. We believe we maintain good relations with our
employees. Our employees, with the exception of some individual employees in
Sweden, are not represented by labor unions. Certain of our employees in
Sweden may belong to labor unions representing professional or other classes
of workers. In accordance with Swedish law, our employees in Sweden belonging
to unions may keep this information confidential. We have not entered into
any collective bargaining arrangements with any unions in Sweden, nor have we
needed to recognize any unions in Sweden. We do not employ a significant
number of temporary employees.

SCIENTIFIC ADVISORY PANEL

         We have assembled a group of scientific advisors who are leaders in
fields related to human clinical genetics and gene discovery. Our Scientific
Advisory Panel meets as required with one or more members having particular
expertise in providing advice on specific aspects of our scientific strategy.
Members of our Scientific Advisory Panel receive cash compensation for their
services and are reimbursed for their reasonable expenses of attending
meetings. In addition, some of the members of the Scientific Advisory Panel
may also receive options to


                                      -47-

<PAGE>


purchase our ordinary shares. These advisors assist in formulating our
research, development and commercialization strategy and include:

         -        PROFESSOR JASPER RINE PH.D., (CHAIRMAN). PROFESSOR OF GENETICS
                  AT THE UNIVERSITY OF CALIFORNIA, BERKELEY, UNITED STATES. Dr.
                  Rine serves as the Richard and Rhoda Goldman Distinguished
                  Professor of Biology and Professor of Genetics in the
                  Department of Molecular and Cell Biology at the University of
                  California, Berkeley. He previously served as Director of the
                  Human Genome Center at Lawrence Berkeley Laboratories and as a
                  member of the national DOE-HIH Human Genome Coordinating
                  Committee. Dr. Rine was a founder of Acacia Biosciences
                  (acquired by Rosetta Inpharmatics in 1999).

         -        LEIF BERTILSSON, M.D., PH.D., DEPARTMENT OF CLINICAL
                  PHARMACOLOGY, HUDDINGE HOSPITAL, STOCKHOLM, SWEDEN. Professor
                  Bertilsson's research currently focuses on the differences of
                  the rates of metabolism of drugs. Observed differences can
                  commonly be related to both ethnic and genetic variations.

         -        THOMAS HEDNER, M.D., PH.D., DEPARTMENT OF CLINICAL
                  PHARMACOLOGY AT SAHLGRENSKA UNIVERSITY HOSPITAL, GOTHENBURG,
                  SWEDEN. Dr. Hedner is very experienced in cardiovascular
                  research within areas such as hypertension and heart failure
                  and has been involved in several key mortality trials. He acts
                  as a consultant on Cardiovascular Diseases.

         -        MAGNUS INGELMAN-SUNDBERG, PH.D., UNIT FOR MOLECULAR
                  TOXICOLOGY, DEPARTMENT FOR ENVIRONMENTAL MEDICINE, KAROLINSKA
                  INSTITUTE, STOCKHOLM, SWEDEN. Professor Ingelman-Sundberg has
                  extensive research experience in the field of molecular and
                  genetic basis for the way the body interacts with drugs. He
                  also has extensive experience in the field of functional
                  genomics.

         -        LEONID KRUGLYAK PH.D., FRED HUTCHINSON CANCER RESEARCH CENTER,
                  SEATTLE, UNITED STATES. Dr. Kruglyak specializes in the
                  development of new mathematical and computational methods for
                  genetic analysis of complex traits with polygenic inheritance
                  and has published widely in this area.

         -        EVA LINDSTROM, M.D., PH.D., DEPARTMENT OF PSYCHIATRY, THE
                  AKADEMISKA UNIVERSITY HOSPITAL, UPPSALA, SWEDEN. Dr. Lindstrom
                  is a practicing psychiatrist. Dr. Lindstrom is also involved
                  in research with a main focus on schizophrenia and the
                  development of classification scales. She is currently drawing
                  up the Swedish recommendations on the diagnosis of
                  schizophrenia. She is a consultant on disorders of the central
                  nervous system.

         -        PROFESSOR HANS LITHELL, M.D., PH.D., PROFESSOR IN THE
                  DEPARTMENT OF PUBLIC HEALTH AND CARING SCIENCES AT THE
                  UNIVERSITY OF UPPSALA, UPPSALA, SWEDEN. Dr. Lithell has been
                  working extensively on research into elucidating the different
                  components behind the metabolic syndrome and hypertension and
                  their relation in causing the diseases. He has been involved
                  in running longitudinal studies in the outcome of common
                  age-related diseases in a local population group in Sweden. He
                  also acts as a consultant on Cardiovascular and Metabolic
                  Diseases.


                                      -48-

<PAGE>


         -        PROFESSOR NICHOLAS MARTIN, PH.D. PROFESSOR OF GENETIC
                  EPIDEMIOLOGY AT THE QUEENSLAND INSTITUTE OF MEDICAL RESEARCH,
                  BRISBANE, AUSTRALIA. Professor Martin has been working in the
                  area of twin research and genetic epidemiology for over 25
                  years and was a founder of the Australian Twin Registry. He
                  has published landmark research on the genetics of alcoholism,
                  neuropsychiatric diseases and skin cancer and is regarded as
                  one of the world's leading experts in the identification of
                  disease genes from human data and analytical instruments for
                  the statistical analysis of twin data.

         -        LARS-ERIK RUTQVIST, M.D., PH.D., DIRECTOR OF THE ONCOLOGY
                  CENTER OF THE STOCKHOLM-GOTLAND-REGION, KAROLINSKA INSTITUTE,
                  STOCKHOLM, SWEDEN. Dr. Rutqvist is focusing a large part of
                  his work of the development of breast cancer and the
                  improvement of the treatment of the disease.

         -        TIM SPECTOR, M.D. M.SC. FRCP, PHYSICIAN AND EPIDEMIOLOGIST AND
                  DIRECTOR OF THE TWIN RESEARCH UNIT BASED AT ST. THOMAS'
                  HOSPITAL, LONDON, ENGLAND. Dr. Spector has published over 100
                  papers and is the inventor of patents for (1) a diagnostic
                  marker for osteoporosis, (2) the physiological role of TGF-b
                  alleles and (3) Vitamin D receptor alleles and osteoarthritis.

         -        PROFESSOR DORRET BOOMSMA, PH.D., PROFESSOR OF BIOLOGICAL
                  PSYCHOLOGY AT THE FREE UNIVERSITY OF AMSTERDAM, THE
                  NETHERLANDS. Professor Boomsma is a leading authority on the
                  study of the genetics of psychological and emotional diseases
                  and on the study of twins. She founded and set up the
                  Netherlands Twin Registry.

SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

         The table below sets forth certain information regarding the
beneficial ownership of our ordinary shares and vested share options as of
March 31, 2001.

<TABLE>
<CAPTION>
                                                  NUMBER OF SHARES            PERCENT
                                                    BENEFICIALLY            BENEFICIALLY
          NAME OF BENEFICIAL OWNER                    OWNED(1)                 OWNED
---------------------------------------------  ----------------------  -----------------------
<S>                                            <C>                     <C>
Michael Fitzgerald(2)........................             20,435,640                  31.6%
Dr. Paul Kelly(3)............................              3,090,140                   4.8%
Jeremy Ingall................................              1,527,833                   2.4%
Dr. Roberto Rosenkranz.......................                586,666                   0.9%
Sir Walter Bodmer............................                340,000                   0.5%
Rosalind Bergemann...........................                 33,315                   0.1%
Howard Christley.............................                173,573                   0.3%
Roger Dickinson..............................                172,053                   0.3%
Patrick Kleyn................................                370,812                   0.6%
Tony Ratcliffe...............................                173,053                   0.3%
Zahed Subhan.................................                279,433                   0.4%
M.C. Sullivan................................                 25,000                      -
</TABLE>

---------------------
(1)    Includes vested share options.
(2)    Includes 16,730,000 shares beneficially owned by Michael
       Fitzgerald through one of his affiliates, Genelink Holdings Ltd.,
       3,151,000 shares beneficially owned by Michael Fitzgerald through
       one of his affiliates, Raddison Trustee Ltd. and 17,640 shares
       held by Cloverleaf Holdings Limited, a company controlled by
       Michael Fitzgerald.
(3)    Includes 2,545,140 shares  beneficially owned by Paul Kelly through one
       of his affiliates,  R&H Trust Co. (Jersey) Limited.


                                      -49-

<PAGE>


OUR SHARE OPTION SCHEMES

         We have adopted three share option schemes and have issued a number
of individual share options. Our share option schemes include (1) our share
option plan, (2) our savings related share option scheme and (3) our
international executive share option plan. As of March 31, 2001, we had
granted options that may be exercised for up to 7,741,950 shares in total, at
a weighted average exercise price of $4.22 per ordinary share with exercise
prices ranging from $0.71 to $7.00 per ordinary share.

         The following table provides summary information for each of our
directors and executive officers who hold options to purchase our outstanding
ordinary shares as of March 31, 2001. We granted each option without monetary
consideration. Each option is to purchase our ordinary shares, or the
equivalent number of ordinary shares in the form of ADSs. All of our existing
directors and executive officers as a group held options to purchase
5,149,346 ordinary shares (or the equivalent number of ordinary shares in the
form of ADSs) as of March 31, 2001.

<TABLE>
<CAPTION>
                                              NUMBER OF
                                           ORDINARY SHARES     EXERCISE
                                            UNDERLYING THE     PRICE PER     EXERCISE PRICE         OPTION
                         DATE OF GRANT       OPTIONS HELD        SHARE           PER ADS        EXPIRATION DATE
                      -------------------  ----------------  --------------  ---------------  -------------------
                                                                ((POUND))         ($)
<S>                   <C>                  <C>               <C>             <C>              <C>
Michael Fitzgerald..       July 26, 2000        537,000             -             14.00            July 26, 2010
Sir Walter Bodmer...        June 1, 1997        200,000           0.43              -               June 1, 2004
                           July 26, 2000        140,000             -             14.00            July 26, 2010
Jeremy Ingall.......        July 1, 1997        172,000           0.58              -               July 1, 2004
                           July 26, 2000        280,000             -             14.00            July 26, 2010
                        November 8, 2000        500,000             -             14.00         November 8, 2010
                       February 28, 2001        500,000             -              4.50        February 28, 2011
Paul Kelly..........       July 26, 2000        543,000             -             14.00            July 26, 2010
Roberto Rosenkranz..        June 1, 1999        172,000           1.11              -          December 31, 2004
                           July 26, 2000        280,000             -             14.00            July 26, 2010
Rosalind Bergemann..   February 28, 2001        99,946              -              4.50        February 28, 2011
Roger Dickinson.....   November 19, 1999        190,280           1.34              -          November 19, 2009
                       February 24, 2000        90,180            1.61              -          February 24, 2010
Tony Ratcliffe......   November 19, 1999        190,280           1.34              -          November 19, 2009
                       February 24, 2000        90,180            1.61              -          February 24, 2010
Howard Christley....   November 19, 1999        200,000           1.34              -          November 19, 2009
                       February 24, 2000        82,080            1.61              -          February 24, 2010
Zahed Subhan........   November 19, 1999        212,680           1.34              -          November 19, 2009
                       February 24, 2000        133,700           1.61              -          February 24, 2010
M.C. Sullivan.......   February 28, 2001        75,000              -              4.50        February 28, 2011
Patrick Kleyn.......   November 19, 1999        417,920           1.34              -          November 19, 2009
                       February 24, 2000        20,000            1.61              -          February 24, 2010
                           July 26, 2000        23,100              -             14.00            July 26, 2010
</TABLE>


OUR SHARE OPTION PLAN

         Our share option plan has two parts. Part A is approved by the U.K.
Inland Revenue. Part B has not and will not be submitted to the U.K. Inland
Revenue for approval. The terms of part A and part B of our share option plan
are the same unless we indicate to you otherwise.

         Under our share option plan, our board has discretion to grant
options to purchase our ordinary shares and ADSs to any of our full time or
part time employees who is not within two years of retirement, including any
executive director who is required to devote at least


                                      -50-

<PAGE>


25 hours a week working for us. Our board typically only grants options
within 42 days of the announcement of our annual or interim results, although
they may grant options at other times in exceptional circumstances.

         On any date, the total number of ordinary shares over which options
may be granted to purchase under the plan, together with the number of
ordinary shares over which options were granted (1) under the plan in the
previous 10 years or (2) under any other employee share scheme (other than
savings related schemes), may not exceed 10% of the number of our issued
ordinary shares on that date. Lapsed options and options granted under our
share option plan before our Nasdaq National Market quotation are not counted.

         The exercise price of the options may not be less than either (1) if
new ordinary shares will be issued, the nominal value of the ordinary shares
to be purchased at the time the options are granted (or, for options over
ADSs, the ordinary shares represented by those ADSs) or (2) whether new
ordinary shares will be issued or existing ordinary shares will be sold, the
market value of the ordinary shares or ADSs to be purchased at the time the
options are granted. Under part A, the U.K. Inland Revenue must agree with
the market value. Under part B, the market value of an ADS equals the average
of the high and low reported sales prices of an ADS on the Nasdaq National
Market on the business day before the date the option was granted. The
options may also be issued subject to performance conditions. Under part A,
any performance conditions must be approved by the U.K. Inland Revenue.

         In general, the options may be exercised at any time between three
and ten years from the date they were granted or, under part B, any other
date our board has specified, as long as any performance conditions have been
fulfilled. The options become exercisable immediately if the option holder is
no longer an eligible employee because of injury, sickness, disability or
redundancy (even if a performance condition has not been satisfied) or
retirement or if we sell the company or business that employs the option
holder (only if all performance conditions have been satisfied). The options
also become exercisable if we experience a change of control, even if all
performance conditions have not been satisfied. The options lapse if they are
not exercised within 10 years from being granted or if the option holder
ceases to be our employee for reasons other than those described above unless
our board decides otherwise. The options may not be transferred.

         Our board may not issue any options to any person if either: (1)
under part A, that person would hold options to purchase ordinary shares
(granted under Part A or other share scheme approved by the U.K. Inland
Revenue except savings related share option schemes) with an aggregate
purchase price in excess of (pound)30,000; or (2) under part B, that person
would hold options or other rights to purchase ordinary shares (granted
during the prior ten years except under savings related share option schemes)
and the market value of the ordinary shares subject to those options,
determined at the time of each grant, exceeds eight times that person's
annual earnings (excluding benefits).


                                      -51-

<PAGE>

OUR SAVINGS RELATED SHARE OPTION SCHEME

         Our savings related share option scheme has been submitted to the
U.K. Inland Revenue for formal approval, which we expect will be received. We
have assumed that the U.K. Inland Revenue has approved this scheme in the
following discussion.

         Any full time or part time employees of, or directors who are
required to devote at least 25 hours a week working for, us or our U.K.
subsidiaries are eligible to receive options under our savings related share
option scheme, and employees having worked for us for a period established by
our board of up to five years must be allowed to participate on similar
terms. Our board can invite eligible employees to apply for options to
purchase either ordinary shares or ADSs at the option price during a six week
period following the announcement of our annual or interim results or outside
these periods in exceptional circumstances. An eligible employee
participating in our savings related option scheme must enter into a savings
contract under which he agrees to save a regular monthly sum of between
(pound)5 and (pound)250 for a three or five year period, and in return is
granted an option to purchase the number of ordinary shares or ADSs with a
total exercise price as nearly equal to, but not exceeding, the amount saved
under the savings contract (subject to our board's right to reduce
applications to comply with limits to the number of ordinary shares available
and also subject potentially to being allowed to take account of the bonus).
The bonus is paid at the end of the three or five years and an additional
bonus may be available after seven years. The exercise price of the options
is determined by our board but may not be less than the higher of (1) 80% of
the market value of the ordinary shares or ADSs agreed in writing between us
and the U.K. Inland Revenue or (2) if new shares will be issued, nominal
value of the ordinary shares (or, for options over ADSs, the ordinary shares
represented by those ADSs), both calculated immediately before the invitation
date.

         An option may generally be exercised for a six month period
following the third, fifth or seventh anniversary of the starting date
elected by the option holder when applying for a savings contract. After that
period the option lapses. Options may only be exercised by an option holder
while he is one of our directors or employees, except in cases of death,
injury, disability, redundancy, retirement or if we sell the company or
business that employs the option holder, when the option holder may be
permitted to exercise the options earlier using savings accumulated up to the
date of death or cessation of employment. The options are not transferable
and may only be exercised by the persons to whom they were granted or their
personal representatives. The options may be exercised within certain limits
in the event we are subject to a takeover, reconstruction, amalgamation or
winding-up.

         The number of ordinary shares that may be issued on the exercise of
options granted under our savings related share option scheme, or any other
share option scheme we adopt in any ten year period, may not exceed 10% of
our issued share capital on the date of grant of the options (excluding
options we grant before we are quoted on the Nasdaq National Market).

OUR INTERNATIONAL EXECUTIVE SHARE OPTION PLAN

         We have adopted an international executive share option plan. Under
this plan we grant options to subscribe for newly issued or purchase existing
ordinary shares (which may be in the form of ADSs) to our directors and
employees who devote almost all of their working time to us.


                                      -52-

<PAGE>


         Our board determines the type of an option as well as the option
price, which may not be less than:

         -        for options to purchase existing ordinary shares, (1) for our
                  ADSs, the average of the high and the low sales price of our
                  ADSs on the day prior to the grant and (2) for our ordinary
                  shares, the same price as adjusted for the number of our
                  ordinary shares underlying each ADS; and

         -        for options to subscribe for newly issued ordinary shares, (1)
                  for our ordinary shares, the nominal value of our ordinary
                  shares, and (2) for our ADSs, the nominal value of our
                  ordinary shares underlying each ADS.

         Our board may only grant options under the international executive
share option plan within six weeks of the announcement of our financial
results for any period, although they may grant options at other times in
exceptional circumstances.

         Under our international executive share option plan, we may not
grant any options which would cause (1) the number of our ordinary shares
which may be acquired pursuant to options granted under the plan to exceed
6,000,000 and (2) the number of our ordinary shares which may be issued
pursuant to options granted under the plan when combined with options granted
under other of our employee share option schemes, to exceed 10% of our
ordinary share capital in issue at that time and (3) the market value of the
ordinary shares which may be issued pursuant to all options granted under our
international executive share option plan and other executive share option
schemes determined at the time of each grant to exceed eight times the annual
compensation (excluding benefits) of the person to whom our board granted the
options.

         When the options are granted, our board will determine when they are
exercisable, but they have to be exercised within ten years of being granted.
Options can be exercised early if an option holder ceases to be employed by
reason of death, injury, disability, redundancy, retirement or if we sell the
company or business that employs the option holder. There are also special
provisions to enable exercise if we are subject to a take-over,
reconstruction, amalgamation or winding up.

         Our board may elect to pay cash to the option holder on the exercise
of an option instead of arranging for the transfer of ordinary shares. The
amount of cash will be equal to the difference between the option price and
the market value of the ordinary shares on the day before the options are
exercised.

         Our directors may, at any time, amend our international executive
share option plan. The prior approval of our shareholders at a general
meeting must be obtained, however, for amendments to the provisions limiting
the number of ordinary shares over which options can be granted. Any
amendment that is to the disadvantage of option holders requires the consent
of the majority of them.

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS


                                      -53-

<PAGE>

         The table below sets forth certain information regarding the
beneficial ownership of our ordinary shares and vested share options as of
March 31, 2001, for persons known by us to own more than 3% of our shares.

<TABLE>
<CAPTION>
                                                                    NUMBER OF SHARES         PERCENT
                                                                      BENEFICIALLY         BENEFICIALLY
                   NAME OF BENEFICIAL OWNER                             OWNED(1)              OWNED
----------------------------------------------------------------  ----------------------  ---------------
<S>                                                               <C>                     <C>
Michael Fitzgerald(2)..........................................       20,435,640                31.6%
Dr. Alejandro Zaffaroni(3).....................................        4,800,740                 7.4%
Rahn & Bodmer Banquiers Zurich.................................        4,318,420                 6.7%
Dr. Paul Kelly(4)..............................................        3,090,140                 4.8%
</TABLE>

---------------------
(1)   Includes vested share options.
(2)   Includes 16,730,000 shares beneficially owned by Michael Fitzgerald
      through one of his affiliates, Genelink Holdings Ltd., 3,151,000 shares
      beneficially owned by Michael Fitzgerald through one of his affiliates,
      Raddison Trustee Ltd. and 17,640 shares held by Cloverleaf Holdings
      Limited, a company controlled by Michael Fitzgerald.
(3)   Includes 3,020,480 ordinary shares beneficially owned by Dr. Zaffaroni
      through one of his affiliates, the Zaffaroni Revocable Trust, and 884,060
      ordinary shares beneficially owned by Dr. Zaffaroni through one of his
      affiliates, the Zaffaroni Family Partnership, L.P.
(4)   Includes 2,545,100 shares beneficially owned by Dr. Paul Kelly through
      one of his affiliates, R&H Trust Co. (Jersey) Limited.


         All of our shareholders, including those set forth above, have the
voting rights attached to the ordinary shares which they hold. None of our
shareholders have any additional voting rights.

         As of March 31, 2001, approximately 20,336,004 of our ordinary shares
(including ordinary shares held in the form of ADSs), or approximately 31% of
our issued share capital on that date, were held by approximately 26
shareholders with registered addresses in the United States. These figures do
not include either the number of ordinary shares held by shareholders with
registered addresses outside the United States in which U.S. residents have
an interest or the number of any such U.S. residents.

         Michael Fitzgerald, the non-executive chairman of our board, is also
our largest shareholder. As of March 31, 2001, Mr. Fitzgerald beneficially
owned 19,898,640 ordinary shares, or approximately 30.7% of our issued share
capital on that date. Accordingly, Mr. Fitzgerald has the ability to
substantially influence all matters submitted to our shareholders for
approval, including the election and removal of directors, and thus the
ability to control our management and affairs.

RELATED PARTY TRANSACTIONS

         We did not have any related party transactions or similar
relationships that are required to be disclosed in the years ended March 31,
1999, 2000 and 2001.

ITEM 8.  FINANCIAL INFORMATION

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

         See "Item 18. Financial Statements" for our audited consolidated
financial statements filed as part of this annual report.

LEGAL PROCEEDINGS


                                      -54-

<PAGE>


         We are currently not a party to any material legal proceedings.

DIVIDEND POLICY

         We have never declared or paid any dividends on our ordinary shares
and do not anticipate paying any cash dividends in the foreseeable future. We
currently intend to retain future earnings, if any, to finance operations and
the expansion of our business. Our board will have discretion to make any
future determination to pay cash dividends and this will depend on our
financial condition, results of operations, capital requirements and other
factors that our board decides are relevant.

         We would pay cash dividends, if any, in British pounds. Holders of
ADSs would receive dividends paid on the ordinary shares in U.S. dollars.
Exchange rate fluctuations would affect the U.S. dollar amount received by
holders of ADSs on conversion by the depositary of dividends paid in British
pounds.

SIGNIFICANT CHANGES

         Since March 31, 2001, there have been no significant changes to our
financial position.

ITEM 9.           THE OFFER AND LISTING

MARKET PRICE INFORMATION

         The following tables below show, for the periods indicated, the high
and low closing prices of our ADSs on the Nasdaq National Market. Our ADSs
have been traded and quoted on the Nasdaq National Market since July 25,
2000. There is no public market for our ordinary shares.

<TABLE>
<CAPTION>
                         YEAR ENDED MARCH 31,                                HIGH         LOW
------------------------------------------------------------------------ --------------------------
                                                                              (IN U.S. DOLLARS)
<S>                                                                      <C>           <C>

2001 (commencing July 25, 2000)..........................................   20.000        2.938


<CAPTION>
                               QUARTERLY                                     HIGH          LOW
------------------------------------------------------------------------ ---------------------------
                                                                             (IN U.S. DOLLARS)
<S>                                                                      <C>           <C>
2001
First quarter (through May 18)...........................................    6.250        3.500
2000
Fourth quarter (ended March 31, 2001)....................................    8.250        2.938
Third quarter (ended December 31, 2001)..................................   14.063        5.630


<CAPTION>
                                MONTHLY                                      HIGH          LOW
------------------------------------------------------------------------ ---------------------------
                                                                             (IN U.S. DOLLARS)
<S>                                                                      <C>           <C>
2001
April....................................................................    4.844        3.700
March....................................................................    4.563        2.938
February.................................................................    6.125        4.375
January..................................................................    8.250        5.688
2000
December.................................................................    9.250        5.625
November.................................................................   12.875        8.500
</TABLE>

PRINCIPAL TRADING MARKET


                                      -55-

<PAGE>


         Our share capital consists of one class of ordinary shares. Our ADSs
have been quoted and traded on the Nasdaq National Market under the symbol
"GMNI" since July 25, 2000. Each ADS represents two of our ordinary shares.
There is no public market for our ordinary shares.

ITEM 10.  ADDITIONAL INFORMATION

MEMORANDUM AND ARTICLES OF ASSOCIATION

OBJECTS AND PURPOSES

         We are a public limited company formed under the laws of England and
Wales. We are registered as Company No. 3377251 with The Registrar of
Companies for England and Wales. Our objects and purposes are found in clause
4 of our memorandum of association, and they include carrying on, directly or
indirectly, any trade or business whatsoever, which our board deems us
capable of conveniently or advantageously carrying on. Our memorandum of
association grants us a range of corporate capabilities to achieve these
objectives. You can find a more complete description of our objects and
purposes in clauses 4(a) through 4(x) of our memorandum of association.

DIRECTORS

         A director generally may not vote upon any proposal, arrangement or
contract before our board in which he or she has a material interest. Our
articles of association generally prohibit a director from voting on, or
being counted in the quorum in relation to, any proposal, arrangement or
contract in which the director is materially interested. However, a director
shall be entitled to vote on, and be counted in the quorum in respect of, any
resolution concerning any of the following matters:

         -        the giving of any guarantee, security or indemnity in respect
                  of money lent or obligations incurred by the director at our
                  request or for our benefit;

         -        any proposal regarding the director's underwriting of our
                  shares, debentures or other securities;

         -        any contract concerning any other company in which the
                  director is interested, directly or indirectly (whether as an
                  officer, shareholder, creditor or otherwise), provided that
                  the director does not hold one per cent or more of the equity
                  share capital or voting rights available to members of that
                  company;

         -        arrangements for the benefit of our employees under which the
                  director benefits in a similar manner, provided the director
                  does not receive a privilege or advantage not given to the
                  employees; and

         -        contracts concerning our purchase or maintenance of any
                  insurance policy under which the director may benefit.

Directors do not have the power to vote compensation to themselves or any
members of their body.

         Our board exercises our borrowing powers. Only an amendment of our
articles of association may change the borrowing power of our board.


                                      -56-

<PAGE>

         There is no maximum age limit for persons to serve as directors, and
directors are not required to retire on account of age. Our shareholders may
remove a director from our board by ordinary resolution as long as the
shareholder proposing the removal provides us with notice of the proposal at
least 28 days before the shareholder's meeting voting thereon.

         Neither our memorandum nor articles of association requires our
directors to be shareholders.

RIGHTS, PREFERENCES AND RESTRICTIONS RELATING TO SHARES

         DIVIDEND RIGHTS

         Subject to English law, our shareholders may declare a dividend at a
general meeting upon the recommendation of our board. The shareholders may
declare a smaller dividend than recommended by our board, but they may not
declare a larger dividend. Our board may pay interim dividends if it appears
to them that they are justified by our financial position.

         Either our board or our shareholders may fix a date as the record
date by reference to which a dividend on the shares will be declared or paid,
whether or not it is before the date on which the shareholders make the
declaration. Until it is claimed, our board may invest or otherwise make use
of for our benefit any dividend unclaimed for one year after having been
declared. Any dividend unclaimed for a period of 12 years from the date when
it was declared or became due for payment shall be forfeited and shall revert
to us. No dividend on any of our ordinary shares bears interest, and no
dividend on any other shares we might decide to issue in the future will bear
interest unless specifically provided by the rights attaching to those shares.

         VOTING RIGHTS

         Under Section 373 of the Companies Act, a company's articles of
association govern the voting rights of shareholders' subject to the
statutory right of shareholders to demand a poll (I.E., a vote by the number
of shares held) at a general meeting. Any of our shareholders on the register
48 hours prior to a shareholders' meeting may vote in person or, where
proxies are allowed (I.E., on a poll) and assuming we receive the proxy at
least 48 hours prior to the time set for the meeting, by proxy.

         Subject to the restrictions referred to in the following paragraph,
at a meeting of shareholders, every holder of shares who is present in person
or by proxy shall have one vote on a show of hands or one vote for every
share held on a poll. The following persons may demand a poll:

         -        the chairman of the meeting;

         -        at least five shareholders, present in person or by proxy,
                  having the right to vote at the meeting;

         -        a holder or holders of shares representing at least 10% of the
                  total voting rights of all shareholders having the right to
                  vote at the meeting; or

         -        a holder or holders of shares on which an aggregate sum has
                  been paid up equal to at least 10% of the total sum paid up on
                  all shares with the right to attend and vote at the meeting.


                                      -57-

<PAGE>


         A holder of shares may not, unless that holder is acting as a proxy
for another member, be present or vote any of his shares at any general
meeting if:

         -        the holder or any other person appearing to have an interest
                  in those shares has been served with a notice under Section
                  212 of the Companies Act, which requires him to provide
                  information specified in that section and contains a statement
                  that upon failure to supply that information before the
                  expiration period specified in the notice, which may not be
                  less than 28 days, the registered holder of the shares is not
                  entitled to vote any of those shares, and the person on whom
                  that notice was served fails to supply the information within
                  the specified period; or

         -        the holder has not paid in full all amounts due on his shares.

         Our directors do not stand for election at staggered intervals and
cumulative voting is virtually unknown in English law.

         RIGHTS TO SHARE IN PROFITS

         Holders of our ordinary shares have no rights to share in our
profits.

         RIGHTS IN LIQUIDATION

         Subject to the rights attached to any shares we might decide to
issue on special terms and conditions, upon our liquidation or winding up,
after all our debts and liabilities and the expenses of the liquidation have
been discharged, with the approval of a special resolution of shareholders
and in compliance with English law, any of our surplus assets may be divided
among the holders of shares in proportion to their holdings after deducting
any amounts remaining unpaid in respect of such shares.

         ALTERATION OF SHARE CAPITAL

         We may from time to time by ordinary resolution of our shareholders:

         -        increase our share capital by the amount, to be divided into
                  shares of the amounts, that the resolution prescribes;

         -        consolidate and divide all or any of our share capital into
                  shares of a larger amount than our existing shares;

         -        cancel any shares which, at the date of the passing of the
                  resolution, have not been taken, or agreed to be taken, by any
                  person and diminish the amount of our share capital by the
                  amount of the shares canceled; and

         -        subject to English law, subdivide any of our shares into
                  shares of a smaller amount than that fixed by our memorandum
                  of association, provided that the proportion between the
                  amount paid and the amount, if any, unpaid on each reduced
                  share must be the same as on the share from which the reduced
                  share is derived, and the resolution may determine that any of
                  the shares resulting from the sub-division may have any
                  preference or advantage or have qualified or deferred rights
                  or be subject to any restrictions.


                                      -58-

<PAGE>


         Subject to English law, we may purchase or enter into a contract to
purchase any of our own shares of any class (including any redeemable shares,
if we should decide to issue any) provided that we obtain the approval of
either more than 50% (in the case of open market purchases) or 75% (in the
case of private purchases) of attending shareholders present in person or by
proxy at a general meeting of shareholders. However, we may only repurchase
shares out of our distributable profits or the proceeds of a fresh issue of
shares made for that purpose, and, if we pay any premium, we must pay the
premium out of our distributable profits.

         We may, by special resolution of our shareholders, reduce our share
capital or any capital redemption reserve, share premium account or other
undistributable reserve, subject in each case to confirmation by the English
courts.

         Our shares are not subject to any sinking fund.

         LIABILITY TO FURTHER CAPITAL CALLS

          Holders of our ordinary shares are not subject to calls on capital
by us provided that the amounts required to be paid on issue have been paid
off in full. All of our ordinary shares are fully paid.

         PRINCIPAL SHAREHOLDER RESTRICTIONS

         There are no provisions in our memorandum or articles of association
that discriminate against shareholders as a result of the shareholder owning
a substantial number of shares.

VARIATION OF RIGHTS

         Subject to certain provisions of English law, the rights attached to
any of our shares may be varied with the consent in writing of the holders of
at least 75% in nominal value of the issued shares of that class or with the
sanction of an extraordinary resolution passed at a separate meeting of the
holders of the shares of that class.

SHAREHOLDERS' MEETINGS AND NOTICES

         Under English law, there are two types of general meetings of
shareholders, annual general meetings and extraordinary general meetings. We
must hold an annual general meeting in each calendar year not later than 15
months from the previous annual general meeting. At an annual general
meeting, shareholders vote on matters including the election of directors,
appointment of auditors, fixing of directors' remuneration, approval of the
annual accounts and the board's report and declaration of dividends. Any
other general meeting is an extraordinary general meeting.

         Our board may convene an extraordinary general meeting, and must
convene one if demanded by the holders of at least 10% of our paid-up shares.
An annual general meeting and an extraordinary general meeting called to pass
a special resolution must be called upon at least 21 days' notice specifying
the place, day and time of the meeting and the general nature of the business
of the meeting. Shareholders may not transact any business at any general
meeting unless a quorum of shareholders representing one-third of our shares
entitled to vote on the matter is present in person or by proxy.


                                      -59-

<PAGE>


         An ordinary resolution requires a simple majority of the votes cast
at a general meeting. A special resolution, necessary for matters such as
amending our articles of association, requires at least 75% of the votes of
attending shareholders present in person or by proxy who are entitled to vote
on the resolution in question. An extraordinary resolution, necessary for a
small number of matters relating to variation of the rights of different
classes of shares and proceedings in a winding-up, requires the same voting
percentage as a special resolution.

LIMITATION ON SECURITY OWNERSHIP

         There are currently no restrictions under English law or under our
memorandum or articles of association that limit the right of non-residents
or foreign persons to hold or vote our ordinary shares or ADSs, except in
relation to those countries against which the United Kingdom or European
Union have imposed sanctions and other limitations that would generally apply
to all of the shareholders.

CHANGE IN CONTROL

         There are currently no provisions in our memorandum or articles of
association that would have an effect of delaying, deferring or preventing a
change in of our control and that would operate only with respect to a
merger, acquisition or corporate restructuring involving us or any of our
subsidiaries.

         As an English public limited company we are, however, subject to the
U.K. City Code on Takeovers and Mergers. The applicability of the City Code
may make it difficult or undesirable for a purchaser to acquire a substantial
percentage of our shares and could, under certain circumstances, have the
effect of delaying, deferring or preventing a change in our control. The City
Code does not have the force of law, but compliance with it is often required
in practice by any public limited company considered to be resident in the
United Kingdom, such as ourselves, and of any person wishing to use the
facilities of the U.K. securities market.

         Under the City Code, except with the consent of the U.K. Panel on
Takeovers and Mergers, any person or persons acting in concert who:

         -        acquire shares which (together with shares already held by
                  them) carry 30% or more of our voting rights; or

         -        hold 30% to 50% of the voting rights and acquire, within a 12
                  month period, further shares

must make an offer for all of our equity and voting non-equity share capital
in which such person or persons acting in concert hold shares. The offer must
be made in cash, or have a cash alternative, for at least the highest price
paid by the offeror or persons acting in concert with it for such shares in
the previous 12 months.

NOTIFICATION OF INTEREST IN SHARES

         Section 198 of the Companies Act requires any person, subject to
limited exceptions, who acquires an interest of 3% or more or, in the case of
certain interests, 10% or more of our shares to notify us of his interest
within two business days following the day on which the obligation to notify
us arises. After the shareholder exceeds that level of share ownership, that


                                      -60-

<PAGE>

person must make a similar notification for each following whole percentage
figure increase or decrease, rounded down to the next whole number. For the
purposes of the notification obligation, the interest of a person in the
shares means any kind of interest in shares, subject to certain exceptions,
including any share:

         -        in which such person's spouse or child or stepchild is
                  interested; or

         -        in which a corporate body is interested where either:

                  -        that corporate body or its directors act under that
                           person's directions or
                           instructions; or

                  -        that person is entitled to exercise or controls
                           one-third or more of the voting power of that
                           corporate body; or

         -        in which another party is interested where the person and that
                  other party are parties to a "concert party" agreement under
                  Section 204 of the Companies Act and any interest in shares is
                  in fact acquired by any one of the parties pursuant to the
                  agreement.

           A "concert party" agreement is an agreement under which one or
more parties acquire interests in shares of a particular company and impose
obligations or restrictions on any one or more of the parties as to the use,
retention or disposal of such interests.

           In addition, Section 212 of the Companies Act enables us, by
written notice, to require a person whom we know holds, or have reasonable
cause to believe is, or has been, holding an interest in our shares at any
time during the three years immediately preceding the date on which we issue
the notice to confirm that fact. Further, we can require any person who holds
or has held an interest in our shares during this relevant time, to give such
further information as may be required relating to his or her interest and
any other interest in our shares of which that person is aware.

           The Companies Act restricts the rights attaching to our shares for
non-compliance with Section 212. In addition, our articles of association
provide for disenfranchisement, loss of entitlement to dividends and other
payments and restrictions on transfer and other alienability.

CHANGES IN CAPITAL

         The content of our memorandum and articles of association is largely
derived from an established body of corporate law and, therefore, they mirror
the Companies Act in their provisions. There are no provisions in our
memorandum and articles of association concerning changes of capital where
these provisions would be considered more restrictive than that required by
the Companies Act.

MATERIAL CONTRACTS

         We have entered into the following contracts, which may be material
to our business, since April 30, 1999.


                                      -61-

<PAGE>


         In March 1999, we granted a license to Axis-Shield to use our COL1A1
patents. The material terms of this agreement are described in "Item 4.
Information on the Company -- Business Overview -- Commercial Relationships
--Commercial Agreements -- Axis-Shield."

         In June 1999, we granted a license to Affymetrix to use our COL1A1
patents. The material terms of this agreement are described in "Item 4.
Information on the Company -- Business Overview -- Commercial Relationships
--Commercial Agreements -- Affymetrix."

         In September 1999, we entered into a research collaboration
agreement with Celera Genomics. The material terms of this agreement are
described in "Item 4. Information on the Company -- Business Overview --
Commercial Relationships -- Commercial Agreements -- Celera Genomics."

         In March 2000, we entered into a collaboration agreement with
Sequenom. The material terms of this agreement are described in "Item 4.
Information on the Company -- Business Overview -- Commercial Relationships
-- Commercial Agreements -- Sequenom."

         In March 2000, we entered into a research collaboration agreement
with CuraGen. The material terms of this agreement are described in "Item 4.
Information on the Company -- Business Overview -- Commercial Relationships
--Commercial Agreements -- CuraGen."

         In March 2001, we entered into two further non-exclusive agreements
with CuraGen. The material terms of these agreements are described in "Item
4. Information on the Company -- Business Overview -- Commercial
Relationships --Commercial Agreements -- CuraGen."

EXCHANGE CONTROLS

         There are currently no English foreign exchange controls affecting
(1) the import or export of capital, including the availability of cash and
cash equivalents for use by us or (2) the payment of dividends, interest or
other distributions to non-resident holders of our securities.

TAXATION

         The following discussion describes the material U.S. federal income
tax and U.K. tax consequences of the purchase, ownership and disposition of
shares or ADSs (evidenced by ADRs) to beneficial owners:

         -        who are residents of the United States for purposes of the
                  current United Kingdom/United States Income Tax Convention
                  (the "Income Tax Convention") and the United Kingdom/United
                  States Estate and Gift Tax Convention (the "Estate and Gift
                  Tax Convention" and, together with the Income Tax Convention,
                  the "Conventions");

         -        whose shares or ADSs are not, for the purposes of the
                  Conventions, effectively connected with a permanent
                  establishment in the United Kingdom;

         -        who otherwise qualify for the full benefits of the
                  Conventions; and

         -        who are U.S. holders (as defined below).


                                      -62-

<PAGE>

         The statements of U.S. federal income tax and U.K. tax laws set out
below:

         -        are based on the laws in force and as interpreted by the
                  relevant taxation authorities as of the date of this annual
                  report;

         -        are subject to any changes in U.S. or English law, in the
                  interpretation thereof by the relevant taxation authorities,
                  or in the Conventions, occurring after such date; and

         -        are based, in part, on representations of the Depositary, and
                  assume that each obligation in the Deposit Agreement and any
                  related agreement will be performed in accordance with its
                  terms.

         No assurance can be given that taxing authorities or the courts will
agree with this analysis.

         This discussion does not address all aspects of U.S. and U.K.
taxation that may be relevant to you and is not intended to reflect the
individual tax position of any beneficial owner, including tax considerations
that arise from rules of general application to all taxpayers or to certain
classes of investors or that are generally assumed to be known by investors.
The portions of this summary relating to U.S. federal taxation are based upon
the U.S. Internal Revenue Code of 1986, as amended (the "Code"), its
legislative history, existing and proposed U.S. Treasury regulations
promulgated thereunder, published rulings by the U.S. Internal Revenue
Service ("IRS"), and court decisions, all in effect as of the date hereof,
all of which authorities are subject to change or differing interpretations,
which changes or differing interpretations could apply retroactively. The
portions of this summary relating to U.S. federal taxation are limited to
investors who hold the shares or ADSs as capital assets within the meaning of
Section 1221 of the Code (generally, property held for investment) and does
not purport to deal with investors in special tax situations, such as dealers
in securities or currencies, persons whose functional currency is not the
U.S. dollar and certain persons, including but not limited to life insurance
companies, tax exempt entities, financial institutions, traders in securities
that elect to use a "mark-to-market" method of accounting for their
securities holdings, regulated investment companies, persons holding shares
or ADSs as part of a hedging, integrated, conversion or constructive sale
transaction or straddle or persons subject to the alternative minimum tax,
who may be subject to special rules not discussed below. In particular, the
following summary does not address the adverse tax treatment to you if you
own, directly or by attribution, 10% or more of our outstanding voting share
capital and we are classified as a "controlled foreign corporation" for U.S.
federal tax purposes.

         As used herein, the term "U.S. holder" means a beneficial owner of
shares or ADSs who or which is:

         -        a citizen or resident of the United States;

         -        a corporation created or organized in or under the laws of the
                  United States or any political subdivision thereof;

         -        an estate the income of which is subject to U.S. federal
                  income taxation regardless of its source; or


                                      -63-

<PAGE>


         -        a trust (1) that is subject to the supervision of a court
                  within the United States and the control of one or more U.S.
                  persons as described in section 7701(a)(30) of the Code or (2)
                  that has a valid election in effect under applicable U.S.
                  Treasury regulations to be treated as a U.S. trust.

         If a partnership holds our shares or ADSs, the tax treatment of a
partner will generally depend upon the status of the partner and the
activities of the partnership. If you are a partner of a partnership holding
our shares or ADSs, you should consult your tax advisors.

         THE SUMMARY DOES NOT INCLUDE ANY DESCRIPTION OF THE TAX LAWS OF ANY
STATE, LOCAL OR FOREIGN GOVERNMENTS THAT MAY BE APPLICABLE TO THE SHARES OR
ADSs. YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISOR REGARDING THE U.S.
FEDERAL, STATE, AND LOCAL TAX CONSEQUENCES TO YOU OF THE OWNERSHIP OF SHARES
OR ADSS, AS WELL AS THE TAX CONSEQUENCES TO YOU IN THE UNITED KINGDOM AND ANY
OTHER JURISDICTIONS.

         For the purposes of the Conventions and the Code, you will be
treated as the owner of the shares represented by ADSs evidenced by the ADRs.
Exchanges by U.S. holders of shares for ADRs will not be subject to U.S.
federal income tax.

TAXATION OF DIVIDENDS

UNITED KINGDOM

         A U.K. resident individual shareholder will generally be entitled to
a tax credit in respect of any dividend received. The amount of the tax
credit is equal to one-ninth of the cash dividend or 10% of the aggregate of
the cash dividend and the associated tax credit.

         Under the terms of the Income Tax Convention, you may be entitled to
receive from the U.K. Inland Revenue, in respect of a cash dividend, a
payment equal to the amount of the tax credit to which an individual resident
in the U.K. for tax purposes would have been entitled had such resident
received the dividend, reduced by an amount to be withheld from such payment
not to exceed 15% of the sum of the dividend and the tax credit amount. At
the current levels of the tax credit, however, and as a result of the amount
so withheld, which withholding shall not exceed the amount of the tax credit,
you would not be entitled to receive any payment in respect of the tax credit
for dividends paid by us. For example, if you receive a dividend (solely for
illustrative purposes) of (pound)90, you would be entitled to a tax credit of
(pound)10, or one-ninth of (pound)90. However, since the amount withheld
(here limited to 10%) equals the amount of the tax credit, no actual treaty
payment would be made and you would receive only the cash dividend, which in
this case would be (pound)90. For U.S. federal income tax purposes, if you
elect the application of the Income Tax Convention with respect to dividends
(as discussed below) you would take into account an amount equal to the
dividend plus the tax credit, which under our illustration would be
(pound)100, and you would be treated as having paid U.K. tax equal to the
amount of the tax credit, which in this case would be (pound)10 (the "U.K.
Withholding Tax").

         Certain U.S. corporations which either alone or together with one or
more associated corporations control, directly or indirectly, at least 10% of
our voting stock may be entitled to a treaty payment under the terms of the
Income Tax Convention. The position of such U.S. holders is not generally
dealt with in this summary and such U.S. holders should consult their own tax
advisors with respect to the detailed application of the Income Tax
Convention to their


                                      -64-

<PAGE>


own particular circumstances and on the procedure for obtaining any payment
to which they may be entitled.

         You should consult your own tax advisors as to whether you will be
considered to have received any income with respect to the tax amount and
whether we will be considered to have paid U.K. Withholding Tax.

UNITED STATES

         Subject to the PFIC discussion below, if you are eligible for
benefits under, and elect the application of, the Income Tax Convention to
distributions you receive from U.S. corporations, the gross amount of a
dividend plus the U.K. tax credit amount considered received and unreduced by
the U.K. Withholding Tax (1) will be included in your gross income on the day
actually or constructively received by you, in the case of shares, or by the
Depositary, in the case of the ADSs, and (2) the dividend will be treated as
foreign source dividend income to the extent paid out of our current or
accumulated earnings and profits as determined for U.S. federal income tax
purposes. You elect the application of the Income Tax Convention by filing a
timely and duly completed Form 8833 with your income tax return for the
relevant year. Distributions you receive from us will constitute dividends
for these purposes to the extent paid out of our current and accumulated
earnings and profits. Distributions in excess of our current and accumulated
earnings and profits will first be treated, for U.S. federal income tax
purposes, as a nontaxable return on capital to the extent of the U.S.
holder's basis in the shares or ADSs and then as gain from the sale or
exchange of a capital asset. Dividends paid by us will not be eligible for
the corporate dividends received deduction that is applicable in certain
cases to U.S. corporations. U.S. holders of shares or ADSs are urged to
consult their own tax advisors as to their eligibility for benefits, if any,
under the Income Tax Convention.

         The amount of any dividend paid in British pounds will equal the
U.S. dollar value of the British pounds received calculated by reference to
the exchange rate in effect on the date the dividend is received by you, in
the case of shares, or by the depository, in the case of ADSs, regardless of
whether the British pounds are converted into U.S. dollars. If you do not
convert the British pounds received as a dividend into U.S. dollars on the
date of receipt, you will have a basis in the British pounds equal to their
U.S. dollar value on the date of receipt. Generally, any gain or loss
realized on your subsequent conversion or other disposition of the British
pounds will be treated as ordinary income or loss.

         Subject to certain conditions and limitations, the U.K. Withholding
Tax withheld from dividends will be treated as a foreign income tax that may
be deducted from U.S. federal taxable income or credited against the U.S.
holder's U.S. federal income tax liability. However, the U.K. tax may be
deducted only if the U.S. holder does not claim a credit for any foreign
taxes paid or accrued in that year. In addition, a U.S. holder will not be
entitled to a deduction or foreign tax credit with respect to U.K. tax that
may be refunded to a U.S. holder pursuant to the Income Tax Convention or
U.K. law. Accordingly, a U.S. holder who is eligible for, but does not apply
to receive, a refund pursuant to the Income Tax Convention will not be able
to claim a deduction or foreign tax credit for that portion of U.K. taxes
withheld in excess of 15% of the dividend. Further, in certain circumstances,
a U.S. holder that (i) has held shares or ADSs for less than a specified
minimum period during which it is not protected from risk of loss, (ii) is
obligated to make payments related to the dividends or (iii) holds the shares
or ADSs in arrangements in


                                      -65-

<PAGE>


which the U.S. holder's expected economic profit, after non-U.S. taxes, is
insubstantial will not be allowed a foreign tax credit for foreign taxes
imposed on dividends paid on shares or ADSs. For the purposes of computing
the foreign tax credit, dividends paid on the shares or ADSs will be treated
as income from sources outside the United States, but generally will be
grouped separately, together with other items of "passive" or "financial
services" income. The rules governing the foreign tax credit are complex.
U.S. holders are urged to consult their tax advisors regarding the
availability of the foreign tax credit in their particular circumstances.

TAXATION OF CAPITAL GAINS

UNITED KINGDOM

         If you are not resident or ordinarily resident in the United Kingdom
for U.K. tax purposes, you will not be liable for U.K. tax on capital gains
realized or accrued on the sale or other disposition of shares or ADSs unless
the shares or ADSs are held in connection with your trade or business (which
for this purpose includes a profession or a vocation) in the United Kingdom
through a branch or agency and the shares or ADSs are or have been used, held
or acquired for the purposes of such trade or business of such branch or
agency.

         A U.S. holder who is an individual who has on or after March 17,
1998 ceased to be resident or ordinarily resident in the United Kingdom for a
period of less than five years of assessment between the date of departure
from the United Kingdom and the date of return to the United Kingdom and who
disposes of shares or ADSs during that period may also be liable for U.K. tax
on capital gains notwithstanding that the person may not be resident in the
United Kingdom at the time of the disposal.

UNITED STATES

         Subject to the PFIC discussion below, gain or loss realized by a
U.S. holder on the sale or other disposition of the shares or ADSs will be
subject to U.S. federal income tax as capital gain or loss in an amount equal
to the difference between the U.S. holder's basis in the shares or ADSs and
the amount realized on the disposition. The capital gain or loss will be
long-term capital gain or loss if the U.S. holder has held the shares or ADSs
for more than one year at the time of the sale or exchange. Gain or loss
realized by a U.S. holder generally will be treated as U.S. source gain or
loss for U.S. foreign tax credit purposes.

PASSIVE FOREIGN INVESTMENT COMPANY CONSIDERATIONS

         Based upon our current operations and assets, we do not believe that
we are a passive foreign investment company, or PFIC, and we do not expect to
become a PFIC in the future for U.S. federal income tax purposes. Our belief
that we are not a PFIC and our expectation that we will not become a PFIC in
the future are based on our current and planned business activities,
including our ability to conclude certain contracts on terms that are
agreeable to us. In the event that we fail to conclude those contracts on a
timely basis, or at all, it is likely that we would be a PFIC for the taxable
year ending March 31, 2002 and possibly for future taxable years. This
conclusion is a factual determination made annually and could change. In
addition, a number of the factors that will be relevant to the determination
as to whether we are a PFIC will depend on circumstances that may not be
within our control. In reaching the conclusion that we are not a PFIC, we
valued our assets based on the price of our shares as of the date of this
filing. For


                                      -66-

<PAGE>


purposes of applying the PFIC rules, that valuation method gives substantial
value to intangible assets, including goodwill, that are not considered to
produce or to be held for the production of passive income for purposes of
the PFIC rules. The IRS has not approved or disapproved of this valuation
method, although we believe this is a reasonable method of valuing our
non-passive assets.

         In general, we will be a PFIC for any taxable year if either:

         -        75% or more of our gross income for the taxable year is
                  passive income; or

         -        50% or more of the value, determined on the basis of a
                  quarterly average, of our assets is attributable to assets
                  that produce or are held for the production of passive income.

         Passive income generally includes dividends, interest, royalties,
rents (other than rents and royalties derived in the active conduct or a
trade or business and not derived from a related person), annuities and gains
from assets that produce passive income.

         The determination of whether we are a PFIC is made annually.
Accordingly, it may be possible that we will become a PFIC in the current or
any future year due to changes in our asset or income composition or if our
projections are not accurate. Because we have valued our assets based on the
market value of our ordinary shares as of the date of this filing, a decrease
in the price of our shares could result in us becoming a PFIC.

         If we are classified as a PFIC in any year that a U.S. holder is a
shareholder, we generally will continue to be treated as a PFIC for that U.S.
holder in all succeeding years, regardless of whether we continue to meet the
income or asset test described above, although shareholder elections may
apply in certain circumstances. For purposes of the PFIC tests, we will be
treated as owning our proportionate share of the assets, and as receiving
directly our proportionate share of the income, of any foreign corporation of
which we own at least 25% of the stock value.

         If we become a PFIC, you will be subject to special tax rules for:

         -        any "excess distribution" by us, which is generally any
                  distribution that is greater than 125% of the average annual
                  distributions received by you in the three preceding taxable
                  years, or your holding period for the shares or ADSs, if
                  shorter; and

         -        any gain realized on the sale or other disposition, including
                  a pledge, of shares of ADSs.

         Under these special tax rules:

         -        the excess distribution or gain would be allocated ratably
                  over the holding period for the shares or ADSs;

         -        the amount allocated to the current taxable year, and any
                  taxable year prior to the first taxable year in which we were
                  a PFIC would be treated as ordinary income; and


                                      -67-

<PAGE>


         -        the amount allocated to each other year would be subject to
                  tax at the highest tax rate in effect for that year and the
                  interest charge generally applicable to underpayments of tax
                  would be imposed with respect to the resulting tax
                  attributable to each such prior year.

         As an alternative to these special rules, the U.S. holder may make
an election to have us treated as a qualified electing fund in the first
taxable year in which the U.S. holder owns the shares or ADSs and we comply
with various reporting requirements. A U.S. holder that makes a qualified
electing fund election will be currently taxable on its pro rata share of our
ordinary earnings and net capital gain (at ordinary income and capital gains
rates, respectively) for each taxable year in which we are a PFIC, regardless
of whether or not dividend distributions are actually made. Therefore, a U.S.
holder could have a tax liability with respect to those earnings or gain
without a corresponding receipt of cash. The U.S. holder's basis in the
shares or ADSs will be increased to reflect the amount of the taxed but
undistributed income. Distributions of income that had previously been taxed
will result in a corresponding reduction of basis in the shares or ADSs and
will not be taxed again as a distribution to the U.S. holder. Each U.S.
holder who desires qualified electing fund treatment must individually make a
qualified electing fund election. We intend to comply with all reporting
requirements necessary for a U.S. holder to make a qualified electing fund
election, will timely notify U.S. holders of each year that we are a PFIC and
will provide to U.S. holders such annual information as may be required to
make such a qualified electing fund election. A qualified electing fund
election is, however, subject to a number of specific rules and requirements,
and U.S. holders are strongly urged to consult their tax advisors concerning
the benefits of making the qualified electing fund election.

         Alternatively, it may be possible for you to make a "mark-to-market"
election with respect to the shares or ADSs. If you make a "mark-to-market"
election you would be required to recognize ordinary income in an amount
equal to the excess of the fair market value of your shares or ADSs over your
adjusted basis of those shares or ADSs, calculated as of the close of that
taxable year, provided that the shares or ADSs are regularly traded on a
qualified exchange. If the adjusted basis of those shares or ADSs exceeds
their fair market value, you may deduct the amount of such excess, but only
to the extent of amounts included in your ordinary income in prior taxable
years under the election. Under current law, the "mark-to-market" election
may be available to U.S. holders of shares or ADSs because the ADSs are
traded on the Nasdaq National Market which constitutes a qualified exchange
as designated in the Code, although the ADSs might not be "regularly traded"
for purposes of the "mark-to-market" election, and you should note that we
anticipate that only the ADSs and not the shares will be traded on the Nasdaq
National Market. U.S. holders should consult their tax advisors about the
availability of the "mark-to-market" election and whether making the election
would be advisable in the U.S. holder's particular circumstances.

         The consequences of the elections under the provisions described
above are complex, and we urge you to consult your tax advisor with respect
to the availability and effect of those elections in your particular
circumstances.

         If you own shares or ADSs during any year that we are a PFIC, you
must file IRS Form 8621. You should consult your tax advisor concerning the
U.S. federal income tax consequences of holding shares or ADSs if we are
considered a PFIC.


                                      -68-

<PAGE>


U.K. INHERITANCE AND GIFT TAX

         If you are an individual domiciled in the United States and are not
a national of the United Kingdom for the purposes of the Estate and Gift Tax
Convention, any share or ADS beneficially owned by you will not be subject to
U.K. inheritance tax on your death or on a gift made by you during your
lifetime, provided that any applicable U.S. federal gift or estate tax
liability is paid, except where the share or ADS is part of the business
property of your U.K. permanent establishment or pertains to your U.K. fixed
base used for the performance of independent personal services. The Estate
and Gift Tax Convention generally provides for tax paid in the United Kingdom
to be credited against tax payable in the United States, based on priority
rules set forth in that Convention, in the exceptional case where a share or
ADS is subject to both U.K. inheritance tax and U.S. federal gift or estate
tax. Where the shares or ADSs have been placed in trust by a settler who, at
the time of the settlement, was a U.S. holder, the shares or ADSs will
generally not be subject to U.K. inheritance tax if the settler, at the time
of the settlement, was domiciled in the United States for the purposes of the
Estate and Gift Tax Convention and was not a U.K. national.

U.S. GIFT AND ESTATES TAXES

         If you are an individual, you will be subject to U.S. gift and
estate taxes with respect to the shares or ADSs in the same manner and to the
same extent as with respect to other types of personal property.

U.K. STAMP DUTY AND STAMP DUTY RESERVE TAX

         Subject to certain exemptions, stamp duty will be charged at the
rate of 1.5% rounded up to the nearest (pound)5, or there will be a charge to
the stamp duty reserve tax at the rate of 1.5% on the amount or value of the
consideration paid, or in some circumstances the issue price or open market
value, on a transfer or issue of shares (1) to, or to a nominee for, a person
whose business is or includes the provision of clearance services, or (2) to,
or to a nominee for, a person whose business is or includes the issuing of
depositary receipts. It is understood that the U.K. Inland Revenue Stamp
Office considers a depositary issuing ADSs upon receipt of a company's
ordinary shares to fall within one or the other of the above two categories.
On the deposit of further shares with the depositary, stamp duty reserve tax
will be payable by the person depositing those shares. Where stamp duty
reserve tax is charged on a transfer of shares and ad valorem stamp duty is
chargeable on the instrument effecting the transfer, the amount of the stamp
duty reserve tax charged is an amount equal to the excess, if any, of the
stamp duty reserve tax charge due on the transfer after the deduction of the
stamp duty paid.

         You will not be entitled to a foreign tax credit with respect to any
U.K. stamp duty or stamp duty reserve tax, but may be entitled to a deduction
subject to applicable limitations under the Code. You are urged to consult
your own tax advisors regarding the availability of a deduction under their
particular circumstances.

TRANSFERS OF ADRS AND ADSS

         No U.K. stamp duty will be payable on an instrument transferring an
ADR or on a written agreement to transfer an ADR provided that the instrument
of transfer or the agreement to transfer is executed and remains at all times
outside the United Kingdom. Where these


                                      -69-

<PAGE>


conditions are not met, the transfer of, or agreement to transfer an ADR
could, depending on the circumstances, attract a charge to ad valorem stamp
duty.

         No stamp duty reserve tax will be payable in respect of an agreement
to transfer an ADR, whether made in or outside the United Kingdom.

         Where no sale is involved and no transfer of beneficial ownership
has occurred, a transfer of shares by the custodian or the depositary or its
nominee to the holder of an ADR upon cancellation of the ADR is subject to
U.K. stamp duty of (pound)5.00 per instrument of transfer.

ISSUE AND TRANSFER OF ORDINARY SHARES IN REGISTERED FORM

         Except in relation to persons whose business is or includes the
issue of depositary receipts or the provision of clearance services or their
nominees, the allotment and issue of shares by us will not normally give rise
to a charge to U.K. stamp duty or stamp duty reserve tax.

         Transfers of shares, as opposed to ADSs, will attract ad valorem
stamp duty normally at the rate of 0.5% of the value of the consideration
(rounded up to the nearest (pound)5.00). A charge to stamp duty reserve tax,
normally at the rate of 0.5% of the consideration, arises, in the case of an
unconditional agreement to transfer shares, on the date of the agreement, and
in the case of a conditional agreement the date on which the agreement
becomes unconditional. In the case of transfers effected through the CREST
system, the stamp duty reserve tax is collected through the system. In other
cases, the stamp duty reserve tax is payable on the seventh day of the month
following the month in which the charge arises. Where an instrument of
transfer is executed and duly stamped before the expiry of a period of six
years beginning with the date of that agreement, the charge to stamp duty
reserve tax is canceled if such stamp duty reserve tax has not been paid and,
if any of the stamp duty reserve tax has been paid, a claim may be made for
its repayment.

TRANSFER REPORTING REQUIREMENTS

         Under recently promulgated U.S. Treasury Department regulations, a
U.S. holder, including a tax exempt entity, that purchases any shares or ADSs
for cash will be required to file an IRS Form 926 or similar form with the
IRS the U.S. holder owned, directly or by attribution, immediately after the
transfer at least 10% by vote or value of us or (2) the purchase, when
aggregated with all purchases made by the U.S. holder, or any related person
thereto, within the preceding 12 month period, exceeds $100,000. If a U.S.
holder fails to file the required form, the U.S. holder could be required to
pay a penalty equal to 10% of the gross amount paid for the shares or ADSs,
subject to a maximum penalty of $100,000, except in cases involving
intentional disregard. U.S. holders should consult their tax advisors for
advice regarding this or any other reporting requirement which may apply to
their acquisition of the shares or ADSs.

INFORMATION REPORTING AND BACKUP WITHHOLDING

         In general, information reporting requirement will apply to certain
payments within the United States of interest, including payments made by the
U.S. office of a paying agent, broker or other intermediary, and to proceeds
of a sale, redemption or other disposition of notes through a U.S. branch of
a U.S. or foreign broker. A 31% "backup withholding" tax may apply to such
payments or proceeds if the beneficial owner fails to provide a correct
taxpayer


                                      -70-

<PAGE>


identification number or certification of exempt status or, in the case of
payments of interest, fails to certify that he is not subject to such
withholding or fails to report interest and dividend income in full. Non-U.S.
Holders are generally exempt from the information reporting and backup
withholding rules but may be required to comply with certification and
identification requirements in order to prove their exemption. For purposes
of these rules, a "U.S.-related broker" is a broker or other intermediary
that is a controlled foreign corporation for U.S. federal income tax purposes
or that is a non-U.S. person, 50% or more of the gross income from all
sources of which, over a specified three-year period, is effectively
connected with a U.S. trade or business. In general, a holder may comply with
this certification requirement by providing the paying agent, broker or other
intermediary with a duly completed and executed copy of IRS Form W-9, in the
case of U.S. Holders, or IRS Form W-8BEN, in the case of Non-U.S. Holders.
The proceeds of a sale, redemption, or other disposition of notes through a
foreign branch of a U.S. broker or U.S.-related broker generally will be
subject to information reporting, but will not be subject to backup
withholding. Any amounts withheld under the backup withholding rules from a
payment to a beneficial owner will be allowed as a refund or credit against
such beneficial owner's U.S. federal income tax liability provided the
required information is furnished to the IRS. Purchasers of shares or ADSs
should consult their own tax advisors regarding the application of the rules
on information reporting and backup withholding.

DOCUMENTS ON DISPLAY

         We are subject to the filing requirements of the Securities Exchange
Act of 1934 and file periodic reports with the Securities and Exchange
Commission, commonly referred to as the SEC. You may read and copy any
documents that we have filed with the SEC at the SEC's Public Reference Room
at 450 Fifth Street, N.W., Washington, DC 20549. You may also call the SEC at
1-800-SEC-0330 for further information about the Public Reference Room. Some
of our SEC filings are available on the SEC's Internet site at www.sec.gov.

         Whenever a reference is made in this report to any material contract
or other document to which we are a party, you should refer to the exhibits
that are a part of this report for a complete copy of the contract or
document.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The primary objective of our investment activities is to preserve
capital while at the same time maximizing the income we receive from our
investments without significantly increasing risk. We currently maintain our
portfolio of cash and cash equivalents by investing in term deposits of
varying lengths, between one day and one year, and in diversified
institutional liquidity funds offering immediate access and variable interest
rates. Some of the securities that we invest in may have market risk. This
means that a change in prevailing interest rates may cause the fair value of
the principal amount of the investment to fluctuate. For example, if we hold
a security that was issued with a fixed interest rate at the then-prevailing
rate and the prevailing interest rate later rises, the fair value of the
principal amount of our investment will probably decline. Due to the
short-term nature of our current investments, we believe we have no material
exposure to interest rate risk arising from our investments.

CURRENCY RISK


                                      -71-

<PAGE>


         The funds raised in U.S. dollars from our initial public offering
are held in U.S. dollar denominated investments. As our functional currency
is the British pound, we translate the U.S. dollar denominated investments
into British pounds and record a gain or loss in our consolidated statement
of operations. A strengthening of the British pound against the U.S. dollar
could result in a material increase in our losses for any given financial
period. We have made net foreign currency gains in the year ended March 31,
2001, but you should not view this gain as an indicator of future financial
performance in this area.

         The table below sets forth our currency exposure (I.E., those
transactional exposures that give rise to the net currency gains and losses
recognized in the income and expenditure account) on our net monetary assets
and liabilities. These exposures consist of our monetary assets and
liabilities that are not denominated in the currency used by us or our
subsidiary or affiliate having the asset or liability.

<TABLE>
<CAPTION>
                                                        AS OF MARCH 31, 2001
                                   -----------------------------------------------------------
FUNCTIONAL CURRENCY OF OPERATIONS        NET FOREIGN CURRENCY MONETARY ASSETS/(LIABILITIES)
---------------------------------  -----------------------------------------------------------
                                      POUNDS      SWEDISH KRONOR     DOLLARS        OTHER
                                   ------------ ------------------ ----------- ---------------
                                                          ($ IN MILLIONS)
<S>                                <C>          <C>                <C>         <C>
British pound....................       n/a             (0.2)          79.2          (0.6)
</TABLE>

         We had no off balance sheet, or unrecognized, gains and losses in
respect of financial instruments used as hedges at the beginning or end of
the year ended March 31, 2001. We had no deferred gains or losses during the
year covered.

INTEREST RATE RISK

         The following table analyzes the interest rate composition of our
financial liabilities, comprising borrowings and other contractual
obligations to deliver cash or other financial assets to another entity, by
currency. As of March 31, 2001, we had not entered into any interest rate
swaps or any other interest rate hedging instruments. Our fixed rate
financial liabilities are comprised mainly of finance leases.

         The following table summarizes the nominal and fair values, maturity
and contract terms of our financial liabilities as of March 31, 2001:

<TABLE>
<CAPTION>
                                                                       INTEREST
                                      ----------------------------------------------------------------------
FINANCIAL LIABILITIES                   FLOATING RATE                      FIXED RATE
------------------------------------  ----------------- ----------------------------------------------------
<S>                                    <C>              <C>              <C>               <C>
                                                                                           WEIGHTED AVERAGE
                                                                         WEIGHTED AVERAGE  PERIOD FOR WHICH
                                       ($ IN MILLIONS)  ($ IN MILLIONS)  INTEREST RATE (%)   RATE IS FIXED
CURRENCY
British pound......................                -              3.3                 11%           3 years
Swedish krona......................              0.1                -                  -                 -
                                       --------------   --------------
At March 31, 2001..................              0.1              3.3
                                       ==============   ==============
</TABLE>

         The table below sets forth the interest rate risk profile of our
financial assets as of March 31, 2001, by currency. As of March 31, 2001, we
had no assets on which we received fixed rates of interest. We received only
variable rates of interest on both our short-term deposits, which consist of
investments in institutional liquidity funds and term deposits, and cash at
banks and in hand.


                                      -72-

<PAGE>

<TABLE>
<CAPTION>
                                                       CASH AT
                                                       BANK AND     LIQUIDITY     TERM
                                                        IN HAND       FUNDS      DEPOSITS       TOTAL
                                                      -----------  -----------  -----------  -----------
                                                                      ($ IN MILLIONS)
<S>                                                   <C>          <C>          <C>          <C>
CURRENCY
U.S. dollar........................................          -         79.2          1.1          80.3
British pound......................................        0.2            -            -           0.2
Other currencies...................................        0.2            -            -           0.2
                                                      -----------  ----------    -----------  -----------
                                                           0.4         79.2          1.1          80.7
                                                      ===========  ==========    ===========  ===========
Floating rate......................................        0.4         79.2            -          79.6
Fixed rate.........................................          -            -          1.1           1.1
                                                      -----------  ----------    -----------  -----------
As of December 31, 1999............................        0.4         79.2          1.1          80.7
                                                      ===========  ==========    ===========  ===========
</TABLE>


FAIR VALUES OF FINANCIAL INSTRUMENTS

         There is no difference between the book value and fair value of all
of our financial instruments as of March 31, 2001.

FINANCING AND LIQUIDITY RISK

         We maintain unutilized banking and capital leasing facilities to
mitigate any liquidity risk we may face. As of March 31, 2001, we had total
borrowing and capital leasing facilities of $6.4 million, of which $3.4
million was utilized. The maximum utilization of these facilities during the
year ended March 31, 2001 was $4.2 million.

ITEM 12.          DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not Applicable




                                      -73-

<PAGE>


                                     PART II

ITEM 13.          DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

         None.

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

USE OF PROCEEDS

         Our registration statement on Form F-1 (file number 333-12170),
prepared in connection with our initial public offering and pursuant to which
we registered 13,800,000 of our ordinary shares for sale under the Securities
Act, was declared effective by the SEC on July 24, 2000. The registration
statement on Form F-6 (file number 333-12162), used to register our ADSs
under the Securities Act, was also declared effective by the SEC on July 24,
2000. The aggregate offering price of the 13,800,000 ordinary shares
registered under the Securities Act, all of which were offered in the form of
ADSs, was $96.6 million. The 13,800,000 ordinary shares registered under the
Securities Act were offered for sale in the form of ADSs on July 25, 2000.
All of the 13,800,000 ordinary shares were sold in the form of ADSs by August
22, 2000, at an aggregate offering price of $96.6 million. All of the
ordinary shares (in the form of ADSs) were sold by us and not by or for the
account of any of our shareholders.

         We entered into an underwriting agreement with the underwriters of
our initial public offering, who were represented by SG Cowen Securities
Corporation and Chase Securities Inc., on July 25, 2000. Pursuant to the
underwriting agreement, the underwriters agreed to purchase 12,000,000 of our
ordinary shares (in the form of 6,000,000 ADSs) on July 31, 2000, subject to
certain exceptions, and were granted an option to purchase an additional
1,800,000 of our ordinary shares (in the form of 900,000 ADSs) to cover
over-allotments until August 30, 2000. The underwriters exercised this option
on August 22, 2000.

         From our initial public offering, we raised gross proceeds of $96.6
million. Our issuance costs and expenses amounted to approximately $10.5
million. Accordingly, we raised net offering proceeds of $86.2 million. Our
issuance costs and expenses are set forth in the following table:

<TABLE>
<CAPTION>

                                                                            ISSUANCE COSTS
                                                                             AND EXPENSES
                                                                           ----------------
                                                                           ($ IN THOUSANDS)
<S>                                                                        <C>
Underwriters commission..................................................         6,762
Stamp duty reserve tax...................................................         1,437
NASD and SEC Filing fees.................................................            75
Legal, accounting, printing, insurance and other expenses................         2,195
                                                                            ---------------
                                                                                $10,469
                                                                            ===============
</TABLE>


         None of these costs and expenses were in respect of any direct or
indirect payments to (1) our directors, officers or their associates, (2)
persons owning 10% or more of our shares or (3) affiliates of ours.


                                      -74-

<PAGE>


         From July 25, 2000 to March 31, 2001, the aggregate amounts of net
offering proceeds used for the following purposes was as detailed below. The
balance of the net offering proceeds were retained as restricted cash or cash
equivalents as of March 31, 2001.

<TABLE>
<CAPTION>
                                                                                AS OF MARCH
                                                                                  31, 2001
                                                                              ----------------
                                                                              ($ IN THOUSANDS)
<S>                                                                           <C>
Purchase and installation of laboratory equipment........................                607
Purchase and installation of IT equipment................................                858
Improvements to leasehold premises.......................................                294
Purchase and improvement of freehold premises............................                199
Repayments under bank loans and capital leases...........................                167
Working capital..........................................................              4,138
                                                                              ----------------
                                                                                      $6,263
                                                                              ================
</TABLE>


         None of our net offering proceeds were used to make any direct or
indirect payments to (1) our directors, officers or their associates, (2)
persons owning 10% or more of our shares or (3) affiliates of ours.

ITEM 15. [RESERVED]

ITEM 16. [RESERVED]




                                      -75-

<PAGE>


                                    PART III

ITEM 17. FINANCIAL STATEMENTS

Not applicable.

ITEM 18. FINANCIAL STATEMENTS

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                         PAGE
                                                                                  -------------------
<S>                                                                               <C>
Report of Independent Auditors...................................................        F-1
Consolidated Balance Sheets at March 31, 2000 and 2001...........................        F-2
Consolidated  Statements of Operations  for the years ended March 31, 1999,  2000
and 2001 and from September 11, 1995 (inception) to March 31, 2001...............        F-3
Consolidated  Statement of  Shareholders'  Equity  (Deficit)  for the period from
September 11, 1995 (inception) to March 31, 2001.................................        F-4
Consolidated  Statements  of Cash Flow for the years ended March 31,  1999,  2000
and 2001 and the period from September 11, 1995 (inception) to March 31, 2001....        F-7
Notes to the Consolidated Financial Statements...................................        F-8
</TABLE>

ITEM 19. EXHIBITS

The following documents are filed as part of this annual report:

Exhibit

1.1      Memorandum of Association of Gemini Genomics plc*

1.2      Articles of Association of Gemini Genomics plc*

2.1      Form of Share Certificate*

4.1      Gemini Genomics plc Company Share Option Plan*

4.2      Gemini Genomics plc Savings-Related Share Option Scheme*

4.3      Gemini International Executive Share Option Plan*

4.4      Research Collaboration Agreement, dated September 1, 1999, between
         Gemini Research Limited and PE Corporation (through its business unit
         Celera Genomics)*

4.5      Patent License, dated June 16, 1999, between Gemini Research Limited
         and Affymetrix, Inc.*

4.6      Agreement, dated March 4, 1999, between Gemini Research Limited and
         Shield Diagnostics Limited*

4.7      Research Collaboration Agreement, dated March 23, 2000, between Gemini
         Research Limited and CuraGen Corporation*


                                      -76-

<PAGE>


4.8      Research Collaboration Agreement, dated March 31, 2000, between Gemini
         Research Limited and Sequenom, Inc.*

4.9      Agreement, dated March 23, 2001, between Gemini Genomics (UK) Limited
         and CuraGen Corporation+

4.10     Collaboration Agreement, dated March 23, 2001, between Gemini Genomics
         (UK) Limited and CuraGen Corporation+

8.1      List of subsidiaries of Gemini Genomics plc*



--------
*   Incorporated by reference to our registration statement on Form F-1 (File
    No. 333-12170), filed on June 23, 2000, as amended by Amendment No. 1, filed
    on July 14, 2000 and as amended by Amendment No. 2, filed on July 20, 2000,
    (with exhibits).

+   Confidential treatment requested for portions of this exhibit.


                                      -77-

<PAGE>

REPORT OF INDEPENDENT AUDITORS


To: The Board of Directors and Shareholders

Gemini Genomics plc



We have audited the accompanying consolidated balance sheets of Gemini Genomics
plc (a development stage company) as of March 31, 2000 and 2001 and the related
consolidated statements of operations, shareholders' equity and cash flows for
each of the three years in the period ended March 31, 2001 and the period from
September 11, 1995 (inception) to March 31, 2001. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Gemini Genomics plc (a
development stage company) at March 31, 2000 and 2001 and the consolidated
results of its operations and its consolidated cash flows for each of the three
years in the period ended March 31, 2001 and the period from September 11, 1995
(inception) to March 31, 2001, in conformity with accounting principles
generally accepted in the United States.





                                                                   Ernst & Young


Cambridge, England
22 May 2001





                                      F-1
<PAGE>


GEMINI GENOMICS PLC (A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                      MARCH 31
                                                                          -----------------------------
                                                                              2001              2000
                                                                          ------------       ----------
<S>                                                                           <C>              <C>
ASSETS
Current assets:
Cash and cash equivalents                                                     $79,576          $13,414
Accounts receivable                                                             1,399               88
Inventories                                                                       293              179
Prepaid expenses and other current assets                                       1,414              665
Tax credit receivable                                                             875                -
                                                                          ------------       ----------
Total current assets                                                           83,557           14,346
Property, plant and equipment, net                                              4,104            2,641
Restricted cash                                                                 1,127                -
Goodwill and other intangible assets, net                                       3,672            5,249
                                                                          ------------       ----------
Total assets                                                                  $92,460          $22,236
                                                                          ============       ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank loans                                                                       $139             $243
Accounts payable                                                                3,020            2,487
Collaborative accruals                                                          1,567            1,288
Accrued liabilities and other current liabilities                               3,022            2,338
Deferred income                                                                   100                -
Current portion of capital lease obligations                                    1,395            1,005
                                                                          ------------       ----------
Total current liabilities                                                       9,243            7,361
Capital lease obligations                                                       1,862            2,912
Other noncurrent liabilities                                                        -               75
                                                                          ------------       ----------
Total liabilities                                                              11,105           10,348
                                                                          ------------       ----------

Ordinary shares, L0.05 par value, 120,000,000 authorized and
  64,742,260 shares and 50,895,220 shares outstanding at March 31,
  2001 and March 31, 2000, respectively.                                        5,238            4,192
Additional paid-in capital                                                    134,992           48,954
Deferred compensation                                                          (1,490)          (2,611)
Notes receivable from shareholders                                                  -              (40)
Accumulated other comprehensive loss                                           (6,031)            (414)
Deficit accumulated during the development stage                              (51,354)         (38,193)
                                                                          ------------       ----------
Total shareholders' equity                                                     81,355           11,888
                                                                          ------------       ----------
Total liabilities and shareholders' equity                                    $92,460          $22,236
                                                                          ============       ==========
</TABLE>


SEE ACCOMPANYING NOTES.



                                      F-2
<PAGE>


GEMINI GENOMICS PLC (A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                              PERIOD FROM
                                                                                               SEPTEMBER
                                                                                                11 1995
                                                                                              (INCEPTION)
                                                                                                   TO
                                                                  YEAR ENDED MARCH 31           MARCH 31
                                                        2001            2000         1999        2001
                                                   ------------    ------------  ----------  -------------
<S>                                                    <C>               <C>          <C>         <C>
Revenue                                                $1,579            $164         $198        $1,941
                                                   ------------    ------------  ----------  -------------
Costs and expenses:
Costs of revenue                                           71              25            -            96
Research and development                               12,970           9,932        9,421        39,946
Marketing, general and administrative                   9,382           5,286        1,471        20,163
Amortization of goodwill and other intangible
  assets                                                1,033             311            -         1,344
                                                   ------------    ------------  ----------  -------------
Total costs and expenses                               23,456          15,554       10,892        61,549
                                                   ------------    ------------  ----------  -------------
Loss from operations                                  (21,877)        (15,390)     (10,694)      (59,608)

Foreign currency gain                                   4,472               -            -         4,472
Interest income                                         3,841             478          269         4,770
Interest expense                                         (477)           (493)        (320)       (1,868)
                                                   ------------    ------------  ----------  -------------
Net loss before taxation                              (14,041)        (15,405)     (10,745)      (52,234)
Taxation credit                                           880               -            -           880
                                                   ------------    ------------  ----------  -------------
Net loss                                             $(13,161)       $(15,405)    $(10,745)     $(51,354)
                                                   ============    ============  ==========  =============

Net loss per share--basic and diluted                  $(0.22)         $(0.73)      $(0.54)       $(2.31)
                                                   ============    ============  ==========  =============
Net loss per ADS--basic and diluted                    $(0.44)         $(1.46)      $(1.08)       $(4.62)
                                                   ============    ============  ==========  =============
Pro-forma net loss per share - basic and
   diluted (unaudited)                                                 $(0.35)                    $(1.65)
                                                                   ============              =============
Pro-forma net loss per ADS - basic and
   diluted (unaudited)                                                 $(0.70)                    $(3.30)
                                                                   ============              =============
Shares used in calculation of net loss per
   share and per ADS                               60,140,117      21,182,195   20,000,000    22,267,346
                                                   ============    ============  ==========  =============
Shares used in calculation of pro-forma net loss
   per share and per ADS (unaudited)                               45,959,745                 31,189,754
                                                                   ============              =============
</TABLE>


SEE ACCOMPANYING NOTES.




                                      F-3
<PAGE>


            GEMINI GENOMICS PLC (A DEVELOPMENT STAGE COMPANY)
         CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
       PERIOD FROM SEPTEMBER 11, 1995 (INCEPTION) TO MARCH 31, 2001
                 (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                                        GEMINI
                                                                                                       GENOMICS
                                                        GEMINI INTERNATIONAL HOLDINGS PLC                 PLC
                                       ----------------------------------------------------------- -----------------
                                                                     REDEEMABLE
                                                                    CONVERTIBLE
                                            ORDINARY SHARES      PREFERENCE SHARES    ADDITIONAL    ORDINARY SHARES
                                       ----------------------- ---------------------   PAID IN     -----------------
                                           SHARES      AMOUNT    SHARES      AMOUNT    CAPITAL      SHARES  AMOUNT
                                       -------------  -------- ----------- ---------  --------- ----------  ------
<S>                                    <C>            <C>      <C>         <C>        <C>           <C>     <C>
Issuance of Ordinary Shares for
  $0.0008 per share in March 1996         1,996,000      $2             -       $-         $-            -      $-
Issuance of Ordinary Shares
  for $0.0008 per share
in March 1997                            18,000,000      14             -        -          -            -       -
Translation adjustment                            -       -             -        -          -            -       -
Net loss                                          -       -             -        -          -            -       -
Total comprehensive loss                          -       -             -        -          -            -       -
                                       -------------  -------- ----------- ---------  --------- ----------  ------
Balances at March 31, 1997               20,000,000      16     5,840,000        5      4,635            -       -
  Issuance of redeemable
  convertible preferred shares
  for $0.96 per share in April,
  July and September 1997                         -       -     5,349,560        4      5,210            -       -

Exchange of shares to
  effect reorganization on
  December 5, 1997                     (20,000,000)    (16)   (11,189,560)      (9)    (9,845)  20,000,000    1,646
Issuance of Series C convertible
  preferred ordinary
  shares for $1.21 per
  share in March 1998                             -       -           -        -            -            -       -
Deferred share compensation                       -       -           -        -            -            -       -
  Amortization of deferred
  share compensation                              -       -           -        -            -            -       -
Translation adjustment                            -       -           -        -            -            -       -
Net loss                                          -       -           -        -            -            -       -
Total comprehensive loss                          -       -           -        -            -            -       -
                                       -------------  -------- ----------- ---------  --------- ----------  ------
Balances at March 31, 1998                        -       -           -        -            -   20,000,000   1,646
</TABLE>


<TABLE>
<CAPTION>
                                                                GEMINI GENOMICS PLC
                                  ------------------------------------------------------------------------------
                                                                                              DEFICIT
                                                                                                ACCUM      ACCUM
                                        CONVERTIBLE                       DEFERRED   NOTES     -ULATED    -ULATED      TOTAL
                                         PREFERRED             ADDIT        SHARE  RECEIVABLE  DURING THE   OTHER       SHARE
                                       ORDINARY SHARE          -IONAL        BASED   FROM      DEVELOP     COMPRE     HOLDERS'
                                    --------------------       PAID IN      COMPEN   SHARE      -MENT     -HENSIVE    EQUITY
                                        SHARES    AMOUNT       CAPITAL     -SATION  -HOLDERS    STAGE      INCOME    (DEFICIT)
                                    -----------   ------      ---------  ---------- --------  ----------  --------   ---------
<S>                                     <C>       <C>         <C>        <C>        <C>       <C>         <C>         <C>
Issuance of Ordinary Shares for
  $0.0008 per share in March 1996            -      $-            $-          $-       $-         $-          $-          $-
Issuance of Ordinary Shares
  for $0.0008 per share in
  March 1997                                 -       -             -           -        -          -           -           -
Translation adjustment                       -       -             -           -        -          -           4           4
Net loss                                     -       -             -           -        -     (3,463)          -      (3,463)
                                                                                                                     ---------
Total comprehensive loss                     -       -             -           -        -          -           -      (3,459)
                                    -----------   ------      ---------  ---------- --------  ----------  --------   ---------
Balances at March 31, 1997                   -       -             -           -        -          -           -      (3,459)
Issuance of redeemable
  convertible preferred shares
  for $0.96 per share in April,
  July and September 1997                    -       -             -           -        -          -           -       5,214
Exchange of shares to
  effect reorganization on
  December 5, 1997                  11,275,560     937         7,287           -        -          -           -           -
Issuance of Series C convertible
  preferred ordinary shares
  for $1.21 per share in March 1998    545,360      45           619           -        -          -           -         664
Deferred share compensation                  -       -           384        (384)       -          -           -           -
Amortization of deferred
 share compensation                          -       -            52           -        -          -          52
Translation adjustment                       -       -             -           -        -          -         (35)        (35)
Net loss                                     -       -             -           -        -     (8,123)          -      (8,123)
                                                                                                                     ---------
Total comprehensive loss                     -       -             -           -        -          -           -      (8,158)
                                    -----------   ------      ---------  ---------- --------  ----------  --------   ---------
Balances at March 31, 1998          11,820,920     982         8,290        (332)       -    (12,043)        (31)     (1,488)
</TABLE>

                                            F-4
<PAGE>

<TABLE>
<CAPTION>
                                                                                                           GEMINI
                                                                                                          GENOMICS
                                                      GEMINI INTERNATIONAL HOLDINGS PLC                     PLC
                                            ----------------------------------------------- --------------------------------------
                                                                   REDEEMABLE                                     CONVERTIBLE
                                                                  CONVERTIBLE                                      PREFERRED
                                              ORDINARY SHARES  PREFERENCE SHARES ADDITIONAL  ORDINARY SHARES    ORDINARY SHARES
                                            -----------------  ----------------- PAID IN    ----------------- --------------------
                                              SHARES  AMOUNT    SHARES   AMOUNT  CAPITAL     SHARES    AMOUNT   SHARES      AMOUNT
                                            -------- --------  -------- -------- -------    --------   ------ ----------  --------
<S>                                         <C>      <C>       <C>      <C>      <C>        <C>        <C>    <C>         <C>
Issuance of Series C convertible
  preferred ordinary shares for
  $1.22 per share in May 1998                     -       -        -        -       -              -       -   5,472,460      453
Issuance of Series C convertible
  preferred ordinary shares for $2.21
  per share in March, 1999                        -       -        -        -       -              -     560   6,776,660      560
Deferred share compensation                       -       -        -        -       -              -       -          17      (17)
Amortization of deferred share compensation       -       -        -        -       -              -       -           -      194
Translation adjustment                            -       -        -        -       -              -       -           -        -
Net loss                                          -       -        -        -       -              -       -           -        -
Total comprehensive loss                          -       -        -        -       -              -       -           -        -
                                            -------- --------  -------- -------- -------    --------   ------ ----------  -------
Balances at March 31, 1999                        -       -        -        -       -     20,000,000   1,646   24,070,040   1,995
Payment of notes receivable from
  shareholders                                    -       -        -        -       -              -       -           -        -
Issuance of Series C convertible
  preferred ordinary shares for $2.59
  per share in exchange for all the
  outstanding ordinary and preferred
  shares of Eurona on December 17, 1999           -       -        -        -       -             -       -   1,820,180      147
Issuance of Series C convertible
  preferred ordinary shares for $2.59
  per share in December, 1999                     -       -        -        -       -             -       -   4,281,360      345
Issuance of Series C convertible
  preferred ordinary shares for $2.59
  per share for services and cash on
  December 31, 1999                               -       -        -        -       -             -       -     500,000       40
Issuance of Series C convertible preferred
  shares for services                             -        -       -        -       -             -       -      51,640        5
Deferred share compensation                       -       -        -        -       -             -       -           -        -
Amortization of deferred share compensation       -       -        -        -       -             -       -           -        -
Issuance of warrants for 40,000
Series C convertible
  preferred ordinary shares in connection
  with capital lease financing in
  February 2000 at $0.08                          -       -        -        -       -             -       -           -        -
Exercise of share options in March 2000           -       -        -        -       -       172,000      14           -        -
Conversions of all convertible preferred
  ordinary
</TABLE>

<TABLE>
<CAPTION>
                                                                              GEMINI GENOMICS PLC
                                                    ----------------------------------------------------------------
                                                                                   DEFIVIT       ACCUM
                                                              DEFERRED   NOTES     -ACCUM       -ULATED      TOTAL
                                                      ADDIT     SHARE  RECEIVABLE  -ULATED       OTHER       SHARE
                                                     -IONAL     BASED     FROM    DURING THE     COMPRE     HOLDERS'
                                                     PAID IN    COMPEN   SHARE   DEVELOPMENT    -HENSIVE     EQUITY
                                                     CAPITAL   -SATION  -HOLDERS    STAGE        INCOME    (DEFICIT)
                                                    --------- -------- ----------  -------   ------------  ---------
<S>                                                 <C>       <C>      <C>         <C>       <C>           <C>
Issuance of Series C convertible preferred ordinary
  shares for $1.22 per share in May 1998               6,240        -        -           -          -       6,693
Issuance of Series C convertible preferred
  ordinary shares for $2.21 per share in
  March, 1999                                         14,447        -     (664)          -          -      14,343
Deferred share compensation                                -        -        -           -          -           -
Amortization of deferred share compensation                -        -        -           -          -         194
Translation adjustment                                     -        -        -           -       (191)       (191)
Net loss                                                   -        -        -     (10,745)         -     (10,745)
                                                                                                         ---------
Total comprehensive loss                                   -        -        -           -          -     (10,936)
                                                    --------- -------- ----------  -------   ----------  ---------
Balances at March 31, 1999                            28,994     (155)    (664)    (22,788)      (222)      8,806
Payment of notes receivable from shareholders              -        -      664           -          -         664
Issuance of Series C convertible
  preferred ordinary shares for $2.59 per
  share in exchange for all the outstanding
  ordinary and preferred shares of Eurona on
  December 17, 1999                                    4,573        -        -           -          -       4,720
Issuance of Series C convertible preferred
  ordinary shares for $2.59 per share in
  December, 1999                                      10,756        -        -           -          -      11,101
Issuance of Series C convertible preferred
  ordinary shares for $2.59 per share for
  services and cash on December 31, 1999               1,256        -      (40)          -          -       1,256
Issuance of Series C convertible preferred
  shares for services                                    129        -        -           -          -         134
Deferred share compensation                            2,923   (2,923)       -           -          -           -
Amortization of deferred share compensation                -      467        -           -                    467
Issuance of warrants for 40,000 Series C
  convertible preferred ordinary shares in
  connection with capital lease financing
  in February 2000 at $0.08                              218        -        -           -          -         218
Exercise of share options in March 2000                  105        -        -           -          -         119
Conversions of all convertible preferred ordinary
</TABLE>



                                      F-5
<PAGE>

<TABLE>
<CAPTION>
                                                                                                      GEMINI
                                                                                                     GENOMICS
                                                        GEMINI INTERNATIONAL HOLDINGS PLC               PLC
                                             ------------------------------------------------ --------------------
                                                                    REDEEMABLE
                                                                    CONVERTIBLE
                                               ORDINARY SHARES   PREFERENCE SHARES ADDITIONAL   ORDINARY SHARES
                                             ------------------- -----------------  PAID IN   --------------------
                                              SHARES    AMOUNT   SHARES     AMOUNT  CAPITAL     SHARES     AMOUNT
                                             --------  --------- -------   ------- ---------  ----------  --------
<S>                                          <C>       <C>       <C>       <C>     <C>        <C>         <C>
shares at a one-for-one rate                      -        -        -          -       -      30,723,220     2,532
Translation adjustment                            -        -        -          -       -               -         -
Net loss                                          -        -        -          -       -               -         -
Total comprehensive loss                          -        -        -          -       -               -         -
                                             --------  --------- -------   ------- ---------  ----------  --------
Balances at March 31, 2000                        -        -        -          -       -      50,895,220     4,192
Issuance of ordinary shares in connection
  with Initial Public Offering (net of
  expenses)                                       -        -        -          -       -      13,800,000     1,042
Exercise of share options                         -        -        -          -       -          47,040         4
Deferred share compensation                       -        -        -          -       -               -         -
Amortization of deferred share compensation       -        -        -          -       -               -         -
Payment of notes receivable from
  shareholders                                    -        -        -          -       -               -         -
Translation adjustment                            -        -        -          -       -               -         -
Net loss                                          -        -        -          -       -               -         -
Total comprehensive loss                          -        -        -          -       -               -         -
                                             --------  --------- -------   ------- ---------  ----------  --------
Balances at March 31, 2001                        -       $-        -         $-      $-      64,742,26 0   $5,238
                                             ========  ========= =======   ======= =========  ==========  ========
</TABLE>

<TABLE>
<CAPTION>
                                                                GEMINI GENOMICS PLC
                                                  --------------------------------------------------------------------
                                                                                                            DEFICIT
                                                                                                             ACCUM
                                                       CONVERTIBLE                  DEFERRED    NOTES      -ULATED
                                                        PREFERRED           ADDIT    SHARE    RECEIVABLE  DURING THE
                                                     ORDINARY SHARES       -IONAL    BASED       FROM      DEVELOP
                                                  -----------------------  PAID IN   COMPEN     SHARE       -MENT
                                                     SHARES       AMOUNT   CAPITAL   -SATION   -HOLDERS     STAGE
                                                  -----------    -------- --------- ---------  --------  ------------
<S>                                               <C>            <C>      <C>       <C>         <C>       <C>
shares at a one-for-one rate                       (30,723,220)    (2,532)       -         -        -             -
Translation adjustment                                      -           -        -         -        -             -
Net loss                                                    -           -        -         -        -       (15,405)
Total comprehensive loss                                    -           -        -         -        -             -
                                                  -----------    -------- --------- ---------  --------  ------------
Balances at March 31, 2000                                  -           -   48,954    (2,611)     (40)      (38,193)
Issuance of ordinary shares in connection with
  Initial Public Offering (net of expenses)                 -           -   85,252         -        -             -
Exercise of share options                                   -           -       39         -        -             -
Deferred share compensation                                 -           -      747      (747)       -             -
Amortization of deferred share compensation                 -           -        -     1,868        -             -
Payment of notes receivable from shareholders               -           -        -         -       40             -
Translation adjustment                                      -           -        -         -        -             -
Net loss                                                    -           -        -         -        -       (13,161)
Total comprehensive loss                                    -           -        -         -        -             -
                                                  -----------    -------- --------- ---------  --------  ------------
Balances at March 31, 2001                                  -          $-  $134,992  $(1,490)      $-      $(51,354)
                                                  ===========    ======== ========= =========  ========  ============
</TABLE>


<TABLE>
<CAPTION>
                                                 GEMINI GENOMICS PLC
                                               ----------------------
                                                   ACCUM
                                                  -ULATED    TOTAL
                                                   OTHER     SHARE
                                                  COMPRE    HOLDERS'
                                                 -HENSIVE   EQUITY
                                                  INCOME   (DEFICIT)
                                                ---------- ----------
<S>                                              <C>        <C>
shares at a one-for-one rate                           -           -
Translation adjustment                              (192)       (192)
Net loss                                               -     (15,405)
                                                           ----------
Total comprehensive loss                               -     (15,597)
                                                ---------- ----------
Balances at March 31, 2000                          (414)     11,888
Issuance of ordinary shares in connection with
  Initial Public Offering (net of expenses)            -      86,294
Exercise of share options                              -          43
Deferred share compensation                            -           -
Amortization of deferred share compensation            -       1,868
Payment of notes receivable from shareholders          -          40
Translation adjustment                            (5,617)     (5,617)
Net loss                                               -     (13,161)
Total comprehensive loss                               -     (18,778)
                                                ---------- ----------
Balances at March 31, 2001                       $(6,031)    $81,355
                                                ========== ==========
</TABLE>



                                      F-6
<PAGE>


                GEMINI GENOMICS PLC (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                                       PERIOD
                                                                                                        FROM
                                                                                                    SEPTEMBER 11
                                                                                                        1995
                                                                                                     (INCEPTION)
                                                                                                         TO
                                                                          YEAR ENDED MARCH 31,         MARCH 31
                                                                      2001       2000        1999        2001
                                                                   ---------- ---------   ---------   ----------
<S>                                                                <C>        <C>         <C>          <C>
OPERATING ACTIVITIES:
Net loss                                                           $(13,161)  $(15,405)   $(10,745)    $(51,354)
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization of deferred compensation and non-cash interest charge    1,868        473         194        2,587
Amortization of goodwill and other intangible assets                  1,097        311           -        1,408
Depreciation                                                          1,202        928         598        3,195
Non-cash consideration                                                    -      1,360         648        2,736
Changes in operating assets and liabilities                            (897)       612       1,082        2,408
                                                                   ---------- ---------   ---------   ----------
Net cash used in operating activities                                (9,891)   (11,721)     (8,223)     (39,020)
                                                                   ---------- ---------   ---------   ----------
INVESTING ACTIVITIES:
Purchases of plant, property and equipment                           (2,281)      (700)     (1,068)      (6,224)
Acquisition of Eurona and Newfound Genomics                             (40)       (19)          -          (59)
                                                                   ---------- ---------   ---------   ----------
Net cash used in investing activities                                (2,321)      (719)     (1,068)      (6,283)
                                                                   ---------- ---------   ---------   ----------
FINANCING ACTIVITIES:
Proceeds of capital lease obligations                                     -      3,991       1,392        8,005
Payments of capital lease obligations                                  (987)    (1,993)     (1,293)      (4,923)
Deposit of restricted cash                                           (1,173)         -           -       (1,173)
Proceeds from issuance of ordinary and preferred ordinary shares,
  net of issuance costs                                              85,007     11,695      20,560      127,115
Loans (repaid) received                                                (150)       243        (163)          93
                                                                   ---------- ---------   ---------   ----------
Net cash provided by financing activities                            82,697     13,936      20,496      129,117
                                                                   ---------- ---------   ---------   ----------
Effects of exchange rate changes on cash                             (4,323)      (247)        236       (4,238)
Net increase in cash and cash equivalents                            66,162      1,249      11,441       79,576
Cash and cash equivalents, beginning of period                       13,414     12,165         724            -
                                                                   ---------- ---------   ---------   ----------
Cash and cash equivalents, end of period                            $79,576    $13,414     $12,165      $79,576
                                                                   ========== =========   =========   ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid                                                          $427       $487        $320       $1,643
SCHEDULE OF NON-CASH TRANSACTIONS:
Fixed assets financed through capital lease obligations                $738     $3,991      $1,392       $8,743
Issuance of preferred ordinary shares in connection with
  the acquisition of Eurona                                              $-     $4,720          $-       $4,720
</TABLE>


                            SEE ACCOMPANYING NOTES.



                                      F-7
<PAGE>


GEMINI GENOMICS PLC (A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

Gemini International Holdings Limited ("GIHL"), was incorporated on September
11, 1995 and, until its acquisition by Gemini Genomics plc (the "Company",
formerly Gemini Holdings plc) on December 4, 1997, was the holding company of
Gemini Research Limited, Genos Limited and Gemini Gene Data Limited. The Company
was capitalized by the issue of 50,000 Class B preferred ordinary shares of
(pound)1 each which were issued to Raddison Trustee Limited. Raddison Trustee
Limited was the majority shareholder of both GIHL and the Company, thus
resulting in the companies being under common control. The Company acquired all
of the issued shares in GIHL in consideration of an issue of shares in the same
number and class to the same shareholders as then held shares in GIHL. The class
rights of shares in GIHL and the Company were essentially identical. By reason
of the fact that it acquired 50,000 Class B preferred ordinary shares, Raddison
Trustee Limited waived its entitlement of 45,700 Class B preferred ordinary
shares to which it would otherwise have been entitled. The shareholders in GIHL
and the Company were accordingly the same. The acquisition was accounted for as
a combination of entities under common control at historical costs and
consequently consolidated financial information is presented as if Gemini
International Holdings Limited had been owned by the Company since inception. As
at March 31, 2001, Gemini Genomics plc is the holding company for Gemini
Genomics UK (formerly Gemini Research Limited), Genos Limited, Gemini GeneData
Limited, Gemini Genomics AB (formerly Eurona Medical AB) Gemini Genomics Inc.,
and Newfound Genomics Inc.

The Company is a clinical genomics company that identifies relationships between
human genes and common human diseases. It has not yet generated substantial
revenues from its commercial operations. Accordingly, through the date of these
financial statements, the Company is considered to be in the development stage.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company has sustained operating losses
since inception and expects such losses to continue as it furthers its research
and development programs. Since inception, the Company has incurred significant
losses and, as of March 31, 2001, has an accumulated deficit of $51.4 million.
Management believes sufficient funds will be available to support operations
through at least May 31, 2002. The Company may seek to fund its operations
thereafter through collaborative arrangements and through public and private
financings.

UNCERTAINTIES

Gemini is subject to risks common to companies in the biotechnology sector
including, but not limited to, the ability to discover and commercialise genetic
links to diseases, departure of key personnel, protection of intellectual
property, ability to obtain additional financing, ability to negotiate
collaborative agreements, effects of foreign currency movements, and compliance
with government and other regulations.

USE OF ESTIMATES

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


                                      F-8
<PAGE>

FOREIGN CURRENCY AND CURRENCY TRANSLATION

The functional currency of the Company is the British pound. The Company's
foreign subsidiaries, Gemini Genomics AB (formerly Eurona Medical AB ( "Eurona
")), Gemini Genomics, Inc., and Newfound Genomics Inc., use the Swedish kronor,
US dollar, and Canadian dollar, respectively, as their functional currency, and
translate those currencies to British pounds in accordance with Statement of
Financial Accounting Standards ( "SFAS ") No. 52, FOREIGN CURRENCY TRANSLATION.
Foreign exchange differences are recorded as a component of "other comprehensive
income ". The financial statements herein are presented in U.S. dollars for the
convenience of the user. Translation of balance sheet data from British pounds
to the U.S. dollar is made at the exchange rate ruling at the balance sheet
date. Translation of income statement and cash flow amounts is made at the
average exchange rate for the year.

Foreign currency transaction gains and losses are reported according to the
exchange rates prevailing on the transaction date and are included in the
consolidated statement of operations.

BASIS OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its subsidiaries, all of which are wholly owned. All inter-company accounts and
transactions are eliminated on consolidation. Acquisitions are accounted for
from their date of acquisition.

SHARE-BASED COMPENSATION

The Company accounts for employee share options in accordance with Accounting
Principles Board Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES ("APB
25") using the intrinsic value method. Share compensation expense for options
granted to non-employees has been determined in accordance with SFAS No. 123 and
Emerging Issues Task Force ("EITF") 96-18 as the fair value of the consideration
received. The Company has provided the pro forma disclosures of net loss and net
loss per share in accordance with SFAS No. 123 using the fair value method.

REVENUE RECOGNITION

Revenues are earned from services pursuant to customer licensing agreements and
collaborative research and development agreements for periodic license fees,
research payments, additional payments and milestone payments. License fees,
research payments, and additional payments are recognized rateably over the term
of the agreement or as milestones are achieved. Payments received in advance of
work performed are recorded as deferred revenue.

In fiscal 2001, the Company changed its method of accounting for non-refundable
upfront product license fees and certain other related fees to be recognized
over the periods of continuing involvement. The Company historically recognized
these fees as revenue when all of the conditions to payment had been met and
there were no further performance contingencies or conditions to the Company's
receipt of payment. These fees were not creditable against future payments. The
Company believes the change in accounting principles is consistent with guidance
provided in the SEC Staff Accounting Bulletin No. 101 - "Revenue Recognition in
Financial Statements" released in December 1999. The change in accounting
principle has no effect on prior year results.

RESEARCH AND DEVELOPMENT

Research and development costs, including costs associated with the development
of computer software to be used in the Company's research and development
activities, are expensed in the period incurred.

ADVERTISING COSTS

Advertising costs are charged to operations as incurred. Advertising costs in
the years ended March 31, 1999, 2000 and 2001 were nil, $23,000 and $64,000,
respectively.


                                      F-9
<PAGE>

PATENT COSTS

Patent costs and costs related to patent prosecution are expensed as incurred as
recoverability of such expenditure is uncertain.

INCOME TAXES

In accordance with SFAS No. 109, ACCOUNTING FOR INCOME TAXES, a deferred tax
asset or liability is determined based on the difference between the financial
statement and tax basis of assets and liabilities as measured by the enacted tax
rates, which will be in effect when these differences reverse. The Company
provides a valuation allowance against net deferred tax assets unless, based
upon the available evidence, it is more likely that the deferred tax assets will
be realized.

CASH AND CASH EQUIVALENTS

Cash equivalents consist of highly liquid term deposits and investments in
institutional liquidity funds.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial instruments, including cash and cash equivalents, accounts receivable,
accounts payable, and accrued liabilities, are carried at cost, which management
believes approximates fair value because of the short-term maturity of these
instruments. The carrying value of long-term debt approximates fair value based
on the market interest rates available to the Company for debt of similar risk
and maturities.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost less accumulated depreciation
and amortization. Maintenance and repairs are expensed as incurred. Depreciation
and amortization is provided using the straight-line method over the estimated
useful life of the related assets, as follows:

<TABLE>
<CAPTION>
                                                                                          USEFUL LIVES
                                                                                              IN YEARS
                                                                                         -------------
<S>                                                                                      <C>
Leasehold improvements                                                                   Life of lease
Laboratory equipment                                                                      4 to 5 years
Office equipment                                                                          4 to 5 years
Freehold building                                                                             20 years
</TABLE>

CAPITAL LEASES

Assets acquired under capital lease agreements are recorded at the present value
of the future minimum rental payments using interest rates appropriate at the
inception of the lease, which approximates the cost of the leased assets.
Property and equipment subject to capital lease agreements are amortized over
the shorter of the life of the lease or the estimated useful life of the asset,
in accordance with the Company's normal depreciation policies, unless the lease
transfers ownership or contains a bargain purchase option, in which case the
leased asset is amortized over the estimated useful life of such assets.


                                      F-10
<PAGE>


GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill represents the excess of purchase price over the fair value of
identifiable tangible and intangible assets acquired and is amortized using
the straight-line method over its estimated useful life. The Group reviews
the carrying amount of goodwill if facts and circumstances suggest that it
may be impaired. If this review indicates that goodwill will not be
recoverable, as determined based on the estimated undisclosed cash flows of
the entity acquired over the remaining amortisation period, the carrying
amount of the goodwill is reduced by the estimated shortfall of cash flows.

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with SFAS No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED
ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF, if indicators of impairment
exist, the Company assesses the recoverability of the affected long-lived assets
by determining whether the carrying value of such assets can be recovered
through undiscounted future operating cash flows. If impairment is indicated,
the Company will measure the amount of such impairment by comparing the carrying
value of the asset to the present value of the expected future cash flows
associated with the use of the asset. To date, no such indicators of impairment
have been identified.

INVENTORIES

Inventories are stated at the lower of actual cost or market value. Cost is
determined by the first-in, first-out method. At March 31, 2000 and 2001,
inventories consisted entirely of research supplies.

SOFTWARE COSTS

The Company expenses purchased and internally developed software costs, except
those costs required to be capitalized under Statement of Position 98-1,
ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL
USE. To date, the amount of software capitalized is insignificant.

LOSS PER SHARE AND PRO FORMA LOSS PER SHARE

In accordance with SFAS No. 128, the Company calculates basic net loss per share
based on the weighted-average number of ordinary shares outstanding during the
period and diluted earnings per share based on the dilutive effect of ordinary
share equivalents consisting of share options and warrants (calculated using the
treasury stock method). Potentially dilutive securities have been excluded from
the diluted net loss per share calculation as they have an anti-dilutive effect
due to the Company's net loss.

The computation of pro forma net loss per share includes ordinary shares
issuable on the conversion of outstanding shares of convertible preferred
ordinary shares (using the as-if converted method from the original date of
issuances.

Potential ordinary shares excluded from the calculation of diluted net loss per
share as their inclusion would have been anti-dilutive were:

<TABLE>
<CAPTION>
                                                                               MARCH 31
                                                               ---------------------------------------
                                                                   2001         2000          1999
                                                               -----------   -----------  ------------
<S>                                                            <C>           <C>          <C>
Convertible preferred ordinary shares in ordinary shares                -             -    24,070,040
Warrants to purchase ordinary shares                               40,000        40,000             -
Options to purchase ordinary shares                             7,578,872     3,561,420     2,512,440
                                                               -----------   -----------  ------------
Total potential ordinary shares                                 7,618,872     3,601,420    26,582,480
                                                               ===========   ===========  ============
</TABLE>



OTHER COMPREHENSIVE INCOME

On June 1997, the FASB issued SFAS No.130, REPORTING COMPREHENSIVE INCOME, which
establishes standards for the reporting and disclosing of comprehensive income
and its components in the financial


                                      F-11
<PAGE>

statements. The only item of other comprehensive income (loss) which the Company
currently reports is foreign currency translation adjustments.

SHORT-TERM INVESTMENTS AND CONCENTRATION OF CREDIT RISK

The Company has no investment securities that would be subject to classification
in accordance with SFAS No. 115, ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND
EQUITY SECURITIES. The Company invests its surplus cash in bank term deposits,
having a maturity period of between one day and one year, or in institutional
liquidity funds. The term deposits can be terminated early at a nominal cost and
the liquidity funds provide for immediate access. Accordingly, all cash
resources have been disclosed under cash and cash equivalents.

SEGMENT REPORTING

Effective January 1998, the Company adopted SFAS No. 131, DISCLOSURE ABOUT THE
SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION. The Company has determined it
operates in only one segment for the following reasons: the Company's principle
product offering is the discovery of disease genes, and all other product
offerings are ancillary to this; the Company's chief operating decision maker
reviews the Company's results as a single entity; to date, essentially all of
the Company's efforts have been directed towards discovery of disease genes and
this is expected to remain the Company's focus for the foreseeable future.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities", amended in
June 2000 by SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities." These Statements establish a new model for
accounting for derivatives and hedging activities and supersede and amend a
number of existing standards. Upon the standard's initial application, all
derivatives are required to be recognized in the balance sheet as either assets
or liabilities and measured at fair value. In addition, all hedging
relationships must be designated, reassessed and documented. The Company is
required to implement the Statements in the first quarter of the fiscal year
ended March 31, 2002. Considering the Company's current activities, there will
be no significant impact on its financial position or results of operations upon
adoption of SFAS No. 133.




                                      F-12
<PAGE>


2 SIGNIFICANT CONTRACTS

TECHNOLOGY ALLIANCES

In February 1999, the Company entered into a collaboration agreement with Large
Scale Proteomics, Inc. Under this agreement, the Company provides samples and
clinical data from selected identical twin pairs and Large Scale Proteomics,
Inc. conducts protein analysis. Each company is responsible for its own costs
under the project. When, and if, discoveries made under the collaboration are
commercialized, each company is required to make payments to the other according
to the nature of the product and its commercialization. The agreement terminates
when neither party is required to make further payments thereunder. Large Scale
Proteomics, Inc. may terminate the agreement if it provides notice within 120
days of its decision not to proceed with the project. Either party may terminate
the collaboration agreement if there is a material breach by the other that is
not cured. No payments have been received or made to date.

In September 1999, the Company entered into a collaboration agreement with
Celera Genomics, Inc. ("Celera") to jointly search for novel gene discoveries.
Under this agreement, the Company provides fine-mapped regions and Celera
performs high-throughput sequencing of these regions. Each company is
responsible for its own research costs. The Company will jointly own with Celera
any gene discoveries from this collaboration and will share equally with Celera
revenues received from licensing of such gene discoveries. All costs of
exploitation of gene discoveries will be shared equally by the Company and
Celera. The agreement terminates in September 2001.

In March 2000, the Company entered into separate collaboration agreements with
CuraGen, Inc. and Sequenom, Inc. Under these agreements, the Company provides
clinical data and DNA samples and CuraGen, Inc. and Sequenom, Inc. provide
genetic analysis of the samples. Each company is responsible for its own costs,
although the Company will reimburse CuraGen, Inc. and Sequenom, Inc. for a
portion of their costs. No cost reimbursement has been made by the Company to
date and this is not expected to be material in future years. No minimum funding
commitments are defined in the agreements. Revenues arising from the agreements
will be shared between the Company and CuraGen, Inc. or Sequenom Inc. The
agreements with both CuraGen, Inc. and Sequenom, Inc. are each for an initial
term of two years.

In October 2000, the Company entered into a further collaboration agreement with
CuraGen, Inc. Under this agreement, the Company provides disease associated
genes it discovers and CuraGen, Inc. provides its PathCalling(TM) proteomic
technology in order to rapidly ascertain the biological context of the disease
associated genes. Revenues arising from the agreement will be shared between the
Company and CuraGen, Inc. The agreement is for an initial term of two years. No
revenues have yet been recognised under this agreement.

In November 2000, the Company entered into a collaboration agreement with
Rosetta Inpharmatics, Inc. Under this agreement, the Company provides clinical
data and DNA samples, from which RNA, the translator of DNA, is collected and
Rosetta Inpharmatics, Inc. will screen many thousands of genes with the
intention of identifying and characterising sets of genes associated with common
human diseases. Each company is responsible for its own costs. Revenues arising
from the agreements will be shared between the Company and Rosetta Inpharmatics,
Inc. The agreement is for an initial term of two years. No revenues have yet
been recognised under this agreement.

In December 2000, the Company entered into a collaboration agreement with Genmab
A/S. Under this agreement, the Company provides novel disease targets it
discovers and Genmab A/S will provide its fully human antibody technology to
create and develop new products. Each company is responsible for its own costs.
Revenues arising from the agreements will be shared between the Company and
Genmab A/S. The agreement is for an initial term of two years. No revenues have
yet been recognised under this agreement.

In March 2001, the Company entered into two further agreements with CuraGen,
Inc. Under these agreements, the Company has provided CuraGen, Inc. with DNA
samples and clinical data and will


                                      F-13
<PAGE>

provide genotyping and analysis services under one of the agreements. The
Company will own the intellectual property rights arising and have granted
CuraGen, Inc. an exclusive, indefinite worldwide license to commercially exploit
any discoveries arising. The Company has received an up-front payment and may
generate additional revenues over the next three years.

LICENSE AGREEMENTS

The Company has entered into license agreements for the use of the Company's
patents and patent applications relating to the COL1A1 disease gene with
Affymetrix, Inc. and Axis Shield plc. Under these agreements, the Company
receives license fees and will potentially receive royalties. Through March 31,
2001, the Company has received license fees of $150,000 under the agreement with
Affymetrix, Inc. and $152,000 under the agreement with Axis-Shield plc. The
license agreements terminate upon the expiration of the patents relating to the
COL1A1 disease gene. In addition, the Company may terminate the Affymetrix, Inc.
license agreement for an uncured material breach and may terminate the
Axis-Shield plc agreement for an uncured material breach or if Axis-Shield plc
does not pay royalties within 90 days of their being due.

SERVICES AGREEMENT

The Company has performed gene validation services for Kyowa Hakko Kogyo, Inc.
The services were successfully concluded in March 2000, and aggregate revenues
of $184,000 have been received.

CLINICAL COLLABORATIONS

The Company has entered into a number of agreements with clinical collaborators,
based at various universities and hospitals. Under these agreements, the Company
pays either an amount per item of clinical data provided, or an annual fee. The
maximum annual amount payable on any of the existing contracts is approximately
$1.1 million and the annual aggregate cost is approximately $4.2 million. The
contracts vary in length with the last to expire in February 2005.

3 CASH AND CASH EQUIVALENTS

The following is a summary of cash and cash equivalents at March 31, 2000 and
2001:

<TABLE>
<CAPTION>
                                                                                           MARCH 31
                                                                                     -----------------
                                                                                        2001    2000
                                                                                     --------- -------
                                                                                        (IN THOUSANDS)
<S>                                                                                  <C>       <C>
Cash                                                                                 $   393   $   678
Cash on interest bearing short term deposits and invested in institutional
liquidity funds                                                                       79,183    12,736
                                                                                     --------- -------
                                                                                     $79,576   $13,414
                                                                                     ========= =======
</TABLE>

4 RESTRICTED CASH

In addition to the above, there is restricted cash of $1,127,000 held in term
deposits with restrictions of access, in support of a number of capital lease
obligations and operational leases.


                                      F-14
<PAGE>


5 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                                           MARCH 31
                                                                                     ------------------
                                                                                       2001      2000
                                                                                     --------  --------
                                                                                        (IN THOUSANDS)
<S>                                                                                   <C>      <C>
Land and buildings                                                                      $192        $-
Leasehold improvements                                                                   711       367
Laboratory equipment                                                                   4,762     3,758
Office equipment                                                                       1,248       435
                                                                                     --------  --------
                                                                                       6,913     4,560
Less accumulated depreciation                                                         (2,809)   (1,919)
                                                                                     --------  --------
                                                                                      $4,104    $2,641
                                                                                     ========  ========
</TABLE>

The depreciation expense on property, plant and equipment amounted to $598,000,
$928,000 and $1,202,000 for the years ended March 31, 1999, 2000 and 2001,
respectively. Depreciation expense for the period from inception (September 11,
1995) through March 31, 2001 was $3,195,000. Included in property, plant and
equipment are assets under capital lease obligations with an original cost of
approximately $3,535,000 and $3,642,000, as of March 31, 2000 and 2001,
respectively. Accumulated depreciation on assets under capital leases was
$1,969,000 and $2,221,000, respectively.

During January 2001, Newfound Genomics, Inc., a subsidiary of the Company,
purchased a freehold property of 5,850 sq ft in St John's, Newfoundland for
$192,000. This property is under refurbishment and will provide facilities for
sample collection, office space and laboratory facilities for the Company's
Newfoundland operations.

6 COMMITMENTS AND CONTINGENCIES

DEBT FACILITY

In February 2000, the Company secured a $5.0 million line of credit with Hewlett
Packard International Bank Limited ("HPIB Limited"), to utilize against capital
equipment financings over the following 18-month period. In February 2000, the
Company drew $2.0 million against this line of credit as a capital lease to
support capital expenditure. Interest is repayable quarterly at 11% per annum
over the four-year period of the lease, which has a capital repayment holiday
for the first 18 month period. In the event that the Company draws further
funds, it has agreed to issue warrants to purchase up to an additional 80,000
ordinary shares, each at an exercise price of L0.05 ($0.07) per ordinary
share. The Company has no commitments for any additional financings. The Company
issued warrants to HPIB Limited for 40,000 ordinary shares at an exercise price
of L0.05 per share ($0.07 per share). The fair value of each warrant was
estimated at approximately $5.53. The aggregate fair value of the warrants is
approximately $218,000 and has been recorded in additional paid-in capital and
treated as a discount to the capital lease obligation. The discount is being
accreted on a straight-line basis (which materially approximates to the
actuarial method) to interest expense over the four-year period of the lease.
For the years ended March 31, 2000 and 2001, additional interest expense of
$6,000 and $52,000, respectively, was recorded related to these warrants.

PURCHASE COMMITMENTS

At March 31, 2001 the Company was committed to complete the refurbishment of
their freehold premises in Newfoundland, Canada. This refurbishment is expected
to be completed by June 2001, at a total cost of approximately $200,000, which
the Company expect to finance from its existing cash resources.


                                      F-15
<PAGE>

LEASES

In February 2001, the Company undertook a sale and leaseback transaction with
Investec Asset Finance PLC. The Company sold scientific and IT equipment
recently acquired for $0.7 million and have entered into a three-year lease
arrangement. No gain or loss was recognized on this transaction. Repayments are
quarterly and interest is payable at 9.8% per annum.

As of March 31, 2001, the Company had $3.6 million of property, plant and
equipment financed through long-term obligations. The obligations under the
equipment leases are secured by the equipment financed, bear interest at a
weighted-average rate of between 5.3% and 11% and are due in monthly and
quarterly installments through September 2003. Under the terms of the
agreements, the financed equipment may be purchased by the Company at a nominal
value at the end of the financing term. As of March 31, 2001, future minimum
lease payments under operating and capital leases are as follows:

<TABLE>
<CAPTION>

                                                                              OPERATING        CAPITAL
                                                                                LEASES          LEASES
                                                                              ---------        -------
                                                                                    (IN THOUSANDS)
YEARS ENDING MARCH 31,
<C>                                                                           <C>            <C>
2002                                                                             $1,183         $1,815
2003                                                                                999          1,284
2004                                                                                835            882
2005                                                                                679              -
Amounts thereafter                                                                3,293              -
                                                                               ----------      --------
Total minimum lease and principal payments                                        6,989          3,981
                                                                               ==========
Less amount representing interest                                                                 (724)
                                                                                               --------
Present value of minimum capital lease obligation                                                3,257
Less current portion of future payments                                                          1,395
                                                                                               --------
Capital lease obligation, less current portion                                                  $1,862
                                                                                               ========
</TABLE>


Rent expense relating to operating leases was approximately $178,000, $242,000
and $565,000 in the years ended March 31, 1999, 2000 and 2001, respectively.

During the year ended March 31, 2001 the Company extended a 10-year operating
lease of 19,600 square feet of laboratory and office space in Newton,
Massachusetts, to house the senior management, business development,
intellectual property and investor relations activities of the Company. Costs
incurred in refurbishing this property are capitalized within Leasehold
Improvements, see note 5.

CONTINGENCIES

In the ordinary course of business the Company may be subject to legal
proceedings and claims. The Company is not currently subject to any material
legal proceedings.


                                      F-16
<PAGE>


7 LONG-TERM DEBT

Of the total bank loans, the non-current amounts outstanding are as follows:

<TABLE>
<CAPTION>

                                                                                           MARCH 31
                                                                                        2001     2000
                                                                                       ------   ------
                                                                                       (IN THOUSANDS)
<S>                                                                                    <C>     <C>
Loans, repayable by quarterly installments to March 31, 2002.

The interest rate is 4.85%                                                                $-      $75
                                                                                       ======   ======
</TABLE>


In accordance with the above bank loans, of which $63,000 is classified within
current liabilities, the bank has a floating charge over the assets of Eurona up
to a value of $318,000. There are no covenants attached to the loans.

8 ESTABLISHMENT OF NEWFOUNDLAND GENOMICS INC.

In June 2000, the Company formed Newfound Genomics Inc. in Newfoundland, Canada,
a joint-venture with Lineage Biomedical. In February 2001, the Company acquired
the outstanding share capital it did not then own from Lineage Biomedical Can
for $60,000. The Can $60,000 (US$40,000) was recorded as goodwill since the
joint-venture had no identifiable assets. Newfound Genomics Inc. has established
local facilities and commenced clinical and genetic data collection from the
geographically isolated population in Newfoundland.

9 SHAREHOLDERS' EQUITY

INITIAL PUBLIC OFFERING

On July 26, 2000, the Company completed a public offering of its ordinary shares
by issuing 13,800,000 ordinary shares in the form of American Depositary Shares
("ADSs"). Each ADS represents two ordinary shares. The aggregate value was $96.6
million, or $14 per ADS. Issuance costs for the offering amounted to
approximately $10.4 million. The Company received net proceeds of $86.2 million.

ORDINARY SHARES

On March 17, 2000, the Company effected a conversion of all its outstanding
convertible preferred ordinary shares into ordinary shares and a 20-for-one
ordinary share split. All shares and per share amounts have been retroactively
restated to give effect to the share split.

Each ordinary share entitles the holder to one vote on all matters submitted to
a vote of the Company's shareholders. Ordinary shareholders are entitled to
receive dividends, if any, as may be declared by the Board of Directors. At
March 31, 2000 and 2001, the Company had 120,000,000 ordinary shares authorized
and 50,895,220 and 64,742,260 shares issued and outstanding, respectively.

ISSUANCE OF SHARES TO EX-EMPLOYEES

In December 1999, the Company issued 500,000 shares at par ($0.08) to
ex-employees of Gemini Research Limited. The fair value of the shares was
determined as $1,296,000 and a marketing, general and administrative expense of
$1,256,000 was recorded in the year, reflecting the difference between the fair
value of the shares and the amount payable. At March 31, 2000 an amount of
$40,000 receivable for the shares remained outstanding and is presented in the
balance sheet for that year as a deduction from shareholders' equity. The amount
was received during the year ended March 31, 2001.

SHARE OPTION PLANS

Under the terms of the Gemini Genomics plc Company Share Option Plan Part A
("Plan A"), the Board of Directors may grant U.K. Inland Revenue approved share
options to employees, directors and consultants of the Company at an exercise
price approved by the U.K. Inland Revenue. Share options granted under plan A
generally vest and become exercisable on the third anniversary date of the
grant. Options expire 10 years from the date of grant. Under the terms of the
Gemini Genomics plc Company


                                      F-17
<PAGE>

Share Options Plan Part B ("Plan B"), the Board of Directors may grant
unapproved share options to employees or executive directors of the Company.
Options granted under Plan B generally vest over a two-year period; one-third
vest on date of grant, one-third vest one year from date of grant, and one-third
vest two years from date of grant. Options become exercisable as soon as they
have vested and expire ten years from the date of grant, except options granted
on December 19, 1997, which expire seven years from the date of grant. Under
both Plan A and Plan B ("the Plans"), share option grants are generally made at
an exercise price equal to the fair value of the ordinary shares on the date of
grant, as determined by the Company's Board of Directors and (in the case of
Plan A) as agreed with the UK Inland Revenue. The Company may also issue share
options outside the Plans. There are 3,561,420 ordinary shares reserved for
issuance upon the exercising of share options. Plan A and Plan B were adopted by
the Board of Directors on December 19, 1997.

Under the terms of the International Executive Share Option Plan, the Board of
Directors may grant share options to subscribe for newly issued or purchase
existing ordinary shares (which may be in the form of ADSs) to our directors and
employees who devote almost all of their working time to us. When the options
are granted, our board will determine when they are exercisable, but they have
to be exercised within ten years of being granted.



SHARE OPTION ACTIVITY
At March 31, 1999, 2000 and 2001, options to purchase 964,560, 2,037,060 and
4,236,643 ordinary shares were exercisable at a weighted average exercise price
of $0.80, $1.67 and $2.84, respectively. The weighted average fair value of
options granted in the years ended March 31, 1999, 2000 and 2001 was $0.11,
$1.16 and $4.77, respectively.

A summary of share option activity under the Plans is as follows:

<TABLE>
<CAPTION>

                                                                                   OPTIONS OUTSTANDING
                                                                                              WEIGHTED
                                                               OPTIONS           NUMBER        AVERAGE
                                                             AVAILABLE               OF       EXERCISE
                                                             FOR GRANT          OPTIONS          PRICE
                                                            -----------      -----------     ----------
<S>                                                        <C>            <C>                 <C>
Inception of the plans (December 19, 1997)
Initial authorized                                           2,203,500                -              -
Granted                                                     (1,861,400)       1,861,400           0.81
Cancelled                                                      480,140         (480,140)          0.94
                                                            -----------      -----------
Balance at March 31, 1998                                      822,240        1,381,260           0.77
Granted                                                       (158,620)         158,620           1.55
Cancelled                                                       27,440          (27,440)          1.20
                                                            -----------      -----------
Balance at March 31, 1999                                      691,060        1,512,440           0.84
Additional authorized                                        2,886,022                -              -
Granted                                                     (2,420,980)       2,420,980           2.15
Cancelled                                                      200,000         (200,000)          1.98
Exercised                                                            -         (172,000)          0.69
                                                            -----------      -----------
Balance at March 31, 2000                                    1,356,102        3,561,420           1.67
Additional authorized                                        5,041,684                -              -
Granted                                                     (4,298,086)       4,298,086           5.54
Cancelled                                                       70,516          (70,516)          5.80
Exercised                                                            -          (47,040)          0.88
                                                            -----------      -----------
Balance at March 31, 2001                                    2,170,216        7,741,950           4.22
                                                            ===========      ===========
</TABLE>




                                      F-18
<PAGE>


The following table summarizes information concerning current outstanding and
exercisable options at March 31, 2001:


<TABLE>
<CAPTION>
                                          OPTIONS OUTSTANDING
                                            WEIGHTED-AVERAGE

                                                        REMAINING           OPTIONS EXERCISABLE
                     EXERCISE         NUMBER           CONTRACTUAL                 NUMBER
                      PRICES       OUTSTANDING             LIFE                 EXERCISABLE
                     --------      -----------         -----------          -------------------
<S>                  <C>            <C>                  <C>                     <C>
                       $0.71          804,220              3.72                    804,220
                       $0.96          452,240              4.05                    452,240
                       $1.22          168,400              7.82                    168,400
                       $1.79          172,000              8.42                    114,667
                       $2.16        1,498,100              8.58                    960,780
                       $2.25        1,266,274              9.92                    422,091
                       $2.57          562,020              8.92                    374,680
                       $7.00        2,818,696              9.33                    939,565
                                   -----------                              --------------------
                                    7,741,950              8.92                  4,236,643
                                   ===========                              ====================
</TABLE>


The Company has elected to follow APB 25 and related interpretations in
accounting for its share options issued to employees. Compensation expense is
determined using the intrinsic value method based on the difference between the
exercise price and the deemed fair value of the Company's ordinary shares on the
date the share options were granted.

Share options granted to non-employees are valued using the Black-Scholes option
valuation method and the following assumptions for the years ended March 31,
1999, 2000 and 2001: risk-free interest rate of 5.5%, 6.2% and 6.0%,
respectively, volatility of 0.01 for 1999 and 2000 and 1.402 for 2001, zero
dividend yield and an expected life of four years. The value of the options is
recorded as deferred compensation and amortized using the straight-line method
over the vesting period.

Share option compensation expense was recorded as follows:

<TABLE>
<CAPTION>
                                                                                     NON-
                                                                     EMPLOYEE    EMPLOYEE
                                                                      RELATED     RELATED        TOTAL
                                                                     EXPENSES    EXPENSES     EXPENSES
                                                                   ----------    --------   ----------
                                                                              (IN THOUSANDS)
<S>                                                                 <C>           <C>        <C>
PERIOD ENDING
March 31, 1997                                                      $   -         $  -       $    -
March 31, 1998                                                          1           51           52
March 31, 1999                                                          3          191          194
March 31, 2000                                                        281          192          473
March 31, 2001                                                      1,407          461        1,868
                                                                   ------         ----        ------
Since Inception (September 11, 1995)                               $1,692         $895        $2,587
                                                                   ======         ====        ======
</TABLE>



Amortization of the deferred compensation balance of $1,490,000 at March 31,
2001 will be approximately $1,485,000 and $5,000 for the fiscal years ending
March 31, 2002 and 2003, respectively.




                                      F-19
<PAGE>


PRO-FORMA DISCLOSURE UNDER SFAS NO. 123

Pro-forma information regarding employee stock options is required under SFAS
No. 123, and has been determined as if the Company had accounted for its
employee stock options under the fair value method. The fair value of these
options was estimated at the date of grant using the Black-Scholes option
valuation method and the following assumptions for the years ended 1999, 2000
and 2001: volatility of 0.01 for 1999 and 2000 and 1.402 for 2001, risk-free
interest rate of 5.5%, 6.2% and 6.0%, respectively, zero dividend yield and an
expected life of four years.

For the purposes of pro-forma disclosures, the estimated fair value of the
options is amortized to expense over the vesting period of the options. The
Company's pro-forma information is as follows:

<TABLE>
<CAPTION>
                                                                                   YEAR ENDED MARCH 31
                                                                        ----------------------------------
                                                                           2001         2000        1999
                                                                        ----------   ---------   ---------
                                                                       (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                                       <C>         <C>         <C>
Net loss:

As reported                                                               $12,843     $15,405     $10,746
SFAS No. 123 pro forma                                                    $19,254     $15,515     $10,766
Loss per share:
As reported--basic and diluted                                            $ (0.32)    $ (0.73)    $ (0.54)
SFAS No. 123 pro forma                                                    $ (0.64)    $ (0.73)    $ (0.54)
</TABLE>

The effects of applying SFAS No. 123 for recognizing compensation expense and
for pro forma disclosures are not likely to be representative of the effects on
reported net loss for future years.

WARRANTS

In February 2000 the Company granted warrants to purchase 40,000 ordinary shares
at an exercise price of (pound)0.05 ($0.07) per share (see note 6). The warrant
remains outstanding at March 31, 2001.

10 INCOME TAXES

The Company has no provision for payment of U.K., Swedish or Canadian income
taxes for any period as it has incurred operating losses since inception.

The taxation credit consists of the following:

<TABLE>
<CAPTION>
                                                                                         MARCH 31
                                                                                 -----------------------
                                                                                    2001          2000
                                                                                 ---------      --------
                                                                                      (IN THOUSANDS)
<S>                                                                              <C>            <C>
UK taxation on current year                                                          $910           $-
Overseas taxation                                                                     (30)           -
                                                                                 ---------      --------
                                                                                     $880           $-
                                                                                 =========      ========
</TABLE>

The UK taxation on the current year arose as a result of a change in the UK
corporation tax legislation. With effect from April 2000 companies engaged in
research and development which meet certain criteria are permitted to surrender
corporation tax losses in return for a cash refund of employee and payroll
taxes.




                                      F-20
<PAGE>


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

<TABLE>
<CAPTION>
                                                                                        MARCH 31
                                                                                 ----------------------
                                                                                   2001         2000
                                                                                 ---------    ---------
                                                                                     (IN THOUSANDS)
<S>                                                                               <C>           <C>
Deferred tax assets:
Net operating loss carryforwards                                                  $13,596       $8,594
Book reserves in excess of tax                                                         25           35
Short-term timing differences                                                          12           (2)
                                                                                 ---------    ---------
Total deferred tax assets                                                          13,633        8,627
Valuation allowance                                                               (13,633)      (8,627)
                                                                                 ---------    ---------
Total                                                                                  $-           $-
                                                                                 =========    =========
</TABLE>


For the year ended March 31, 2000, the Company had, subject to agreement with
the U.K. Inland Revenue, corporation tax losses amounting to $10.4 million,
resulting in a total loss carry-forward at March 31, 2000 of approximately
$28.6 million. As of March 31, 2001, the Company has accumulated losses,
subject to agreement with the U.K. Inland Revenue, amounting to a further
$11.4 million, resulting in total loss carried forward at March 31, 2001 of
$40.0 million which under U.K. and Swedish tax law do not expire. Because of
the Company's lack of earnings history, the deferred tax assets have been
fully offset by a valuation allowance. As of March 31, 2001, Eurona Medical
AB has, subject to agreement with the Swedish tax authorities, income tax
losses that are at least $3.9 million. These are available for offset against
profits from future Swedish operations.

11 ACQUISITION OF EURONA MEDICAL AB

On December 17, 1999, the Company completed the acquisition of Eurona Medical
AB, a Swedish pharmacogenetics company. The Company assumed all the liabilities
of Eurona and acquired all of its ordinary shares in exchange for 1,820,180
preferred ordinary shares and $19,000 in cash. Including direct acquisition
costs of $186,000, the total purchase price was $4.9 million.

The acquisition was accounted for using the purchase method. Under the purchase
method of accounting, the aggregate acquisition cost is allocated to the
acquired company's assets and liabilities, based on the fair values on the date
of acquisition. Included within the liabilities assumed is $600,000 relating to
termination costs of a number of employees.

In purchasing Eurona, the Company obtained access to clinical collaborators. The
total spent by Eurona since inception on research and development at the date of
acquisition was approximately $8.9 million. Eurona has raised a total of
approximately $13.3 million in equity finance prior to acquisition by the
Company, but had not succeeded to commercialising its business model.

The Company has performed a review of the research projects being undertaken by
Eurona and determined that none of the projects have economic value, as none of
the research projects undertaken by Eurona will be pursued. Consequently, in
allocating the acquired assets and liabilities, no value has been assigned to
acquired in-process research and development.




                                      F-21
<PAGE>


A summary of the purchase price for the acquisition is as follows (in
thousands):

<TABLE>
<S>                                                                                             <C>
Preferred ordinary shares                                                                       $4,720
Cash paid to shareholders                                                                           19
Accrued direct acquisition costs                                                                   186
                                                                                              ---------
Total purchase price                                                                            $4,925
                                                                                              =========
The purchase price was allocated as follows (in thousands):
Assets acquired                                                                                 $1,587
Liabilities assumed                                                                             (2,284)
Intangible assets acquired:
Assembled workforce                                                                                350
Goodwill                                                                                         5,272
                                                                                              ---------
Total purchase price                                                                            $4,925
                                                                                              =========
</TABLE>


The above intangible assets are being amortized over their estimated useful life
of five years.

Had the acquisition of Eurona been consummated at the beginning of the years
below, the unaudited pro forma results would have been as follows:

<TABLE>
<CAPTION>
                                                                                  YEAR ENDED MARCH 31,
                                                                                 ----------------------
                                                                                   2000         1999
                                                                                 --------     ---------
                                                                                     (IN THOUSANDS)
<S>                                                                              <C>            <C>
Revenue                                                                            $1,238         $295
Net loss for the period                                                           (22,933)     (20,506)
Net loss per ordinary share - basic and diluted                                  $  (1.00)    $  (0.94)
</TABLE>

The Company made a $0.6 million provision in respect of the termination costs of
35 employees (largely executive, managerial and support staff) under an
integration plan approved in December 1999. These costs all related to salaries
and benefits due, and employment costs arising within these 35 employees' notice
periods. A total of $0.3 million of termination benefits were paid in the period
ended March 31, 2000, leaving a $0.3 million provision at March 31, 2000, all
remaining liabilities related to these termination costs were paid by March 31,
2001. The Company also realigned the research focus for Eurona although the only
activities terminated were those of the executive functions.

The assembled workforce and goodwill are being amortized over their estimated
useful life of 5 years. Amortization of assembled workforce and goodwill was
$373,000 and $1,604,000 for the years ended March 31, 2000 and 2001,
respectively.

12 PENSION PLANS

The Company operates a defined contribution group personal pension plan for
substantially all its employees in the United Kingdom and contributes to a state
scheme and a defined contribution scheme for its employees in Sweden. The
Company contributions to the U.K. defined contribution scheme totaled $60,000,
$81,000 and $106,000 in the years ended March 31, 1999, 2000 and 2001,
respectively and $305,000 in the period from September 11, 1995 (inception)
through March 31, 2001.

The Company operates a 401-K pension plan for substantially all its employees in
the US. This plan commenced during fiscal year 2001, and the Company
contributions to the US plan amounted to $5,000.

13 RELATED PARTY TRANSACTIONS

Cloverleaf Holdings Limited, a company controlled by Michael Fitzgerald,
provided consulting services to the Company for which it received $140,000
per annum, payable in equal monthly installments, through November 1999 when
the arrangement was terminated and replaced with a contract under which
Michael Fitzgerald received fees for services as a non-executive director.
No balances were outstanding at March 31, 1999, 2000 or 2001.  There were no
other related party transactions in the years ending March 31, 1999, 2000 or
2001.

                                      F-22
<PAGE>


14 SEGMENT INFORMATION--GEOGRAPHIC

The Company reports operating results based on geographic areas. A summary of
the key financial data by segment is as follows:

<TABLE>
<CAPTION>
                                                          UNITED                    NORTH
                                                         KINGDOM        SWEDEN     AMERICA       TOTAL
                                                         -------        ------     -------       -----
                                                     (IN THOUSANDS)
<S>                                                    <C>             <C>         <C>       <C>
YEAR ENDED, AND AT MARCH 31, 1999:
Revenue                                                     $198            $-          $-        $198
Loss from operations                                     (10,694)            -           -     (10,694)
Property, plant and equipment                              2,099             -           -       2,099
Total assets                                              14,766             -           -      14,766
YEAR ENDED, AND AT MARCH 31, 2000:
Revenue                                                      164             -           -         164
Loss from operations                                     (12,716)       (2,674)          -     (15,390)
Property, plant and equipment                              1,933           708           -       2,641
Total assets                                              21,049         1,187           -      22,236
YEAR ENDED, AND AT MARCH 31, 2001:
Revenue                                                    1,579             -           -       1,579
Loss from operations                                     (16,357)       (3,718)     (1,802)    (21,877)
Property, plant and equipment                              2,029           825       1,250       4,104
Total assets                                             $89,882        $1,095      $1,483     $92,460
</TABLE>

15 SUBSEQUENT EVENTS

The Company has entered into an agreement to enter a new lease for 35,600 square
feet of premises being constructed in Cambridge, England with effect from May
2002. This lease will expire in May 2020.



16 QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 FISCAL 2001 QUARTER ENDED
                                                    --------------------------------------------------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)             JUNE 30    SEPTEMBER 30    DECEMBER 31    MARCH 31
                                                    -------    ------------    -----------    --------
<S>                                                  <C>             <C>            <C>         <C>
Net revenues                                             $-              $-            $72      $1,484
Gross margin                                              -               -             39       1,447
Operating loss                                       (4,979)         (4,743)        (5,450)     (6,764)
Net loss                                             (4,975)         (2,569)        (4,183)     (1,546)
Net loss per share - basic and diluted               $(0.10)         $(0.04)        $(0.06)     $(0.02)
Net loss per ADS - basic and diluted                 $(0.20)         $(0.08)        $(0.12)     $(0.04)
</TABLE>


<TABLE>
<CAPTION>
                                                                 FISCAL 2000 QUARTER ENDED
                                                    --------------------------------------------------
                                                    JUNE 30    SEPTEMBER 30    DECEMBER 31    MARCH 31
                                                    -------    ------------    -----------    --------
<S>                                                 <C>             <C>            <C>         <C>
Net revenues                                           $115              $-             $-         $49
Gross margin                                             90               -              -          49
Operating loss                                       (2,586)         (2,244)        (5,272)     (5,340)
Net loss                                             (2,532)         (2,262)        (5,319)     (5,345)
Net loss per share - basic and diluted               $(0.13)         $(0.11)        $(0.27)     $(0.27)
Net loss per ADS - basic and diluted                 $(0.26)         $(0.22)        $(0.54)     $(0.54)
</TABLE>

                                     F-23
<PAGE>
                                   SIGNATURE

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

                                       Gemini Genomics plc
                                       (Registrant)


                                       By: /s/ Roger Dickinson
                                           -----------------------------------
                                       Name:   Roger Dickinson
                                       Title:  Executive Vice President, Legal
                                               and Corporate Affairs

Date: May 23, 2001