##### Table of Contents



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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



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FORM 20-F

(Mark One)



|o |  | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE COMMISSION
|- |  | ---------------------------------------------------------------------------------------------
| 
|  |  | OR                                                                                           
| 
|þ |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934         
| 
|  |  | For the fiscal year ended: December 31, 2002                                                 
| 
|  |  | OR                                                                                           
| 
|o |  | TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934     

Commission for file number 1-14710



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Amersham plc(Exact Name of Registrant as Specified in its Charter)

England
(Jurisdiction of Incorporation or Organization)

Amersham Place, Little Chalfont, Buckinghamshire, England HP7 9NA
(Address of Principal Executive Offices)

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

|                                                                              |  |                              |  | 
|----------------------------------------------------------------------------- |  | ---------------------------- |  | 
|                                                                              |  | Name of each                
|Title of each class                                                           |  | exchange on which registered
|                                                                              |  |                             
|Ordinary Shares of 5p each                                                    |  | New York Stock Exchange     
|American Depositary Shares, each representing five Ordinary Shares of 5p each |  | New York Stock Exchange     

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

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

The number of outstanding shares of each class of stock of Amersham plc as of December 31, 2002 was:

|                                                                              |  |                  |             | 
|----------------------------------------------------------------------------- |  | ---------------- | ----------- | 
|Title of Class                                                                |  | Number of Shares
|                                                                              |  |                 
|Ordinary Shares of 5p each                                                    |  |                  | 701,812,083 | 
|American Depositary Shares, each representing five Ordinary Shares of 5p each |  |                  | 2,298,410   | 



---

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

Yes
þNo o

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

Item 17 o Item 18 þ



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TABLE OF CONTENTS



|                                         |                                                                                       |  |  |  |  |  |  | 
|---------------------------------------- | ------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|                                         | DEFINITIONS AND USAGE                                                                
|                                         | ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                        
|                                         | ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE                                      
|                                         | ITEM 3. KEY INFORMATION                                                              
|                                         | ITEM 4. INFORMATION ON THE COMPANY                                                   
|                                         | ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                 
|                                         | ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                   
|                                         | ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                            
|                                         | ITEM 8. FINANCIAL INFORMATION                                                        
|                                         | ITEM 9. THE OFFER AND LISTING                                                        
|                                         | ITEM 10. ADDITIONAL INFORMATION                                                      
|                                         | ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                  
|                                         | ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                      
|PART II                                 
|                                         | ITEM 13. DEFAULTS, DIVIDEND ARREARS AND DELINQUENCIES                                
|                                         | ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|                                         | ITEM 15. CONTROLS AND PROCEDURES                                                     
|                                         | ITEM 16. [Reserved]                                                                  
|PART III                                
|                                         | ITEM 17. FINANCIAL STATEMENTS                                                        
|                                         | ITEM 18. CONSOLIDATED FINANCIAL STATEMENTS                                           
|                                         | ITEM 19. EXHIBITS                                                                    
|SIGNATURE                               
|CERTIFICATIONS                          
|Service Agreement                       
|Letter regarding Service Contract       
|Letter regarding Employment Agreement   
|Letter regarding UK pension arrangements
|Letter(dated 01/27/03) re Dr Andrew Carr
|Letter (dated 02/20/03) to W M Castell  
|Letter (02/20/03) to G.W.Battersby      
|Letter (dated 02/20/03) to A Carr       
|Letter (dated 02/20/03) to G.F.B Kerr   
|Letter (dated 02/20/03) to P.Loescher   
|Section 906 Certification               
|Consent of Independant Accountants      



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##### Table of Contents



TABLE OF CONTENTS

|        |  |                                                                              |  |                       |     |          |   |      |  | 
|------- |  | ---------------------------------------------------------------------------- |  | --------------------- | --- | -------- | - | ---- |  | 
|        |  |                                                                              |  |                       |     |          |   | Page
|        |  |                                                                              |  |                       |     |          |   |     
|        |  |                                                                              |  | Definitions and Usage |     |          | 2 |     
|        |  |                                                                              |  |                       |     | PART I   |   |      |  | 
|Item 1  |  | Identity of Directors, Senior Management and Advisers                        |  |                       | 4   |         
|Item 2  |  | Offer Statistics and Expected Timetable                                      |  |                       | 4   |         
|Item 3  |  | Key Information                                                              |  |                       | 4   |         
|Item 4  |  | Information on the Company                                                   |  |                       | 17  |         
|Item 5  |  | Operating and Financial Review and Prospects                                 |  |                       | 62  |         
|Item 6  |  | Directors, Senior Management and Employees                                   |  |                       | 92  |         
|Item 7  |  | Major Shareholders and Related Party Transactions                            |  |                       | 107 |         
|Item 8  |  | Financial Information                                                        |  |                       | 108 |         
|Item 9  |  | The Offer and Listing                                                        |  |                       | 109 |         
|Item 10 |  | Additional Information                                                       |  |                       | 113 |         
|Item 11 |  | Quantitative and Qualitative Disclosures About Market Risk                   |  |                       | 116 |         
|Item 12 |  | Description of Securities Other than Equity Securities                       |  |                       | 117 |         
|        |  |                                                                              |  |                       |     | PART II  |   |      |  | 
|Item 13 |  | Defaults, Dividend Arrears and Delinquencies                                 |  |                       | 118 |         
|Item 14 |  | Material Modifications to the Rights of Security Holders and Use of Proceeds |  |                       | 118 |         
|Item 15 |  | Controls and Procedures                                                      |  |                       | 118 |         
|Item 16 |  | Reserved                                                                     |  |                       | 118 |         
|        |  |                                                                              |  |                       |     | PART III |   |      |  | 
|Item 17 |  | Financial Statements                                                         |  |                       | 119 |         
|Item 18 |  | Consolidated Financial Statements                                            |  |                       | 119 |         
|Item 19 |  | Exhibits                                                                     |  |                       | 119 |         
|        |  |                                                                              |  | Signature             |     |          |   |     
|        |  |                                                                              |  | Certifications        |     |          |   |     





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##### Table of Contents






DEFINITIONS AND USAGE

Definitions

The following definitions apply throughout this document unless the context
requires otherwise:

|                                                                                                   |  |   |  |                                                                                                                                                                
|-------------------------------------------------------------------------------------------------- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|ADR                                                                                                |  | - |  | American Depositary Receipt, evidencing American Depositary
Shares                                                                                             
|                                                                                                   |  |   |  |                                                                                                                                                                
|ADS                                                                                                |  | - |  | American Depositary Share, each representing five Amersham plc Ordinary Shares                                                                                 
|                                                                                                   |  |   |  |                                                                                                                                                                
|Act                                                                                                |  | - |  | the UK Companies Act 1985 (as amended)                                                                                                                         
|                                                                                                   |  |   |  |                                                                                                                                                                
|Amersham International                                                                             |  | - |  | Amersham International plc, a former name of Amersham plc (see
also Nycomed Amersham plc) which was changed in October 1997                                    
|                                                                                                   |  |   |  |                                                                                                                                                                
|Amersham                                                                                           |  | - |  | Amersham plc and its consolidated subsidiaries                                                                                                                 
|                                                                                                   |  |   |  |                                                                                                                                                                
|Amersham Biosciences or
the Bioscience business
(formerly Amersham
Pharmacia Biotech or
APBiotech) |  | - |  | Amersham Biosciences Limited, a 100% subsidiary of Amersham plc
since March 21, 2002                                                                           
|                                                                                                   |  |   |  |                                                                                                                                                                
|Amersham Health or the
Health business
(formerly Nycomed
Amersham Imaging or
Imaging)              |  | - |  | Amershams medical imaging business                                                                                                                            
|                                                                                                   |  |   |  |                                                                                                                                                                
|Board                                                                                              |  | - |  | the Board of Directors of the Company                                                                                                                          
|                                                                                                   |  |   |  |                                                                                                                                                                
|Combined Code                                                                                      |  | - |  | London Stock Exchange Principles of Good Governance and the
provisions of the code of Best Practice issued on June 25, 1998                                    
|                                                                                                   |  |   |  |                                                                                                                                                                
|Company                                                                                            |  | - |  | Amersham plc                                                                                                                                                   
|                                                                                                   |  |   |  |                                                                                                                                                                
|EBITDA                                                                                             |  |   |  | earnings before interest, taxation, depreciation and amortization                                                                                              
|                                                                                                   |  |   |  |                                                                                                                                                                
|FDA                                                                                                |  | - |  | Food and Drug Administration, a governmental agency in the US                                                                                                  
|                                                                                                   |  |   |  |                                                                                                                                                                
|Group                                                                                              |  | - |  | Amersham plc and its consolidated subsidiaries (used
interchangeably with Amersham including Amersham International
and Nycomed Amersham plc)                  
|                                                                                                   |  |   |  |                                                                                                                                                                
|Noon Buying Rate                                                                                   |  | - |  | the noon buying rate in the City of New York for cable transfers
in foreign currencies as specified for custom purposes by the
Federal Reserve Bank of New York
|                                                                                                   |  |   |  |                                                                                                                                                                
|NMP                                                                                                |  | - |  | Nihon Medi-Physics Company Ltd., the issued share capital of
which is 50% owned by Amersham plc                                                                
|                                                                                                   |  |   |  |                                                                                                                                                                
|Nycomed                                                                                            |  | - |  | Nycomed ASA and its consolidated subsidiaries                                                                                                                  
|                                                                                                   |  |   |  |                                                                                                                                                                
|Nycomed Amersham plc                                                                               |  | - |  | former name of Amersham plc which was changed in July 2001                                                                                                     

2



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##### Table of Contents



|                                             |  |   |  |                                                                                                       
|-------------------------------------------- |  | - |  | ------------------------------------------------------------------------------------------------------
|Ordinary Shares                              |  | - |  | ordinary shares of 5p each in the capital of Amersham plc                                             
|                                             |  |   |  |                                                                                                       
|Nycomed Pharma or Pharma                     |  | - |  | Amershams former therapeutic business                                                                
|                                             |  |   |  |                                                                                                       
|Pharmacia & Upjohn Inc
or Pharmacia & Upjohn |  | - |  | references to Pharmacia & Upjohn now relate to Pharmacia
Corporation, the entitys name having changed
|                                             |  |   |  |                                                                                                       
|R&D                                          |  | - |  | research and development                                                                              
|                                             |  |   |  |                                                                                                       
|UK GAAP                                      |  | - |  | UK generally accepted accounting principles                                                           
|                                             |  |   |  |                                                                                                       
|US GAAP                                      |  | - |  | US generally accepted accounting principles                                                           
|                                             |  |   |  |                                                                                                       
|VPS                                          |  | - |  | Verdipapirsentralen, the Norwegian paperless securities
registration settlement system                

3



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##### Table of Contents






ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable




ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable




ITEM 3. KEY INFORMATION

A.     Selected financial data

The results of Amersham plc are presented below for the year to December 31,
2002 together with comparative data for prior periods.

The following selected financial data for the five years ended December 31,
2002, 2001, 2000, 1999 and 1998 and at December 31, 2002, 2001, 2000, 1999, and
1998 should be read in conjunction with the audited UK GAAP Consolidated
Financial Statements for the Company included in Item 18 Consolidated
Financial Statements.

The Consolidated Financial Statements are prepared in accordance with UK GAAP,
which differs in certain respects from US GAAP. Certain significant
differences between UK GAAP and US GAAP are discussed in Note 38 of Item 18
Consolidated Financial Statements, which includes reconciliations of certain
amounts calculated in accordance with UK GAAP to US GAAP.

Presentation changes

Certain changes have been made to the presentation of the consolidated
financial information to show as discontinued operations the Industrial Quality
and Safety Assurance (QSA) business, which we sold on February 27, 1998, and
the Nycomed Pharma business, which we sold on May 14, 1999. Where appropriate,
comparative figures have been restated so that they are presented on a
consistent basis.

Following the introduction of Financial Reporting Standard (FRS) 18 Accounting
Policies in December 2000, the Group has changed its revenue recognition
accounting policy in 2001 with respect to technology transfer agreements.
During 2002, we implemented FRS 19, Deferred Taxation and now deferred tax
liabilities will be recognized for most types of timing differences regardless
of whether they are anticipated to reverse in the foreseeable future. Deferred
tax assets will be recognized to the extent that it is more likely than not
they will be recoverable. The figures for 1998, 1999, 2000 and 2001 have
correspondingly been restated.

The consolidated results for the year ended December 31, 2002 and the financial
position as at December 31, 2002 shown below in US dollars, have been
translated at the year end rate of £1=$1.61.

4



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##### Table of Contents



|                                                               |  |                          |         |            |  |            |         |            |  |      |         |             |  |  |         |   |  |  |         |   |  |  |         |  
|-------------------------------------------------------------- |  | ------------------------ | ------- | ---------- |  | ---------- | ------- | ---------- |  | ---- | ------- | ----------- |  |  | ------- | - |  |  | ------- | - |  |  | ------- | -
|                                                               |  | 12 months to December 31
|                                                               |  |                         
|                                                               |  | 1998                     |         | 1999       |  | 2000       |         | 2001       |  | 2002 |         | 2002       
|                                                               |  | (restated)               |         | (restated) |  | (restated) |         | (restated) |  |      |         | (unaudited)
|                                                               |  | (£m)                     |         | (£m)       |  | (£m)       |         | (£m)       |  | (£m) |         | ($m)       
|                                                               |  |                          |         |            |  |            |         |            |  |      |         |            
|CONSOLIDATED PROFIT AND LOSS DATA                              |  |                          |         |            |  |            |         |            |  |      |         |             |  |  |         |   |  |  |         |   |  |  |         |  
|Amounts in accordance with UK GAAP:                            |  |                          |         |            |  |            |         |            |  |      |         |             |  |  |         |   |  |  |         |   |  |  |         |  
|Turnover(1)                                                    |  |                          | 1,320.6 |            |  |            | 1,291.6 |            |  |      | 1,282.8 |             |  |  | 1,515.2 |   |  |  | 1,537.7 |   |  |  | 2,475.7 |  
|Cost of sales                                                  |  |                          | (467.0  | )          |  |            | (471.0  | )          |  |      | (431.0  | )           |  |  | (500.1  | ) |  |  | (481.0  | ) |  |  | (774.4  | )
|Gross profit(2)                                                |  |                          | 853.6   |            |  |            | 820.6   |            |  |      | 851.8   |             |  |  | 1,015.1 |   |  |  | 1,056.7 |   |  |  | 1,701.3 |  
|Operating profit of continuing operations(1)(2)                |  |                          | 221.6   |            |  |            | 250.0   |            |  |      | 241.2   |             |  |  | 292.5   |   |  |  | 309.8   |   |  |  | 498.8   |  
|Operating profit from discontinued operations(2)               |  |                          | 37.7    |            |  |            | 10.3    |            |  |      |        |             |  |  |        |   |  |  |        |   |  |  |        |  
|Exceptional items(3)                                           |  |                          | (35.1   | )          |  |            | (55.2   | )          |  |      | (27.0   | )           |  |  | 46.6    |   |  |  |        |   |  |  |        |  
|Goodwill amortization                                          |  |                          | (2.4    | )          |  |            | (8.9    | )          |  |      | (10.7   | )           |  |  | (11.7   | ) |  |  | (36.6   | ) |  |  | (58.9   | )
|Amounts written off investments(3)                             |  |                          |        |            |  |            |        |            |  |      |        |             |  |  | (4.4    | ) |  |  | (2.4    | ) |  |  | (3.9    | )
|Profit before interest and taxation                            |  |                          | 221.8   |            |  |            | 196.2   |            |  |      | 203.5   |             |  |  | 323.0   |   |  |  | 270.8   |   |  |  | 436.0   |  
|Interest                                                       |  |                          | (33.3   | )          |  |            | (27.1   | )          |  |      | (10.0   | )           |  |  | (8.7    | ) |  |  | (7.1    | ) |  |  | (11.4   | )
|Taxation                                                       |  |                          | (75.2   | )          |  |            | (70.9   | )          |  |      | (79.9   | )           |  |  | (96.5   | ) |  |  | (94.3   | ) |  |  | (151.8  | )
|Exceptional item  taxation(3)                                 |  |                          |        |            |  |            |        |            |  |      |        |             |  |  |        |   |  |  | 9.2     |   |  |  | 14.8    |  
|Minority Interest                                              |  |                          | (13.9   | )          |  |            | (10.3   | )          |  |      | (6.6    | )           |  |  | (7.1    | ) |  |  | 0.1     |   |  |  | 0.1     |  
|Profit attributable to shareholders from
continuing operations |  |                          | 84.8    |            |  |            | 83.0    |            |  |      | 107.0   |             |  |  | 210.7   |   |  |  | 178.7   |   |  |  | 287.7   |  
|Profit attributable to shareholders                            |  |                          | 99.4    |            |  |            | 87.9    |            |  |      | 107.0   |             |  |  | 210.7   |   |  |  | 178.7   |   |  |  | 287.7   |  
|Average number of shares(4)                                    |  |                          | 627.5m  |            |  |            | 630.5m  |            |  |      | 630.9m  |             |  |  | 634.4m  |   |  |  | 684.7m  |   |  |  | 684.7m  |  
|Earnings per share(4)                                          |  |                          | 15.8p   |            |  |            | 13.9p   |            |  |      | 17.0p   |             |  |  | 33.2p   |   |  |  | 26.1p   |   |  |  | 42.0c   |  
|Diluted earnings per share(4)                                  |  |                          | 15.7p   |            |  |            | 13.8p   |            |  |      | 16.8p   |             |  |  | 33.0p   |   |  |  | 25.9p   |   |  |  | 41.7c   |  
|Dividends per share(4)                                         |  |                          | 5.30p   |            |  |            | 5.85p   |            |  |      | 6.40p   |             |  |  | 7.10p   |   |  |  | 7.80p   |   |  |  | 12.6c   |  
|Amounts in accordance with US GAAP:                            |  |                          |         |            |  |            |         |            |  |      |         |             |  |  |         |   |  |  |         |   |  |  |         |  
|(Loss)/income from continuing operations(5)                    |  |                          | (3.8    | )          |  |            | 14.6    |            |  |      | 64.6    |             |  |  | 124.4   |   |  |  | 160.5   |   |  |  | 258.4   |  
|Net (loss)/income                                              |  |                          | (3.8    | )          |  |            | 14.6    |            |  |      | 64.6    |             |  |  | 124.4   |   |  |  | 160.5   |   |  |  | 258.4   |  
|Average number of shares(4)                                    |  |                          | 627.5m  |            |  |            | 630.5m  |            |  |      | 630.9m  |             |  |  | 634.4m  |   |  |  | 684.7m  |   |  |  | 684.7m  |  
|Net (loss)/income per share, basic(4)(6)                       |  |                          | (0.6)p  |            |  |            | 2.3p    |            |  |      | 10.2p   |             |  |  | 19.6p   |   |  |  | 23.4p   |   |  |  | 37.7c   |  
|Net (loss)/income per share, diluted(4)(6)                     |  |                          | (0.6)p  |            |  |            | 2.3p    |            |  |      | 10.1p   |             |  |  | 19.5p   |   |  |  | 23.3p   |   |  |  | 37.5c   |  

The consolidated profit and loss statements have been restated for each of the
years ended December 31, 1998, 1999, 2000 and 2001 following the implementation
of FRS 19 as explained in Note 37 of Item 18 Consolidated Financial
Statements.



---

|1. |  | Figures for the years ended December 31, 1998, 1999 and 2000 have been
restated following the introduction of FRS 18.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Figures for the year ended December 31, 1998 have been restated following
the implementation of FRS 12 and to include the results of Nycomed Pharma
as a discontinued operation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|3. |  | 12 months to
December 31, 1998
The 12 months to December 31, 1998 includes £29.8 million of integration
costs related to the Pharmacia Biotech and Nycomed mergers, £3.6 million of
integration costs related to the acquisition of Molecular Dynamics and £1.7
million of Year 2000 costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   |  | 12 months to December 31, 1999
The 12 months to December 31, 1999 include £36.9 million of integration
costs related to the Pharmacia Biotech and Nycomed mergers, £4.1 million of
integration costs related to Molecular Dynamics, £4.1 million of Year 2000
costs, £4.4 million of write down of investments and intangible assets, a
£17.2 million loss on disposal of fixed assets from continuing operations
and £11.5 million profit on disposal of Nycomed Pharma.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   |  | 12 months to December 31, 2000
The 12 months to December 31, 2000 includes £9.7 million of costs associated
with the disposal of Nycomed Pharma, £10.9 million relating to the
rationalization of radiopharmaceutical production in Nycomed Amersham
Imaging and £6.4 million relating to the proposed partial flotation of
Amersham Biosciences.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |  | 12 months to December 31, 2001
The 12 months to December 31, 2001 include £3.4 million of costs relating to
the proposed partial flotation of Amersham Biosciences, £5.8 million related
to the costs of exiting the disease profiling project, £4.4 million of write
down of investments and intangible assets, and £8.5 million for the costs of
exiting the Harwell site as well as income of £9.0 million relating to the
transfer of pension assets from former pension plans. In addition, in
September 2001, the Group sold its remaining investment in Nycomed Pharma,
which consisted of shares and warrants, for £72.4 million and realized £50.6
million for the outstanding Nycomed Pharma loan notes held by the Group. The
Group has recorded a profit on the transaction of £55.3 million after
charging costs associated with the disposal, including costs incurred in
transferring the Nycomed name to Nycomed Pharma

5



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##### Table of Contents



|   |  | 12 months to
December 31, 2002
As a result of the formation of a consolidated tax group in the US on July
31, 2002, the Group has recognized a deferred taxation asset of £9.2 million
primarily related to the future utilization of tax losses arising from prior
periods.                                        
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|4. |  | Adjusted for the stock split and bonus issue approved by shareholders on
May 15, 1998. Details of the diluted number of shares are found within
Note 10 of Item 18 Consolidated Financial Statements.                                                                                                             
|  
|5. |  | Includes the results of Nycomed Pharma as a continued operation until
September 2001 when we sold the remaining 29% investment. Under US GAAP,
the results of Nycomed Pharma are not classified as a discontinued
operation in the period to this date (see Note 38 of Item 18 Consolidated
Financial Statements).
|  
|6. |  | Calculations of basic and diluted earnings per share under US GAAP for
the five years ended December 31, 2002, 2001, 2000, 1999 and 1998 are set
out in Note 39 of Item 18 Consolidated Financial Statements.                                                                                                     

|                                            |  |                |         |            |  |            |         |            |  |      |         |              |  |  |         |   |  |  |         |   |  |  |         |  
|------------------------------------------- |  | -------------- | ------- | ---------- |  | ---------- | ------- | ---------- |  | ---- | ------- | ------------ |  |  | ------- | - |  |  | ------- | - |  |  | ------- | -
|                                            |  | At December 31
|                                            |  |               
|                                            |  | 1998           |         | 1999       |  | 2000       |         | 2001       |  | 2002 |         | 2002        
|                                            |  | (restated)     |         | (restated) |  | (restated) |         | (restated) |  |      |         | (unaudited))
|                                            |  | (£m)           |         | (£m)       |  | (£m)       |         | (£m)       |  | (£m) |         | ($m)        
|                                            |  |                |         |            |  |            |         |            |  |      |         |             
|CONSOLIDATED BALANCE SHEET DATA             |  |                |         |            |  |            |         |            |  |      |         |              |  |  |         |   |  |  |         |   |  |  |         |  
|Amounts in accordance with UK GAAP:         |  |                |         |            |  |            |         |            |  |      |         |              |  |  |         |   |  |  |         |   |  |  |         |  
|Total current assets                        |  |                | 788.2   |            |  |            | 708.6   |            |  |      | 654.3   |              |  |  | 753.1   |   |  |  | 673.3   |   |  |  | 1,084.0 |  
|Total assets                                |  |                | 1,539.4 |            |  |            | 1,386.1 |            |  |      | 1,431.0 |              |  |  | 1,541.0 |   |  |  | 2,164.7 |   |  |  | 3,485.2 |  
|Current liabilities                         |  |                | (389.8  | )          |  |            | (348.6  | )          |  |      | (388.1  | )            |  |  | (483.3  | ) |  |  | (526.8  | ) |  |  | (848.1  | )
|Non-current liabilities
(including grants)  |  |                | (671.9  | )          |  |            | (412.9  | )          |  |      | (373.7  | )            |  |  | (158.0  | ) |  |  | (207.5  | ) |  |  | (334.1  | )
|Provisions                                  |  |                | (213.5  | )          |  |            | (199.3  | )          |  |      | (190.6  | )            |  |  | (240.8  | ) |  |  | (253.5  | ) |  |  | (408.1  | )
|Equity shareholders funds                  |  |                | 215.1   |            |  |            | 363.7   |            |  |      | 416.9   |              |  |  | 596.3   |   |  |  | 1,172.0 |   |  |  | 1,886.9 |  
|Minority interests                          |  |                | 49.1    |            |  |            | 61.6    |            |  |      | 61.7    |              |  |  | 62.6    |   |  |  | 4.9     |   |  |  | 7.9     |  
|Amounts in accordance with US GAAP:         |  |                |         |            |  |            |         |            |  |      |         |              |  |  |         |   |  |  |         |   |  |  |         |  
|Goodwill and identifiable
intangible assets |  |                | 1,696.5 |            |  |            | 1,442.3 |            |  |      | 1,316.4 |              |  |  | 1,175.2 |   |  |  | 1,738.4 |   |  |  | 2,798.9 |  
|Total assets                                |  |                | 3,162.2 |            |  |            | 2,762.2 |            |  |      | 2,690.6 |              |  |  | 2,561.6 |   |  |  | 3,184.5 |   |  |  | 5,127.0 |  
|Minority interest                           |  |                | 155.1   |            |  |            | 158.0   |            |  |      | (146.9  | )            |  |  | (138.2  | ) |  |  | (4.9    | ) |  |  | (7.9    | )
|Shareholders equity                        |  |                | 1,618.4 |            |  |            | 1,547.5 |            |  |      | 1,549.7 |              |  |  | 1,627.0 |   |  |  | 2,140.2 |   |  |  | 3,445.7 |  

The consolidated balance sheets have been restated following the implementation
of FRS 19 as explained in Note 37 of Item 18 Consolidated Financial
Statements. Also, the consolidated balance sheets at December 31, 1998, 1999
and 2000 had previously been restated for the introduction of FRS 18
Accounting Policies as explained in Note 38 of Item 18 Consolidated
Financial Statements contained in the Annual Report on Form 20-F filed with
the Securities and Exchange Commission on June 26, 2002. Further, the
consolidated balance sheet at December 31, 1998 had previously been restated
for the introduction of FRS 12 (Provisions, contingent liabilities and
contingent assets), as explained in note 3 of Item 18 Consolidated Financial
Statements contained in the Annual Report on Form 20-F filed with the SEC in
June 2000.

Dividends

The Company has paid dividends on its Ordinary Shares in respect of each fiscal
year since 1982. If a dividend is declared with respect to shares of any
class, the same dividend must be declared with respect to all shares of that
class.

The following table sets forth the aggregate amounts of dividends (net of tax
credits) paid in respect of each fiscal period indicated and translated, solely
for convenience, into US dollars per share at the Noon Buying Rate on each of
the respective payment dates for such dividends:

|                     |  |           |      |                    |  |                    |         |  |  |  |        | 
|-------------------- |  | --------- | ---- | ------------------ |  | ------------------ | ------- |  |  |  | ------ | 
|                     |  | Pence per |      | Translated into US |  | Translated into US
|                     |  | share     |      | dollars per share  |  | dollars per ADS   
|Period ended         |  | Total     |      | Total              |  | Total             
|                     |  |           |      |                    |  |                   
|December 31, 1998(1) |  |           | 5.30 |                    |  |                    | 0.08818 |  |  |  | 0.4409 | 
|December 31, 1999    |  |           | 5.85 |                    |  |                    | 0.09448 |  |  |  | 0.4724 | 
|December 31, 2000    |  |           | 6.40 |                    |  |                    | 0.09536 |  |  |  | 0.4768 | 
|December 31, 2001    |  |           | 7.10 |                    |  |                    | 0.10295 |  |  |  | 0.5148 | 
|December 31, 2002(2) |  |           | 7.80 |                    |  |                    | 0.12558 |  |  |  | 0.6279 | 



---

|(1) |  | Following the share split and bonus issue approved by shareholders on May
15, 1998.
|--- |  | -----------------------------------------------------------------------------------
|   
|(2) |  | Includes proposed final dividend of 5.15 pence per share ($0.082915)               

6



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##### Table of Contents



Following the ratification of the new US/UK Double Tax Treaty (the New Treaty)
on 31 March 2003, a holder of Ordinary Shares or ADRs who is a resident of the
United States for the purposes of the New Treaty and who receives a dividend on
or after 1 May 2003 will no longer be entitled to receive a payment in respect
of a UK tax credit, unless certain elections are made (see Item 10  E.
Taxation  Taxation of dividends).

The Company expects to continue to pay dividends. The Company is not currently
subject to any laws or agreements that restrict materially its ability to pay
dividends. The declaration and payment of any future dividends depends upon our
income, availability of sufficient distributable profit, financial condition
and cash flow, as well as other factors affecting the Company.

Exchange Rates

The following table sets forth, for the periods and dates indicated, certain
information concerning the exchange rate for pounds sterling expressed in US
dollars per pound sterling, for cable transfers in foreign currencies as
certified by the Federal Reserve Bank of New York based on the Noon Buying Rate
in the City of New York.

No representation is made that amounts in pounds sterling have been, could have
been or could be converted into US dollars at that rate or at any other rate.

|                       |  |                   |      |            |  |         |      |        |  |  |      |  |  |  |      | 
|---------------------- |  | ----------------- | ---- | ---------- |  | ------- | ---- | ------ |  |  | ---- |  |  |  | ---- | 
|Year ended December 31 |  | Period End(1)     |      | Average(2) |  | High(3) |      | Low(3)
|                       |  |                   |      |            |  |         |      |       
|                       |  | US Dollars per £1
|1998                   |  |                   | 1.66 |            |  |         | 1.66 |        |  |  | 1.70 |  |  |  | 1.63 | 
|1999                   |  |                   | 1.62 |            |  |         | 1.62 |        |  |  | 1.65 |  |  |  | 1.58 | 
|2000                   |  |                   | 1.49 |            |  |         | 1.51 |        |  |  | 1.62 |  |  |  | 1.42 | 
|2001                   |  |                   | 1.45 |            |  |         | 1.44 |        |  |  | 1.47 |  |  |  | 1.40 | 
|2002                   |  |                   | 1.61 |            |  |         | 1.51 |        |  |  | 1.61 |  |  |  | 1.40 | 



---

|(1) |  | The period end rate at December 31                                              
|--- |  | --------------------------------------------------------------------------------
|   
|(2) |  | The average of the rates on the last day of each month during the calendar
year.
|   
|(3) |  | The high and low rates during the 12-month period ended December 31.            

The following table sets forth, for the periods and dates indicated, certain
information concerning the exchange rate for pounds sterling, expressed in US
dollars per pound sterling, for the high and low exchange rates each month, for
the previous six completed months.

|              |  |                   |      |         |  |        |      |  |  |  |      | 
|------------- |  | ----------------- | ---- | ------- |  | ------ | ---- |  |  |  | ---- | 
|              |  | Period End(1)     |      | High(2) |  | Low(2)
|              |  |                   |      |         |  |       
|              |  | US Dollars per £1
|November 2002 |  |                   | 1.55 |         |  |        | 1.60 |  |  |  | 1.54 | 
|December 2002 |  |                   | 1.61 |         |  |        | 1.61 |  |  |  | 1.54 | 
|January 2003  |  |                   | 1.65 |         |  |        | 1.66 |  |  |  | 1.59 | 
|February 2003 |  |                   | 1.58 |         |  |        | 1.65 |  |  |  | 1.57 | 
|March 2003    |  |                   | 1.58 |         |  |        | 1.62 |  |  |  | 1.55 | 
|April 2003    |  |                   | 1.60 |         |  |        | 1.60 |  |  |  | 1.55 | 



---

|(1) |  | The period end rate as per each calendar month end.
|--- |  | ---------------------------------------------------
|   
|(2) |  | The high and low rates during the calendar month.  

The Noon Buying Rate on April 16, 2003 was $1.57 = £1.

B.     Capitalization and indebtedness

Not applicable

C.     Reasons for the offer and use of proceeds

Not applicable

7



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##### Table of Contents



D.     Risk factors

Described below are some of the risks affecting our business generally and our
two principal business segments. These are not intended to be a fully
comprehensive list but rather a concise listing of those major risks which are
considered to be material to Amersham plc. In addition, profits are an economic
reward for taking risk and other, different risks may rise in profile in the
future. Any of the following risks may materially and adversely affect our
business, financial condition or results of operations.

1.     General risks affecting Amersham

Foreign exchange fluctuations may adversely affect our reported earnings and
the value of our assets.

We record our transactions and prepare our financial statements in pounds
sterling, but a significant portion of our earnings and expenditures are in
other currencies. Changes in exchange rates between the pound sterling and
these other currencies can result in increases or decreases in our costs and
revenues. Fluctuations in exchange rates between the pound sterling and other
currencies may also affect the book value of our assets outside the UK and the
amount of shareholders equity. We seek to minimize our currency exposure by
engaging in hedging of transactional exposures, where we deem it appropriate.
To mitigate some of these risks, we have hedged certain assets and liabilities
held in foreign currency and anticipated future foreign currency cash flows for
2003. We cannot predict, however, all changes in currency and interest rates,
inflation or other factors which could affect our international businesses.

Our operations must comply with environmental statutes and regulations, and any
failure to comply could result in extensive costs which would harm our
business.

The manufacture of some of our products involves the use, transportation,
storage and disposal of hazardous or toxic materials and is subject to various
environmental protection and occupational health and safety laws and
regulations in the countries in which we operate. This has exposed us in the
past, and could expose us in the future, to risks of accidental contamination
and events of non-compliance with environmental laws which could result in
regulatory enforcement or personal injury and property damage claims or could
lead to a shutdown of some of our operations, which could have an adverse
effect on our business and results of operations. We currently incur costs to
comply with environmental laws and regulations and these costs may become more
significant.

The environmental laws of many jurisdictions impose actual and potential
obligations on us to remediate contaminated sites. These obligations may
relate to sites:



| |  | that we currently own or operate;            
|- |  | ---------------------------------------------
| 
| |  | that we formerly owned or operated; or       
| 
| |  | where waste from our operations was disposed.

These environmental remediation obligations could reduce our operating results.
In particular, our accruals for these obligations may be insufficient if the
assumptions underlying the accruals prove incorrect or if we are held
responsible for additional, currently undiscovered contamination.

Stricter environmental, safety and health laws and enforcement policies could
result in substantial costs and liabilities to us, and could subject our
handling, manufacture, use, reuse or disposal of substances or pollutants to
more rigorous scrutiny than is currently the case. Consequently, compliance
with these laws could result in capital expenditures as well as other costs and
liabilities, thereby harming our business and operating results.

If our business continuity plans are inadequate, a major production or supply
chain interruption could result in a loss of customers and market share.

Recent world events have made it apparent that the possibility exists for major
events to occur that could disrupt or interrupt production or delivery of goods
and services to customers and / or

8



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##### Table of Contents



from vendors. In addition, our business is dependent on key facilities and
employees for production, which could be significantly disrupted by a
catastrophic event. In addition, we are dependent upon some sole supply
arrangements. We currently have business continuity plans in place to react to
these types of events. However, it is possible that these plans are inadequate
to fully insulate our business from their impact. Therefore, we may be exposed
to the loss of sales, market share and customers if our business continuity
plans are unable to address a particular production or supply chain
interruption.

If we pursue acquisitions in the future, we may absorb significant resources or
be unsuccessful.

As part of the strategy of our business, we may pursue acquisitions,
investments and/or other alliances. Acquisitions may involve significant cash
expenditures, debt incurrence, additional operating losses and expenses that
could have a material adverse effect on the operating results of the business.

It may be difficult for us to complete such transactions quickly and to
integrate acquired businesses efficiently into the current business. Future
acquisitions could expose us to unforeseen liabilities and result in
significant charges relating to intangible assets. Sizable acquisitions may
also divert senior management from focusing on our existing businesses.

In addition, if any transaction involves customer bases or businesses located
outside the United Kingdom, the transaction may be further complicated by the
need to consider differing tax structures, the effects of currency fluctuations
on the reported results of the business and compliance with foreign laws and
regulations. The failure to properly identify and address these and other
risks could limit our ability to realize the anticipated benefits of an
acquisition.

If our businesses cannot attract, employ and retain the highly skilled staff
necessary to develop, market and support our technologically advanced products,
we may be unable to generate revenue growth and maintain market share.

Technologies in our industry have undergone, and are expected to continue to
undergo, rapid and significant change. Highly skilled staff are integral to
developing, marketing and supporting new products that will meet or exceed the
expectations of the marketplace and achieve market acceptance. Without these
highly skilled staff, our businesses may be unable to maintain or grow market
share, which could result in lower than expected revenues and earnings.

2.     Amersham Health

Risks relating to our Health business

Our Health business faces competition from new products and from generic
products.

All products within the patented portfolio of the Health business face
competition from competitors proprietary products. This competition may
increase as new products enter the market. The business also faces competition
from generic products after patents on its products, or the patents on a
competitors products, expire. Loss of patent protection may lead to loss of
sales in the products markets and could affect future income. Patent
protection is not available in major markets for a number of the Health
businesss leading products, notably Omnipaque and OncoSeed, both of which
already face generic competition.

As new competitive products enter the market, they may be more effective or
more effectively marketed and sold than Amersham Healths products. If our
Health business fails to maintain its competitive position, this could have a
material adverse effect on the segments results. Information on patents held
and their expiry dates is provided within Item 4 Information on the Company.

9



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##### Table of Contents



Research and development efforts in our Health business may not succeed or our
competitors may develop more effective or successful products.

In order to remain competitive, we commit substantial resources each year to
research and development (R&D) through both our own dedicated resources and
various collaborations with third parties. Amersham Healths ongoing
investment in new product launches and R&D for future products could produce
higher costs without a proportional increase in revenues.

In the pharmaceutical diagnostics business, the R&D process can take up to 12
years from discovery to commercial product launch. This process is conducted
in various stages, and during each stage there is a substantial risk that we
will not achieve our goals and accordingly may abandon a product in which we
have invested substantial amounts. If Amersham Health fails to continue
developing commercially successful products, or if competitors develop more
effective products or a greater number of successful new products, this could
have a material adverse effect on the results of the business.

Amersham Health operates in a highly competitive industry.

The principal competitors of our Health business are major international
corporations with substantial resources for R&D, production and marketing. In
addition, a significant proportion of Amersham Healths US business is through
contracts with large Group Purchasing Organizations (GPOs). Periodically these
contracts come up for renewal and/or are subject to competitive tender. In
addition, the size of certain hospital accounts means that these are
individually significant to our business. Loss of a significant GPO or
significant hospital contract to a competitor would have an adverse effect on
the income stream of the business, which would adversely affect our results.

Product liability claims could adversely affect the business results of
Amersham Health.

Product liability is a potential risk for the business. Substantial damages
awards have been made in some jurisdictions against healthcare companies based
upon claims for injuries allegedly caused by the use of their products.
Although we mitigate an amount of this risk through insurance, there can be no
assurance that a future product liability claim or series of claims brought
against us would not have an adverse effect on our Health business or the
results of operations.

Our Health business depends on the ongoing availability of materials and assets
to continue manufacturing our products and an interruption to this availability
could adversely affect our business and results.

The products marketed, distributed and sold by our Health business are either
manufactured at our dedicated manufacturing facilities, through toll
manufacturing arrangements, or through supply agreements with third parties.
In as much as many of its products are chemically based and are the result of
technically complex manufacturing processes, we can provide no assurances that
supply will not be interrupted due to a number of different factors and causes,
including the possibility of regulatory intervention.

Risks relating to the industry in which Amersham Health operates

There is a possibility that products, waste material or related medical
equipment owned or supplied by the Company could be subject to malevolent
misuse.

Although Amersham Healths nuclear interests are mainly in short lived isotopes
for medical uses, there is a possibility that products, waste material or
related medical equipment owned or supplied by the Company could be subject to
malevolent misuse. Such misuse of our products or of another companys similar
products, waste or equipment could result in restrictions being placed upon
Amershams products or sources of supply during production, storage,
transportation, distribution to customers or subsequent usage. Such
restrictions could have a material impact on the business sales which could
materially impact its financial results.

10



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##### Table of Contents



Price controls can limit revenues and adversely affect the results of our
Health business.

In addition to normal price competition in the market place, the prices of our
Health businesss products are affected by price controls imposed by
governments and healthcare providers in many countries. Price controls operate
differently in different countries and can cause wide variations in prices
between markets. Currency fluctuations can aggravate these differences. The
existence of price controls can limit the revenues earned from our Health
products and may have an adverse effect on our business and results of
operations.

There is the potential in any country to which Amersham Health sells that a
government could use its purchasing power to demand price reductions or
discounts from suppliers thereby reducing revenue earning opportunities for
suppliers. Many governments have implemented or are introducing healthcare
reforms in an attempt to curb increasing healthcare costs. In some markets,
governmental price-cut rounds can occur regularly. In response to rising
healthcare costs, many governments and private medical care providers, such as
Health Maintenance Organizations (HMOs) have instituted reimbursement schemes
that favor the substitution of generic products for more expensive brand-names.
There can be no guarantee that current price levels will remain at todays
level in any market the business serves.

Product regulation may adversely affect the ability of Amersham Health to bring
new products to market or to continue to supply existing products to the
market.

We, like our competitors, are subject to strict government controls on the
development, manufacture, labeling, distribution and marketing of products. We
must obtain and maintain regulatory approval for our products from regulatory
agencies before products may be sold in a particular jurisdiction. The
submission of an application to a regulatory authority does not guarantee that
a license to market the product will be granted. Each authority may impose its
own requirements and delay or refuse to grant approval, even though a product
has been approved in another country.

In the principal markets of our Health business, the approval process for a new
product is complex, lengthy and expensive. The time taken to obtain approval
varies by country but generally takes from six months to several years from the
date of application. Regulatory delays, the inability to successfully complete
clinical trials, claims and concerns about safety and efficacy, new
discoveries, patents and products of competitors and related patent disputes
and claims about adverse side effects are only a few of the factors that could
adversely affect the realization of product registration. These factors
increase both the cost and the risk that Amersham Health will not succeed in
selling new products successfully.

In addition, like our competitors, our pharmaceutical and medical device
production activities are required to meet the standards of Good Manufacturing
Practice (GMP) specified by the national regulatory authorities of those
countries into which our products are supplied. Failure to maintain compliance
may result in expensive remedial activity, substantial fines, the detention of
imports to markets or withdrawal of the approval of a product New Drug
Application or Marketing Authorization.

3.     Amersham Biosciences

Risks related to our Biosciences business

If our Biosciences business does not keep up with rapid technological change or
continue to introduce new products, we may be unable to maintain market share
or to recover investments we make in our technologies.

Technologies in the life sciences industry have undergone, and are expected to
continue to undergo, rapid and significant change. Amersham Biosciences may not
be able to keep pace with the rapid rate of change and introduce new products
that will adequately meet the requirements of the marketplace or achieve market
acceptance. If we fail to introduce new and innovative products, we could lose
market share to our competitors and experience a reduction in our growth rate
and damage to our reputation and business.

11



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##### Table of Contents



The future success of our Biosciences business will depend in large part on our
ability to maintain a competitive position with respect to these technologies.
We believe that successful new product introductions provide a significant
competitive advantage because customers make an investment of time in selecting
and learning to use a new product, and are reluctant to switch to a competing
product after making their initial selection. However, our Biosciences business
or others may make rapid technological developments, which could result in our
technologies, products or services becoming obsolete before we are able to
recover the expenses incurred to develop them.

If our Biosciences business cannot enter into new strategic alliances or
licensing agreements or maintain the ones that we have, we may be unable to
develop and commercialize our technologies into new products and services or
continue to commercialize existing products or services.

Our strategy of providing products to researchers working on a variety of life
sciences projects requires us to continually develop a wide spectrum of
products. To generate broad product lines, it is advantageous to license
technologies from others and to enter into strategic alliances in addition to
our own product development efforts. As a result, the ability of our
Biosciences business to obtain new technologies from third parties, is, and
will continue to be for the foreseeable future, critical to our ability to
develop and offer new products to further our business. Under our current
strategy, and for the foreseeable future, we will remain dependent on licensing
agreements and strategic alliances to further our business.

Amersham Biosciences may be unable to maintain or expand existing strategic
alliances or establish additional alliances or licensing arrangements necessary
to continue to develop and commercialize products, and any of those
arrangements may not be on terms favorable to the business. In addition,
current or any future arrangements may be unsuccessful. If our Biosciences
business is unable to obtain or maintain any third party license required to
sell or develop our products or product enhancements, we may choose to obtain
substitute technology either through licensing from another third party or by
developing the necessary technology ourselves. Any substitute technology may be
of lower quality or may involve increased cost, either of which could adversely
affect the ability of our Biosciences business to provide our products
competitively and harm our business.

Amersham Biosciences also depends on collaborators for the development and
manufacture of complex instrument systems and chemicals and other materials
that are used in laboratory experiments and for development of software
packages for analyzing data produced by these instrument systems. We cannot
control the amount and timing of resources our collaborators devote to our
products. We may not be able to enter into or satisfactorily retain these
research, development and manufacturing collaborations and licensing
agreements, which could reduce our growth and harm our competitive position.
For a discussion of existing collaborations you should read Item 4 Information
on the Company  Business overview  Amersham Biosciences.

If our Biosciences business does not successfully distinguish our products and
services from those of our competitors, we may be unable to compete
successfully to generate revenue growth.

Competition in the life sciences industry is intense, and we expect it to
increase. Rapid technological change and frequent new product introductions
characterize the markets served by the segment. We compete with a variety of
businesses that offer or are developing products and services that are
substantially similar to our products and services. Many of the businesses
competing with Amersham Biosciences have significant financial and other
resources to invest in new technologies, substantial intellectual property
portfolios, substantial experience in new product development, regulatory
expertise, manufacturing capabilities and the distribution channels to deliver
products to customers. An inability to continue developing products, which
distinguish us from our primary competitors, could limit our ability to
generate revenue growth.

12



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##### Table of Contents



If Biosciences manufacturing were disrupted, we may be unable to supply
products to our customers and achieve expected revenues.

Amersham Biosciences has an established global manufacturing base with six
primary facilities in Piscataway, New Jersey, San Francisco and Sunnyvale,
California in the US, Uppsala and Umea in Sweden, and Cardiff in the United
Kingdom. If any of these facilities, particularly the Uppsala chemical
production site, were disrupted, the Biosciences business may not be able to
deliver expected revenues or earnings. Although Amersham Biosciences has
implemented safety measures and prepared contingency plans to mitigate this
risk, it is uncertain whether these steps will successfully address the risks
that will arise if manufacturing is disrupted.

Operating results may fluctuate from period to period.

Our Biosciences business operating results may vary from period to period due
to numerous factors, many of which are outside our control, including the
number, timing and market acceptance of new products the business or our
competitors introduce. In addition, the business is subject to seasonal
fluctuations due to calendar year budgeting for large capital items by
customers, resulting generally in lower levels of sales in the first and third
quarters of each year and higher levels of sales in the second and fourth
quarters. Factors that may cause the business results to vary by period
include:



| |  | the volume and timing of orders for its products and services;                                                                                  
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | changes in the mix of its products and services;                                                                                                
| 
| |  | the number, timing and significance of new products and services introduced by its competitors;                                                 
| 
| |  | the ability of the business to develop, market and introduce new and enhanced products and services on a timely basis;                          
| 
| |  | changes in the cost, quality and availability of reagents and components required to manufacture or use its products;                           
| 
| |  | the timing and costs of any acquisitions of businesses or technologies;                                                                         
| 
| |  | the extent, nature and speed of restructuring may differ from that forecast, yielding different levels of cost and or
savings to those expected;
| 
| |  | the availability of commercial and government funding to customers of Amersham Biosciences products and services;                              
| 
| |  | reduced capital investment by significant pharmaceutical companies for extended periods subsequent to mergers.                                  

R&D costs associated with Amersham Biosciences technologies, products and
services, as well as personnel costs, marketing programs and overhead account
for a substantial portion of its operating expenses. These expenses cannot be
adjusted quickly in the short term. If revenues of the business decline or do
not grow as anticipated, Amersham Biosciences may not be able to reduce its
operating expenses accordingly. Failure to achieve anticipated levels of
revenue could therefore significantly harm our operating results for a
particular period.

Risks related to the Life Sciences industry

Use of genomics and proteomics information to develop or commercialize products
is unproven.

The development of new drugs and the diagnosis of disease based on genomic or
proteomic information is unproven. Few therapeutic or diagnostic products
based on genomic or proteomic

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discoveries have been developed and commercialized. If our customers are
unsuccessful in developing and commercializing products based on our products
or services, our customers and we may be unable to generate sufficient revenues
and our Biosciences business may suffer as a result. The development of
genomics or proteomics-based products is subject to risks of failure, in that
such products:



| |  | may be found to be toxic;                                                                        
|- |  | -------------------------------------------------------------------------------------------------
| 
| |  | may be ineffective;                                                                              
| 
| |  | may fail to receive regulatory approvals;                                                        
| 
| |  | may fail to be developed prior to the successful marketing of similar
products by competitors; or
| 
| |  | may infringe on proprietary rights of third parties.                                             

If ethical and other concerns surrounding the use of genetic information become
widespread, there may be less demand for some of the key products of Amersham
Biosciences.

Genetic testing has raised ethical issues regarding confidentiality and the
appropriate use of the resulting information. For these reasons, governmental
authorities may call for limits on, or regulation of, the use of genetic
testing, or they may prohibit testing for genetic predisposition to certain
conditions, particularly for those that have no known cure. The development of
products based on the use of genetic information represents a significant
market opportunity for our discovery systems business. Any of the scenarios
mentioned above could reduce the potential market for our products.

Reductions in R&D budgets and capital spending policies of our customers may
reduce our Biosciences business sales. Reductions in government funding of
Biosciences research may also reduce demand for Amersham Biosciences products.

A significant portion of our Biosciences products, such as our DNA sequencing
systems or our bioprocess systems are capital purchases for our customers,
which include pharmaceutical, biotechnology and agrochemical companies,
research institutes, universities and medical research centers. Fluctuations in
the R&D budgets or capital spending policies of these organizations could have
a significant effect on the demand for our Biosciences products. R&D budgets
and capital spending policies fluctuate due to changes in available resources,
spending priorities and institutional budgetary policies. Any significant
decrease in life sciences R&D expenditures by our customers could seriously
damage our business.

A significant portion of Amersham Biosciences sales are to researchers,
universities, government laboratories and private foundations whose funding is
dependent upon both the level and timing of funding from government sources. As
a result, the timing and amount of revenues from these sources may vary
significantly due to factors that can be difficult to foresee. Although the
level of research funding has increased during the past several years, grants
have, in the past, been frozen for extended periods or have otherwise become
unavailable to various institutions without advance notice. Government funding
of R&D is subject to the political process, which is inherently unpredictable.
Also, government proposals aiming to reduce or eliminate budgetary deficits
have sometimes included reduced allocations to the U.S. National Institute of
Health (NIH) and other government agencies that fund R&D activities. If
researchers were not able to obtain, for any extended period, government
funding necessary to purchase our products or if there is a decrease in overall
research funding, it could reduce the sales to this segment and damage our
business.

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Risks related to intellectual property held by Amersham Biosciences

The scope of our issued patents may not provide us with adequate protection of
our intellectual property, which would harm our competitive position. The
measures that we rely upon in addition to patents to protect our intellectual
property may not be adequate to protect our products and services and could
affect our Biosciences business ability to compete.

Any issued patents that cover Amersham Biosciences proprietary technologies may
not provide us with substantial protection or be commercially beneficial to the
business. The issuance of a patent is not conclusive as to its validity or its
enforceability. The US federal courts or equivalent national courts or patent
offices elsewhere may invalidate these patents or find them unenforceable.
Competitors may also be able to design around our patents. If we are unable to
protect our patented technologies, we may not be able to commercialize our
technologies, products or services and our competitors could commercialize our
technologies.

Our Biosciences business also relies on a combination of trade secrets,
copyrights and trademarks, non-disclosure agreements and other contractual
provisions and technical measures to protect our intellectual property rights.
While we generally require employees, collaborators, consultants and other
third parties to enter into confidentiality agreements where appropriate, it is
not always possible to enforce these arrangements.

Monitoring the unauthorized use of our technology is difficult, and the steps
we have taken may not prevent unauthorized use of our technology. The
disclosure or misappropriation of our intellectual property for any of the
above reasons could harm our ability to protect our rights and our competitive
position.

We may become involved in disputes regarding our patents and other intellectual
property rights, which could result in the forfeiture of these rights, expose
the business to significant liability and divert managements focus.

In order to protect or enforce our patent rights, our Biosciences business may
need to initiate patent litigation against third parties. In addition, we have
been and may in the future be sued by third parties alleging that we are
infringing their intellectual property rights. These lawsuits are expensive,
take significant time and divert managements focus from other business
concerns. These lawsuits could result in the invalidation or limitation of the
scope of Amersham Biosciences patents, forfeiture of the rights associated
with these patents or an injunction preventing Amersham Biosciences from
selling any allegedly infringing product. In addition, Amersham Biosciences may
not prevail or a court may find damages or award other remedies in favor of the
opposing party in any of these suits. During the course of these suits, there
may be public announcements of the results of hearings, motions and other
interim proceedings or developments in the litigation. Securities analysts or
investors may perceive these announcements to be negative, which could cause
the market price of the Groups stock to decline.

Many of Amersham Biosciences products are based on complex, rapidly developing
technologies. Although Amersham Biosciences tries to identify all relevant
third party patents, these products could be developed by the business without
knowledge of published or unpublished patent applications that cover some
aspect of these technologies. The life sciences industry has experienced
intensive enforcement of intellectual property rights by litigation and
licensing. If we are found to be infringing the intellectual property of
others, we could be required to stop the infringing activity, or we may be
required to design around or license the intellectual property in question. If
we are unable to obtain a required license on acceptable terms, or are unable
to design around any third party patent, we may be unable to sell some of our
products and services, which could result in reduced revenue.

4.     Forward Looking Information

The Private Securities Litigation Reform Act of 1995 provides for a safe harbor
for forward-looking statements. This Annual Report contains words such as
believe, expect and anticipate and

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similar expressions, that identify forward-looking statements, which reflect
the Groups views about future events and financial performance. Such
forward-looking statements relate to, among other things, the outlook of
Amersham plc, including in particular, the expected growth of certain of the
Groups products or the markets for those products, the impact of currency
movements during 2003 and the Groups expectations regarding the development of
its business, particularly its biosciences business and the fields of genomics
and proteomics. Such statements include but are not limited to statements
under Item 3. Key Information  D. Risk Factors, Item 5. Operating and
Financial Review and Prospects and Item 11. Quantitative and Qualitative
Disclosures about Market Risk. Actual results could differ materially from
those projected in such forward-looking statements as a result of various
factors that may be beyond the control of the Group.

The following important factors could cause actual results to differ materially
from those projected or implied in any forward-looking statements:



|i.   |  | Changes in demand for the products of Amersham plc worldwide or in the
markets for those products as well as changes in managements expectation
of the development of new markets and the timing of completion of various
trials leading to the introduction of new products;
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|ii.  |  | Changes in the cost or supply of raw materials, changes in interest rates
and the impact of competition; and                                                                                                                                                                  
|    
|iii. |  | Price controls and price reductions, fluctuations in exchange rates for
foreign currencies, changes in governmental regulation, and the risk of
loss of patents or trademarks.                                                                                                

Accordingly readers are cautioned not to place undue reliance on these
forward-looking statements. In any event, these statements speak only as of
the date on which they are made, and the Company does not undertake any
obligation to update or revise any of them, whether as a result of new
information, future events or otherwise.

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ITEM 4. INFORMATION ON THE COMPANY

A.     History and development of the company

Amersham plc is a public company with limited liability organized under the
laws of and registered in England and Wales. Amersham plc and its subsidiary
undertakings constitute an international group (the Group) engaged in the
R&D, production, sale, distribution and licensing of medical imaging contrast
media and radiopharmaceuticals through its Amersham Health business. The Group
is also engaged in R&D, manufacture and sale of specialized products and
services for life sciences research, and the manufacture of biopharmaceuticals
through its Amersham Biosciences business.

Background

Amersham International was incorporated in the UK on February 16, 1971.
Following privatization in 1982, Amersham International successfully developed
its healthcare and life sciences business by means of organic growth and by a
series of strategic acquisitions and alliances. Amersham International became
a world leader in the field of nuclear medicine with a range of therapeutic and
diagnostic products, and was at the forefront of the development of innovative
radioactive and non-radioactive products for use in life sciences research.

During 1997, Amersham International entered into two mergers in order to
enhance its position in the fields of in vivodiagnostic imaging and life
sciences.

On August 5, 1997, Amersham International and Pharmacia Biotech, the
Sweden-based biotechnology supply business of Pharmacia Corporation,
transferred their life sciences businesses to a new company, Amersham Pharmacia
Biotech Limited. In 2001, the name of Amersham Pharmacia Biotech was changed to
Amersham Biosciences. At December 31, 2001, Amersham Biosciences was owned 55%
by Amersham plc and 45% by Pharmacia Corporation. On March 21, 2002, the
Company purchased the 45% ownership stake in Amersham Biosciences held by
Pharmacia Corporation, thereby taking 100% ownership of Amersham Biosciences.
The cash consideration for the purchase was £704 million and was financed by
the issue of new share capital plus the use of existing cash resources and
drawings under Amershams committed bank facilities.

On October 21, 1997, Amersham International merged with Nycomed ASA. The
healthcare business of Amersham International and the medical imaging business
of Nycomed were consolidated into the Groups imaging business. Following this
merger, the Company changed its name to Nycomed Amersham plc on October 22,
1997.

On July 12, 2001, the Company changed its name from Nycomed Amersham plc to
Amersham plc. On October 15, 2001 the Company announced its two business
groupings were changing their names to Amersham Biosciences and Amersham
Health.

Recent Developments

On February 26, 2003, the Group announced a restructuring of its discovery
systems business area. The restructuring program, which is intended to deliver
a more efficient manufacturing cost base and focus R&D on fewer sites, will
result in the net loss of approximately 400 jobs. The Group will incur one-off
costs in the range of £45-50 million, which are expected to result in savings
running at the rate of £30-35 million per annum by the end of 2004. The
restructuring plans are expected to bring benefits in 2003 moving the business
to profitability during 2004.

On April 22, 2003 we announced an intended merger of our brachytherapy business
with the urology business of Galil Medical to create a stand-alone marketing
company. The combined sales of both businesses would have been approximately
£57 million ($90 million) in 2002. The new company, which is 75% owned by
Amersham, will be accounted for as a joint venture.

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On April 30, 2003 we reported sales of £381 million for the first three months
of 2003 (2002: £381 million), up 6% at constant exchange and excluding
discontinued products. We confirmed that our outlook for the year is unchanged
and that the restructuring of our discovery systems business area is on track
to deliver profitability during 2004.

The full text of our press release can be found on our internet site
www.amersham.com

Registered Address

The registered address of the Company is:

Amersham plc
Amersham Place
Little Chalfont
Buckinghamshire
HP7 9NA
England
Tel: +44 1494 544000
Internet address: www.amersham.com

None of the information contained in our website is incorporated in this Annual
Report.

Acquisitions and Dispositions

As part of its strategy to expand its operations, the Group has made the
following significant business acquisitions since January 1, 1993:

|                                                        |  |                              |  |                            |  |                 |          |       
|------------------------------------------------------- |  | ---------------------------- |  | -------------------------- |  | --------------- | -------- | ------
|                                                        |  | Principal Market             |  | Date Acquisition           |  | Purchase Price*
|Acquired Company                                        |  | Areas                        |  | Completed                  |  | (In £millions) 
|                                                        |  |                              |  |                            |  |                
|United States Biochemical Corporation                   |  | US                           |  | April 1993                 |  |                 | 43.9     |       
|Nihon Medi-Physics (NMP)                                |  | Japan                        |  | December 1994,October 1996 |  |                 | 110.3    | **    
|Pharmacia Biotech AB                                    |  | Europe/US/Japan              |  | August 1997                |  |                 | 39.9     | ***   
|Nycomed ASA                                             |  | North Europe/Europe/US/Japan |  | October 1997               |  |                 | 1,595.7  |       
|Molecular Dynamics Inc.                                 |  | US                           |  | September 1998             |  |                 | 125.1    |       
|AG Technology Corp and InnovaSep
Technology Corporation |  | US                           |  | January 2002               |  |                 | 31 to 42 | ****  
|Pharmacia Biosystems AB/Amersham
Biosciences Limited    |  | Europe/US/Japan              |  | March 2002                 |  |                 | 704.1    | ***** 
|Cimarron Software, Inc.                                 |  | US                           |  | May 2002                   |  |                 | 4.0      | ******
|CodeLink                                               |  | US                           |  | July 2002                  |  |                 | 14.0     |       



---

|*      |  | Represents the purchase price of equity.                                                                                                                                                                                                                                                                                                                                            
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|**     |  | Represents 50% ownership in NMP.                                                                                                                                                                                                                                                                                                                                                    
|      
|***    |  | Represents acquired assets.                                                                                                                                                                                                                                                                                                                                                         
|      
|****   |  | For more detail on how the purchase price will be calculated, see Note
24(b) of Item 18 Consolidated Financial Statements.                                                                                                                                                                                                                                                        
|      
|*****  |  | Represents the purchase of the remaining 45% of Amersham Biosciences
from Pharmacia Corporation.                                                                                                                                                                                                                                                                                    
|      
|****** |  | Represents the acquisition of a further 16% holding, taking the Groups
total holding to 35%. The Group has a controlling stake as a result of a
shareholders agreement. Since May 10, 2002, the Group had subscribed for
and was allotted additional share capital, taking its holding at December
31, 2002 to 44%. See Note 24(b) to Item 18 Consolidated Financial
Statements.

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United States Biochemical Corporation

In April 1993, the Company acquired 100% of the shares of United States
Biochemical Corporation (USB), based in Ohio, US. The company was a major
supplier of reagents, biochemicals, intermediates and related services to the
North American life sciences industry and strengthened Amershams position as
one of the leading suppliers of products in this area.

Nihon Medi-Physics

In December 1994, the Company acquired a 20% stake in Nihon Medi-Physics
Company Ltd (NMP). On April 24, 1996, the Company entered into an agreement
to increase its shareholding in NMP from 20% to 50%. Pursuant to this
agreement, the Companys Japanese healthcare business merged with NMP on August
31, 1996, increasing the Companys interest to 33.95%. The transaction was
completed on October 18, 1996 when the Company increased its interest in NMP to
50%.

Pharmacia Biotech AB

On August 5, 1997, Amersham International and Pharmacia Biotech, the
Sweden-based biotechnology supply business of Pharmacia Corporation,
transferred their life sciences businesses to a new company, Amersham Pharmacia
Biotech Limited. In 2001, the name of Amersham Pharmacia Biotech was changed to
Amersham Biosciences. At December 31, 2001, Amersham Biosciences was owned 55%
by the Company and 45% by Pharmacia Corporation.

On March 21, 2002, the Company purchased the 45% ownership stake in Amersham
Biosciences held by Pharmacia Corporation through the acquisition of Pharmacia
Biosystems AB which held 39% and the direct acquisition of the remaining 6%
thereby taking 100% ownership of Amersham Biosciences.

Nycomed ASA

On October 21, 1997, Amersham International merged with Nycomed ASA. The
healthcare business of Amersham International and the medical imaging business
of Nycomed were consolidated into the Groups imaging business. The purchase
consideration was satisfied by the issue of 37.1 million 25p ordinary shares
and 25.4 million 25p non-voting shares at £24.2 and £23.4 per share
respectively, £78.5m in cash under the Mandatory Cash offer and future cash
consideration of £23.9m in respect of the compulsory purchase which was fully
paid by December 31, 1999.

Molecular Dynamics Inc

On September 11, 1998, Amersham Pharmacia Biotech acquired, following a cash
tender offer, the 91% of Molecular Dynamics shares it did not already own. The
net cash paid during the year in respect of this acquisition was £125.1
million. The acquisition further strengthened Amersham Pharmacia Biotechs
competitive position in the market for DNA sequencing, genomic analysis and
fluorescent imaging.

AG Technology Corp and InnovaSep Technology Corporation

On January 31, 2002, Amersham Biosciences broadened its bioprocess capabilities
through the acquisition of 100% of the issued share capital of two US companies
in the membrane separations field, AG Technology and InnovaSep Technology, both
based near Boston, Massachusetts.

Cimarron Software, Inc

On May 10, 2002, Amersham Biosciences acquired a further 16% holding in
Cimarron Software, Inc for £4 million, taking the Groups total holding at
acquisition to 35%. Since May 10, 2002, Cimarron Software, Inc has been
consolidated as a subsidiary undertaking as the Group controls the company
through a shareholders agreement from that date. Cimarron Software, Inc is an
information company located in Salt Lake City, Utah, which supplies software
for life sciences research. Since May 10, 2002, the Group has subscribed for
and was allotted additional share capital, taking its holding at December 31,
2002 to 44%. The Group has obligations to subscribe for a further 7% of share
capital over the next three years, and has options to acquire the remaining 49%
of the company for a maximum consideration of $33 million, the total
consideration payable being contingent on certain specified performance
conditions.

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CodeLink

On July 11, 2002, Amersham Biosciences acquired the net assets of the CodeLink
pre-arrayed slides business in Tempe, Arizona from Motorola Life Sciences for
£14 million. Arrays are chips, or small slides, onto which genes and proteins
are placed. They are used to study how genes or proteins are expressed 
switched on or switched off  in a particular disease state, so that
researchers may understand the relationship between gene or protein function to
disease and thus design better therapeutic drugs and diagnostic tests. The
CodeLink platform is based on a unique, patented manufacturing process that
produces high-quality arrays.

Dispositions

QSA

On February 20, 1998, the Company signed an agreement for the sale of its
Industrial Quality and Safety Assurance Business (QSA) to AEA Technology plc
with transfer of assets and payments phased over the next four years. We
completed the sale on February 27, 1998. The Group incurred a loss on the
disposal of QSA of £22.2 million which includes provision for operating losses
to the date of disposal, decommissioning of the remaining plant and buildings
and other costs which were recorded in the results for the nine months ended
December 31, 1997.

Nycomed Pharma

In May 1999, the Group sold 71% of its Nycomed Pharma business to a new company
formed by a private equity group. The Group recorded a pre tax gain of £11.5
million in the year ended December 31, 1999 after adding back attributable
goodwill previously written off to reserves. The tax charge on the disposal
amounted to £9.5 million. Further costs of £9.7 million with a related tax
credit of £1.1 million, associated with exiting from the Pharma business, were
accounted for in the year ended December 31, 2000 giving a total loss
associated with the disposal of £6.6 million after tax in 1999 and 2000. In
September 2001, the Group sold its remaining investment in Nycomed Pharma,
which consisted of shares and warrants, for £72.4 million and realized £50.6
million for the outstanding Nycomed Pharma loan notes held by the Group. The
Group recorded a profit on the transaction of £55.3 million after charging
costs associated with the disposal, including the costs incurred in
transferring the Nycomed name to Nycomed Pharma.

The Group did not account for its remaining 29% equity interest in Nycomed
Pharma as an associated undertaking under UK GAAP as Nycomed Pharma was
controlled by its majority shareholder and, in the opinion of the directors,
the Group did not exercise significant influence over its operations. The
results of Nycomed Pharma were therefore included as a discontinued operation
for all years presented within the financial statements. Under US GAAP, the
investment was accounted for using the equity method. The reconciliation of
significant differences between UK GAAP and US GAAP is set out in Note 38 of
Item 18 Consolidated Financial Statements.

Other Developments

In February 2002, Amersham Biosciences announced a court mediated settlement
with Applied Biosystems Group which includes a cross-licensing agreement
covering all patents involved in the litigation, and a co-development
arrangement for the joint development, supply and commercialization of certain
new DNA analysis technologies.

On May 8, 2002, the Company announced a further stage of development with the
expansion of Imanet through the formation in Sweden of a company called
Uppsala Research Imaging Solutions AB (URIS). URIS is a joint venture owned
75% by Amersham Health and 25% by Uppsala University Holdings (UUH) and is
formed out of the Uppsala PET (Positron-Emission Tomography) Centre.

On February 27, 2003 the Company expanded Imanet further through the formation
in Finland of a company called Turku Research Imaging Solutions OY (TRIS).
TRIS will conduct business through the Turku PET Centre.

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B.     Business Overview

The Business of Amersham plc

Amersham plc is currently organized into two principal lines of business: the
medical imaging business (Amersham Health) and the biosciences business
(Amersham Biosciences).

Amersham Health is a world leader in the development, manufacture and supply of
innovative products for the diagnosis and treatment of disease. Medical
imaging products are used when information is needed about parts of the body,
such as organs, tissues and blood vessels, which are not easily distinguishable
from the normal body background.

Amersham Biosciences is a world-leading provider of biotechnology systems and
solutions for research into genes and proteins, the discovery and development
of drugs, and the manufacture of biopharmaceuticals.

Regulation

General

The international pharmaceutical industry is one of the worlds most highly
regulated industries. Regulatory controls are a major determinant of whether a
substance can be developed into a marketable product and how long such
development takes.

In common with other pharmaceutical companies, the Group is subject to strict
controls on the manufacture, distribution and marketing of its products.
Further controls exist over the clinical trial phases of the development of a
product. Of particular importance is the requirement in most countries to
obtain and maintain registration or marketing authorization for a product from
the relevant regulatory authority to enable it to be marketed in those
countries. Pharmaceutical product registration or licensing is principally
concerned with the safety, efficacy and quality of new medicines. Before such a
product is approved for marketing, it must undergo exhaustive and lengthy
clinical trials. It takes many years from the start of development of a new
pharmaceutical compound to the submission of an application for registration.
The application will include specific details of the plant and procedures
involved in production. The time taken from submission of such application to
launch of the product is typically one to two years. Europe, the US, Australia,
Canada and Japan have very high standards of regulatory appraisal and
consequently, in most cases, a lengthy approval process. The trend in recent
years has been towards greater regulation and higher standards, but also
towards international harmonization of documentation requirements for product
registration.

After a product has been approved by the regulatory authorities and has been
launched, it is a condition of the product approval that all aspects relating
to its safety, efficacy and quality must be kept under review. Depending on
the jurisdiction, fines or other penalties may be imposed for failure to adhere
to the conditions of product licenses and, in extreme cases, the product
license can be revoked. During a products development and following its
launch, the product may be the subject of third party studies and reports that
evaluate or comment upon its efficacy and relative benefit, alone and in
combination with other products. These studies and reports, even if not widely
accepted by the scientific community, may influence the acceptance of the
product in the market.

During the life of a product, strict procedures must be in place to monitor,
evaluate and report any potential adverse reactions. Where adverse reactions
occur or it is judged that they may occur, changes may be required to
prescribing advice and to the product licenses. In extreme cases, the product
may need to be withdrawn.

Internal monitoring procedures are also maintained in relation to registered
products to ensure that quality is assured and that operations are conducted in
line with approved processes. During the life of a product, improvements and
modifications to manufacturing processes may be made either directly by the
manufacturer or, as necessary, with the approval of the relevant regulator.
Approval is also required for any changes to product formulation, packaging or
labeling. In

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addition, manufacturing plants and processes are subject to periodic external
inspection by the regulators as part of their monitoring procedures to ensure
that manufacturers are complying with prescribed standards of operation.

Amershams pharmaceutical and medical device production activities are required
to meet the standards of Good Manufacturing Practice (GMP) specified by the
national regulatory authorities of those countries into which its products are
supplied.

The principles of GMP are laid out in regulations  principally the Code of
Federal Regulations of the US Food and Drug Administration and the EC Guide to
Good Manufacturing Practice for Medicinal Products  which cover manufacturing
and control practices, the design of premises, process validation, training,
storage and distribution, and the systems of working and documentary practices
by which they are managed.

Compliance with current interpretations of these principles is enforced by
periodic inspection by authorized inspectors from major national regulatory
authorities or by the sharing of reports generated under the Pharmaceutical
Inspection Convention (PIC) scheme, or in the case of medical devices by audits
performed by Notified Bodies such as the British Standards Institute (BSI) or
Lloyds Register Quality Assurance (LRQA).

Within Europe, the process for approval of marketing authorizations is now
uniform across the European Union member states due to regulations which came
into force on January 1, 1995. These regulations make provision for and require
the use of one of two procedures when applying for marketing approval
throughout the community. The centralized procedure uses the European
Medicines Evaluation Agency along with the Committee for Proprietary Medicinal
Products to oversee assessment of applications, and results in the issuance of
a single authorization for the entire European Union. The mutual recognition
(or decentralized) procedure provides for issuance of a national marketing
authorization in one member state and then requires mutual recognition by other
European Union national authorities.

In the US, the pharmaceutical industry is subject to regulation by national,
state and local agencies and to the regulations of the FDA, which administers
requirements covering the testing, approval, manufacturing, distribution and
marketing of drugs and reviews the quality, safety and efficacy of drugs
marketed in the US. With respect to many new products, the effect of the FDA
drug approval process has been to increase substantially the amount of time and
money necessary to develop and market such products in the US. The FDA
Modernization and Accountability Act, which was enacted on November 21, 1997
and reauthorized on October 1, 2002, has helped to reduce review times for new
drugs. In the US, generic substitution statutes which permit, or in some
instances require, the dispensing pharmacist to substitute a different
manufacturers version of a drug for the one prescribed have been enacted by
virtually all states. The Group is registered with the FDA as a producer and
distributor of drugs and of medical devices. Pursuant to such registration,
the Groups products that are exported to, or manufactured in, the US are
listed with the FDA by the Group or its licensees. In addition, the Group or
its licensees file applicable pre-market application and notifications pursuant
to the Federal Food, Drug and Cosmetic Act. The Group believes that it is in
compliance with applicable FDA regulations.

In the UK the Groups nuclear activities are regulated by the Nuclear
Installations Inspectorate (NII), part of the Health & Safety Executive (HSE).
Sites are issued with a Nuclear Site License by the NII and Certificates of
Authorisation from the Environment Agency (EA), part of the Department of
Environment, Food and Rural Affairs (DEFRA). These Authorisations regulate
gaseous, liquid and solid discharges. The Sites are also covered by the 1999
Ionising Radiations Regulations. Sites are regularly inspected by both NII and
EA appointed Site Inspectors.

In the US, the possession, use and distribution of reactor byproduct
radioactive material is regulated by the Nuclear Regulatory Commission (NRC).
In states that have entered into agreement with the NRC to regulate byproduct
material, these so-called Agreement States have jurisdiction. Naturally
occurring and accelerator produced materials are regulated by individual
states, more than half of which are Agreement States. Regulation is
administered through regulations and licenses issued by both the NRC and these
states. Regulatory compliance is monitored and enforced by inspection and
investigation as a result of reported incidents. The U.S.

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Environmental Protection Agency (EPA) also has regulations concerning release
of radioactive materials. Transportation of radioactive material is regulated
by the US Department of Transportation (DOT).

In Germany, Amersham Buchler has a handling and transport license for
radioactive materials issued under the Radiological Protection Ordinance.

The closure of any nuclear licensed site in the UK would require surrender of
the license and full decommissioning of the site to the satisfaction of both
the EA and the NII.

Pharmaceuticals Pricing

General

The overall cost of providing healthcare services has been and will continue to
be subject to review by governmental and legislative bodies around the world.
Prices for products are sometimes subject to direct price controls and drug
reimbursement programs which have varying price control mechanisms. Governments
may influence the price of pharmaceutical products through their control of
national health care organizations which may bear a large part of the cost of
supplying such products to consumers. In the US, Japan, Germany and certain
other countries, pressure can be exerted on prices by government-funded or
private medical care plans. The Group expects that governments and other bodies
will increasingly seek to control costs and that the pharmaceutical industry
will continue to be affected by pressure to contain health care expenditures.

In addition to the normal competitive forces that affect the level of prices, a
further constraint exists in most countries in which the Group sells its
products through the presence of price controls on pharmaceuticals. These
controls arise because governmental agencies in a particular country are the
principal purchasers of the product. Price control mechanisms operate
differently from country to country and can result in large differentials in
prices between markets. The effects of the inflexibility of such mechanisms may
be aggravated by currency fluctuations. These price differentials are sometimes
exploited by traders (parallel importers) who purchase branded products in
low-priced markets and export to high-priced markets.

Price controls can be exercised in a number of different ways. In many
countries, the prices of individual products are controlled by governments. In
addition, in certain countries, manufacturers must file separate price
applications to qualify for reimbursement by the national health insurance
system. Under reference price systems, which are now in effect in a number of
European countries including Germany, the Netherlands, Norway, Sweden and
Denmark, governments will only reimburse patients drug costs on the basis of a
reference price which corresponds roughly to the price of the cheapest medicine
in each drug category. Products whose price exceeds the reference price will
thus be more expensive for the patient to purchase. An EU directive, which
became effective on January 1, 1990, also sets forth certain rules concerning
the governmental operation of price controls and reimbursement applications.

In the US, there are currently no government price controls over private sector
purchases; however, in 1990, federal legislation was enacted which requires
drug manufacturers to pay prescribed rebates to the states on certain drugs in
order for such drugs to be eligible for Medicaid reimbursement. Since the
enactment of such federal legislation, several states have enacted similar
legislation in respect of state entitlement programs (i.e. requiring rebates in
exchange for eligibility for reimbursement by such programs).

The Japanese government sets the prices at which pharmaceuticals are reimbursed
by all insurance carriers. Every other year a revision of these prices is
carried out; however, not every drug class or brand within a class is affected
by these revisions. For the past decade these revisions have resulted in
significant overall price decreases for existing products. The average price
revision for all pharmaceutical products in the Japanese market was 9.7%
effective on April 1, 1998, 7% effective on April 1, 2000 and 6.3% effective on
April 1, 2002.

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Environmental and Other Regulatory Matters

General

The Amersham Group is subject to various environmental protection and
occupational safety and health laws and regulations in the countries in which
it operates. In addition, in its current operations and over the years, the
Group has handled, manufactured, used and disposed, and will continue to deal
in or otherwise handle, manufacture, use and dispose of materials and wastes
classified as hazardous or toxic by one or more regulatory agencies.

The Group has developed a worldwide program of corporate environmental and
safety policies. These policies are designed to ensure that environmental and
occupational safety and health protection are key business objectives at all
locations, and they detail the purpose, scope and responsibilities of
environmental and occupational safety and health concern throughout the Groups
worldwide operations. Continuing improvements are being made in the reduction
of waste and levels of discharges and emissions from its manufacturing
processes, including radioactive waste.

Significant capital expenditures, as well as operating costs, have been
incurred to comply with the laws and regulations governing the protection of
the environment, occupational safety and health, and the handling of hazardous
materials. There are inherent risks in handling hazardous or toxic materials
and wastes, and the Group incurs costs to comply with the environmental
regulations applicable to its operations. Amersham plc has no reason to believe
that current and expected expenditures and risks occasioned by these
circumstances are likely to have a material adverse effect on its financial
condition; however, no assurance can be given that a change in circumstances
may not result in such a material adverse effect. The Groups manufacturing
operations are all subject to these environmental laws and regulations.
Although the Group continues to make capital expenditures for environmental
protection, it does not anticipate being obliged as a result of such laws and
regulations to incur costs which would have a material impact upon the Groups
financial condition or results of operations.

Radioactive waste

Radioactive waste is inevitably generated in the manufacture of radioactive
materials, and the Groups policy, which is managed by an executive committee,
is to minimize the generation of such waste and, to the extent possible,
dispose of it in a timely fashion through safe and authorized routes of
disposal. The Groups radioactive manufacturing processes result in radioactive
solid waste by-products that can be placed pursuant to the UKs Radioactive
Waste Regulations into three categories as follows:



| |  | Very Low Level Waste (VLLW) is waste that represents a low enough
concentration of radioactivity/volume to require no controls on
disposal to landfill;                                                                                                                                                                                                                                                                                                                                                                                                                                          
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Low Level Waste (LLW) is waste arising from materials used as part of
the manufacturing process, which have become contaminated. It is
defined as beta gamma waste of less than 12 GBq per tonne and alpha
waste of less than 4 GBq per tonne or less for fissile material.
Generally, this material can be characterized as small items of
laboratory equipment, packaging, glassware and other consumables used
within a laboratory. All LLW is consigned to the national
above-surface repository at Drigg that is managed by British Nuclear
Fuels plc (BNFL) on behalf of the UK Government;
| 
| |  | Intermediate Level Waste (ILW) is any material above the activity
limits specified as LLW that is not heat producing. ILW can range
from extremely small, low activity items, which result in a high
specific activity such as smoke detector foils, to heavily
contaminated enclosures, or items specifically designed to transport
or contain higher levels of activity.                                                                                                                                                                                                                       

Disposal routes currently exist for VLLW and LLW and, dependant on the physical
and chemical attributes of the waste, for many types of ILW where the specific
activity is within a factor of five of that described as LLW using e.g.
incineration.

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The remaining ILW, depending on half-life, may be stored to decay to either LLW
or VLLW at which point it will be disposed of accordingly. The Group stores
both its ILW for decay and its residual ILW (that which will remain ILW within
a reasonable period of institutional supervision, generally taken to be 50
years) in safe conditions on operational sites. This is pending the
availability of a national facility, whereupon risk and title will be
transferred to the appropriate government funded organization. With respect to
radioactive materials generated or used by the US facilities, such materials,
in line with specific conditions of acceptance relating to activity, physical
and chemical properties, are disposed of in the US, reused or recycled. If no
disposal or recycling/reuse route exists, in the last instance, radioactive
materials generated or used by the US facilities are returned to the country of
origin in line with any international agreements that may be in place.

The costs and liabilities of environmental and other regulatory matters

At December 31, 2002, the Groups provision for costs associated with the
eventual decommissioning of facilities and the eventual disposal of
intermediate level waste (ILW) was £65.5 million. The amounts charged to profit
and loss in respect of decommissioning and effluent costs for the year to
December 31, 2002 were £5.1 million. The Groups accounting policy with
respect to radioactive decommissioning costs and costs associated with
radioactive waste arising from operations (effluent costs) are set out in Note
1 of Item 18 Consolidated Financial Statements.

The Group presently has decommissioning plans for the Harwell facility and
portions of the Amersham and Braunschweig manufacturing facilities. The
Harwell facility handled radioactive materials up until 1997 and appropriate
measures are being taken to comply with applicable regulations governing
closure of the property, which is expected to be completed by 2005. Idle
portions of the manufacturing facilities at Amersham and Braunschweig will also
be decommissioned, with the work expected to be completed by 2010.

Provisions for decommissioning and effluent costs relate to the costs,
determined on a going concern basis, associated with decommissioning
radioactive facilities and with the eventual disposal of the Groups ILW which
arises from operations. Decommissioning costs will be incurred after the
facilities are withdrawn from use in radioactive operations and extend out to
2036. Total decommissioning and effluent costs to be incurred in the next 10
years amount to approximately £37.4 million. The provisions are based on the
latest technical assessment of the process and methods likely to be used, and
are stated at current prices and discounted using a real discount rate of 4%.

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Segmental information

The following table sets forth the Groups turnover by major business sector
and geographic area, and their percentage contribution to the Groups total
turnover, for the three years ended December 31, 2002, 2001 and 2000.

|                                  |  |                   |         |                   |  |                   |       |   |  |    |         |   |  |  |       |   |  |  |         |   |  |  |       |  
|--------------------------------- |  | ----------------- | ------- | ----------------- |  | ----------------- | ----- | - |  | -- | ------- | - |  |  | ----- | - |  |  | ------- | - |  |  | ----- | -
|                                  |  | 12 months to      |         | 12 months to      |  |                   |       |   |  |    |         |  
|                                  |  | December 31, 2000 |         | December 31, 2001 |  | 12 months to     
|                                  |  | (restated)        |         | (restated)        |  | December 31, 2002
|                                  |  |                   |         |                   |  |                  
|                                  |  | £m                |         | %                 |  | £m                |       | % |  | £m |         | %
|                                  |  |                   |         |                   |  |                   |       |   |  |    |         |  
|Turnover by major business sector |  |                   |         |                   |  |                   |       |   |  |    |         |   |  |  |       |   |  |  |         |   |  |  |       |  
|Amersham Health(1)                |  |                   | 773.9   |                   |  |                   | 56.2  |   |  |    | 922.0   |   |  |  | 57.5  |   |  |  | 947.7   |   |  |  | 58.6  |  
|Amersham Biosciences              |  |                   | 603.7   |                   |  |                   | 43.8  |   |  |    | 680.5   |   |  |  | 42.5  |   |  |  | 670.5   |   |  |  | 41.4  |  
|                                  |  |                   |         |                   |  |                   |       |   |  |    |         |   |  |  |       |   |  |  |         |   |  |  |       |  
|Total                             |  |                   | 1,377.6 |                   |  |                   | 100.0 |   |  |    | 1,602.5 |   |  |  | 100.0 |   |  |  | 1,618.2 |   |  |  | 100.0 |  
|                                  |  |                   |         |                   |  |                   |       |   |  |    |         |   |  |  |       |   |  |  |         |   |  |  |       |  
|Turnover by geographic area(2)    |  |                   |         |                   |  |                   |       |   |  |    |         |   |  |  |       |   |  |  |         |   |  |  |       |  
|Europe                            |  |                   | 766.5   |                   |  |                   | 55.6  |   |  |    | 722.1   |   |  |  | 45.1  |   |  |  | 903.9   |   |  |  | 55.9  |  
|North America                     |  |                   | 743.4   |                   |  |                   | 54.0  |   |  |    | 853.7   |   |  |  | 53.3  |   |  |  | 871.8   |   |  |  | 53.9  |  
|Asia Pacific and Rest of World    |  |                   | 271.9   |                   |  |                   | 19.7  |   |  |    | 286.3   |   |  |  | 17.9  |   |  |  | 277.0   |   |  |  | 17.1  |  
|                                  |  |                   |         |                   |  |                   |       |   |  |    |         |   |  |  |       |   |  |  |         |   |  |  |       |  
|                                  |  |                   | 1,781.8 |                   |  |                   | 129.3 |   |  |    | 1,862.1 |   |  |  | 116.3 |   |  |  | 2,052.7 |   |  |  | 126.9 |  
|Less intersegment sales           |  |                   | (404.2  | )                 |  |                   | (29.3 | ) |  |    | (259.6  | ) |  |  | (16.3 | ) |  |  | (434.5  | ) |  |  | (26.9 | )
|                                  |  |                   |         |                   |  |                   |       |   |  |    |         |   |  |  |       |   |  |  |         |   |  |  |       |  
|Total                             |  |                   | 1,377.6 |                   |  |                   | 100.0 |   |  |    | 1,602.5 |   |  |  | 100.0 |   |  |  | 1,618.2 |   |  |  | 100.0 |  
|                                  |  |                   |         |                   |  |                   |       |   |  |    |         |   |  |  |       |   |  |  |         |   |  |  |       |  



---

|(1) |  | Included within Amersham Health is the Groups share of NMP sales for
each of the three years to December 31.
|--- |  | -------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Based on region of origin.                                                                                   

1.     Amersham Health

Business Summary

Note: Market numbers within the text represent internal company estimates
unless stated otherwise.

Amersham Health is a market-leading, global business specializing in the field
of in vivodiagnostic products for the early and accurate detection of disease.
Today our products are primarily used to aid in the diagnosis of anatomical
and functional abnormalities of soft tissue within the body. Increasingly,
however, Amersham is developing products that detect changes in cells at the
molecular level. Such changes usually occur well before symptoms or functional
changes become apparent.

We focus on the management of heart disease, circulatory disease and stroke;
degeneration of the brain such as seen in Alzheimers disease and Parkinsons
disease; lung disease and a range of cancers. In addition, we are a major
provider of therapy products to treat prostate and thyroid cancer.

As the cost of healthcare continues to rise and populations age, governments
and healthcare providers increasingly recognize the value of investment in
early and accurate diagnosis, in order to most effectively manage therapeutic
intervention and its associated costs. This, together with increased capability
and numbers of scanning machines, greater incidence of disease and improved
medical practices (which rely on the identification of the underlying cause of
disease), continues to drive growth and demand for our products.

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Product portfolio and market share

Before patients can be treated, they must first be diagnosed. Medical imaging
products play a very significant role in making the invisible visible, enabling
healthcare professionals to expand and improve their abilities to detect and
then define the extent of disease, so they can better treat disease and improve
quality of life.

Medical imaging has evolved beyond recognition since the first use of X-rays to
visualize bones in the living body over a century ago. Today, the ability to
scan the entire body in a matter of seconds and identify disease-induced
abnormalities with accuracy is taken for granted. Medical imaging is now
established as an important part of modern healthcare, demonstrated by the fact
that in 2002 over 800 million medical imaging procedures were performed
worldwide. Of these, approximately 120 million scans were enhanced or made
possible with medical diagnostic products, generating revenues of around £2.8
billion. The relevance of imaging to the practice of modern medicine is
expected to continue to increase in future years.

One of the most significant reasons for the increasing relevance of imaging is
the greater average longevity of the global population and the rise in
prevalence of age-related diseases such as cardiovascular disease, cancer and
neurological disease (e.g. Alzheimers, Parkinsons disease and stroke).
Imaging is particularly well suited to assist in the diagnosis and management
of such diseases and indeed, statistics show that people over the age of 45
require on average three to four times as many diagnostic investigations as
those under 45. Age-related diseases are among the most common in the
industrialized nations and represent a cost burden to the healthcare system.
Accordingly, there is a health benefit to develop earlier and more reliable
diagnostic tests to assist in the treatment and prevention of these diseases.

(FOCUS ON DISEASE BAR GRAPH)



---

Through access to the internet, patients are also becoming better informed
about their medical conditions and the management of those conditions.
Accordingly, physicians will have to incorporate each patient into the clinical
decision making process which increasingly involves the selection of
appropriate imaging techniques.

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Global medical diagnostic market

Amersham Health, Bracco, Tyco, Schering and Bristol-Myers Squibb (BMS),
together with their respective licensees, are the major players in the medical
diagnostics market...

Diagnosis plays an increasingly important part in modern healthcare,
particularly in growing disease areas such as cardiology, neurology and
oncology. By providing structural and functional diagnostic information about
the body, medical imaging reduces healthcare cost and improves quality of life.

There are four main medical imaging modalities  X-ray (including computer
tomography, CT), magnetic resonance imaging (MRI), radiopharmaceutical imaging,
and ultrasound. Radiopharmaceutical imaging always requires a diagnostic
product, while the other three modalities may or may not use a diagnostic
product, depending on the procedure. Each modality is rapidly evolving to meet
the growing demands of modern healthcare requirements. Overall, the emphasis in
technology advancement is to improve the speed, efficiency and functionality of
instrumentation, lower its cost and hence, increase accessibility. Improving
the speed will allow for increased numbers of procedures per unit, keeping pace
with the rising demand.

The selection of imaging modality is based on a variety of factors including
the amount and type of information which can be obtained regarding the
suspected disease or condition, how quickly and conveniently the information
can be obtained, the side effects, image quality and cost effectiveness.

X-ray/CT medical diagnostics

|               |  |                    
|-------------- |  | -------------------
|Total scans    |  | approx. 630 million
|Enhanced scans |  | approx. 75 million 
|Market size    |  | approx £1.4 billion

X-ray is the most frequently performed imaging procedure covering all body
areas and is often the entry point for the diagnostic work-up. X-ray computed
tomography, or CT scanning, has had the greatest impact on the medical
diagnostics market. CT scanning allows cross-sectional imaging of the body with
exquisite depiction of anatomic detail, and is finding growing use in coronary
angiography and interventional procedures. Approximately 40% of CT scans
currently involve the use of medical diagnostic products.

The development of multi-slice CT machines, which are capable of performing
sub-second imaging of millimeter-thin slices of body tissues, has opened up a
host of new applications such as blood vessel imaging and blood clot imaging,
many of which require large volumes of medical diagnostic contrast media.

MRI medical diagnostics

|                |  |                   
|--------------- |  | ------------------
|Total scans     |  | approx. 40 million
|Enhanced scans  |  | approx. 10 million
|Market size     |  | over £320 million 
|No. MR scanners |  | over 15,000       

Magnetic resonance imaging (MRI) is often the method of choice for imaging the
central nervous system, particularly for detecting cancers in the brain and
abnormalities in the spine. More recently, MRI has found use in imaging the
blood vessels and depicting brain regions affected by stroke. Roughly 25% of
the MRI scans use a medical diagnostic product with every segment of
contrast-enhanced MRI experiencing growth, and we expect this trend to
continue.

New MRI contrast media are being developed for vascular imaging, cardiac
imaging, visualization of air spaces in the lungs, and for targeting specific
tissues such as lymph nodes and blood clots. The ability to identify high-risk
patients in the foreseeable future, along with the need for accurate anatomical
and functional information, are expected to drive the market for these new
products.

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Radiopharmaceutical medical diagnostics

|               |  |                   
|-------------- |  | ------------------
|Enhanced scans |  | approx. 28 million
|Market size    |  | over £1.1 billion 
|No. cameras    |  | over 15,000       

Radiopharmaceutical imaging provides metabolic and functional information about
diseases such as stroke, dementia, coronary artery disease and cancer that
complements anatomical imaging such as CT or MRI. Radiopharmaceutical imaging
always requires the use of a radiolabeled medical diagnostic product, which
binds to and accumulates in the cells or tissues being studied, and the image
is obtained with the aid of a gamma camera.

Recent innovations in radiopharmaceutical imaging enable the visualization of
precise cellular activities and subtle changes in organ function, such as
changes in brain function due to Parkinsonism.

The latest advance in radiopharmaceutical imaging is positron-emission
tomography (PET). PET, an advanced molecular imaging technique, can provide
images of the entire body and visualizes biochemical events at the cellular
level. It is an extremely sensitive technique for the early detection of tumors
and metastases, and PET procedures are now reimbursed by Medicare in the US for
seven types of cancer. The clinical application of PET technology is a rapidly
growing emerging market, with around 300,000 procedures performed in the US in
2002. Continued advances in instrumentation and improvements in PET chemistry
could expand its use into other significant markets, e.g. the management of
neurological conditions such as Alzheimers disease.

Another significant development is the advent of compound modality instruments
combining high-resolution CT images of the anatomy with low-resolution
functional (PET or single photon emission computed tomography (SPECT)) images
during parts of the same imaging procedure. These enable more accurate localization of disease and assist the planning of
surgical interventions and radiotherapy. Such developments in so-called fusion
imaging are expected to fuel the growth of both CT and PET imaging.

Ultrasound medical diagnostics

|                |  |                    
|--------------- |  | -------------------
|Total scans     |  | approx. 140 million
|Enhanced scans  |  | approx. 0.5 million
|Market size     |  | over £10 million   
|No. instruments |  | over 150,000       

Ultrasound is used extensively by both hospital and office-based cardiologists
to evaluate patients with known or suspected coronary artery disease. The vast
majority of cardiac patients are screened by ultrasound, and in 2002 over 25
million ultrasound scans of the heart were performed throughout the world.
However, results are often equivocal with patients frequently referred on to
more reliable and expensive techniques (e.g. CT and MRI).

Only a fraction of the ultrasound scans currently use a medical diagnostic
product, the primary use being to improve the assessment of heart wall motion
through endocardial border delineation, or visualization of the surface of the
heart muscle. The true utility of ultrasound in cardiology could be realized
with the visualization of myocardial perfusion. This will require advances in
instrumentation along with advance ultrasound diagnostic products, in order to
obtain a reliable and robust imaging procedure. In radiology,
contrast-enhanced ultrasound has the potential to differentiate between benign
and malignant tumors in various tissues. Developments such as these would
expand the ultrasound medical diagnostics market.

Radiotherapy market

The most significant therapeutic market for radioisotopes is prostate
brachytherapy, a minimally invasive outpatient procedure in which radioactive
iodine or palladium seeds are implanted within the prostate gland to irradiate
the tumor. The mounting clinical evidence supporting the efficacy of this
treatment was further underpinned in 2002 through two important studies, one
relating to the treatment of high-risk patients with palladium-103 seeds in
combination with external beam

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radiation, and the other demonstrating the
benefits of Amershams RAPID Strand iodine-125 delivery system.

In the US, around 25% of men presenting with early stage prostate cancer are
treated with brachytherapy seed implants. Slower market growth and increased
competition, with the number of competitors rising from two in 1998 to 14 in
2002, have resulted in significant pricing and market share pressure. In 2002,
the US Medicare reimbursement system set a fixed cost for brachytherapy
procedures and we expect further changes which may intensify price pressures to
take effect in 2003.

Brachytherapy is gaining acceptance in Europe, and while only a small
percentage of early stage prostate cancer patients currently receive seed
implants, the market has substantial development potential. See Recent
Developments in Item 4 where we announce the merger of our brachytherapy
business with the urology business of Galil Medical to create a stand-alone
marketing company.

Radiolabeled monoclonal antibodies are being developed for the treatment of
several types of cancer. The antibodies target specific tumor cells and then
attach to them, allowing the radioactive component to destroy tumor cells while
sparing the surrounding healthy cells. 2002 saw the first of these compounds
licensed by the FDA for the treatment of non-Hodgkins lymphoma patients who
have failed to respond to previous therapies.

Other radiotherapy products include strontium-89, which can target growing bone
cancers and help to alleviate pain, and iodine-131 for the treatment of thyroid
tumors.

Business Environment

The importance of early and accurate diagnosis of disease as a critical first
step to effective treatment has been understood by physicians for centuries.
Growing awareness of this need amongst patients, technological advances in the
use of electronic scanning for in vivoimaging and the aging of populations in
North America, Europe and Japan, are stimulating a significant increase in the
use of diagnostic techniques.

Our extensive distribution network of Amersham owned companies around the
world, and multiple distribution arrangements into other countries, mean that
we are well placed to serve this growing market. Worldwide spending on
healthcare is expected to continue to increase over coming years. Growing
realization by governments and healthcare providers, who fund the majority of
the healthcare cost, that targeted treatments at well diagnosed disease can
show cost efficiency over more generalized treatment is also contributing to
growth in the diagnostic sector.

In the radiotherapy market, the widespread prevalence of prostate cancer
amongst men over 50 is becoming widely known and the need for early
intervention is increasingly understood. Effective, proven alternatives to
radical surgery are becoming accepted in most markets as a legitimate form of
disease management in this category.

Products

X-ray Imaging

In 1961, our Health business introduced our first internally developed ionic
X-ray contrast product. The key breakthrough for the contrast media market and
for Amersham came in 1982 with Amershams introduction of Omnipaque, a highly
stable non-ionic contrast product with safety and tolerance for a wide range of
diagnostic applications. An ionic substance is one which dissociates into
electronically charged particles when placed in solution, while conversely, a
non-ionic substance remains electrically neutral.

Second generation, non-ionic products have fewer adverse effects and, due to
reduced patient movement during the procedure, better imaging capabilities than
ionic products. The non-ionic contrast market is expected to continue to grow,
as a result of an increase in the number of diagnostic procedures driven by
population growth, increasing scanner installations, changes in

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medical
practice including the need for good diagnostic information prior to the use of
new therapeutic products.

Omnipaqueis Amersham Healths largest selling imaging product with sales for
2002 of £222 million, up 6% on 2001 at constant exchange rates. It is also the
worlds largest selling in vivodiagnostic imaging product. The active
substance in Omnipaqueis iohexol, which is the product of several complex
chemical production steps. In addition, Amersham Health has licensed this
product to Daiichi and Schering to whom Amersham sells bulk iohexol for
manufacture into finished Omnipaque for selling into Japan and parts of Europe.

In 1996, Amersham Health launched a third generation non-ionic X-ray contrast
product, Visipaque,which has the same isomolality (concentration) as human
blood. This isomolality and its non-ionic structure means it offers a greater
degree of safety and comfort to patients in certain procedures. In 2003, new
clinical data have been released indicating that Visipaque may offer better
utility and renal safety in select high risk patients. Worldwide sales of
Visipaquein 2002 grew by 18% at constant exchange rates to £91 million
compared to 2001.

Magnetic Resonance Imaging (MRI)

Omniscanis Amersham Healths leading MRI product and is a non-ionic
gadolinium-based contrast medium. The benefits of non-ionic over ionic
products have been less significant in MRI than in X-ray imaging; however, the
non-ionic nature of Omniscanmakes it a potentially safer and more effective
contrast medium, particularly in procedures requiring rapid injection of high
doses such as MR angiography and whole body imaging. Omniscanwas developed
initially for CNS (central nervous system) indications, but new indications are
being approved in an increasing number of countries, including whole body and
pediatric indications. Amersham Health
has approval for body indications in 18 countries in Europe, and in the US,
Canada, parts of Latin America and Japan. The introduction of pre-filled
syringes has made application of the product easier for those administering the
product and safer for patients. Sales of Omniscanin 2002 were £96 million, up
17% on 2001 at constant exchange rates.

Radiopharmaceutical Imaging

Myoviewis Amersham
Healths advanced technetium99m labeled heart imaging
product. It is approved in all major markets for the diagnosis and
localization of myocardial ischemia and / or infarction. Myoviewoffers a more
convenient preparation and faster imaging time than any other technetium heart
imaging product and is continuing to increase its market share. Sales of
Myoview in 2002 were £133 million, up 26% on 2001 at constant exchange rates.

Amersham Health also produces Ceretecfor the imaging of blood flow in the
brain and for localizing areas of infection, and an extensive range of generic
nuclear imaging products. In 2002 sales of Ceretec amounted to £21 million.

In September 2000, Amersham Health launched DaTSCAN, a new diagnostic product
for Parkinsons disease, in Europe. This represents an important step in
Amershams evolution towards the commercialization of disease-specific
molecular diagnostic products. Approximately 1 million people across Europe
suffer from Parkinsons disease, with many new cases arising each year. This
debilitating neurological disorder occurs due to a significant decrease in a
key chemical transmitter in the brain, which commences several years before
symptoms are visible. DaTSCANspecifically identifies the loss of the key
chemical transmitter and hence can determine the patients clinical outcome.
For the first time, patients and physicians are able to objectively define the
presence of Parkinsons disease, distinct from Essential Tremor which has
similar symptoms but a very different treatment regime, minimizing the
potential for misdiagnosis. Sales of DaTSCAN in 2002 were £3 million.

Ultrasound

In January 2002, Amersham Health gained exclusive rights to Optison, the first
of a new class of ultrasound products, which shows a robust capability to image
the endocardial borders of the heart. These rights include the markets of
North America, Europe, Latin America and much of Asia, excluding Japan. This
key entry into the emerging ultrasound market has established

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Amersham in a
leading market position in a short period of time. Amersham has established a
specialized Optison sales team whose objective is to educate the medical
community on the advantages of this new diagnostic tool.

Sonazoid

In the US and Europe, myocardial perfusion has been the primary target market
for the development of Sonazoid, a third generation ultrasound product. The
use of ultrasound for this indication has been limited by the slow development
of sufficiently robust imaging procedures which replaces advanced ultrasound
equipment. Therefore, although Sonazoid has shown promising safety data, a
decision has been taken to suspend work in the US and Europe and to continue to
focus on Optison, which is marketed for improved visualization of the surfaces
of the heart muscle. In Japan, the development of Sonazoid with Daiichi
continues. The first use of Sonazoid in Japan will be established in the liver
disease market.

Radiotherapy

Amersham Healths leading radiotherapy products are OncoSeedand the
proprietary RAPID Strand, which are surgically implanted in the prostate gland
for the treatment of early stage prostate cancer. Usually conducted as an
outpatient procedure, treatment with these seed implants has demonstrated
comparable efficacy to prostatectomy and external beam radiation therapy, with
lower complications of impotency and incontinence in certain patient groups. We
have maintained our market leadership in this area through a time of greatly
increased competition, with the only iodine product on the market with more
than 10 year patient survival data. In November 2000, we added the leading
palladium brachytherapy seed in the US, TheraSeed, to our portfolio via a
distribution agreement with Theragenics. In June 2001, our
Health business introduced EchoSeed, a unique seed implant with enhanced
visualization under ultrasound. EchoSeeds patented groove design, in
combination with conventional ultrasound imaging, allows the physician to see
more seeds during the implant procedure, thus facilitating optimal placement in
the prostate. Sales of all seeds in 2002 were £50 million, down 10% from 2001,
at constant exchange rates. Amersham Health also manufactures and sells
Metastron, which provides pain relief for cancer patients with bone
metastases.

Production

Production facilities and sources

Our Health business synthesizes bulk material (iohexol, iodixanol, gadodiamide,
iopentol) for X-ray and MRI contrast media at our production facilities at
Lindesnes, Norway.

The finished X-ray and MRI products are formulated and packaged at its
facilities in Oslo, Norway in Cork, Ireland and in Shanghai, China. Production
also occurs under contract manufacture agreements with third parties.

Daiichi Pharmaceutical Co., Ltd. (Daiichi) is licensed to process iohexol
into Omnipaqueand gadodiamide into Omniscanin Japan. Schering AG
(Schering) is licensed to process iohexol into Omnipaquefor sale in certain
European countries.

In 2001, we expanded primary production facilities at our Lindesnes plant in
Norway as worldwide demand for X-ray contrast media continues to grow. In June
2002, we approved a new £47 million investment at Lindesnes to source increased
volumes of a significant intermediate for contrast media production, to be
completed in 2005. Secondary manufacturing capacity was also increased with
the opening in September 2002 of an extension to our secondary manufacturing
facility in Cork, Ireland.

We produce Myoviewand Ceretecat our facility in Gloucester, UK, for
worldwide distribution. Our production facility in Oslo was approved for
manufacturing of Myoviewas a second supplier in May 2002.

Our primary manufacturing plant and distribution center for nuclear imaging
products in the US, and our only production site for RAPID Strand, is located
in Arlington Heights, Illinois, near

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OHare Airport, which permits rapid
distribution throughout the entire US marketplace. Product manufacturing also
takes place in South Plainfield, New Jersey. Utilizing three cyclotrons in the
US, it produces numerous radiopharmaceuticals for the North American market.

We produce OncoSeed,Metastronand technetium generators and other
radioisotopes used in imaging at our manufacturing site in Amersham, UK.
DaTSCAN, another radiopharmaceutical product, is produced in our production
unit in Eindhoven, Netherlands. Production facilities are currently been
upgraded to secure future increase in supply.

At the end of 2000, we announced our intention to close our nuclear
manufacturing facility in Saluggia, Italy. This closure is expected to occur
during 2003.

Raw Materials

Radioactive isotopes used in the manufacture of certain nuclear imaging
products are particularly essential to the operation of Amersham Healths
business. In addition, the manufacturing processes of X-ray imaging products
require significant quantities of iodine. Amersham Health utilizes suppliers
based in Chile and Japan to ensure the supply of this essential raw material.
Our manufacturing operations require a wide variety of raw materials,
electronic and mechanical components, chemical and biochemical materials, and
other supplies, some of which are occasionally found to be in short supply. We
have multiple commercial sources for most components and supplies but are
dependent on single sources for a limited number of such items, in particular
certain radioactive isotopes.

Marketing and Distribution

X-ray Imaging

Our Health business markets and distributes our X-ray imaging products through
licensees, subsidiaries, distributors and local agents.

We utilize our own subsidiaries to market Omnipaque(iohexol) in most European
countries, the US and Canada. We use Sanofi Synthelabo and Inaltec as
distributors in Central and South America. In some large markets in Europe
and in Japan, we license major companies to market Omnipaque. We sell iohexol
in bulk to our licensees. In addition, we receive royalty payments based on the
licensees final sales of Omnipaque .

Amersham Health has granted Schering AG, a German pharmaceutical company, a
non-exclusive license to formulate and sell Omnipaquein certain countries,
including Germany. The license agreement with Schering does not extend to
future X-ray imaging products of the Group.

Our Health business sells iohexol to Daiichi, a major Japanese pharmaceutical
company. We have a license agreement for Omnipaquepursuant to which Daiichi
has the rights to formulate and market Omnipaquecontrast media in Japan. In
addition, Daiichi has a separate R&D agreement with us for contrast media
products (excluding nuclear medicine and magnetic resonance imaging products),
which gives Daiichi an option to acquire sole rights to produce and sell such
new products in Japan.

Visipaqueis marketed by Amersham Health in all major European countries.
Visipaquewas launched in the US in 1996 and is marketed by Amersham Healths
US subsidiary. Visipaque is marketed in Japan by Daiichi.

In the US, Amersham Health markets directly to end-users. We distribute both
directly to end-users and through wholesalers. We continue to be the market
leader in the US for X-ray contrast media.

In October 1998, we renewed a five-year agreement with Novation, the supply
company of two healthcare alliances comprising hospitals and community health
centers covering a third of the US market. The agreement enables us to supply
Novation customers with X-ray and MRI contrast media products. In December
2000, this agreement was extended for two years through March 2005.

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We invest in end-user support programs, such as advanced educational programs
in radiology, scientific research and publications. Our Health business is
also involved in the development of new packaging systems for simpler and safer
administration of contrast media to the patient, for example pre-filled
syringes, see Products  MRI.

Magnetic Resonance Imaging

Our Health business currently markets Omniscanin several countries through
our own distribution network. Omniscan was launched in Japan in June 1996
through our licensee, Daiichi Pharmaceutical.

Under a licensing agreement with Schering, the parties have granted each other
a non-exclusive worldwide license to develop, produce and market existing and
future MRI contrast media which are covered by either partys patents.
Schering also has the right to co-market certain future MRI contrast media
developed by us. The agreement provides for the payment of certain financial
consideration by the Group to Schering.

Ultrasound

In May 2000, Amersham Health and Mallinckrodt announced a major intellectual
property settlement giving Amersham Health a $10 million upfront license fee
and joint access to Mallinckrodts Optison ultrasound contrast agent. We also
agreed to collaborate on further joint development and commercialization of
Mallinckrodts Optison and of our Sonazoid. In 2001,
we agreed with Tyco Inc, the new owners of Mallinckrodt, to terminate this
agreement and from January 2002, we obtained full rights to revenues from
Optison worldwide outside Japan and took on the sole responsibility for and
costs of further ultrasound developments and marketing and distributing this
product.

Daiichi has the option to market the Groups new ultrasound imaging products,
excluding Optison, in Japan. Daiichi exercised its option to market the
Groups ultrasound contrast medium Sonazoidin Japan in March 1998.

Radiopharmaceutical Imaging

The principal customers for Amersham Healths radiopharmaceutical imaging
products are nuclear medicine doctors and their related support staff. In
addition, promotional activity is aimed at doctors who refer their patients for
nuclear medicine procedures. We have a substantial sales and marketing
organization which is able to maintain regular contact with all significant
nuclear medicine centers in all major markets.

We believe that we have the broadest commercial and manufacturing
infrastructure within the nuclear medicine industry. A major presence in the
principal regions of North America, major western European countries and Japan
is supported with active sales organizations in each region. Strategically, we
have positioned ourselves as a provider of a broad range of nuclear medicine
products in each region.

The nature of Amersham Healths product portfolio places significant demands on
our infrastructure for rapid distribution of radioisotopes from our
manufacturing centers and radiopharmacies to customers.

The market place in the US represents the single largest market for
radiopharmaceuticals. With three major competitors in this market,
distribution is an important competitive factor. In contrast to the European
market, most radiopharmaceuticals in the US are channeled through commercial
radiopharmacies. Amersham Healths 30 radiopharmacies are aligned with 35
facilities owned and operated by Mallinckrodt Medical Inc. together with 122
independently operated pharmacies to provide distribution of its products
through a national network of 187 radiopharmacies.

In January 1999 Amersham Health was awarded a new three year contact to provide
Novation customers with a full range of nuclear imaging products. This
agreement was also extended, through December 2003.

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In April 1997, Amersham Health and Bracco entered into a patent licensing
agreement and an option agreement enabling us to develop, make and sell
Myoview until December 31, 1999, with an extension under the contract
manufacture option to June 28, 2002, the expiration date of the Bracco patent.
Under this agreement, Amersham Health was required to pay a royalty on gross
sales of Myoview in the US to Bracco. This royalty agreement ceased on June
28, 2002 following which no royalty became payable. Amersham continues to
manufacture certain products for Bracco under the contract manufacture option
element of the agreement.

Through NMP, our joint venture with Sumitomo Chemical Company Ltd., we have
become the leading supplier of nuclear healthcare products in Japan. NMP
supplies a wide range of radiopharmaceutical products and dosage forms
throughout Japan. As is the case in other regions of the world, the most
important single application for radiopharmaceuticals in Japan has been the
nuclear cardiology imaging segment. With these products, including Thallium 201
and Myoview, our Health business is able to meet a wide range of customer
demands for heart imaging. Production in Japan also includes radioisotope
product forms specific to the Japanese market. Distribution in Japan is
directed from two manufacturing facilities, one near Tokyo and one in the Osaka
region.

Together with NMP, we have achieved a leadership position in the
radiopharmaceutical segment of the nuclear medicine market through a
combination of organic business growth, acquisition, alliances and joint
ventures.

Therapy

In May 2002, Amersham Health was awarded the Novation contract for
brachytherapy seeds to add to our portfolio of contracts with group purchasing
organizations. The Novation award was a three year sole-source agreement to
provide its customers with a full line of brachytherapy products including
OncoSeed, RAPID Strand, EchoSeed and TheraSeed.

Competition

We operate in a highly competitive market place against other international
pharmaceutical companies and specialists in the manufacture and distribution of
contrast products. Due to the high cost of developing new products and of
maintaining distribution channels internationally, the industry has
rationalized to a core group of 5 major companies. Ownership changes in recent
years (e.g. Tycos acquisition of Mallinckrodt and Bristol Myers Squibbs
acquisition of Duponts pharmaceutical and diagnostics business) have assisted
an industry drive to improve profitability after a history of price discounting
in the 1990s. As a major player in the industry, we maintain our drive to
maximize revenues through product differentiation, line extensions, market
leadership and premium services.

The US patent for Omnipaqueexpired on December 31, 1999 and Omnipaquehas
been exposed to generic competition in the US market since that time. However,
sales of the product continue to grow due to market demand.

The MRI market continues to be very competitive with a few companies actively
developing new MRI contrast products. While the ultrasound contrast media
market is still in development, several companies in addition to Amersham
Health are actively developing ultrasound contrast products.

The nuclear imaging market also continues to be highly competitive,
characterized by the application of advanced technology. There are numerous
companies which specialize in, and a number of larger companies which devote a
significant portion of their resources to the development, manufacture, and
sale of products which compete with those manufactured or sold by us. Many of
our competitors are well-known manufacturers with a high degree of technical
proficiency. In addition, competition is intensified by the ever-changing
nature of the technologies in the industries in which we are engaged. The
markets for our products are characterized by specialized manufacturers, which
often have strength in narrow segments of these markets. While the absence of
reliable statistics makes it difficult to determine precisely our relative
market position in our industry segments, Amersham Health believes we are one
of the principal manufacturers in our fields, marketing a broad line of nuclear
imaging and radiotherapy products.

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Distribution channels are a means of competitive advantage in the
radiopharmaceutical market. With respect to our nuclear imaging and
radiotherapy products, the requirements for local language labeling, when
combined with relatively small production volumes and short half-life isotopes,
support Amersham Healths strategy of multiple production sites, which
management believes, gives us a considerable competitive advantage. Although
different market dynamics exist in Europe compared to North America, a small
number of city or regional radiopharmacies serving several hospitals are
beginning to be established in Europe.

The US market for brachytherapy seeds in prostate cancer became increasingly
competitive during the year, with generic producers continuing to erode prices
in both Palladium and Iodine segments. In addition, new presentations such as
pre-loaded needles and stranded products were added to the portfolio of several
competitors.

Medicare reimbursement changes in early 2002 were introduced and will be
followed by further adjustments in 2003. The effect of these changes has been
to increase pricing awareness amongst our customers and further pressurize the
competitive pricing environment. Despite these difficulties we have maintained
our leadership position by continuing to promote the clinical benefits of our
key brands.

Research & Development

General

We are committed to the ongoing search for new products and have a track record
in bringing them successfully to market. However, R&D in the pharmaceutical
industry is both expensive and prolonged; it also entails considerable
uncertainty. The process of developing novel therapeutic drugs and contrast
products typically takes years from discovery through testing and registration
to initial product launch, although this process varies considerably from case
to case and country to country.

All potential pharmaceutical products go through two major stages of
development before a product registration can be granted: pre-clinical and
clinical. In pre-clinical testing, potential compounds are tested
comprehensively to determine whether they are safe to administer to humans.
This stage of development involves investigating the effects of the compound on
various bodily functions as well as studying its absorption, distribution,
metabolism and excretion in selected species.

Clinical trials and full product development will often be carried out on a
joint basis in more than one country to optimize the rate of commercialization
globally. Clinical development of a potential pharmaceutical product falls
into the following three phases:

|      |  |                                                                                                                                                                                               |  |                                                                                                                                                                                                                 
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Phase |  | Description                                                                                                                                                                                   |  | Purpose                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                               |  |                                                                                                                                                                                                                 
|I     |  | The first trials of a new
drug in humans. The drug
is given for a short
period to a small number
of healthy volunteers or
patients suffering from
the disease for which the
drug is intended. |  | To gain preliminary
elucidation of the human
pharmacological
properties and safety of
the drug/imaging agent.                                                                                                   
|      |  |                                                                                                                                                                                               |  |                                                                                                                                                                                                                 
|II    |  | Pilot studies, usually
open trials on a small
number of patients                                                                                                                              |  | To determine if the
drug/imaging agent has
the intended effect, and
to approximate the
therapeutic dose range.                                                                                                  
|      |  |                                                                                                                                                                                               |  |                                                                                                                                                                                                                 
|III   |  | Expanded trials                                                                                                                                                                               |  | To determine the efficacy
of the drug/imaging agent
and the pattern and
frequency of the side
effects, as well as to
compare the drug with
established methods of
treatment or standard
treatments or diagnosis.

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R&D activities in medical imaging are conducted principally in Oslo, Norway;
Amersham, UK; Princeton and Durham, US; Munich, Germany; Malmo, Sweden and by
NMP (50% owned) and Daiichi (technical and commercial relationship) in Japan.
Daiichi and NMP perform additional clinical trials necessary to develop
products for the Japanese market.

In the year ended December 31, 2002, expenditure on imaging and
radiotherapeutic R&D (excluding that undertaken by NMP) amounted to £95.1
million, 10% of Health turnover.

The following table summarizes the status of Amersham Healths key products
either (i) under development, (ii) seeking new medical indications or (iii)
recently marketed in certain territories:

|             |  |                 |  |                                                                               |  |                                                                                      |  |              |  |                                                                                      
|------------ |  | --------------- |  | ----------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------ |  | ------------ |  | -------------------------------------------------------------------------------------
|             |  |                 |  | Application                                                                   |  | Development Status                                                                  
|             |  |                 |  | (not all imaging                                                              |  |                                                                                     
|Product name |  | Technology      |  | products)                                                                     |  | US                                                                                   |  | Japan        |  | Europe                                                                               
|             |  |                 |  |                                                                               |  |                                                                                      |  |              |  |                                                                                      
|DaTSCAN     |  | Nuclear imaging |  | Dopamine
transporter imaging
for Parkinsons
disease                          |  |                                                                                     |  | Phase II     |  | Launched Sept 2000                                                                   
|             |  |                 |  |                                                                               |  |                                                                                      |  |              |  |                                                                                      
|Omniscan    |  | MRI             |  | MR Angiography
Cardiac perfusion                                              |  | Both in Phase IIB                                                                    |  |             |  | Cardiac perfusion
in Phase IIB                                                       
|             |  |                 |  |                                                                               |  |                                                                                      |  |              |  |                                                                                      
|Myoview     |  | Nuclear imaging |  | Cardiac perfusion
imaging under
pharmacological
stress                        |  | Approved Nov 2001                                                                    |  | ***          |  |                                                                                     
|             |  |                 |  |                                                                               |  |                                                                                      |  |              |  |                                                                                      
|Myoview     |  | Nuclear imaging |  | Detection of
suspected breast
tumors following
mammography                    |  |                                                                                     |  |             |  | Approved in UK July
2001. Registration
in rest of Europe
ongoing                     
|             |  |                 |  |                                                                               |  |                                                                                      |  |              |  |                                                                                      
|Myoview     |  | Nuclear imaging |  | Detection and
monitoring of left
ventricular
function                         |  | Approved Feb 2003                                                                    |  | ****         |  |                                                                                      
|             |  |                 |  |                                                                               |  |                                                                                      |  |              |  |                                                                                      
|NeoTect*    |  | Nuclear imaging |  | Lung cancer                                                                   |  | Marketed  rights
transferred back to
Schering in 2002                               |  |             |  | Approved December
2000                                                               
|             |  |                 |  |                                                                               |  |                                                                                      |  |              |  |                                                                                      
|Sonazoid    |  | Ultrasound      |  | Heart perfusion                                                               |  | Phase II completed.
Entry into Phase
III suspended                                   |  |             |  | Phase II completed.
Entry into Phase
III suspended                                   
|             |  |                 |  |                                                                               |  |                                                                                      |  |              |  |                                                                                      
|Sonazoid    |  | Ultrasound      |  | Radiology (liver)                                                             |  | Phase II completed
April 2002.
Further development
terminated for
commercial reasons |  | **
Phase III |  | Phase II completed
April 2002.
Further development
terminated for
commercial reasons.
|             |  |                 |  |                                                                               |  |                                                                                      |  |              |  |                                                                                      
|Clariscan   |  | MRI             |  | Cardiac function/perfusion,
coronary
angiography,
angiogenesis, tumor
imaging |  | Terminated Jan 2002                                                                  |  |             |  | Terminated Jan 2002                                                                  

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|             |  |                     |  |                                            |  |                               |  |           |  |                              
|------------ |  | ------------------- |  | ------------------------------------------ |  | ----------------------------- |  | --------- |  | -----------------------------
|             |  |                     |  | Application                                |  | Development Status           
|             |  |                     |  | (not all imaging                           |  |                              
|Product name |  | Technology          |  | products)                                  |  | US                            |  | Japan     |  | Europe                       
|             |  |                     |  |                                            |  |                               |  |           |  |                              
|Metastron   |  | Radiotherapy        |  | Metastatic bone
pain relief                |  | Marketed                      |  | Phase III |  | Marketed in most
countries   
|             |  |                     |  |                                            |  |                               |  |           |  |                              
|Helispin    |  | MRI                 |  | Functional lung
imaging                    |  | Phase II                      |  |          |  | Phase II                     
|             |  |                     |  |                                            |  |                               |  |           |  |                              
|NC100668     |  | Nuclear Imaging     |  | Deep Vein
Thrombosis/Pulmonary
Embolism    |  | Phase II                      |  |          |  | Phase II                     
|             |  |                     |  |                                            |  |                               |  |           |  |                              
|FDG          |  | PET imaging         |  | Oncology,
cardiology and
neurology imaging |  | Technology
assessment ongoing |  | Phase III |  | Technology
assessment ongoing
|             |  |                     |  |                                            |  |                               |  |           |  |                              
|Bexxar***** |  | Radio-immunotherapy |  | Treatment of
Non-Hodgkins
Lymphoma        |  |                              |  |          |  | Phase III                    



---

|*     |  | Trademark owned by Schering AG and licensed exclusively to Amersham                         
|----- |  | --------------------------------------------------------------------------------------------
|     
|**    |  | Marketing partner in Japan is Daiichi Pharmaceutical                                        
|     
|***   |  | Pharmacological Stress agents are not approved in Japan                                     
|     
|****  |  | Myoviewlicense in Japan is of a broad scope, which can allow assessment
of cardiac function
|     
|***** |  | Trademark owned by Coulter Pharmaceutical, Inc..                                            

Research & Development partnerships

Amersham Health looks forward to contributing to the advancement of medicine.
Our research efforts and the collaborations we are forging are designed to
bring us closer to achieving this goal, and to help us develop powerful new
products.

Bexxar (tositumomab and
Iodine I131 tositumomab)

In October 2001, we announced an agreement to develop and market a novel
radioimmunotherapy in Europe for the treatment of Non-Hodgkins Lymphoma (NHL).
This agreement is with the Corixa Corporation (Corixa) and covers the product
which is known in the US as Bexxar. Under the terms of the agreement, Corixa
and Amersham Health cooperate with the aim of registering the product in Europe
for the treatment of certain types of NHL, a cancer of the white blood cells.
Corixa is responsible for generation of clinical trial data to support
registration in Europe while Amersham Health is responsible for manufacture and
sale of radiolabeled antibody in the territory. There are currently over
40,000 patients newly diagnosed with NHL in the five largest European countries
every year.

General Electric Medical Systems

In November 2001, we announced a collaborative agreement with General Electric
Medical Systems (GEMS) in the field of production of imaging agents for
Positron Emission Tomography (PET). PET is a rapidly growing nuclear imaging
modality which is currently used primarily in the diagnosis of cancer and
monitoring of response to cancer therapies. PET is reimbursed by insurance
companies for a number of indications in cancer in the US. PET is also used in
and reimbursed by insurance companies for the diagnosis of certain types of
heart problems. In the research setting PET has shown great promise in the
diagnosis of a number of neurological diseases although currently no PET
technique is reimbursed by insurance companies for such indications in either
the US or Europe.

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Currently the manufacture of the radioactive substances used in PET imaging is
a relatively complex process. The complexity of the manufacturing process and
lack of GMP may impede the development of new, patent protected PET ligands in
the future. The collaboration between GEMS and Amersham Health is designed to
greatly simplify and improve the manufacture of a wide range of PET imaging
agents and thus to facilitate the overall growth of PET as a clinical imaging
modality and to give both GEMS and Amersham Health a strong basis from which to
compete in this market. In this collaboration, GEMS will develop a mechanized
process which manufactures PET agents, probably to fully certified GMP
standards, using proprietary chemistry belonging both to GEMS and Amersham
Health. In turn, Amersham Health will invent and own important new chemistries
for use in this automated system and will develop new PET imaging agents for
sale. The first two agents to be produced on this new system are anticipated
to be fluorodeoxyglucose,
FDG, and Fluoro-DOPA (F-DOPA). FDG is the most widely used PET imaging agent
and is currently used primarily in the diagnosis and monitoring of cancer. The
use of FDG is reimbursed by insurance companies in the US. F-DOPA may be used
in the diagnosis and monitoring of neurological diseases such as Parkinsons
disease. It is anticipated, but not guaranteed, that other PET imaging agents
will be developed that utilize this novel system.

Imanet

In early 2001, we established Imanet, an Imaging Research network designed to
exploit our capability in spin signal technology (SST) and Positron Emission
Tomography (PET). Spin signal technology is an enhanced form of magnetic
resonance imaging (MRI), based on bombarding inert gases such as helium and
xenon with high power lasers. These capabilities were increased by our 75%
holding in Imaging Research Solutions Ltd (IRSL) which owns assets acquired
from the UK Medical Research Council (MRC) in February 2001. Imanet is
pursuing collaboration agreements with leading pharmaceutical companies who are
seeking to license SST and PET products for use in their R&D activities. In
early 2002 the first significant collaboration with Pfizer was announced. This
collaboration provides a basis for Amersham Health to access new molecules that
have the potential to be developed into in vivoimaging agents from Pfizers
extensive library of novel chemical compounds while Pfizer benefits by using
Amershams PET technology to make faster decisions on its potential therapeutic
development candidates.

On May 8, 2002, the Company announced a further stage of development with the
expansion of Imanet through the formation in Sweden of Uppsala Research
Imaging Solutions AB (URIS). URIS is a joint venture owned 75% by Amersham
Health and 25% by Uppsala University Holdings (UUH) and is formed out of the
Uppsala PET (Positron-Emission Tomography) Centre, which has a worldwide
reputation for its academic and commercial excellence in PET.

On February 27, 2003, the Company announced a third partnership that further
strengthens our Imanet PET network. By establishing a new PET imaging business
within the facilities of and in collaboration with the Turku PET Center in
Finland, Amersham now is able to bring the expertise of this world-class PET
center into the overall Imanet network. The addition of the Turku PET Center
now allows Amersham an expanded capacity and capability to partner with
pharmaceutical firms to assist them in developing their therapeutic molecules
through the use of PET.

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Patents and Trademarks

We have obtained patents in many countries covering significant products
developed through our R&D activities. Patent protection is available in the US,
Western Europe, Japan and most other developed countries for new products, as
well as for pharmaceutical formulations and manufacturing processes.

We believe that we continue to have patent protection for our important
existing products in our major markets and, in addition, have obtained patents,
or anticipate that patents will be granted, for a majority of new compounds and
compositions which are under development.

Patent applications will normally be filed to protect a compound or composition
at an early stage in the development of diagnostic and therapeutic products.
The life of a patent is typically 20 years from the time of filing. With
effect from June 8, 1995, the US Patent Law (which had previously been a
notable exception to this norm) was amended such that the term of a US patent
will also be 20 years from the time of filing, (US patents in force on June 8,
1995 will have a term which is the greater of 20 years from filing or 17 years
from grant). By the time a new drug is launched in the market, it may have a
significantly shorter patent protection due to the length of the R&D period and
the time taken to obtain the necessary marketing approvals from national
regulatory authorities. In major markets, such as the European Economic Area
(EEA) (which includes the EU member countries, plus Norway, Iceland and
Liechtenstein), Japan and the US, an extension to the term of protection may be
granted for medical products; thereby taking some account of the marketing
delay arising from compliance with regulatory requirements.

Within the EEA a Supplementary Protection Certificate (SPC) may be granted
for a period of up to 5 years to ensure an effective term of protection of up
to 15 years based on the first product authorization within the EEA. In the US
and Japan the patent term is extended based on the time elapsed during the
product registration procedure. The maximum extension is five years, and in
the US the extension given is typically 2-3 years. Amersham Health will
generally file applications for SPCs and extensions whenever possible.

In addition, we have obtained, or intend where possible to apply for, patents
relating to all new technologies and compounds, which we are developing for our
businesses. Finally, with Amersham Healths deepening disease expertise, we
anticipate filing patents for diagnostic methods of use that encompass
methods and processes for the diagnosis and monitoring of disease.

Amersham Health seeks to obtain trademark protection for its products in its
major markets. Trademark protection in some countries depends upon whether the
trademark has remained in use. In other countries, trademark protection
continues as long as the mark is registered subject to cancellation. A
trademark generally assumes increasing importance when the patent on a product
expires. We protect our trademarks vigorously against infringements.

40



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The following table sets forth the patents and patent expiration dates on
significant medical imaging products held by Amersham Health in its major
markets:

|                                       |  |                 |      |       |  |         |      |         |  |        |      |       |  |  |      |   |  |  |      |  
|-------------------------------------- |  | --------------- | ---- | ----- |  | ------- | ---- | ------- |  | ------ | ---- | ----- |  |  | ---- | - |  |  | ---- | -
|                                       |  | Expiration date
|                                       |  |                
|                                       |  | United          |      |       |  |         |      |         |  |        |      | Great |  |  |      |  
|Products                               |  | States          |      | Japan |  | Germany |      | Britain |  | France
|                                       |  |                 |      |       |  |         |      |         |  |       
|Visipaque                             |  |                 |      |       |  |         |      |         |  |        |      |       |  |  |      |   |  |  |      |  
|(a) Chemical substance (iodixanol)     |  |                 | 2011 |       |  |         | 2008 |         |  |        | 2008 |       |  |  | 2008 |   |  |  | 2008 |  
|(b) Formulation                        |  |                 | 2011 |       |  |         | 2011 |         |  |        | 2011 |       |  |  | 2011 |   |  |  | 2011 |  
|Omniscan                              |  |                 |      |       |  |         |      |         |  |        |      |       |  |  |      |   |  |  |      |  
|(a) Chemical substance (gadodiamide)   |  |                 | 2007 | @     |  |         | 2005 |         |  |        | 2007 | @     |  |  | 2007 | @ |  |  | 2007 | @
|(b) Pharmaceutical formulation         |  |                 |     |       |  |         | 2009 |         |  |        | 2009 |       |  |  | 2009 |   |  |  | 2009 |  
|Ceretec                               |  |                 |      |       |  |         |      |         |  |        |      |       |  |  |      |   |  |  |      |  
|(a) Propylene amine oxime Tc
complexes |  |                 | 2003 |       |  |         | 2004 |         |  |        | 2004 |       |  |  | 2004 |   |  |  | 2004 |  
|(b) Chemical structure                 |  |                 | 2006 |       |  |         | 2006 |         |  |        | 2006 |       |  |  | 2006 |   |  |  | 2006 |  
|(c) Cell labeling use                  |  |                 |     |       |  |         | 2007 |         |  |        | 2007 |       |  |  | 2007 |   |  |  | 2007 |  
|Myoview                               |  |                 |      |       |  |         |      |         |  |        |      |       |  |  |      |   |  |  |      |  
|(a) Tc complex patent                  |  |                 |     |       |  |         | 2008 |         |  |        | 2008 |       |  |  | 2008 |   |  |  | 2008 |  
|(b) Tetrofosmin specific               |  |                 | 2010 | (1)   |  |         | 2009 |         |  |        | 2009 |       |  |  | 2009 |   |  |  | 2009 |  



---

|*   |  | Term of protection extended from 2003 to 2008 in Germany, Great Britain,
France and Japan                     
|--- |  | --------------------------------------------------------------------------------------------------------------
|   
|@   |  | Term of protection extended from 2004 to 2007 in the United States and
from 2005 to 2007 in France and Germany
|   
|(i) |  | Includes 16-month patent term extension (US only).                                                            

2.     Amersham Biosciences

Note: Market numbers within text represent internal company estimates unless
stated otherwise.

On March 21, 2002, the Company purchased the 45% ownership stake in Amersham
Biosciences held by Pharmacia Corporation, thereby taking 100% ownership of
Amersham Biosciences.

Business summary and environment

Amersham Biosciences is a leading global provider of systems (instruments,
reagents, consumables and software) and services used in gene and protein
research, drug discovery and development, and biopharmaceutical manufacturing.

Amersham Biosciences offers a comprehensive product range that spans the entire
drug discovery and development process. We have a proven track record of
providing high quality technology to our customers, who number approximately
50,000 in 100 countries. Amersham Biosciences has a strong, global customer
franchise, with pharmaceutical, biotechnology and agrochemical companies,
research institutes, universities and medical research centers. Our customers
include all of the top 20 pharmaceutical companies. Amersham Biosciences has a
strong track record in innovation and R&D, spending a substantial percentage of
our annual revenues on these activities. Our long-standing commitment to R&D
provides our customers with a broad range of innovative technologies and
products, including products for gene analysis, protein analysis, drug
screening, toxicology studies, clinical drug development and drug
manufacturing.

Many of Amersham Biosciences products form the basis of what we call integrated
systems. These are whole systems that enable our customers to efficiently meet
their research and manufacturing objectives. These systems consist of
equipment or instruments and reagents optimized for use with instruments and
software to analyze and link the research results.

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The Amersham Biosciences business includes two principal business streams,
discovery systems and protein separations that share activities in R&D, sales
and marketing, distribution and manufacturing. Effective January 1, 2002,
Amersham Biosciences reorganized its business streams, creating discovery
systems consisting of the former drug discovery, laboratory products, and
service, agency and other business streams, and maintaining the protein
separations business stream. Segmental reporting has been restated as
appropriate for periods prior to January 1, 2002.

Discovery systems consists of products and services in Genomics, Proteomics,
Bioassays and Informatics, while protein separations consists of products and
services in bioprocess and laboratory separations. The revenues from these
business streams are further discussed in Item 5 Operating and Financial
Review and Prospects, within the Amersham Biosciences segment.

The following is a brief background of the life sciences market and an overview
of the specific markets within which Amersham Biosciences competes.

Fifty years have passed since the discovery of the double helix structure of
DNA heralded a new era of medicine. At the beginning of the 21st century,
catalyzed by the completion of the human genome, life science continues to be
seen as a major driver towards improved healthcare for all. Having the map of
the human genome enabled life scientists to move into a new era of
understanding biological processes at the cellular level. This new precision in
biology is expected to lead to a fundamental shift in the practice of medicine,
enabling delivery of the goal of personalized medicine by facilitating better
understanding, profiling, prediction and treatment of disease. In addition to
technological advances, our knowledge-based society feeds a more informed and
responsive public who continue to expect availability of cost-effective
healthcare to improve their lives.

Research work in academia is critical for understanding the mechanisms of
disease and underpinning improved healthcare; this has been reflected by
generally stable sector funding during 2002. Government and charity spending
to support the academic segment continued to be strong with double-digit growth
in 2001. In the US, for example, the NIH budget increased by 14 per cent to
approximately $23 billion in 2002, but it is anticipated that growth in funding
in 2003 will be decreased.

Capital funding of start-up biotechnology companies has been under significant
pressure in 2002 and the first quarter of 2003, and sources of funding are now
shifting from the public capital markets to a combination of the venture
capital community and other private sources. Following the sequencing of the
human genome, the market is uncertain about where the next frontier will be
found. Companies are now turning towards functional biology, where the interest
is in deciphering what the genes and their protein products actually do. In
addition companies that previously commercialized software and genomic data
have developed new business strategies, moving from discovery companies to
therapeutic developers, e.g. Celeras acquisition of Axys Pharmaceuticals and
Millenniums acquisition of COR Therapeutics. Consolidation is likely to
continue, frequently in association with large pharmaceutical companies through
marketing alliances, to create powerful biotechnology players.

Despite the availability of far more potential targets than previously, there
has been a reduction in the number of innovative drugs being registered by
pharmaceutical companies worldwide. Escalating R&D costs are reducing
productivity and placing a greater importance on steps to limit the possibility
of failure in the later stages of development. By better understanding the
function and variation of genes and proteins in disease and health,
pharmaceutical companies will increase their opportunity of identifying
disease-relevant targets leading to better-targeted molecular drugs. In an
attempt to maximize returns, companies have refocused some of their resources
to later stage development to support life-cycle management. These companies
also faced additional pressures such as market pricing and increased generic
competition. In 2002 these significant issues were coupled with a backdrop of
global recessionary pressure, increased focus on corporate governance and
contraction of capital budgets.

Notwithstanding the global market challenges of 2002, dynamism and change
remain the hallmarks of the biosciences market.

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Overview of selected market segments for Amersham Biosciences

The market in which Amersham Biosciences competes has a worldwide value of
approximately £5 billion. We have set out selected application segments in the
table below. Customers include R&D groups within academic and clinical
research laboratories, pharmaceutical companies, biotech companies and
biopharmaceutical manufacturing groups.

|                                            |  |                  |      |                       |  |                                           
|------------------------------------------- |  | ---------------- | ---- | --------------------- |  | ------------------------------------------
|Selected application segment                |  | Market size (£m) |      | Principal competitors
|                                            |  |                  |      |                      
|Bioprocess (industrial protein separations) |  |                  | 590  |                       |  | Millipore, Merck KgaA, Tosoh
Bioscience   
|                                            |  |                  |      |                       |  |                                           
|Laboratory protein separations              |  |                  | 345  |                       |  | Bio-Rad, Applied Biosystems               
|                                            |  |                  |      |                       |  |                                           
|Genomics  sequencing                       |  |                  | 500  |                       |  | Applied Biosystems                        
|                                            |  |                  |      |                       |  |                                           
|Genomics  gene expression                  |  |                  | 400  |                       |  | Affymetrix, Agilent                       
|                                            |  |                  |      |                       |  |                                           
|Proteomics                                  |  |                  | 740  |                       |  | Applied Biosystems, Bio-Rad, Waters       
|                                            |  |                  |      |                       |  |                                           
|High throughput drug screening              |  |                  | 1200 |                       |  | Cellomics, Molecular Devices,
Perkin-Elmer

Key market drivers are the sourcing and allocation of funds in these customer
segments and the number of biopharmaceuticals in clinical trials. Total
worldwide pharmaceutical/biotech R&D expenditure increased by approximately
nine per cent in 2001; growth slowed to an estimated six per cent for leading
companies in 2002.

(GROWTH IN PHARMACEUTICAL AND BIOTECHNOLOGY R&D EXPENDITURE BAR GRAPH)

2002 company estimate.

The biosciences market is fuelled by integrated systems, instruments,
consumables and informatics, to support customers to achieve their goals faster
and more efficiently.

Increasingly, sophisticated platforms such as biochips are being applied across
genomics and are starting to enter proteomics. These technologies generate
large amounts of data in a much shorter time than previously achieved, and have
high potential in general research as well as in other applications such as in
vitroclinical diagnostics.

Biologically based drugs (e.g. insulin, monoclonal antibodies, vaccines, DNA
medicines) continue to grow in importance. Nine out of the 26 drug approvals
by the FDA during 2002 were biologics.

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Protein separations

Bioprocess

The number of biopharmaceutical candidates in clinical trials and gaining
regulatory approval has continued to increase. There are now over 100 such
biopharmaceuticals from companies such as Amgen, Eli Lilly, Johnson & Johnson
and NovoNordisk. The key purification steps in the production of these drugs
require systems, membranes and chromatography media designed and manufactured
to the highest standards.

Biotechnology drug candidates in clinical trials comprise a wide range of
compounds including anti-sense DNA, monoclonal antibodies, DNA-based gene
therapies, growth factors, interferon and vaccines. The growth rates in this
area are expected to be maintained or to rise in the future as an increasing
number of novel proteins, peptides and anti-sense drugs are brought to market
as therapeutic products. There are currently more than 500 biopharmaceuticals
in phase I, II and III clinical trials worldwide. The market growth for
bioprocess products will be underpinned by the increasing propensity of
pharmaceutical companies to look for manufacturing technologies that further
improve overall production economy. Because of the relatively large doses
required in their use, the increased number of monoclonal antibodies in later
stage development has triggered investment in manufacturing capacity to meet
the expected demand.

Growth in number of licensed biopharmaceuticals

(GROWTH IN NUMBER OF LICENSED BIOPHARMACEUTICALS BAR GRAPH)

Laboratory separations

Chromatography is one of the core technologies used in protein analysis, and,
although affected by the slowdown in capital spending on tools, the longer term
growth in this market is being fuelled by the overall market expansion in
proteomics. Laboratory chromatography techniques are also used in method
development and scale-up for biopharmaceutical manufacturing.

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Discovery systems

Genomics

The genomics market is heterogeneous and is composed of sub-segments such as
gene sequencing, gene expression and genetic variation, which are growing at
different rates.

Sequencing efforts are now increasingly focused on exploration of genetic
differences in the four nucleotide bases within, and between, a variety of
species. Technologies are being applied to improving sample preparation prior
to sequencing as well as reducing sample volumes, providing greater ease of use
and increasing overall efficiencies.

Measuring and monitoring the level to which different genes are expressed is
increasingly performed using microarray platforms with pre-arrayed nucleic
acids (biochips) or with technologies to allow researchers to prepare their own
arrays.

Tailoring of drug treatments is an important goal of personalized medicine.
Analysis of single nucleotide polymorphisms (SNPs) should facilitate a better
understanding of individual susceptibility to disease and response to drug
treatment. The market is currently very small, but with technological advances
it could show dramatic growth.

Proteomics

Proteomics  studies to discover the identity, function and interaction of
proteins in living organisms  is currently experiencing good growth. Proteins
are responsible for cellular structure, metabolism and function including
signaling and growth, and are therefore the targets of most drug discovery
efforts.

In contrast to genomics, the industrialization of proteomics is in its
infancy. Unlike DNA, proteins cannot be readily amplified to aid detection and
analysis. Also, in contrast to the 35,000 to 45,000 human genes, there may be
up to two million different types of proteins, and these have complex
differences in their three dimensional structure which affect their function.

Current trends include the drive towards integrated approaches to provide
increased sample throughput, sensitivity and accuracy. Technologies such as
microarrays are just starting to be applied for protein analysis, but are
considerably more complex than their DNA counterparts.

Bioassays

Researchers use bioassays to measure and quantify the biological processes
involved in cellular activities, metabolism and disease. Bioassays are
involved at almost every stage of the preclinical drug discovery R&D process.
Validation of target molecules, primary screening of possible drug candidates,
secondary screening to select lead candidates and finally, testing of the lead
candidates to validate their metabolic/toxicological properties are among the
hurdles that must be passed before a potential drug candidate can move into
clinical trials.

The success of primary screening approaches has now led to development of the
market for high information secondary-screening formats. Researchers are now
starting to use such formats to examine how modification of selected genes
within cells is translated into physiological changes.

Informatics

The integration of the vast amounts of data generated from increasingly large
numbers of sample studies and multiple technology platforms represents one of
the key challenges for life science research in the 21st century. While major
corporations such as IBM are becoming active in this segment, current market
needs are focused on laboratory information management systems (LIMS) which
integrate platforms, sample and reagent logistics and enable production
research by handling data from sample to end result. The LIMS market is
predicted to grow to over £0.5 billion by 2007. (Source: Frost and Sullivan).

Amersham Biosciences Business Strategy and Competitive Strengths

Amersham Biosciences vision is to enable molecular medicine in which the
genetic basis for disease will be understood, leading to earlier and more
accurate diagnosis of disease, and more effective treatment. Our strategy is to
build on our position as a leading provider of biotechnology

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systems to enable the molecular medicine revolution. Our discovery systems and
protein separations streams operate in markets representing significant
opportunities for growth. Our systems, products and services are critical
components of research into genes and proteins, the discovery and development
of drugs, and the manufacture of biopharmaceuticals. We believe that we are
well positioned with both our commercial and academic customers as a result of
the following set of competitive strengths:



| |  | The breadth of Amersham Biosciences technologies and our
comprehensive product lines span many segments of the drug discovery,
development and manufacturing processes.Amersham Biosciences offers
well-recognized branded products such as our MegaBACE DNA sequencing
system, our LEADseeker drug screening system and our Sepharose
separations media used in biopharmaceutical manufacturing.                                                           
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Our commitment to R&D, our long-standing reputation for scientific
excellence and our development of innovative products.
Amersham Biosciences has a strong record in developing, and continuing to
develop, state-of-the-art technologies, both internally and in partnership.
We expect this commitment to R&D will result in new product introductions in
2003. Our strong intellectual property portfolio, which is a vital asset,
supports our R&D efforts.
| 
| |  | Amersham Biosciences global market franchise with strong customer
relationships.
Amersham Biosciences global strengths in sales,
operations, and R&D enables us to offer our customers a complete set
of products to meet their needs. We have technology and commercial
partnerships with many of the top 50 pharmaceutical companies. We
believe that our bioprocess products are used in the production of
almost all licensed biopharmaceuticals.          
| 
| |  | Strong management team.
Amersham Biosciences has a strong management team with an average of over 15
years of experience in the life sciences industry.                                                                                                                                                                                                                                                                                                         
| 
| |  | The partnership
approach.Amersham Biosciences has a history of strategic developments through
acquisitions, investments and research alliances, as well as through
strategic partnerships with our customers. These alliances have resulted in
some of our key products and have provided us with early access to new
technologies.                                                                                                                             

Specific plans for each principal business stream are as follows:



| |  | Discovery systems.
Amersham Biosciences plans to capitalize on the continuing growth in the
drug discovery market by commercializing innovative technologies to develop
systems to enable gene and protein studies and drug screening. We have
demonstrated this by launching leading, innovative systems in each of these
areas and will continue their development with extensions into second or
third generation systems supported by informatics. We are focusing our
portfolio to capitalize on the market changes towards gene expression and
proteomics. This business stream is expected to benefit from expansion in
informatics, which Amersham Biosciences plans to develop in the two areas of
laboratory workflow software and bioinformatics to take advantage of the
increased need for data management, data integration and further analysis.
This will include the study of data across experimental domains, for example
using data for gene expression and protein expression in the same study.
Data mining tools are required for this purpose. Some but not all of these
products will be developed in Amersham Biosciences laboratories, while
others will be licensed-in through a focused licensing strategy.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Protein separations.
We are positioning ourselves to capitalize on the expanding pipeline of
biopharmaceutical products and grow our protein separations business through
the introduction of new products and technologies, including membrane
filtration technology acquired in January 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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Amersham Biosciences Products

Discovery systems

Amersham Biosciences has a leading position in the market for systems that
enable faster, more efficient drug discovery. This business stream covers the
following areas: genomics, proteomics, bioassays and informatics.

Genomics
Interpreting the DNA sequence can lead to the identification of the proteins
derived from it. In addition, comparison of DNA sequences between normal and
affected individuals across a disease population provides valuable information
on the genetic changes giving rise to a disease, thereby facilitating the
development of improved diagnostic and therapeutic techniques and the
development of drugs targeted toward an individuals specific genotype.

Amersham Biosciences provides a comprehensive range of instruments, reagents
and software sold individually or as integrated systems to enable genetic
analysis. Some of the products, in particular MegaBACE high throughput
sequencing systems, have been critical to the sequencing of the human genome.
Microarray products are crucial for comparative gene expression analysis that
will occupy scientists for many years to come.

The principal genomics products are summarized below:

|                                                  |  |                                                                                                    |  |                                                                     
|------------------------------------------------- |  | -------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------
|Product Group                                     |  | Type of product                                                                                    |  | Primary area of use                                                 
|                                                  |  |                                                                                                    |  |                                                                     
|Products being marketed                           |  |                                                                                                    |  |                                                                     
|                                                  |  |                                                                                                    |  |                                                                     
|MegaBACE 4000 DNA Analysis System                |  | 384 capillary DNA sequencer                                                                        |  | Automated DNA
sequencing with
ultra high
throughput                 
|                                                  |  |                                                                                                    |  |                                                                     
|MegaBACE 1000
DNA Analysis System                |  | 96 capillary DNA sequencer                                                                         |  | Automated DNA
sequencing &
genotyping                               
|                                                  |  |                                                                                                    |  |                                                                     
|MegaBACE 500                                     |  | Flexible throughput capillary
array genetic analysis                                               |  | Automated DNA
sequencing &
genotyping                               
|                                                  |  |                                                                                                    |  |                                                                     
|Lucidea Microarray System                        |  | DNA microarray spotter, scanner
and slide processor                                                |  | Differential gene
expression                                        
|                                                  |  |                                                                                                    |  |                                                                     
|Thermo Sequenase                                 |  | DNA polymerase which is stable at
high temperatures for use in
sequencing reactions                |  | Automated DNA
sequencing &
genotyping                               
|                                                  |  |                                                                                                    |  |                                                                     
|DYEnamic Energy
Transfer primers
and terminators |  | Fluorescently labeled primers and
terminators for DNA sequencing
giving highly sensitive detection |  | Automated DNA
sequencing                                            
|                                                  |  |                                                                                                    |  |                                                                     
|TempliPhi                                        |  | Template preparation using novel
enzyme                                                            |  | Preparation of
template for DNA
sequencing                          
|                                                  |  |                                                                                                    |  |                                                                     
|SNuPe reagent                                    |  | High throughput, single nucleotide
Primer extensions for MegaBACE                                 |  | Genotyping, SNP
validation and
scoring                              
|                                                  |  |                                                                                                    |  |                                                                     
|CodeLink array
technology                        |  | Pre-arrayed slides                                                                                 |  | Gene expression,
SNP validation and
analysis                        
|                                                  |  |                                                                                                    |  |                                                                     
|Genetic Profiler
2.0 Analysis
software            |  | Genotyping software                                                                                |  | Genotyping on the
MegaBACE DNA
Analysis System                     
|                                                  |  |                                                                                                    |  |                                                                     
|Ready-To-Go                                      |  | Reagents and kits                                                                                  |  | Molecular biology
research                                          
|                                                  |  |                                                                                                    |  |                                                                     
|Typhoon                                          |  | Multi-modal detection imager                                                                       |  | Laboratory
detection
applications                                   
|                                                  |  |                                                                                                    |  |                                                                     
|Products in
development                           |  |                                                                                                    |  |                                                                     
|                                                  |  |                                                                                                    |  |                                                                     
|CodeLink array
technology                        |  | Pre-arrayed slides with new content                                                                |  | Gene expression,
SNP validation and
analysis                        
|                                                  |  |                                                                                                    |  |                                                                     
|GenomiPhi DNA
Amplification kit                  |  | Template amplification/purification                                                                |  | Whole genome
amplification from
cells and blood for
genetic analysis

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The MegaBACE 4000 DNA sequencer is an automated, fluorescent DNA sequencing
system that consists of hardware, software and reagents designed for
industrial-scale DNA analysis. It uses 384 capillaries, each about the size of
a human hair, filled with a gel which acts as a separating filter during
electrophoresis, the separation of particles using an electric field. Operating
in parallel, the capillaries separate, detect and analyze fluorescently labeled
DNA fragments. The MegaBACE system automates gel preparation, sample
injection, DNA separation and data analysis, allowing significant productivity
gains compared to traditional slab gel systems. MegaBACE also provides
customers with enhanced processing speed. MegaBACE has played a significant
role in several public and private sector genome sequencing operations, and we
have manufactured over 1,000 systems as of December 31, 2002. The MegaBACE
systems generate recurring revenues through sales of reagents and other
consumables that are used with the system.

In addition to DNA sequencing, the MegaBACE platform can support a range of
drug discovery applications, including microsatellite genotyping, or
identifying the genes possessed by individuals, and the study of inheritance
patterns and variations in single base pairs of DNA. In 1999, Amersham
Biosciences launched a second application on the MegaBACE 1000 platform
allowing researchers to detect small differences in similar DNA samples. This
application, known as the MegaBACE 1000 Genotyper, uses the same hardware as
the MegaBACE sequencing system, but employs different software and
chemistries.

The MegaBACE brand was further extended to the wider sequencing market, by
introducing a flexible concept with the MegaBACE 500 system. The MegaBACE 500
enables users to move between 32, 48 and 96 capillaries on the MegaBACE
platform, meeting the lower throughput needs of many researchers at sequencing
laboratories.

Microarrays are small arrays of biological material on an inert substance,
typically genes on a glass slide that can be used to test for functional
criteria. They are powerful tools for scientists to monitor and analyze the
expression levels of thousands of genes in a single experiment. Amersham
Biosciences microarray systems use dyes and scanners and large sets of DNA,
which spot onto a glass surface to enable researchers to study how genes are
expressed.

In July 2002, Amersham Biosciences acquired the CodeLink pre-arrayed slides
business in Tempe, Arizona from Motorola Life Sciences. The acquisition moved
Amersham Biosciences into the pre-arrayed (ready to use) chip market, building
on its well established business of spotters and scanners for researchers to
make their own arrays. Arrays are chips, or small slides, onto which genes and
proteins are placed. They are used to study how genes or proteins are
expressed  switched on or switched off  in a particular disease state, so
that researchers may understand the relationship between gene or protein
function to disease and thus design better therapeutic drugs and diagnostic
tests. CodeLink has a unique, patented manufacturing process that produces
arrays of high quality, sensitivity and reproducibility, and with more useable
data points than any other pre-arrayed slide currently in the market. There
are currently five CodeLink products on the market, with several more in
development including higher density chips with 20,000 DNA spots per slide.
CodeLink has been undergoing comparison tests in customer laboratories and
feedback to date has been positive.

Proteomics

Interest in proteomics research is growing rapidly as pharmaceutical and
biotechnology companies seek to understand the role of proteins in diseases,
and to generate new ideas for drugs or interventions in cellular processes. The
complexity of this task and its potential in the drug discovery and development
process creates an opportunity to develop high throughput systems for protein
analysis, involving the next generation of two dimensional gel electrophoresis,
mass spectrometry and liquid chromatography technology. Two dimensional gel
electrophoresis is a technique for the separation of proteins by electrical
charge and by size. Mass spectrometry is a technique for identifying chemicals,
including proteins, by their molecular weight. Liquid chromatography is the
separation of proteins and peptides according to their physical properties.
Amersham Biosciences currently markets products using differential gel
electrophoresis, mass spectrometry and liquid chromatography techniques.

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Under the brand name Ettan, Amersham Biosciences has built on its experience
in protein analysis, separation and purification to develop high throughput
analysis systems for proteomic research, and is well positioned to take
advantage of the proteomic market opportunity. Over the next few years,
Amersham Biosciences expects to launch a series of integrated protein analysis
systems, also under the Ettan brand, based on linking two dimensional gel
electrophoresis, imaging instruments, mass spectrometry and liquid
chromatography. The Ettan MALDI ToF Pro mass spectrometer, related CAF
chemistry kits for sequencing, Ettan 2D DIGE (two dimensional differential
imaging gel electrophoresis), and the Ettan Spot Handling WorkStation were
launched in 2002.

The principal proteomics products are summarized below.

|                                                                                        |  |                                                                           |  |                                                                                                                                     
|--------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------
|Product Group                                                                           |  | Type of product                                                           |  | Primary area of use                                                                                                                 
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|Products being marketed                                                                 |  |                                                                           |  |                                                                                                                                     
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|Ettan 2D DIGE or Two
Dimensional
Differential Imaging Gel
Electrophoresis system       |  | Fluorescent dyes for labeling
proteins, imaging instruments
and software  |  | Protein expression
analysis, which is
the process of
detecting
differences in
protein populations
found in normal and
diseased cells
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|Ettan Dalt Six and Twelve                                                              |  | Gel electrophoresis systems
for the 2nd dimension                         |  | Protein expression
analysis                                                                                                         
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|IPGPhor                                                                                |  | Gel electrophoresis system for
the 1st dimension                          |  | Protein expression
analysis                                                                                                         
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|ImageMaster and DeCyder                                                               |  | Imaging analysis software                                                 |  | Protein expression
analysis                                                                                                         
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|GST recombinant fusion
products                                                         |  | Vectors and reagents to
facilitate the production of
recombinant proteins |  | Protein
identification and
characterization,
which is the
process of
determining the
structure and
function of a
protein            
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|Hoefer                                                                                 |  | Electrophoresis and blotting
instruments                                  |  | Detection and
analysis of
proteins                                                                                                  
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|Ettan Spot Picker                                                                      |  | Accurate automatic spot picking                                           |  | Protein expression
analysis and
identification and
characterization                                                                 
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|Ettan MALDI ToF Pro                                                                    |  | Mass spectrometry                                                         |  | Protein
identification and
characterization                                                                                         
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|Ettan Spot Handling Work
Station                                                       |  | Integrated spot picker,
digester and spotter                              |  | Protein expression
analysis and
identification and
characterization                                                                 
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|Ettan ESI ToF LC-MS                                                                    |  | Liquid chromatography-mass
spectrometry integrated system                 |  | Protein
identification and
characterization                                                                                         
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|Products in development                                                                 |  |                                                                           |  |                                                                                                                                     
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|Ettan 2D DIGE extensions
(new dyes, improved
software, low cost image
analysis system) |  | Fluorescent dyes for labeling
proteins, imaging instruments
and software  |  | Protein expression
analysis                                                                                                         
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|Multidimensional
chromatography system
MDLC                                             |  | Chromatography system for
separation of proteins                          |  | Protein
identification and
characterization                                                                                         
|                                                                                        |  |                                                                           |  |                                                                                                                                     
|P4-Parallel Purification
Protein Platform                                               |  | High throughput protein
purification platform                             |  | Protein
amplification and
purification used
to isolate protein
samples for
research                                                 

49



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##### Table of Contents



Bioassays

Scientists are discovering many new drug targets as a result of genomic and
proteomic research efforts. These discoveries, coupled with the greater
availability of large libraries of possible drug compounds, have resulted in
demand from the pharmaceutical industry for higher throughput technology for
drug screening to alleviate this major bottleneck in the drug discovery
process. In addition, pharmaceutical companies are also seeking more
sophisticated technology to enable them to understand the metabolism and
toxicology of drug candidates earlier in the drug development process in order
to eliminate drug candidates with high toxicity and reduce the need for
expensive animal testing and clinical trials. Drugs with high toxicity are
unsuitable for use in treating disease.

Once a target has been identified, many candidate chemicals are tested rapidly
in a process termed high throughput screening in order to identify lead
candidates which interact with the target. These lead candidates are then
investigated intensively with respect to both their biochemical and chemical
properties in order to optimize the lead candidates, through secondary drug
screening, to a stage where they may perform adequately as a novel medicine for
the treatment of disease. Typically, researchers will screen between 100,000
and 2,000,000 candidates to identify the handful that may constitute lead
candidates. These studies require the sensitive analysis of complex reactions
involving a number of biochemicals, proteins and nucleic acids. The assays used
require advanced technology for both labeling and detection of biomolecules and
researchers must be able to perform the assays quickly.

Amersham Biosciences established an early market leadership position in high
throughput screening through the introduction of our Scintillation Proximity
Assay in the early 1990s, sold through technology access contracts. Building on
this success, Amersham Biosciences introduced the innovative LEADseeker
homogeneous imaging system in 1998 and has continued to develop the
capabilities of this system culminating in the launch of the LEADseeker
multimodality imaging system in 2002. This system can be used for detection of
radiometric proximity assays, fluorescence intensity, fluorescence
polarization, time-resolved fluorescence and luminescence. Using charged
coupled device detection, the system can read any plate format sensitively and
rapidly. Fluorescence assays can be read in as little as 10s which, combined
with a flexible and rapid plate delivery mechanism, means throughput of over
100,000 compounds per hour. The open automation architecture (hardware and
software) is compatible with most currently available automation solutions,
giving a choice of set up.

The acquisition of Praelux in February 2000 provided Amersham Biosciences with
access to advanced cell imaging technology, which permits development of
systems for cell-based secondary assays for cellular screening and target
validation. The INCell Analyzer system enables real time tracking and
measurement of the movement of molecules within a cell. This significant
advance over existing technology uniquely combines high throughput and high
information content. In addition to the INCell instrument, Amersham Biosciences
also provides customized assays for specific customers and has developed novel
biologies and reagents that enable the profiling of hit compounds from
screening so as to increase the productivity of the drug development process

Amersham Biosciences is also a major provider of services for the custom
radioactive labeling of potential drug compounds for absorption, distribution,
metabolism and excretion studies.

The principal bioassays products are summarized below:

|                                      |  |                                                                                           |  |                                                      
|------------------------------------- |  | ----------------------------------------------------------------------------------------- |  | -----------------------------------------------------
|Product group                         |  | Type of product                                                                           |  | Primary area of use                                  
|                                      |  |                                                                                           |  |                                                      
|Products being
marketed               |  |                                                                                           |  |                                                      
|                                      |  |                                                                                           |  |                                                      
|Scintillation
Proximity Assay, or
SPA |  | Beads which emit
light when a
radioactive compound
is bound close to
the particle surface |  | High throughput screening                            
|                                      |  |                                                                                           |  |                                                      
|Cyanine Dye labels                    |  | Fluorescent dyes
optimized for
labeling of proteins
and nucleic acids                     |  | Assay technology for
screening and development
assays
|                                      |  |                                                                                           |  |                                                      
|Custom labeling                       |  | Custom synthesis of
molecules with radio
or stable isotope
labels                         |  | Toxicology, metabolism
and distribution studies      

50



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|                                         |  |                                                                      |  |                                                                                         
|---------------------------------------- |  | -------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------
|Product group                            |  | Type of product                                                      |  | Primary area of use                                                                     
|                                         |  |                                                                      |  |                                                                                         
|Green Fluorescent
Proteins               |  | Licenses for
research and
screening
applications                     |  | Cell-based assays                                                                       
|                                         |  |                                                                      |  |                                                                                         
|INCell Analyzer                          |  | Advanced imaging
device and
biological assay
reagents                |  | Cell-based system for
cellular screening and
target validation in drug
discovery process
|                                         |  |                                                                      |  |                                                                                         
|LEADseeker
Multimodality
Imaging System |  | Advanced system
addressing all major
modalities for
screening assays |  | Very high throughput
screening                                                          

Informatics

Informatics is a broad term referring to software, which enables researchers to
capture and transform massive amounts of data from different systems into
organized databases that researchers can analyze. As high throughput tools for
drug discovery become established, Amersham Biosciences expects that the major
bottleneck will no longer be hardware, but the ability of the customer to
manage raw data generated from laboratories and to transform that data into an
organized body of information that can facilitate the drug discovery process.
The market environment is now set to change as customers adopt bioinformatics
products (a subset of informatics products) to capitalize on the ability of
these high-end systems to generate data. Customers are also recognizing the
power of integrating their data across disciplines, other institutions and
steps in the drug discovery process, which has created a market for analytical
software packages and expert knowledge systems. Amersham Biosciences is
introducing informatics software in order to support its integrated systems and
customers laboratory workflow systems. These systems are designed to:



| |  | design, automate and acquire data, such as gene sequences, from biological experiments;                                                                                     
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | analyze and interpret experiment results;                                                                                                                                   
| 
| |  | enable the transfer of refined data into drug discovery databases; and                                                                                                      
| 
| |  | extract data from databases and analyze it further in order to compare results from one experimental process to another to
gain greater understanding of biological systems.

Amersham Biosciences expects these systems will further the goal of enabling
molecular medicine by speeding up the drug discovery process through more
efficient data handling.

In 1999, Amersham Biosciences began collaborating with Cimarron Software, Inc.
(Cimarron), an informatics company located in Salt Lake City, Utah which
supplies software for life sciences research, to develop a number of laboratory
workflow software packages. In May 2002, Amersham Biosciences acquired a
controlling stake in Cimarron, pursuant to its 35% share holding (44% as of
December 31, 2002) and a shareholders undertaking, providing Amersham
Biosciences with control over completion of these packages. Although these
packages integrate across Amersham Biosciences discovery systems technology
platforms, including MegaBACE, Lucidea microarray systems and Ettan, they
are based on open architecture, thus allowing these packages to be connected to
other software packages. Amersham Biosciences launched the first informatics
software products developed jointly with Cimarron in September 2002.

The principal informatics products are summarized below:

|                        |  |                                                                             |  |                                                 
|----------------------- |  | --------------------------------------------------------------------------- |  | ------------------------------------------------
|Product group           |  | Type of product                                                             |  | Primary area of use                             
|                        |  |                                                                             |  |                                                 
|Products being marketed |  |                                                                             |  |                                                 
|                        |  |                                                                             |  |                                                 
|Sequencing LWS 1.0      |  | High throughput DNA
sequencing laboratory work
flow system                  |  | Automated DNA
sequencing                        
|                        |  |                                                                             |  |                                                 
|Genotyping LWS 1.0      |  | High throughput DNA
genotyping laboratory work
flow system                  |  | Automated DNA
genotyping                        
|                        |  |                                                                             |  |                                                 
|Gene Expression LWS 1.0 |  | High throughput gene
expression laboratory work
flow system                 |  | Data acquisition
for gene
expression
experiments
|                        |  |                                                                             |  |                                                 
|Products in development |  |                                                                             |  |                                                 
|                        |  |                                                                             |  |                                                 
|Ettan WS LWS 1.0        |  | High throughput laboratory
work flow system for use
with Ettan Work Station |  | Protein expression
analysis                     

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|                        |  |                                                                             |  |                                                                                     
|----------------------- |  | --------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------
|Product group           |  | Type of product                                                             |  | Primary area of use                                                                 
|                        |  |                                                                             |  |                                                                                     
|Gene expression LWS 1.2 |  | Updated system for gene
expression to include new
workflows and instruments |  | Data acquisition
for gene
expression
experiments,
including
integration of
CodeLink
|                        |  |                                                                             |  |                                                                                     
|Genotyping LWS 1.2      |  | Updated system for genotyping                                               |  | Automated DNA
genotyping                                                            
|                        |  |                                                                             |  |                                                                                     
|Proteomics LWS 1.2      |  | Updated system for
proteomics to include new
features                       |  | Expands use of
proteomics
instruments e.g.
MALDI systems                            

Protein separations

Amersham Biosciences protein separations business is built on extensive
experience in liquid chromatography and understanding of proteins. The
business is organized into two parts  bioprocess and laboratory separations.
Bioprocess is the production of systems for the purification and production of
biopharmaceuticals on a large scale, while laboratory separations, is the
production of smaller, laboratory-scale systems for the purification and
separation of proteins.

Bioprocess

Amersham Biosciences bioprocess business helps customers manufacture
biomolecular based medicines. We provide biopharmaceutical manufacturers with
scaleable and integrated technologies for purifying biopharmaceuticals, and
services that offer reduced process development time and cost efficient
production of biopharmaceutical medicines, such as hormones, enzymes, blood
clotting factors, vaccines, antibodies, growth factors and antisense nucleic
acid sequences.

Biopharmaceuticals are drugs based on active biomolecules, such as proteins,
peptides or DNA. Having Amersham Biosciences products designed-in to the
biopharmaceutical purification process is the key to sustainable revenues in
the biopharmaceutical manufacturing process. Design-in is facilitated through
biotechnology and pharmaceutical companies using Amersham Biosciences
purification products successfully during their development phases, which are
designed to be readily scaled-up, validated and registered in full-scale
manufacturing. Once the FDA or other regulatory body approves a manufacturing
process, changing this process is time consuming and expensive for the
manufacturer. Amersham Biosciences chromatography media are used in the
manufacture of over 90% of approved biopharmaceuticals and are involved in the
majority of biopharmaceuticals that are currently in clinical trials.

Apart from demonstrated scalability, Amersham Biosciences believes its
bioprocess business has a competitive advantage based on:



| |  | the reputation built in the purification field since 1959;                                 
|- |  | -------------------------------------------------------------------------------------------
| 
| |  | consistent quality supported by ISO 9001 certification;                                    
| 
| |  | a large range of media, allowing choice, and in some cases, custom design;                 
| 
| |  | product lines with well-known brands, recognized by customers and regulatory organizations;
| 
| |  | the manufacturing capacity to ensure reliable supply of chromatography media;              
| 
| |  | a complete solution, including equipment and regulatory support;                           
| 
| |  | documentation to support validation and registration; and                                  
| 
| |  | a dedicated and experienced global sales force.                                            

A key strength of Amersham Biosciences bioprocess business is reliability and
a proven record of results. One of its leading products, Sephadex, which
brought a new level of speed and simplicity to purification techniques, was
introduced over 40 years ago, and is still a leading brand in separations media
today. Sephadex has had an important role in many scientific discoveries and
has been instrumental in Nobel Prize winning research. It is also widely used
in industry, for example, in the production of highly purified gamma globulin
used to treat a variety of diseases including Acquired Immune Deficiency
Syndrome. Amersham Biosciences also produces a widely used purification media
based on Sepharose originally introduced in the 1980s and other

52



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##### Table of Contents



products based on Sepharose for the purification of active proteins, as well
as system and equipment components used in these processes. These products are
able to address the challenges brought by new types of source materials and new
types of biomolecules, such as those being tested for vaccines and antisense
strategies.

Biotechnology innovation continues to drive the bioprocess business. Amersham
Biosciences is a leading supplier of manufacturing systems and reagents for
industrial DNA synthesis used by the molecular diagnostic industry and the
emerging antisense industry. Antisense drugs involve the use of nucleic acids
that bind to other target nucleic acids producing a therapeutic effect. These
drugs are also known as oligonucleotide pharmaceuticals because of their use of
short DNA sequences, or oligonucleotides. Amersham Biosciences leading
patented product, OligoProcess enabled the antisense industry to manufacture
the first antisense drugs at a commercially viable cost and scale.

Amersham Biosciences reputation, product offerings and support services in the
bioprocess business create strong customer relationships. For example, Fast
Trak services are provided to aid customers in complying with FDA requirements
by providing validation support and regulatory support information. Fast Trak
also provides comprehensive training programs for people working in
biopharmaceutical manufacturing and development.

Amersham Biosciences continues to explore opportunities for the expansion of
the bioprocess business. In August 2001, Amersham Biosciences acquired
Dan-Process A/S, a Danish company, specializing in high-pressure chromatography
instruments for the purification of biomolecules such as peptides. The
acquisition strengthened the separations portfolio by enhancing the ability to
offer a complete systems solution  with both media and instruments  to
biopharmaceutical companies. In addition, in January 2002, two companies in
the membrane separations field, AG Technology and InnovaSep Technology were
acquired. Membrane separations or filtration is a natural extension of the
chromatography business, in which Amersham Biosciences is a market leader, and
these acquisitions give immediate access to the growing membrane separations
market.

Laboratory separations

In laboratory separations, Amersham Biosciences provides systems for the
purification of proteins, peptides and oligonucleotides. Customers include
pharmaceutical and biotechnology companies and academic and research
institutes. The product range covers chromatography systems and chromatography
media. Amersham Biosciences currently has over 20,000 liquid chromatography,
or LC, systems installed world-wide. The ÄKTA product range is the most widely
used chromatography system in the industry. Amersham Biosciences continues to
expand the ÄKTA platform, and during 2002 introduced several upgrades and new
products, including the ÄKTApilot and several new media products.

Amersham Biosciences laboratory separations business is linked to the
bioprocess business through the drug development design-in process. Researchers
in industry use Amersham Biosciences laboratory separations systems to develop
small-scale processes for the purification of biopharmaceuticals, which they
later scale-up using Amersham Biosciences bioprocess products.

The principal bioprocess and laboratory separations products are summarized
below.

|                               |  |                                      |  |                                                                          
|------------------------------ |  | ------------------------------------ |  | -------------------------------------------------------------------------
|Product group                  |  | Type of product                      |  | Primary areas of use                                                     
|                               |  |                                      |  |                                                                          
|Products being
marketed        |  |                                      |  |                                                                          
|                               |  |                                      |  |                                                                          
|Sephadex,
Sepharose, Source |  | Chromatographic separation
materials |  | Purification of
active proteins used
in
biopharmaceuticals               
|                               |  |                                      |  |                                                                          
|Streamline                    |  | Expanded bed chromatography
system   |  | Primary
chromatography step
used for
purification of
active proteins used
|                               |  |                                      |  | in                                                                       
|                               |  |                                      |  | biopharmaceuticals                                                       
|                               |  |                                      |  |                                                                          
|Cytodex                       |  | Micro carrier for cell culture       |  | Research and vaccine
production                                          

53



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##### Table of Contents



|                                                  |  |                                                                     |  |                                                                                                                   
|------------------------------------------------- |  | ------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------
|Product group                                     |  | Type of product                                                     |  | Primary areas of use                                                                                              
|                                                  |  |                                                                     |  |                                                                                                                   
|Ficoll, Percoll                                 |  | Media for cell separation                                           |  | Research
applications, in
vivotreatment                                                                           
|                                                  |  |                                                                     |  |                                                                                                                   
|Chromaflow Columns
BioprocessSystems             |  | Production scale
chromatography columns and
systems                 |  | Purification of
active proteins used
in
biopharmaceuticals                                                        
|                                                  |  |                                                                     |  |                                                                                                                   
|Mabselect                                        |  | Separations media                                                   |  | Purification of
monoclonal
antibodies                                                                             
|                                                  |  |                                                                     |  |                                                                                                                   
|HiTrap                                           |  | Laboratory scale prepacked
chromatography column                    |  | Laboratory scale
purification of
biological molecules                                                             
|                                                  |  |                                                                     |  |                                                                                                                   
|OligoPilot,
OligoProcess                        |  | Systems for oligonucleotide
synthesis                               |  | Synthesis of
oligonucleotides for
production of
pharmaceuticals and
diagnostic probes                             
|                                                  |  |                                                                     |  |                                                                                                                   
|Primer Support                                   |  | Solid phase support beads for
oligonucleotides synthesis            |  | Synthesis of
oligonucleotides for
production of
pharmaceuticals and
diagnostic probes                             
|                                                  |  |                                                                     |  |                                                                                                                   
|ÄKTAFPLC                                         |  | Chromatography systems for
preparative purification of
biomolecules |  | Research and
pharmaceutical
methods development                                                                   
|                                                  |  |                                                                     |  |                                                                                                                   
|ÄKTApilot                                        |  | Laboratory chromatography
system                                    |  | Small production
scale protein
purification under
good manufacturing
practices                                    
|                                                  |  |                                                                     |  |                                                                                                                   
|High flow Protein A                               |  | High productivity affinity
medium                                   |  | Antibody purification                                                                                             
|                                                  |  |                                                                     |  |                                                                                                                   
|Primer Support 200                                |  | Solid phase support beads                                           |  | Synthesis of longer
diagnostic probes                                                                             
|                                                  |  |                                                                     |  |                                                                                                                   
|Products in
development                           |  |                                                                     |  |                                                                                                                   
|                                                  |  |                                                                     |  |                                                                                                                   
|Streamline
reactor/expanded
bed absorption
media |  | Equipment and medium for
expanded bed absorption                    |  | System for initial
capture of
biopharmaceuticals
from production
medium                                           
|                                                  |  |                                                                     |  |                                                                                                                   
|New ion exchange
media, Niex                      |  | New chromatography media                                            |  | Novel ion exchange
media with improved
productivity                                                               
|                                                  |  |                                                                     |  |                                                                                                                   
|Bioselect                                         |  | Customized affinity ligands                                         |  | Biopharmaceutical
manufacturing                                                                                   
|                                                  |  |                                                                     |  |                                                                                                                   
|Viral Inactine                                   |  | Viral inactivation chemical                                         |  | Purification of
plasma and proteins
produced from cell
culture, virus
clearance in
biopharmaceutical
manufacturing
|                                                  |  |                                                                     |  |                                                                                                                   
|ÄKTA 3D                                          |  | High throughput protein
purification                                |  | Protein
purification,
structural genomics                                                                         

54



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##### Table of Contents



Production

Manufacturing

Amersham Biosciences has an established global manufacturing base with six
primary facilities in Piscataway, New Jersey, San Francisco and Sunnyvale,
California in the US, Uppsala and Umea in Sweden, and Cardiff in the United
Kingdom. Amersham Biosciences believes it has sufficient manufacturing
capacity to meet commercial demand for its products for the foreseeable future.
We manage non-radiochemical reagents operations at the Cardiff site, and the
manufacture of radiochemical reagents used in radiolabeling assays and kits in
line with the terms of the Amersham Biosciences nuclear license.

Amersham Biosciences skilled manufacturing staff, of over 1,000 employees, has
technological expertise, significant interaction with R&D teams, direct
customer contact and flexible skills. The manufacturing facilities are
co-located with R&D and focus on the same technologies.

The primary manufacturing facilities optimize material flow and personnel
movement with integrated manufacturing and quality control operations. We
design access and safety features to meet federal, state and local health
ordinances. Except for Piscataway, all Amersham Biosciences manufacturing
facilities are accredited to ISO 9001 international standards.

We rely upon outside vendors to manufacture a number of components of
instruments and some reagents, which are provided in systems. Amersham
Biosciences regularly audits these vendors.

Amersham Biosciences is implementing a resource planning system to manage and
control material and product inventories. This system encompasses product
costing, materials procurement, production planning and scheduling, inventory
tracking and control and batch records, with links to document control for all
manufacturing, quality assurance and regulatory compliance procedures.

Raw Materials

Amersham Biosciences manufacturing operations require a wide variety of raw
materials, electronic and mechanical components, chemical and biochemical
materials, and other supplies some of which are occasionally in short supply.
Dual sourcing is available for most components and supplies, but where Amersham
Biosciences is dependent on single sources for a limited number of these items
it normally secures long-term supply contracts.

Strategic Alliances

An element of Amersham Biosciences strategy is to seek strategic alliances with
major academic research centers and biotechnology and pharmaceutical companies
to access technology. This strategy enables acquisition of new technologies
and maximization of R&D expenditures.

The table below lists some of Amersham Biosciences major strategic partners.

|                              |  |                            |  |                                                                                 
|----------------------------- |  | -------------------------- |  | --------------------------------------------------------------------------------
|Strategic Partner             |  | Technology                 |  | Product                                                                         
|                              |  |                            |  |                                                                                 
|Affibody Technology Sweden
AB |  | Ligands                    |  | Ligands for protein
purification                                                
|                              |  |                            |  |                                                                                 
|Analytica of Branford, Inc.   |  | Mass spectrometry          |  | Ettan range                                                                    
|                              |  |                            |  |                                                                                 
|Aurora Biosciences Corp.      |  | Green Fluorescent
Proteins |  | Right to sell licenses to
use reagents in biological
research and drug discovery
|                              |  |                            |  |                                                                                 
|Beckman Coulter Inc.          |  | Sequencing technology      |  | Separation matrices for
capillary electrophoresis                               
|                              |  |                            |  |                                                                                 
|BioImage AS                   |  | Cell-based assays          |  | LEADseeker cellular
analysis system                                            
|                              |  |                            |  |                                                                                 
|Dyax Corp.                    |  | Ligands                    |  | Peptide ligands for protein
purification                                        

55



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##### Table of Contents



|                                     |  |                                       |  |                                                            
|------------------------------------ |  | ------------------------------------- |  | -----------------------------------------------------------
|Strategic Partner                    |  | Technology                            |  | Product                                                    
|                                     |  |                                       |  |                                                            
|Gyros AB                             |  | CD-based miniaturization              |  | Technology for various
miniaturized drug discovery
products
|                                     |  |                                       |  |                                                            
|Molecular Staging, Inc.              |  | Template isolation &
amplification    |  | TempliPhi range of products                                
|                                     |  |                                       |  |                                                            
|Nonlinear Dynamics Ltd               |  | Software for automated
image analysis |  | Ettan ImageMaster and
Progenesis                          
|                                     |  |                                       |  |                                                            
|Proteometric LLC                     |  | Software for mass
spectroscopy        |  | Ettan range                                               
|                                     |  |                                       |  |                                                            
|Scientific Analysis
Instruments Ltd. |  | Mass spectroscopy                     |  | Ettan range                                               
|                                     |  |                                       |  |                                                            
|Sloan Kettering Institute            |  | Functional Proteomics                 |  | InCell Assays                                              
|                                     |  |                                       |  |                                                            
|Thermo Electron Corporation          |  | Mass Spectrometry                     |  | Mass Spectrometry                                          
|                                     |  |                                       |  |                                                            
|Uppsala University, Sweden           |  | Surface interaction
biotechnology     |  | Technology development for
separation resins               
|                                     |  |                                       |  |                                                            
|V. I. Technologies, Inc.             |  | Bioprocess                            |  | Virus inactivation compounds                               

Amersham Biosciences does not consider any of the agreements set forth in the
table above material to its business. These agreements involve additional
milestone or other payments (including minimum royalty payments) that in
aggregate do not exceed £30 million, the majority of which are expected to be
made within the next five years.

Amersham Biosciences reviews potential acquisition, investment and divestment
opportunities in each of its business streams. Except as otherwise disclosed in
this form, Amersham Biosciences currently does not have any material
commitments or agreements for any acquisition or investments. An acquisition
or investment may be structured as an acquisition, joint venture, or licensing
arrangements. Amersham Biosciences may make an acquisition or investment if it
believes the transaction will enhance the portfolio of offered products,
particularly where the transaction relates to the identification and
commercialization of innovative new technologies.

Marketing and Distribution

Marketing

Amersham Biosciences has an established worldwide sales and marketing network,
with products sold in approximately 100 countries, including an integrated
sales and marketing organization of approximately 1,600 employees serving the
two principal business segments, with direct sales offices in 31 countries.
The sales and marketing force is divided into four regional organizations:
North America, Europe, Japan, and Rest of the World. The broad customer base
and integrated product offerings allow the sales and marketing force to
generate sales across business segments. We have also established direct
marketing through catalog and brochure mailing, telemarketing and web-based
marketing channels. Amersham Biosciences also distributes products provided by
external suppliers.

e-business

Given the large product range and number of customers in the discovery systems
business, Amersham Biosciences is pursuing a strategy to market products
through the Internet. The Internet is expected to provide efficiency gains in
the management of the market for recurring purchases that do not require
extensive sales support. The improved efficiency in order processing and
invoicing offered by Internet marketing channels will be complemented by the
development of further e-business services that will offer technical support to
customers. Amersham Biosciences is investing in new systems and procedures to
improve the existing web presence to enable simpler on-line purchasing and
provide technical information.

In 1999, Amersham Biosciences began developing systems to sell products through
our electronic purchasing channels. The Companys e-commerce website has been
operating in the US since February 2000. e-commerce sales represented
approximately 2% of Amersham Biosciences net sales in 2002.

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Distribution

Amersham Biosciences has a worldwide distribution network consisting of two
central warehouses and two regional warehouses employing over 100 people.

Research and Development

The key objectives of Amersham Biosciences R&D strategy are to develop systems
to enable customers to understand the gene-function relationship and the
molecular basis of diseases, to increase the efficiency and decrease the costs
of drug discovery and enable the manufacture of biopharmaceutical products. R&D
spending decisions are based on a technologys commercial viability and its
ability to meet return on investment criteria.

The following is a list of key systems and products, which Amersham Biosciences
has developed internally over the last three years:



| |  | MegaBACE sequencer and genotyper;         
|- |  | -------------------------------------------
| 
| |  | Lucidea microarray systems;               
| 
| |  | Ettan series;                             
| 
| |  | Two dimensional gel electrophoresis system;
| 
| |  | LEADseeker;                               
| 
| |  | Typhoon;                                  
| 
| |  | Ready-To-Run;                             
| 
| |  | Source;                                   
| 
| |  | STREAMLINE;                               
| 
| |  | ÄKTAFPLC;                                 
| 
| |  | ÄKTAprime;                                
| 
| |  | TempliPhi;                                
| 
| |  | INCell Analyzer,                           
| 
| |  | AKTApilot,                                 
| 
| |  | DYEnamic,                                 
| 
| |  | ET terminators.                            

Amersham Biosciences employed in 2002 approximately 770 scientists in R&D at
the following facilities and specializing in the following scientific areas:



| |  | Amersham, United Kingdom  Molecular sciences and proteomics developments;                                             
|- |  | -----------------------------------------------------------------------------------------------------------------------
| 
| |  | Cardiff, United Kingdom  Cellular sciences and bioassays development;                                                 
| 
| |  | Piscataway, New Jersey, US  Genomic sciences and development, notably DNA chemistry and enzymology;                   
| 
| |  | Sunnyvale, California, US  Instrumentation sciences and genomics development including imaging and sequencing systems;
| 
| |  | San Francisco, California, US  Proteomics development, notably 2-D systems;                                           
| 
| |  | Tokyo, Japan  Material sciences;                                                                                      
| 
| |  | Uppsala, Sweden  Proteomics and protein separation sciences and development.                                          

Amersham Biosciences divides its R&D process into three stages: the research
stage, the development stage and commercial product support. The research stage
demonstrates technology feasibility, generates intellectual property and
develops new systems or processes, which form the basis for new technology
platforms. The development stage is commercially driven and involves the
development of novel or next generation products. Commercial product support
involves demonstration experiments for potential customers, providing
technology training and consulting and collaborating with customers
laboratories both before sales and after product launch.

R&D processes are managed at different levels to enable better decisions on
resource allocation and prioritization. The development function reports
through a formal structure to Business area executive teams to monitor
milestones and resources, to obtain approval to commence projects and to
recommend ending a project if it is not meeting its objectives. Amersham
Biosciences executive management is responsible for setting R&D strategy,
defining licensing activities,

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realizing operating efficiencies and setting priorities. Eminent life
scientists on the Scientific Advisory Board evaluate the R&D portfolio and
advise on trends and related matters.

In 2002, Amersham Biosciences spent £88.0 million on R&D, or 13% of turnover.
In 2001, £86.4 million was spent on R&D, or 13% of turnover, and in 2000,
£71.5 million was spent on R&D, or 12% of turnover. No R&D expenditures were
sponsored by customers.

Intellectual Property

Amersham Biosciences considers the protection of its proprietary technologies
and products to be important to the success of its business. The Company
relies on a combination of patents, licenses and trademarks to establish and
protect proprietary rights to technologies and products. Patents have been
obtained in many countries covering significant products developed through R&D
activities. Amersham Biosciences currently owns 234 issued patents in the US
and 424 issued patents in other major industrialized nations, and has 901
patent applications pending.

Amersham Biosciences believes that it continues to have patent protection for
most important existing products in major markets, and in addition, has
obtained patents, or anticipates that the appropriate regulatory bodies will
grant patents for a majority of the new products and technologies being
developed. Amersham Biosciences intends to continue to file patent
applications as new products and technologies are developed.

U.S. patents normally have a term of 17 years from the date of issue for
patents issued from applications filed prior to June 8, 1995 and 20 years from
the date of filing of the application in the case of patents issued from
applications filed on or after June 8, 1995. Patents in most other countries
have a term of 20 years from the date of filing the patent application.

Amersham Biosciences is party to various exclusive and non-exclusive licensing
agreements with third parties that grant it rights to use key components within
Amersham Biosciences technologies. Amersham Biosciences believes the
licensing agreements listed below are important to its business. Each of these
agreements terminates upon the expiration of the related patents.



| |  | University of California  exclusive license to patents relating to MegaBACE sequencing systems and energy transfer dyes;
|- |  | --------------------------------------------------------------------------------------------------------------------------
| 
| |  | Harvard University  exclusive license to patents relating to Thermo Sequenase DNA Polymerase; and                       
| 
| |  | California Institute of Technology  non-exclusive license to patents relating to fluorescent sequencing technology.      
| 
| |  | Carnegie Mellon University  exclusive license to patents relating to fluorescent cyanine dyes.                           

Amersham Biosciences relies in part on trade secret protection of its
intellectual property and by entering into confidentiality agreements with
third parties, employees and consultants. Employees and consultants also sign
agreements to assign to Amersham Biosciences their interests in patents and
copyrights arising from their work for the Company. Employees also agree not to
use confidential information after their employment. However, these agreements
can be breached and an adequate remedy may not be available. Also, a third
party may learn trade secrets through means other than by breach of
confidentiality agreements, or competitors could independently develop them.

Seasonality

Certain of Amersham Biosciences subsidiaries are subject to seasonal trends
within the year. The fourth quarter is heavily affected by the annual
purchasing patterns of its customers.

Backlog

Amersham Biosciences backlog at December 31, 2002 approximated £38.6 million.
Amersham Biosciences does not consider backlog to be a key measure of future
sales. We anticipate that all products included in backlog will be delivered
before the end of 2003. It is our policy to include in backlog only purchase
orders or production releases that have firm delivery dates within one year.
However, not all recorded backlog may result in actual sales because of
cancellation of orders or other factors.

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C.     Organizational Structure

The following information relating to subsidiary, joint venture and associated
undertakings is given on those entities that, in the opinion of the Directors,
materially affected the profits or assets of the Group.

The primary activity of the majority of the undertakings shown below is the
development and manufacture and/or sale of specialized products for
research-based biotechnology supply and the diagnosis and treatment of disease.
Subsidiary, joint venture, and associated undertakings are listed under the
relevant business operation. Where the relevant company serves more than one
business it is listed under the dominant business operation.

With the exception of Amersham Buchler GmbH & Co KG and Amersham Biosciences
Limited, the Companys holdings in the following undertakings are represented
by ordinary shares. Amersham Buchler GmbH & Co KG is a partnership in which
the Groups interest is in limited liability form. The company holds ordinary
and non-voting preference shares in Amersham Biosciences Limited in the
proportion stated below.

All of the companies listed below operate principally in their country of
incorporation or registration and have coterminous year-ends.

|                                 |  |                  |  |         |     |                                                  |  |  |     |  |  | 
|-------------------------------- |  | ---------------- |  | ------- | --- | ------------------------------------------------ |  |  | --- |  |  | 
|                                 |  |                  |  |         |     | Proportion of
nominal value ofissued shares held
|                                 |  |                  |  |         |     |                                                 
|                                 |  | Country of       |  | by the  |     | by subsidiary                                   
|                                 |  | incorporation or |  | Company |     | undertakings                                    
|                                 |  | registration     |  | %       |     | %                                               
|                                 |  |                  |  |         |     |                                                 
|Holding companies:               |  |                  |  |         |     |                                                  |  |  |     |  |  | 
|Amersham Health Norge AS         |  | Norway           |  |         |    |                                                  |  |  | 100 | 
|Acam Overseas Holdings Limited   |  | UK               |  |         |    |                                                  |  |  | 100 | 
|Acam Holdings (UK) Limited       |  | UK               |  |         | 100 |                                                  |  |  |    | 
|Amersham Benelux BV              |  | Netherlands      |  |         |    |                                                  |  |  | 100 | 
|Amersham Biosystems AB           |  | Sweden           |  |         |     |                                                  |  |  | 100 | 
|                                
|Amersham Biosciences             |  |                  |  |         |     |                                                  |  |  |     |  |  | 
|Amersham Biosciences Limited     |  | UK               |  |         | 61  |                                                  |  |  | 39  | 
|Amersham Biosciences Corp        |  | US               |  |         |    |                                                  |  |  | 100 | 
|Amersham Biosciences UK Limited  |  | UK               |  |         |    |                                                  |  |  | 100 | 
|Amersham Biosciences Europe GmbH |  | Germany          |  |         |    |                                                  |  |  | 100 | 
|Amersham Biosciences AB          |  | Sweden           |  |         |    |                                                  |  |  | 100 | 
|Amersham Biosciences (SV) Corp   |  | US               |  |         |    |                                                  |  |  | 100 | 
|Amersham Biosciences KK          |  | Japan            |  |         |    |                                                  |  |  | 100 | 
|Amersham Biosciences Limited     |  | Hong Kong        |  |         |    |                                                  |  |  | 100 | 
|AG Technology Corp               |  | US               |  |         |     |                                                  |  |  | 100 | 
|InnovaSep Technology Corporation |  | US               |  |         |     |                                                  |  |  | 100 | 
|                                
|Amersham Health                  |  |                  |  |         |     |                                                  |  |  |     |  |  | 
|Amersham Buchler GmbH & Co KG    |  | Germany          |  |         |    |                                                  |  |  | 60  | 
|Amersham Health AS               |  | Norway           |  |         |    |                                                  |  |  | 100 | 
|Amersham Health                  |  | Ireland          |  |         |    |                                                  |  |  | 100 | 
|Amersham Health Inc              |  | US               |  |         |    |                                                  |  |  | 100 | 
|Amersham Health Pte Ltd          |  | Singapore        |  |         |    |                                                  |  |  | 100 | 
|Nycomed Amersham Sorin Srl       |  | Italy            |  |         | 100 |                                                  |  |  |    | 
|Amersham Health Limited          |  | China            |  |         |    |                                                  |  |  | 80  | 
|Amersham Health Holdings Inc     |  | US               |  |         |    |                                                  |  |  | 100 | 
|Joint venture:                   |  |                  |  |         |     |                                                  |  |  |     |  |  | 
|Amersham Health                  |  |                  |  |         |     |                                                  |  |  |     |  |  | 
|Nihon Medi-Physics (NMP)*        |  | Japan            |  |         | 29  |                                                  |  |  | 21  | 



---

|* |  | The investment in NMP relates to ordinary shares. The shares carry standard
pre-emption rights
|- |  | ----------------------------------------------------------------------------------------------

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D.     Property, Plant and Equipment

The net book value of the Groups properties amounted to £205.9 million at
December 31, 2002.

Amershams principal executive offices are located in Buckinghamshire, England.
Listed below are the location of the Groups principal facilities, together
with summary details of the form of title, approximate floor space of the
buildings and the principal activities conducted at such facilities. The Group
considers all the facilities listed below to be reasonably appropriate for the
purposes for which they are used, including manufacturing, R&D, and
administrative purposes. All properties are maintained in good working order
and, in the case of those used for manufacturing purposes, are substantially
utilized on the basis of at least one shift.

|                                           |  |                                           |  |               |             |                     |  |    
|------------------------------------------ |  | ----------------------------------------- |  | ------------- | ----------- | ------------------- |  | ---
|Location                                   |  | Principal Activities                      |  | Square meters |             | (L) Leased(O) Owned
|                                           |  |                                           |  |               |             |                    
|Canada, Quebec                             |  | Offices & distribution                    |  |               | 1,376       |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|China, Shanghai                            |  | Manufacturing                             |  |               | 9,100       |                     |  | O  
|                                           |  |                                           |  |               |             |                     |  |    
|England, Buckinghamshire(The Grove Centre) |  | R&D/manufacturing
all divisions          |  |               | 30,371      |                     |  | O  
|                                           |  |                                           |  |               |             |                     |  |    
|England, Buckinghamshire(Pollards Wood)    |  | Executive office                          |  |               | 4,475       |                     |  | O  
|                                           |  |                                           |  |               |             |                     |  |    
|England, Buckinghamshire,(Amersham Place)  |  | Executive office                          |  |               | 4,903       |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|England, Gloucester                        |  | Offices, production, warehousing          |  |               | 3,570       |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|Germany, Braunschweig                      |  | Manufacturing/Commercial                  |  |               | 5,908
2,370 |                     |  | O
L
|                                           |  |                                           |  |               |             |                     |  |    
|Germany, Freiburg                          |  | Executive office                          |  |               | 1,912
2,377 |                     |  | L
O
|                                           |  |                                           |  |               |             |                     |  |    
|Hong Kong                                  |  | Commercial/manufacturing                  |  |               | 2,094       |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|Ireland, Cork                              |  | Production, warehousing and offices       |  |               | 16,350      |                     |  | O  
|                                           |  |                                           |  |               |             |                     |  |    
|Italy, Saluggia                            |  | Manufacturing/R&D/Commercial              |  |               | 4,500       |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|Japan, Chiba(1)                            |  | Manufacturing/R&D                         |  |               | 12973       |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|Japan, Hyogo (Nishinomiya
main
office)(1)  |  | Executive office                          |  |               | 1,812       |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|Japan, Hyogo(1)                            |  | Manufacturing                             |  |               | 11,039      |                     |  | O  
|                                           |  |                                           |  |               |             |                     |  |    
|Japan, Tokyo(1)                            |  | Executive office                          |  |               | 2,543       |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|Japan, Tokyo                               |  | Commercial/R&D                            |  |               | 3,700       |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|Norway, Lindesnes                          |  | Production, warehousing and offices       |  |               | 27,000      |                     |  | O  
|                                           |  |                                           |  |               |             |                     |  |    
|Norway, Oslo                               |  | Offices, R&D,
productions and warehousing |  |               | 46,777      |                     |  | O  
|                                           |  |                                           |  |               |             |                     |  |    
|Sweden, Staffanstorp                       |  | Commercial/manufacturing                  |  |               | 3,800       |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|Sweden, Umea                               |  | Commercial/manufacturing                  |  |               | 18,100      |                     |  | O  
|                                           |  |                                           |  |               |             |                     |  |    
|Sweden, Uppsala                            |  | Executive office/
manufacturing/R&D       |  |               | 105,000     |                     |  | O  
|                                           |  |                                           |  |               |             |                     |  |    
|US, Arlington Heights, Illinois            |  | Offices and manufacturing                 |  |               | 16,000      |                     |  | O  
|                                           |  |                                           |  |               |             |                     |  |    
|US, Chandler, Arizona                      |  | Manufacturing & R&D                       |  |               | 7,804       |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|US, Lawrenceville, New Jersey              |  | R&D offices                               |  |               | 1,500       |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|US, Piscataway, New Jersey                 |  | Commercial/R&D/
Manufacturing             |  |               | 25,000      |                     |  | O  
|                                           |  |                                           |  |               |             |                     |  |    
|US, Princeton, New Jersey                  |  | Offices                                   |  |               | 10,219      |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|US, San Francisco                          |  | Offices                                   |  |               | 4,467       |                     |  | O  
|                                           |  |                                           |  |               |             |                     |  |    
|US, South Plainfield, New Jersey           |  | Manufacturing                             |  |               | 2,090       |                     |  | O  
|                                           |  |                                           |  |               |             |                     |  |    
|US, Sunnyvale, California (two sites)      |  | Commercial/R&D/
Manufacturing             |  |               | 10,078      |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|US, Westborough, Massachusetts             |  | Manufacturing                             |  |               | 9,290       |                     |  | L  
|                                           |  |                                           |  |               |             |                     |  |    
|Wales, Cardiff (The Maynard Centre)        |  | R&D and manufacturing                     |  |               | 32,963      |                     |  | O  



---

|(1) |  | NMP properties
|--- |  | --------------

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Plans for expansion

Amersham Health has recently received approval from the Group to extend a
project to expand production capacity at the Lindesnes plant in Norway. This
project is planned to run until approximately 2005. In addition, Amersham
Health is currently carrying out an IT upgrade project due to be completed in
the UK at the end of 2003. Amersham Biosciences is in the process of
refurbishing its Pollards Wood site in the UK which is planned to be completed
by May 2003.

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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Introduction

The following discussion and analysis is based on and should be read in
conjunction with the Consolidated Financial Statements and Notes thereto
included in Item 18 Consolidated Financial Statements. The Consolidated
Financial Statements have been prepared in accordance with UK GAAP. The
principal differences between UK GAAP and US GAAP as they relate to the Group
are described in Note 38 of Item 18 Consolidated Financial Statements.
Reconciliation of the significant differences between UK GAAP and US GAAP are
also set forth in Note 38 of Item 18 Consolidated Financial Statements.

Basis of preparation

Summary

The discussion and analysis of the Consolidated Financial Statements is set out
as follows and provides comparisons of statutory reported data for the
following:



| |  | Results of operations for the 12 months to December 31, 2002 compared
with the 12 months to December 31, 2001;
|- |  | --------------------------------------------------------------------------------------------------------------
| 
| |  | Results of operations for the 12 months to December 31, 2001 compared
with the 12 months to December 31, 2000;
| 
| |  | Liquidity and capital resources.                                                                              

Commentary on the Companys R&D policies and intellectual property is included
in Item 4 Information on the Company, and within the discussion of the
results of operations for each year and in Trend Information below.
Commentary on significant trends in production, turnover and inventory is
included within the discussion of the results of operations for each year below
and in Trend Information below. Associated risks are discussed in Item 3.
Key Information  D. Risk Factors

Overview and general matters

Amersham plc is currently organized into two principal lines of business: the
medical imaging business (Amersham Health) and the biosciences business
(Amersham Biosciences).

Amersham Health

Amersham Health is a world leader in the development, manufacture and supply of
innovative products for the diagnosis and treatment of disease. Medical
imaging products are used when information is needed about parts of the body,
such as organs, tissues and blood vessels, which are not easily distinguishable
from the normal body background.

Amersham Health focuses on the management of heart and circulatory disease,
diseases of the brain such as stroke, Alzheimers Disease and Parkinsons
Disease, lung disease, and various cancers. Advances in scanning technologies
and procedures, and greater usage of such diagnostic procedures, are driving
demand for its products, along with the ageing population with its higher
incidence of such diseases.

Amersham Health is actively managing and developing its portfolio of diagnostic
and therapeutic products, which are focused in the areas of cardiology,
neurology, oncology and pulmonology.

As well as discussing revenues from these disease areas in the Operating and
Financial Review, Amersham Health further presents revenues from patented and
unpatented products, revenues by modality and also by their regional
performance.

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Amersham Biosciences

Amersham Biosciences is a world-leading provider of biotechnology systems and
solutions for research into genes and proteins, the discovery and development
of drugs, and the manufacture of biopharmaceuticals.

Effective January 1, 2002, Amersham Biosciences reorganized its business
streams, creating discovery systems consisting of the former drug discovery,
laboratory products, and service, agency and other business streams, and
maintaining the protein separations business stream. Segmental reporting has
been restated as appropriate for periods prior to January 1, 2002.

Through the two business areas, discovery systems and protein separations, we
bridge the gap between life sciences and healthcare. In discovery systems, we
provide high throughput systems to help researchers in industry and academia
understand the genetic and molecular basis of disease and speed up their drug
development. In protein separations, we provide research and manufacturing
technologies that enable pharmaceutical and biotech companies to bring new
biological drugs to the market. Together, these activities cover the gene to
drug spectrum.

Presentation of Information

We continue to assess the performance of the business on a like for like
comparable basis which excludes the impact of exceptional items, goodwill
amortization, foreign exchange rate fluctuations and disposed businesses.
Accordingly, in addition to quoting the absolute growth rates, we also quote a
like for like comparable growth rate excluding the impact of foreign exchange
rate fluctuations and, as appropriate, any other applicable items (ie
exceptional items, goodwill amortization and disposed businesses). Where
other items are not listed, they had no impact on the growth rate. The
impact of foreign exchange rate fluctuations is excluded by translating the
results of comparable periods using a common set of exchange rates.

Exchange Rate Fluctuations

The consolidated results of operations of Amersham plc are presented in pounds
sterling. The Group operates in currencies other than pounds sterling, in
particular the Norwegian kroner, Swedish krona, euro, US dollar and the
Japanese yen. As a result, fluctuations in these currencies compared to the
pound sterling are significant to Amersham plc and its shareholders because,
among other things, they affect the translation of the results of the non-UK
operations into pounds sterling, for the purposes of Amershams consolidated
financial statements. Movements in the exchange rates used to translate such
foreign currencies into pounds sterling may have a significant impact on
Amershams reported results of operations from year to year.

The principal financial exposure is to movements in foreign currency. These
comprise transaction exposures arising from currency cash flows and translation
exposures arising from the conversion of the results of foreign operations into
sterling.

The Group follows policies to reduce the impact of these currency fluctuations
through hedging. Anticipated transaction exposures are hedged on a rolling
six-month basis. In addition where sterling has deviated significantly from
purchasing power parity rates, longer-term forward cover is undertaken.
Profits earned overseas are not hedged. Treasury activities are coordinated
and managed by the Group treasury department in accordance with policies and
procedures approved by the Board. The department operates under close
management supervision and is subject to internal audit. It does not operate
as a profit center and no transactions of a speculative nature are undertaken.

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The key exchange rates for the Group in 2002, compared to 2001 and 2000, were
as follows:

|                 |  |                     |        |                     |  |                     |        |  |  |  |        | 
|---------------- |  | ------------------- | ------ | ------------------- |  | ------------------- | ------ |  |  |  | ------ | 
|                 |  | Average rate        |        | Average rate        |  | Average rate       
|Currency         |  | to sterling in 2000 |        | to sterling in 2001 |  | to sterling in 2002
|                 |  |                     |        |                     |  |                    
|Dollar           |  |                     | 1.51   |                     |  |                     | 1.44   |  |  |  | 1.51   | 
|Japanese yen     |  |                     | 164.00 |                     |  |                     | 183.00 |  |  |  | 188.00 | 
|Euro             |  |                     | 1.65   |                     |  |                     | 1.61   |  |  |  | 1.59   | 
|Swedish krona    |  |                     | 13.96  |                     |  |                     | 14.99  |  |  |  | 14.57  | 
|Norwegian kroner |  |                     | 13.36  |                     |  |                     | 12.97  |  |  |  | 11.99  | 

The impact of exchange rates on profit before tax in the year ended December
31, 2002 was neutral, after hedging, when compared to the year ended December
31, 2001, as a result of the benefits from translating profits earned in the
strengthening Scandinavian currencies offsetting the impact of weakening sales
in Japanese Yen and US Dollars.

In 2001, profit before tax was impacted by a favorable exchange effect of £26
million after hedging, when compared to the year ended December 31, 2000, as a
result of the strengthening US dollar and the weakening of the Scandinavian
currencies against sterling.

Dividends of Amersham, when declared, are paid in pounds sterling, with
Norwegian holders (holding their Amersham Ordinary Shares through the VPS, the
Norwegian securities registry) receiving dividends in Norwegian kroner at the
exchange rate applicable on the dividend record date. US holders of American
Depository Receipts (ADRs) receive dividends in US dollars at the exchange rate
applicable on the dividend record date. If all other factors remain constant,
an increase or decrease in the value of the US dollar or Norwegian kroner
against the pound sterling would respectively decrease or increase the US
dollar or Norwegian kroner value of dividends declared and paid by Amersham in
pounds sterling. Each of the relevant rates of exchange has been volatile in
the recent past, and no assurance can be given that they will not be volatile
in the future. Persons who wish to convert dividends or other distributions
declared and paid in pounds sterling into US dollars or Norwegian kroner may be
required to pay a transaction cost.

Effect of Inflation

Inflation is not considered to have a material effect on the results of the
Group.

Critical accounting policies

Our financial statements are based on the selection and application of
significant accounting policies, some of which require management to make
estimates and assumptions. These policies are in accord with all applicable
United Kingdom accounting standards. The following policies are believed to
involve a higher degree of judgment and complexity than other accounting
policies, all of which are described in Note 1 of Item 18 Consolidated
Financial Statements:

Investments  trade investments

The Groups accounting policy is to carry trade investments at cost less any
provision for impairment, restated to year end exchange rates if the underlying
investment is denominated in foreign currency. During 2002, a charge of £2.4
million was made against the profit and loss account to reflect a reduction in
the carrying value of listed investments following a material reduction in
their market value. The market value of listed investments at December 31,
2002 was £3.6 million and the carrying value after provisions for impairment
was £5.5 million. In applying its accounting policies, the Group has made an
assessment as to the long term value of the listed investments which assumes
that the market value will recover to at least meet their carrying value.
Should the value of the investments not recover and the market value decline
further, then it is possible that further provisions will be necessary. For US
GAAP reporting purposes, the listed trade investments are carried at market
value with the change in market value reflected in Other Comprehensive Income.
In the event a decline in market value is not considered temporary, the loss
will be taken as a charge to US GAAP current earnings.

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Goodwill

From January 1, 1998, the Companys accounting policy has been to capitalize
goodwill arising on acquisitions and to amortize it over its estimated useful
economic life when the goodwill is considered to have a limited useful economic
life in accordance with FRS 10 Goodwill and Intangible Assets. Goodwill is
amortized on a straight-line basis at rates currently from 5% to 14% per annum.
In accordance with UK reporting standards, capitalized goodwill is reviewed
for evidence of impairment at the end of the first full financial year
following the initial date of recognition and, from then on, if management
considers that events or changes in circumstance indicate that the amortized
carrying value of the goodwill is not recoverable. In accordance with FRS 10,
the Company will be required during 2003 to review goodwill arising on
acquisitions it has made in 2002, amounting to £742.8 million and which are
identified in Note 24 of Item 18 Consolidated Financial Statements. When
goodwill is considered to have a useful economic life, impairment testing under
UK GAAP allows only the cash generation during the useful economic life to be
included. Under US reporting standards, with the introduction of Statement of
Financial Accounting Standards (SFAS) 142 for fiscal years starting after
December 15, 2001, goodwill is assumed to be a non-wasting asset, having an
indefinite useful life and will be tested at least annually for impairment. As
goodwill is assumed to be non-wasting, the inclusion of a perpetuity value is
allowed in impairment testing.

Management does not believe that under either UK or US GAAP there is any
impairment in the carrying value of existing goodwill, based on its view of the
business and the expected likely cash flows that will be derived from the
businesses to which the goodwill relates. However, changes in market conditions
or business performance could cause fluctuations in the estimates of future
cash flows of the businesses to which goodwill relates and give rise to a
charge for impairment under both UK and US GAAP. This could be material to both
the balance sheet and profit and loss account of a particular year. At
December 31, 2002, under US GAAP, the carrying value of goodwill was £1,336
million and under SFAS 142 there was no impairment. Under UK GAAP the carrying
value of goodwill at December 31, 2002 was £704.2 million with £36.6 million
being amortized in the profit and loss account for the year. The significant
difference in the level of goodwill under UK GAAP and US GAAP is due to the
fact that the change in accounting policy to capitalize goodwill, as a result
of the introduction under UK GAAP of FRS 10, did not need to be applied
retrospectively to goodwill written off against shareholders funds in previous
years.

Provisions for radioactive decommissioning costs

The Group recognizes in full, under both UK and US GAAP, a provision
(discounted) for the cost of radioactive decommissioning when the relevant
fixed asset becomes operational and an equivalent asset is recognized. The
cost of radioactive decommissioning is determined on a going concern basis on
the basis that the manufacture or handling of radioactive products continues at
the relevant plant or facility on which the asset is operated for the
foreseeable future. In the unlikely event that the Company is required to
totally discontinue activities at one of its nuclear operating sites, the full
costs of exiting and decommissioning would be higher. The relevant
decommissioning asset is capitalized in the balance sheet in association with
the fixed asset to which it relates, and is amortized over the life of the
asset. The unwinding of the discount on the decommissioning provision is
charged in the profit and loss account as part of the interest charge.

The cost of decommissioning is estimated based on the latest technical
assessments of the process and methods likely to be used in carrying out the
decommissioning and the expected date of decommissioning the relevant facility.
For those sites where the assets are currently being used and are active,
these assumptions are reviewed regularly by management and the provision is
adjusted to reflect changes in assumption over the life of the assets. While
these assumptions reflect a high degree of uncertainty because they are looking
at facts and circumstances well into the future, they are unlikely to result in
a material change to either the balance sheet provision or profit and loss
account charge. However, when a decision is taken to exit a site, a more
detailed cost estimate is prepared and this is reviewed on an on-going basis as
the work progresses. Because of the technical uncertainties involved in
carrying out the decommissioning work, it is possible that this review could
result in a significant change in the overall decommissioning cost which will
be reflected as an immediate charge to the profit and loss account. In the
unlikely event that the Company is required to totally discontinue activities
at one of its nuclear operating sites the full costs of exiting and
decommissioning would be higher than provided for.

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Effluent costs associated with radioactive waste arising from operations for
which an authorized disposal route is available, principally low level and very
low level waste, are written off in the year in which they are incurred.
Provision is also made as incurred for the eventual disposal costs of the
Groups intermediate level waste, which arises from its operations. As with
decommissioning costs, these provisions are based on the latest technical
assessment of the process and methods likely to be used to dispose of this
waste and on industry estimates of the likely costs of the necessary disposal
facilities under the relevant governments preferred disposal route. While
these assumptions reflect a high degree of uncertainty because they are looking
at facts and circumstances well into the future, they are unlikely to result in
a material change to either the balance sheet provision or profit and loss
account charge.

At December 31, 2002, the Groups provision for costs associated with the
eventual decommissioning of facilities and the eventual disposal of
intermediate level waste was £65.5 million. The amounts charged to profit and
loss in respect of decommissioning and effluent costs for the year to December
31, 2002 were £5.1 million. Total decommissioning and effluent costs to be
incurred in the next ten years amount to approximately £37.4 million. The
provisions are based on the latest technical assessment of the process and
methods likely to be used stated at current prices and are discounted using a
real discount rate of 4%.

Pensions

The Group currently operates both defined benefit and defined contribution
pension schemes under arrangements that have been separately established by
each company in the Group. Costs are charged as incurred for defined
contribution schemes. However, for defined benefit schemes, the Groups policy
is to account for pension costs by charging the expected cost of providing
pensions over the period during which the Group benefits from the employees
service. The effects of variations from regular cost are spread over the
expected remaining service lives of members of the scheme. This approach is in
accord with the current UK Statement of Standard Accounting Practice (SSAP) 24
Accounting for Pension Costs. SSAP 24 requires the selection of a number of
actuarial assumptions including the expected long-term return on assets of the
pension fund. Actuarial assumptions reflect the best estimate of outcomes,
which carry significant uncertainty. These assumptions are reviewed regularly
with the fund actuaries and may be adjusted periodically based on current
conditions. The focus of the Groups policy is on achieving a relatively stable
charge to the profit and loss account to cover the Groups long-term future
pension liability based on current actuarial assumptions. Therefore changes in
assumption are unlikely to result in a material change to the balance sheet or
profit and loss account charge in a particular year. However, SSAP 24 does not
require us to reflect either the fair, or market, value of the funds assets or
liabilities.

The Group accounts for pension costs under SFAS 87 for US GAAP based on a
comparison of the projected benefit obligation with the market value of the
underlying plan assets. Principally, as a result of this difference in
methodology, the Groups US GAAP pension cost is more sensitive to changing
economic conditions.

A new UK accounting standard for pensions, FRS 17 Retirement Benefits, was
originally planned for implementation in 2003 but has been deferred by the UK
standard setters until 2005. FRS 17, similar to SFAS 87, approaches pensions
accounting from a balance sheet perspective with the aim of ensuring that
financial statements reflect the fair, or market, value of pension assets and
liabilities. Gains and losses will be reflected as incurred rather than being
spread over future accounting periods. An actuarial review of the impact of
moving to a fair, or market, value for the pension fund assets and liabilities
under FRS 17 indicates that the provision for pension costs would be increased
by £127 million on the Groups balance sheet as at December 31, 2002, whilst
the profit and loss account charge is broadly the same. As required under the
disclosure requirements of FRS 17, this is detailed within Note 30 of Item 18
Consolidated Financial Statements.

Deferred taxation

The Group provides for deferred taxation under FRS 19 Deferred Taxation.
This requires liabilities to be recognized for most types of timing differences
regardless of whether they are anticipated to reverse in the foreseeable
future. Deferred tax assets are only recognized to the extent it is more
likely than not that they will be recoverable. The recoverability of such
deferred tax assets is based upon likely business performance, normally the
businesss budget or strategic

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plan and tax planning opportunities available to the Group. In 2002, we
recognized a deferred tax asset of £9.2 million, relating to the utilization of
prior period tax losses following the formation of a consolidated tax group in
the US.

At December 31, 2002, the Group provided for a deferred taxation liability of
£61.5 million based on the current accounting policy and deferred tax assets of
£32.9 million. The 2001 year end accounts have now been restated to reflect
the introduction of FRS 19 and a deferred tax liability of £41.9 million has
been recorded in the December 31, 2001 balance sheet together with deferred tax
assets of £30 million.

Under US GAAP, the Group provides for deferred taxation on a full liability
basis and a valuation allowance is established when it is more likely than not
that some portion or all of a deferred tax asset will not be realized.

Contingent liabilities

The Group is involved in various disputes, and has a number of unresolved
issues, of a nature considered typical for its business, including those
relating to product liability, waste management and infringements of
intellectual property rights, validity of patents and taxation. Although there
can be no assurance regarding the outcome of any of these disputes, the Group
believes that on the basis of current available information they will not have
a material adverse impact on the Groups financial position.

Revenue recognition

Revenues are recognized once the realization of the consideration is reasonably
assured and the provision of the goods or services is substantially complete
with respect to the delivery of the specific product or performance of the
related service. This will normally be the case when there are no material
uncertainties or performance duties outstanding which could prevent the Company
from enforcing the sales transaction and collectibility is reasonably assured.
Product sales are normally recognized only when the goods are shipped to
customers in accordance with the terms of the contract with the customer.
Service revenues are recognized when the service is performed and there are no
significant uncertainties regarding the revenue to be received. The revenue
generated from technology transfer agreements is recognized evenly over the
life of the agreement in order to provide greater comparability between
different arrangements.

Under US GAAP, more prescriptive criteria are applied to assess whether the
culmination of the earnings process has occurred and as disclosed in Note 38 of
Item 18 Consolidated Financial Statements, the Group complies with Staff
Accounting Bulletin 101.

Inventory valuations

Inventories are stated at the lower of cost and net realizable value under both
UK and US GAAP. Provision is made for obsolescent and slow moving stocks and
for radioactive decay. The value of any provision for obsolescence or slow
moving inventory will consider managements best estimate of future sales.
Such forward looking estimates will carry uncertainty and so as projections
change to reflect actual trading performance, the level of provision may also
vary.

Receivable provisions

Provisions under both UK and US GAAP against doubtful receivables are made
taking into consideration the local market situation and past experience of our
dealings with the customer. It is possible that recoverability of a receivable
may change due to circumstances not currently foreseen by management.

Initial Adoption of New Accounting Standards

During 2002, we implemented FRS 19 Deferred Taxation, and have included the
further relevant disclosure requirements of FRS 17 Retirement Benefits.

Prior to implementing FRS 19, provision was made for deferred taxation, using
the liability method, on all material timing differences to the extent that it
was probable that a liability or asset would crystallize. Following the
implementation of FRS 19, liabilities will be recognized for most types of
timing differences regardless of whether they are anticipated to reverse in the
foreseeable future. Deferred tax assets will be recognized to the extent that
it is more likely than not they will

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be recoverable. The introduction of FRS 19 has not had any significant impact
on the Groups balance sheet. We have however restated the effective tax
charge for 2001 to take account of the new accounting standard, increasing last
years effective tax rate from 33.1% to 34.7% and reducing 2001 earnings per
share before exceptional and goodwill amortization from 27.2p to 26.6p.

FRS 17 will change the way that companies account for pensions and other
retirement benefits. During 2002 the introduction of the standard was deferred
until accounting periods ending after January 1, 2005. However, the transition
disclosure period has been extended until this time and so there are further
new disclosures required for the first time in 2002, which are contained in
Note 30 of Item 18 Consolidated Financial Statements. In common with many of
our peer companies, the fall in equity markets has had a significant impact on
our net liability under FRS 17, which has increased from £24 million to £127
million taking into account provisions we have on our balance sheet for
pensions, primarily for unfunded plans in territories where it is not normal
practice to have funded arrangements. This level of net liability, while
significant, can be managed comfortably within the liquidity of the Group going
forward. Had we adopted FRS 17 in 2002, then the charge would have been
broadly the same as under the current accounting standard SSAP 24. It should
also be noted that the net liability required to be disclosed under FRS 17 is
not necessarily the basis on which the funding decisions of the pension plans
within the Group are made. In particular, the triennial valuation of the
Companys UK plan will be made in 2003 and we expect the outcome of the
valuation to be adopted in 2003.

Under US GAAP, following the introduction of SFAS 142, goodwill and intangible
assets with indefinite useful lives are not amortized, but reviewed annually
for impairment. The 2002 amortization charge on such goodwill recognized for
UK GAAP has been reversed for US GAAP purposes as disclosed in Note 38 of Item
18 Consolidated Financial Statements.

Recently Issued Accounting Standards

UK GAAP

Retirement Benefits

In November 2000, the Accounting Standards Board, (ASB), issued FRS 17
Retirement Benefits. The standard will have a significant impact on the way
that companies account for pensions and other post retirement benefits in the
future. Although the standard does not become mandatory until accounting
periods beginning on or after January 1, 2005, it sets down transitional
arrangements which require footnote disclosures in the interim period up to
full adoption. Transitional disclosures required under the standard are given
in note 30 to the accounts.

US GAAP

Asset Retirement Obligations

In June 2001, the FASB published SFAS 143, Accounting for Asset Retirement
Obligations. The standard codifies the accounting for any obligations arising
from asset retirements, requiring the fair value of a liability for obligations
to be recognized in the period it is incurred. Upon initial recognition of
such a liability, entities should capitalize the cost by recognizing an
increase in the carrying value of the related tangible fixed asset. The
statement is effective for financial years beginning after June 15, 2002.

Costs Associated with Exit or Disposal Activities

In June 2002, the FASB published SFAS 146, Accounting for Costs Associated with
Exit or Disposal Activitieswhich addresses financial accounting and reporting
for costs associated with exit or disposal activities and nullifies Emerging
Issues Task Force (EITF) Issue no 94-3, Liability Recognition for Certain
Employee Termination Benefits and other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring). The statement requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred and can be measured at fair value. The
provisions of this statement are effective prospectively for exit or disposal
activities initiated after December 31, 2002.

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Disclosure Requirements for Guarantees

In November 2002, the FASB published Interpretation No 45, (FIN 45), Guarantors
Accounting and Disclosure Requirements for Guarantors, Including Indirect
Guarantees of the Indebtedness of Others. FIN 45 elaborates on the existing
disclosure requirements for most guarantees, including loan guarantees such as
standby letters of credit. FIN 45 will be effective on a prospective basis to
guarantees issued or modified after December 31, 2002.

Consolidation of Variable Interest Entities

In January 2003, the FASB published Interpretation No. 46, (FIN 46)
Consolidation of Variable Interest Entities.Under FIN 46, certain entities
known as Variable Interest Entities (VIE) must be consolidated by the
primary beneficiary of the entity. The primary beneficiary is generally
defined as having the majority of the risks and rewards arising from the VIE.
For VIEs in which a significant (but not majority) variable interest is held,
certain disclosures are required. The measurement principles of this
interpretation will be effective for the Groups December 31, 2003 financial
statements.

Financial Instruments with Characteristics of both Liabilities and Equity

In May 2003, the FASB published SFAS 150, Accounting For Certain Financial
Instruments with Characteristics of both Liabilities and Equity.The standard
establishes how an issuer classifies and measures certain financial instruments
with characteristics of both liabilities and equity and requires that an issuer
classify a financial instrument that is within its scope as a liability or an
asset in some circumstances. SFAS 150 will be effective for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June 15,
2003.

The Group is still evaluating the impact of SFAS 143, SFAS 146, FIN 45, FIN 46
and SFAS 150.

Events impacting comparability

Set out below are events, which impact the comparability of reported financial
information between the periods presented. Further discussion of acquisitions
and dispositions can be found in Item 4 Information on the Company.

Acquisitions

On March 21, 2002, the Group completed the purchase of the 45% minority
interest holding in Amersham Biosciences that it did not already own. The
purchase consideration was £704.1 million of cash, plus costs associated with
the purchase of £4.5 million. The purchase was financed by a placing of 57.5
million new Ordinary Shares on March 18, 2002, which generated £397.0 million
after costs of issue, together with the use of existing cash resources and
drawings under the Groups committed bank facilities. The transaction was
accounted for using purchase accounting. Goodwill of £692.3 million arose on
the transaction, and will be amortized over 20 years from the date of the
purchase. The 20 year useful life reflects the continuing investment in the
development of the business. Amersham Biosciences was already consolidated
with the rest of the Group as a result of our holding of the majority 55%
stake, and so its profits and cash flows are already included in the
consolidated profit and loss account and cash flow statement of the Group for
2000,2001 and 2002.

On January 31, 2002, the Group acquired 100% of the issued share capital of two
filtration companies, AG Technology Corp and InnovaSep Technology Corporation.
The fair value of the total consideration is £38.1 million, of which £11.8
million is deferred consideration and £6.7 million is the Groups best estimate
of deferred contingent consideration. The deferred contingent consideration is
dependent on the acquired companies reaching technological milestones and on
performance conditions. The ultimate amount of deferred and contingent
consideration payable is expected to be in the range of $15-$33 million.
Goodwill arising of £36.9 million is being amortized over ten years.

On May 10, 2002, the Group acquired a further 16% holding in Cimarron Software,
Inc, taking the Groups total holding at acquisition to 35%. Cimarron
Software, Inc is being consolidated as a subsidiary undertaking as the Group
controls the company through a shareholders agreement. Goodwill arising of
£6.3 million is being amortized over seven years. Prior to May 10, 2002
Cimarron Software, Inc was accounted for as a trade investment.

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Since May 10, 2002, the Group has subscribed for and was allotted additional
share capital in Cimarron Software Inc, taking its holding at December 31, 2002
to 44%. Goodwill recognized on the post-acquisition allotments of share
capital amounts to £1.7 million. The Group has obligations to subscribe for a
further 7% of share capital over the next three years, and has options to
acquire the remaining 49% of the company for a maximum consideration of $33
million, the total consideration payable being contingent on certain specified
performance conditions.

On July 11, 2002, the Group acquired the net assets of the CodeLink
pre-arrayed slides business from Motorola Life Sciences for £14 million.
Goodwill arising of £6.8 million is being amortized over ten years.

The Groups estimated useful life for these acquisitions reflects the period
over which the Group expects to receive benefits based on acquired patents and
technology and will thus be different in each acquisition.

Other events impacting
comparability of Group operating profit
In December 2000, Amersham Health recorded a charge of £10.9 million for the
costs of rationalizing our radiopharmaceutical production capacity at specific
sites in the US and Europe. The costs of the rationalization comprise
severance and other cash costs of £8.4 million and non-cash write off of £2.5
million. No further costs associated with the rationalization are expected.

In 2000 and 2001, costs of £6.4 million and £3.4 million respectively were
incurred in connection with the proposed partial flotation of Amersham
Biosciences. The costs relate primarily to adviser fees in preparing the
prospectus for the flotation and other related costs.

In July 2000, the Group sold its business Nycomed Amersham Medical Systems SA
(NAMS), in Paris, France, to Cathnet Sciences Holding A/S for a total
consideration of £10.0 million. After taking into account costs of disposal,
no gain or loss was made on the sale of the facility. Consideration which
remained unpaid at the end of 2002, of an immaterial amount, was provided for
in the 2002 accounts.

In 2001, the Company received £22.5 million related to a transfer of assets
from former pension plans. Of this amount £13.5 million has been applied
against ongoing liabilities primarily for employees who have transferred into
Amersham pension schemes and the balance of £9.0 million has been recognized as
exceptional income, where the Company has no further liability.

Also in 2001, costs of £8.5 million have been accrued in relation to the
decision to terminate the Groups lease at the Harwell site following a
cessation of the Groups manufacturing activities at the site. The costs
relate primarily to asset write offs and decommissioning costs.

In 2002, we recognized as an exceptional item a deferred tax asset of £9.2
million, relating to the utilization of prior period tax losses following the
formation of a consolidated tax group in the US.

Loss on disposal of discontinued
operations and fixed assets
In May 1999, the Group sold 71% of its Nycomed Pharma business to a new company
formed by a private equity group. The Group recorded a pre-tax gain of £11.5
million in the year ended December 31, 1999 after adding back attributable
goodwill previously written off to reserves. The tax charge on the disposal
amounted to £9.5 million. Further costs of £9.7 million with a related tax
credit of £1.1 million, associated with exiting from the Pharma business, were
accounted for in the year ended December 31, 2000 giving a total loss
associated with the disposal of £6.6 million after tax in 1999 and 2000. In
September 2001, the Group sold its remaining investment in Nycomed Pharma,
which consisted of shares and warrants, for £72.4 million and realized £50.6
million for the outstanding Nycomed Pharma loan notes held by the Group. The
Group has recorded a profit on the transaction of £55.3 million after charging
costs associated with the disposal, including the costs incurred in
transferring the Nycomed name to Nycomed Pharma. Subsequent to the transaction
the Company changed its name from Nycomed Amersham plc to Amersham plc. The
shares in Nycomed Pharma were owned by a legal entity in Holland and under
Dutch tax law, the gain on their disposal is not taxable.

The Group did not account for its remaining 29% equity interest in Nycomed
Pharma as an associated undertaking under UK GAAP as the company was controlled
by its majority

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shareholder and, in the opinion of the directors, the Group did not exercise
significant influence over its operations. The results of Nycomed Pharma were
therefore included as a discontinued operation for all years presented within
the financial statements. Under US GAAP, the investment was accounted for
using the equity method. The reconciliation of significant differences between
UK GAAP and US GAAP is set out in Note 38 of Item 18 Consolidated Financial
Statements.

Cash costs of £4.1 million and non-cash write offs of £1.7 million were
incurred in the second half of 2001 in concluding research on, and winding up
the operation of, an early stage investment in disease profiling. An
investment of £4.0 million was made in the research project in the first half
of 2001 and £3.7 million in the year ended December 31, 2000 which has been
charged to operating activities. No further costs will be incurred in relation
to this project.

A.     Operating Results

The following table sets forth certain items from the Groups Consolidated
Profit and Loss Account for the periods indicated, and also expressed as a
percentage of turnover:

|                                                           |  |                                        |         |            |  |      |       |    |  |  |         |   |  |  |       |    |  |  |         |   |  |  |       |   
|---------------------------------------------------------- |  | -------------------------------------- | ------- | ---------- |  | ---- | ----- | -- |  |  | ------- | - |  |  | ----- | -- |  |  | ------- | - |  |  | ----- | --
|                                                           |  | Year ended December 31                
|                                                           |  |                                       
|                                                           |  | 2000                                   |         | 2001       |  | 2002
|                                                           |  |                                        |         |            |  |     
|                                                           |  | (in £millions, except percentage data)
|                                                           |  | (Restated)                             |         | (Restated) |  |      |       |    |  |  |         |  
|Turnover including turnover of
joint venture               |  |                                        | 1,377.6 |            |  |      | 100.0 | %  |  |  | 1,602.5 |   |  |  | 100.0 | %  |  |  | 1,618.2 |   |  |  | 100.0 | % 
|Less share of joint venture turnover                       |  |                                        | (94.8   | )          |  |      | (6.9  | %) |  |  | (87.3   | ) |  |  | (5.5  | %) |  |  | (80.5   | ) |  |  | (5.0  | %)
|                                                           |  |                                        |         |            |  |      |       |    |  |  |         |   |  |  |       |    |  |  |         |   |  |  |       |   
|Group turnover                                             |  |                                        | 1,282.8 |            |  |      | 93.1  | %  |  |  | 1,515.2 |   |  |  | 94.5  | %  |  |  | 1,537.7 |   |  |  | 95.0  | % 
|Cost of sales                                              |  |                                        | (441.9  | )          |  |      | (32.1 | %) |  |  | (499.6  | ) |  |  | (31.2 | %) |  |  | (481.0  | ) |  |  | (29.7 | %)
|                                                           |  |                                        |         |            |  |      |       |    |  |  |         |   |  |  |       |    |  |  |         |   |  |  |       |   
|Gross profit                                               |  |                                        | 840.9   |            |  |      | 61.0  | %  |  |  | 1,015.6 |   |  |  | 63.3  | %  |  |  | 1,056.7 |   |  |  | 65.3  | % 
|Distribution, selling and
administration costs             |  |                                        | (518.2  | )          |  |      | (37.6 | %) |  |  | (595.8  | ) |  |  | (37.2 | %) |  |  | (622.5  | ) |  |  | (38.5 | %)
|R&D expenses                                               |  |                                        | (149.0  | )          |  |      | (10.8 | %) |  |  | (173.8  | ) |  |  | (10.8 | %) |  |  | (184.2  | ) |  |  | (11.3 | %)
|                                                           |  |                                        |         |            |  |      |       |    |  |  |         |   |  |  |       |    |  |  |         |   |  |  |       |   
|Group operating profit                                     |  |                                        | 173.7   |            |  |      | 12.6  | %  |  |  | 246.0   |   |  |  | 15.3  | %  |  |  | 250.0   |   |  |  | 15.5  | % 
|Share of operating profits of joint
venture and associates |  |                                        | 29.8    |            |  |      | 2.2   | %  |  |  | 26.1    |   |  |  | 1.6   | %  |  |  | 23.2    |   |  |  | 1.4   | % 
|                                                           |  |                                        |         |            |  |      |       |    |  |  |         |   |  |  |       |    |  |  |         |   |  |  |       |   
|Total operating profit                                     |  |                                        | 203.5   |            |  |      | 14.8  | %  |  |  | 272.1   |   |  |  | 16.9  | %  |  |  | 273.2   |   |  |  | 16.9  | % 
|Net interest payable                                       |  |                                        | (10.0   | )          |  |      | (0.8  | %) |  |  | (8.7    | ) |  |  | (0.5  | %) |  |  | (7.1    | ) |  |  | (0.4  | %)
|Amounts written off investments                            |  |                                        |        |            |  |      |      |    |  |  | (4.4    | ) |  |  | (0.3  | %) |  |  | (2.4    | ) |  |  | (0.2  | %)
|Profit on sale of fixed asset
investment                   |  |                                        |        |            |  |      |      |    |  |  | 55.3    |   |  |  | 3.5   | %  |  |  |        |   |  |  |      |   
|                                                           |  |                                        |         |            |  |      |       |    |  |  |         |   |  |  |       |    |  |  |         |   |  |  |       |   
|Profit before taxation                                     |  |                                        | 193.5   |            |  |      | 14.0  | %  |  |  | 314.3   |   |  |  | 19.6  | %  |  |  | 263.7   |   |  |  | 16.3  | % 
|Tax on profit on ordinary activities                       |  |                                        | (79.9   | )          |  |      | (5.8  | %) |  |  | (96.5   | ) |  |  | (6.0  | %) |  |  | (85.1   | ) |  |  | (5.3  | %)
|(Profit)/loss attributable to
minority interests           |  |                                        | (6.6    | )          |  |      | (0.5  | %) |  |  | (7.1    | ) |  |  | (0.5  | %) |  |  | 0.1     |   |  |  | 0.0   | % 
|                                                           |  |                                        |         |            |  |      |       |    |  |  |         |   |  |  |       |    |  |  |         |   |  |  |       |   
|Profit attributable to shareholders                        |  |                                        | 107.0   |            |  |      | 7.8   | %  |  |  | 210.7   |   |  |  | 13.1  | %  |  |  | 178.7   |   |  |  | 11.0  | % 
|                                                           |  |                                        |         |            |  |      |       |    |  |  |         |   |  |  |       |    |  |  |         |   |  |  |       |   

Figures for the years ending December 31, 2000 and 2001 have been restated
following the introduction of FRS19, as explained in Note 37 of Item 18
Consolidated Financial Statements.

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Financial year ended December 31, 2002 compared with the financial year ended
December 31, 2001

Turnover

Turnover increased by £15.7 million, or 1%, to £1,618.2 million in 2002,
compared to £1,602.5 million in 2001. Excluding sales attributable to disposed
businesses in Amersham Biosciences (which contributed a 1% increase in sales
growth) and at constant exchange rates, turnover increased by 7% in 2002.
Overall sales growth in sterling was adversely impacted by 5% by the weakening
of the dollar and yen against sterling during the year.

Excluding sales attributable to the 50% share of NMP, our joint venture in
Japan with Sumitomo Chemical Co Ltd., Group turnover increased by £22.5
million, or 1%, to £1,537.7 million in 2002 compared to £1,515.2 million in
2001.

There was growth in turnover across all regions with the exception of Amersham
Health bulk sales in Japan, reflecting the continuing difficult trading
conditions in this market due to the general economic climate and a reduction
in in-market prices as a result of the Japanese governments biennial
pharmaceutical price review.

Turnover of our business segments for the following periods is stated below:

|                     |  |                         |         |      |  |  |         | 
|-------------------- |  | ----------------------- | ------- | ---- |  |  | ------- | 
|                     |  | Year ended December 31,
|                     |  |                        
|                     |  | 2001                    |         | 2002
|                     |  |                         |         |     
|                     |  | (in millions)          
|Turnover             |  |                         | £       |      |  |  | £       | 
|Amersham Health(1)   |  |                         | 922.0   |      |  |  | 947.7   | 
|Amersham Biosciences |  |                         | 680.5   |      |  |  | 670.5   | 
|                     |  |                         |         |      |  |  |         | 
|                     |  |                         | 1,602.5 |      |  |  | 1,618.2 | 
|                     |  |                         |         |      |  |  |         | 



---

|(1) |  | Included within Amersham Health is the Groups share of NMP joint venture
turnover of £80.5 million (2001  £87.3 million)
|--- |  | --------------------------------------------------------------------------------------------------------------------------

Amersham Health

Turnover increased by £25.7 million, or 3%, to £947.7 million in 2002, compared
to £922.0 million in 2001. At constant exchange rates, turnover increased by
8% in 2002.

Our patented medical diagnostic products maintained the growth trends of
earlier years, growing by £54.5 million, or 18%, to £353.5 million in 2002,
compared to £299.0 million in 2001. At constant exchange rates, this
represents growth of 22%. Our cash generative unpatented product sales fell by
£2.5 million, or 0.6%, from £363.3 million in 2001 to £360.8 million in 2002.
At constant exchange rates, this represents growth of 5%. There were a number
of products that were previously classified within Therapy but were moved to
the unpatented portfolio during 2002. Hence, the 2001 unpatented sales, which
were previously disclosed as £353.0 million, have been restated accordingly.
In the second half of 2002, patented product sales exceeded sales of unpatented
products for the first time.

The following table shows turnover within the Health segment split by modality.
2001 figures have been reclassified in line with changes to modalities during
2002.

|                               |               |  |                         |       |      |  |       |       | 
|------------------------------ | ------------- |  | ----------------------- | ----- | ---- |  | ----- | ----- | 
|                               |               |  | Year ended December 31,
|                               |               |  |                        
|                               |               |  | 2001                    |       | 2002
|                               |               |  |                         |       |     
|                               |               |  | (in millions)          
|Net turnover  Amersham Health |               |  | £                       |       |      |  | £     |      
|X-Ray: North America           |               |  | 195.6                   |       |      |  | 199.8 |      
|                               | Rest of world |  |                         | 128.5 |      |  |       | 135.3 | 
|                               |               |  |                         |       |      |  |       |      
|Total X-Ray                    |               |  | 324.1                   |       |      |  | 335.1 |      
|                               |               |  |                         |       |      |  |       |      

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|                               |  |                         |       |      |  |  |       | 
|------------------------------ |  | ----------------------- | ----- | ---- |  |  | ----- | 
|                               |  | Year ended December 31,
|                               |  |                        
|                               |  | 2001                    |       | 2002
|                               |  |                         |       |     
|                               |  | (in millions)          
|Net turnover  Amersham Health |  |                         | £     |      |  |  | £     | 
|Radiopharmaceutical imaging    |  |                         | 245.0 |      |  |  | 269.1 | 
|MRI                            |  |                         | 85.8  |      |  |  | 96.9  | 
|Bulk sales and royalties       |  |                         | 90.9  |      |  |  | 74.7  | 
|Therapy                        |  |                         | 71.3  |      |  |  | 61.5  | 
|NMP (50% joint venture)        |  |                         | 87.3  |      |  |  | 80.5  | 
|Other                          |  |                         | 17.6  |      |  |  | 29.9  | 
|                               |  |                         |       |      |  |  |       | 
|                               |  |                         | 922.0 |      |  |  | 947.7 | 
|                               |  |                         |       |      |  |  |       | 

In X-ray diagnostics, turnover in 2002 increased by £11.0 million, or 3%, to
£335.1 million in 2002, from £324.1 million in 2001. At constant exchange
rates, sales of X-ray diagnostics in 2002 increased by 8% compared to 2001.
The increase in turnover of X-ray diagnostics was mainly due to increased
turnover of Omnipaque and Visipaque, which increased in the year by 6% and
18% respectively at constant exchange rates. The X-ray product Omnipaque was
launched over 20 years ago and is still the best selling in vivodiagnostic
product on the market.

The radiopharmaceuticals diagnostic segment grew by £24.1 million, or 10%, to
£269.1 million in 2002 from £245.0 million in 2001. At constant exchange
rates, this represents an increase of 14%. Products within this category
include Myoview which grew by £22.6 million, or 20%, to £132.9 million in 2002.
This represents an increase of 26% at constant exchange rates. Sales of our
innovative molecular diagnostic DaTSCAN have grown every year since its launch
in Europe in 2000.

Magnetic resonance imaging (MRI) sales grew by £11.1 million, or 13%, to £96.9
million in 2002 from £85.8 million in 2001. This represents an increase of 17%
at constant exchange rates. Omniscan, our leading MRI product, is used in
neurology to detect stroke, brain tumors and other brain abnormalities.
Omniscan continues to be a market leader in this area and is the number one
non-ionic MRI contrast medium sold throughout the world, achieving sales of
£96.1 million in 2002.

Bulk sales and royalties reduced by £16.2 million, or 18%, to £74.7 million in
2002 compared to £90.9 million in 2001. This represents a decrease of 14% at
constant exchange rates. The majority of these sales are in Japan and were
impacted negatively by a government price reduction which took effect in spring
2002.

Therapy products suffered price and volume reductions for OncoSeed in the US
with total sales of therapy products down £9.8 million, or 14%, from £71.3
million in 2001 to £61.5 million in 2002. This represents a decrease of 10% at
constant exchange rates. The full portfolio of brachytherapy seeds for
prostate cancer treatment achieved sales of £50.5 million in 2002, a decrease
of £7.7 million, or 13%, from sales of £58.2 million in 2001. This represents
a decrease of 10% at constant exchange rates. Continued increases in demand
for Rapid Strand (up 27%, or 30% at constant exchange rates), mainly as a
result of new seed implant centre openings, helped to partially offset the
OncoSeed decline.

NMP, our joint venture with Sumitomo Chemical Company Limited in Japan,
produced turnover of £80.5 million in 2002, compared to £87.3 million in 2001,
a decrease of £6.8 million or 8%. At constant exchange rates, this represented
a decrease of less than 1%.

In its first full year under Amershams ownership, Optison achieved
satisfactory results with worldwide sales of £9 million in the new, yet
emerging, ultrasound contrast media market. In North America, we have built a
specialized sales force for developing this new market through focused
education and by working with key opinion leaders. EU marketing authorization
for Optison was granted in June 2002.

Amersham Biosciences

Sales decreased by £10 million, or 1%, to £670.5 million in 2002 compared to
£680.5 million in 2001. Excluding sales from disposed businesses and at
constant exchange rates, this represents

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an increase in sales of 6%. The disposed businesses had a 2% benefit to sales
growth whilst the impact of exchange was 5% adverse. The decrease in turnover
compared to 2001 was caused by the effect of exchange rates and a reduction in
discovery systems product sales where customers, in particularly biotechnology
companies, were impacted by the weakened economy and equity market conditions
largely offset by growth in protein separations turnover globally.

In each geographic region protein separations growth was able to offset the
reduction in turnover in discovery systems. The following table sets forth the
change in turnover by geographic region in 2002 compared to 2001 after
adjusting for the effect of exchange rate fluctuations:

|                  |  |                         |    |   
|----------------- |  | ----------------------- | -- | --
|Geographic Region |  | % increase / (decrease)
|                  |  |                        
|North America     |  |                         | 3  | % 
|Europe            |  |                         | 8  | % 
|Japan             |  |                         | 11 | % 
|Asia Pacific      |  |                         | (2 | %)
|Rest of World     |  |                         | (5 | %)
|Company Overall   |  |                         | 6  | % 

The following table shows turnover within the Amersham Biosciences segment
split into individual business streams. Effective January 1, 2002, Amersham
Biosciences reorganized its business streams, creating discovery systems
consisting of the former drug discovery, laboratory products, and service,
agency and other business streams, and maintaining the protein separations
business stream. Segmental reporting has been restated as appropriate for
periods prior to January 1, 2002.

|                    |  |                         |       |      |  |  |       | 
|------------------- |  | ----------------------- | ----- | ---- |  |  | ----- | 
|                    |  | Year ended December 31,
|                    |  |                        
|                    |  | 2001                    |       | 2002
|                    |  |                         |       |     
|                    |  | (in £ millions)        
|Turnover            |  |                         |       |      |  |  |       | 
|Discovery systems   |  |                         | 412.8 |      |  |  | 394.2 | 
|Protein separations |  |                         | 267.7 |      |  |  | 276.3 | 
|                    |  |                         |       |      |  |  |       | 
|                    |  |                         | 680.5 |      |  |  | 670.5 | 
|                    |  |                         |       |      |  |  |       | 

In the discovery systems stream, turnover decreased to £394.2 million in 2002,
down £18.6 million, or 5%, from £412.8 million in 2001. This represents a
decrease of 1% at constant exchange rates. Sales were impacted by market
conditions, notably the slowdown in pharmaceutical company spending on capital
equipment. Instrument sales, representing about 25% of discovery systems sales,
were down significantly compared with 2001. However, customer spending on
consumables, reagents and software remained good.

In genomics, we are the market leader in enzymology and our sales of reagents
and consumables not only reduce our exposure to the market slowdown in
instrumentation sales, but also underpin our vision of developing technologies
to enable personalized medicine. TempliPhi, the DNA template preparation kit,
continued to make good progress. All of the five major public genome centers
now use TempliPhi, with three of them  the Joint Genome Institute, the
Whitehead Institute, and Baylor College of Medicine  using it in daily
sequence production. It is also seeing increasing acceptance in Japan. New
products based on this technology are in development, and the first of these,
GenomiPhi, will be launched in 2003 for use in whole genome amplification.

The proteomics product area also saw sales growth in reagents and consumables.
Our market-leading 2D DIGE technology, which allows the protein content of
several samples to be simultaneously analyzed and compared, continued to grow
well and development work is ongoing to expand further the range of DIGE
reagents and software. During 2002, we launched our new MALDI mass
spectrometer, the Ettan MALDI TOF Pro for protein characterization, as part of
the complete Ettan range of systems for stand alone or integrated protein
analysis.

Researchers use bioassays products to quantify the biological processes
involved in cellular activity, metabolism and disease. Pharmaceutical
customers use our products to identify drug targets and develop potential new
drugs, eliminating poor drug candidates and those with side

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effects as early as possible, thus reducing the time and cost spent in drug
development. We launched two new instruments in 2002. The latest generation
LEADseeker was launched in September 2002. The INCell Analyzer high
throughput system, which enables researchers to study the effects of a
potential new drug in living cells in real time, continued to be well received
by customers, and a number of systems were sold in the last quarter of the
year. We also saw particularly good growth in custom-labeled products used in
the drug development process, as pharmaceutical companies began to outsource
more of this work.

Turnover in protein separations increased by £8.6 million, or 3%, to £276.3
million compared to £267.7 million in 2001. At constant exchange rates, this
represents an increase of 15%, driven by growth in bioprocess sales and
including first-time benefit from filtration or membrane separation products.
As anticipated, our sales accelerated through the year, with the fourth quarter
being particularly strong as biotech and pharmaceutical companies purchased
manufacturing instruments and media for new production plants and for new drugs
going into clinical trials. We also saw good replenishment sales of media for
existing biopharmaceuticals.

In addition, two further areas contributed to the growth for industrial-scale
bioprocess systems in 2002. First, the market for products used in the
manufacture of DNA-based pharmaceuticals began to grow rapidly, driving sales
of our OligoProcess systems. Second, the membrane separation businesses,
acquired in January, delivered good sales as biopharmaceutical customers took
advantage of the broader product offering. Membrane separation has been
successfully integrated into Amersham Biosciences and a new site in
Massachusetts, US, will be completed in the first half of 2003.

The laboratory separations area saw lower instrument sales, following the
exceptionally high growth in 2001, and as a result of more cautious spending by
pharmaceutical companies. Media sales continued to be good, and a new
instrument, ÄKTA Pilot, launched in December for the production of clinical
grade proteins on the benchtop, has been well received by customers.

Gross profit

Gross profit increased by £41.1 million, or 4%, to £1,056.7 million in 2002
compared to £1,015.6 million in 2001. Gross profit as a percentage of turnover
increased to 65.3% in 2002 compared to 63.3% in 2001. There were no
exceptional items in 2002. In 2001, exceptional items amounted to a credit of
£0.5 million relating to the net of a £8.5 million decommissioning provision
and a £9.0 million pension refund.

The increase in profitability of continuing operations was mainly due to
increased revenue from a better product mix including strong growth in high
margin patented products across both businesses, partially offset by reduced
sales of bulk products in Japan in Amersham Health.

Distribution, selling and administrative costs

Total Group distribution, selling and administration costs increased by £26.7
million, or 4%, to £622.5 million in 2002 compared to £595.8 million in 2001.
As a percentage of turnover this represents an increase from 37.2% in 2001 to
38.5% in 2002. Goodwill amortization, which increased by £24.9 million from
£11.7 million in 2001 to £36.6 million in 2002, is charged to distribution,
selling and administration costs.

Included in distribution, selling and administration costs in 2001 were
exceptional expenses of £9.2 million. There are no exceptional costs in 2002.
In 2001, these related to costs incurred in the exit of the disease profiling
project and costs relating to the proposed partial flotation of Amersham
Biosciences. See Events impacting comparability.

Excluding exceptional items, costs from continuing operations increased by
£35.9 million, or 6%, from £586.6 million in 2001 to £622.5 million in 2002.
As a percentage of turnover however, this represents an increase of 1.9% from
36.6% to 38.5%.

Costs grew with inflation and in Amersham Health higher costs were incurred due
to the addition of five new radiopharmacies in North America and the full year
costs of building a sales team for the promotion of the new ultrasound product
Optison.

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R&D expenses

R&D costs for the year ended December 31, 2002 were £184.2 million, an increase
of £10.4 million or 6% compared to 2001. Amersham Health R&D costs increased
by £12.1 million, or 15%, to £95.1 million in 2002 compared to £83.0 million in
2001. Costs related to Imanet (which are covered by revenues from
pharmaceutical companies for scanning services) accounted for £3 million of
this increase. This represents 10% of Amersham Healths turnover in 2002
compared with 9% in 2001. R&D expenditure in Amersham Biosciences increased by
£1.6 million, or 2%, from £86.4 million in 2001 to £88.0 million in 2002. This
represents 13% of Amersham Biosciences turnover in 2002, unchanged as a
percentage of turnover from 2001. R&D expenditure for the Corporate and Other
segment was £1.1 million, reduced from the £4.4 million of exceptional costs
recorded in 2001 relating to the disease profiling project which was
discontinued during that year.

Amersham Health

Cardiology

Cardiovascular disease continues to be one of the most rapidly expanding
diseases globally and a major cause of death in North America and Europe.
Amersham offers a broad range of products across the range of modalities to
enable physicians to understand the health of a patients heart.

Myoview is our leading radiopharmaceutical diagnostic for visualizing the
supply of blood to the heart. In 2001, this product was approved for use with
pharmacological stress agents. In 2002 we completed a phase III trial with
Myoview for a new cardiac indication, left ventricular function, and US
regulatory approval was received in February 2003.

The safety profile of our third generation X-ray diagnostic, Visipaque, was
further strengthened through a landmark study carried out by the Karolinska
Institute in Stockholm, Sweden in 2002 and published in the prestigious New
England Journal of Medicine in February 2003. The NEPHRIC study showed that
Visipaque significantly reduces the relative risk of developing contrast
media-induced impairment of renal function, a serious clinical problem in some
patient groups.

We successfully completed phase II trials to extend the use of our MRI product
Omniscan in cardiac perfusion and for monitoring blood flow through the renal
arteries. Phase III studies in the US and Europe are being planned and should
commence towards the end of 2003.

In the US and Europe, myocardial perfusion has been the primary target market
for the development of Sonazoid, a third generation ultrasound product. The
use of ultrasound for this indication has been limited by the slow development
of sufficiently robust imaging procedures. Therefore, although Sonazoid has
shown promising safety data, a decision has been taken to suspend work in the
US and Europe and to continue to focus on Optison, our ultrasound product
which is marketed for improved visualization of the surfaces of the heart
muscle. In Japan, the development of Sonazoid by our partner, Daiichi
Pharmaceutical Co. Ltd., continues. The first use of Sonazoid imaging in Japan
will be established in the liver disease market.

Neurology

DaTSCAN, a molecular diagnostic, is Amershams newest entrant to the field of
neuro-imaging. It is the only registered product enabling physicians to
objectively identify Parkinsons disease through cellular change in the brain,
and to distinguish this from a similar disease, Essential Tremor. DaTSCAN is
also being developed for the differentiation of Lewy body from other forms of
dementia. Based on supporting proof-of-concept data from external studies, a
revised development program has been initiated to greatly reduce time-to-market
and we will proceed directly to phase III studies of DaTSCAN for this new
indication.

A technetium-based product, Trodat, also for the diagnosis of Parkinsons
disease, is being developed for the US market and all pre-clinical milestones
have been met to date.

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Cancer

Myoview, our radiopharmaceutical diagnostic, obtained approval for a new
indication in Europe for use in breast tumor imaging in 2002. Breast cancer is
one of the most common cancers in women, and while advances have been made in
breast cancer treatment, the success of these treatments is highly dependent
upon early and accurate diagnosis of the functional status of the disease.
Such diagnosis can now be achieved with the use of Myoview.

The new chemical entity NC100692 for the imaging of angiogenesis (blood supply
to a tumor) and other potential indications has progressed well in its
pre-clinical safety, pharmacology and formulation stages.

Pulmonology

Lung disorders involve a range of problems, from chronic conditions such as
asthma to sudden death due to pulmonary embolism. We are beginning to see
promising results from our Thrombus agent, NC100668, which moved into phase II
trials in April. This radiopharmaceutical agent has the potential to identify
patients with pulmonary embolism earlier than other diagnostic techniques. We
also continue to develop the technology relating to Spin Signal, using
Helispin to enable early detection of lung disease through high-resolution
ventilation imaging of gases using MRI.

Developments in PET imaging

The use of positron emission tomography (PET) for the early detection of tumors
is becoming widely accepted, using fluorodeoxyglucose (FDG) as the imaging
agent. Progress is being made in our collaboration with General Electric
Medical Systems on the development of a solid-phase chemistry delivery system
for use in an FDG cassette. Through this collaboration, we will be able to
provide hospitals and clinics with PET imaging products such as FDG, with
consistently high quality. We are also working to develop new PET diagnostics
for neurological indications.

NMP, our joint venture with Sumitomo Chemical Company Limited in Japan, is
planning to invest £68 million in manufacturing facilities to deliver PET
diagnostic products to key medical centers in Japan. NMP aims to construct six
new manufacturing facilities to supplement its three existing sites. Under
current regulations NMP expects to gain a six-year exclusivity period in the
Japanese market for its first PET diagnostic product.

We continue to expand our Imanet network of imaging research centers, which
began in 2001 with the formation of a joint venture with the Medical Research
Council in the UK. In 2002 we added a second Imanet centre in conjunction with
the University of Uppsala, Sweden. In February 2003, we established a new
centre in Finland, TRIS (Turku Research Imaging Solutions Oy), which will work
in partnership with Turku PET Centre. Imanet provides diagnostic services,
including PET, to assist the pharmaceutical industry in monitoring the
effectiveness of new drugs during the development stage. This helps us
identify new diagnostic molecules for use in very specific therapeutic
applications and in January 2002 we announced a major research collaboration
with Pfizer to achieve this. With contractual work for the majority of the
worlds top pharmaceutical companies in addition to the strategic collaboration
with Pfizer, Imanet is progressing well financially as well as scientifically.

Amersham Biosciences

Amersham Biosciences has now completed a sustained period of building
investment in R&D, particularly within the discovery systems business stream,
creating a broad portfolio from which to launch new products.

Discovery systems R&D expenditure decreased to £66.5 million in 2002 compared
to £69.4 million in 2001, a decrease of £2.9 million or 4%. The minor
reduction was primarily due to genomics eliminating development expenditure as
certain significant instruments were completed and launched in 2001, like the
MegaBACE 4000. Products completing development and launched in 2002 include,
in proteomics, two new high throughput systems to add to the existing Ettan
range, Ettan 2D DIGE and the Ettan MALDI ToF Pro.

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Protein separations R&D expenditure increased to £21.5 million in 2002 compared
to £17.0 million in 2001. The 2002 expenditure increased as expected to
encompass filtration technology through recent investments and due to the start
up of new bulk resin development projects.

Group operating profit

|                                                             |  |                         |       |      |  |  |       | 
|------------------------------------------------------------ |  | ----------------------- | ----- | ---- |  |  | ----- | 
|                                                             |  | Year ended December 31,
|                                                             |  |                        
|                                                             |  | 2001                    |       | 2002
|                                                             |  |                         |       |     
|                                                             |  | (in £ millions)        
|Operating profit                                             |  |                         |       |      |  |  |       | 
|Total continuing operating profit before non-recurring items |  |                         | 280.8 |      |  |  | 273.2 | 
|Exceptional items                                            |  |                         | (8.7  | )    |  |  |      | 
|                                                             |  |                         |       |      |  |  |       | 
|                                                             |  |                         | 272.1 |      |  |  | 273.2 | 
|                                                             |  |                         |       |      |  |  |       | 

Group operating profit increased by £1.1 million to £273.2 million in 2002, and
as a percentage of sales remains unchanged from 2001 at 16.9%. At constant
exchange rates, however, operating profit fell by 3% as a result of a £24.9
million increase in goodwill amortization following the purchase of the 45%
minority interest in Amersham Biosciences.

Group operating profit before exceptional items and goodwill amortization
increased by £17.3 million or 11% from £292.5 million in 2001 to £309.8 million
in 2002. Exceptional items were nil and a charge of £8.7 million in 2002 and
2001 respectively and goodwill amortization was a charge of £36.6 million and
£11.7 million respectively. There was a 1% adverse impact on Group operating
profit due to exchange rate fluctuations in 2002. Excluding the impact of
exceptional items, goodwill amortization and at constant exchange rates,
operating profit in 2002 increased by 7%.

See Events impacting comparability for further details of the exceptional
items in 2001.

|                     |  |                         |       |      |  |  |       |  
|-------------------- |  | ----------------------- | ----- | ---- |  |  | ----- | -
|                     |  | Year ended December 31,
|                     |  |                        
|                     |  | 2001                    |       | 2002
|                     |  |                         |       |     
|                     |  | (in £millions)         
|Operating profit     |  |                         |       |      |  |  |       |  
|Amersham Health      |  |                         | 231.0 |      |  |  | 254.7 |  
|Amersham Biosciences |  |                         | 59.5  |      |  |  | 39.6  |  
|Corporate and Other  |  |                         | (18.4 | )    |  |  | (21.1 | )
|                     |  |                         |       |      |  |  |       |  
|                     |  |                         | 272.1 |      |  |  | 273.2 |  
|                     |  |                         |       |      |  |  |       |  

Operating profit of the Amersham Health segment increased by £23.7 million, or
10%, to £254.7 million in 2002 from £231.0 million in 2001. The operating
margin for the segment was 27% in 2002 compared to 25% in 2001. In 2002 and
2001 respectively, goodwill amortization of £0.9 million and £1.4 million and
exceptional items of nil and £8.5 million were attributable to the segmental
operating profit. Excluding goodwill amortization and exceptional items,
operating profit increased by 6% from £240.9 million in 2001 to £255.6 million
in 2002, representing an increase of 9% at constant exchange rates with a 3%
adverse impact caused by exchange rate fluctuations. Trading margins were
strong throughout with the benefits of product mix and manufacturing
efficiencies.

Operating profit of the Amersham Biosciences segment fell by £19.9 million, or
33%, from £59.5 million in 2001 to £39.6 million in 2002. Operating margins
fell from 9% in 2001 to 6% in 2002. In 2002 and 2001 respectively, goodwill
amortization of £35.7 million and £10.3 million and exceptional items of nil
and £2.6 million were attributable to the segmental operating profit. The
increase in goodwill amortization primarily related to the acquisition of the
minority holding in Amersham Biosciences in March 2002.

Excluding goodwill amortization and exceptional items, operating profit for the
segment increased to £75.3 million in 2002 compared to £72.4 million in 2001
and represents a flat profit at constant exchange rates and with an adverse
impact of exchange rate fluctuations of less than 0.5%. The

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CodeLink and Cimarron acquisitions had a dilutive impact which if excluded
would see operating profit excluding goodwill amortization and exceptional
items, and at constant exchange rates increase to 9% from the flat growth noted
above. This is as a result of a good operating margin in protein separations
and the settlement in February 2002 of the Applera patent litigation.

Within Amersham Biosciences, operating profit before exceptional items and
goodwill amortization of protein separations grew by £11.5 million, or 12%, to
£107.5 million in 2002, compared to £96 million in 2001. This was driven by
the 15% increase in turnover as discussed above. In discovery systems, the
operating loss before exceptional items and goodwill amortization was £32.2
million in 2002 compared to £23.6 million in 2001. The increase in operating
loss was due to negative market conditions, notably the slowdown in
pharmaceutical company spending on capital equipment.

Profit on sale of fixed asset investment

In September 2001, the Group sold its remaining investment in Nycomed Pharma,
which consisted of shares and warrants, for £72.4 million and received £50.6
million in respect of the outstanding Nycomed Pharma loan notes held by the
Group. The Group has recorded a profit on the transaction of £55.3 million
after charging costs associated with the disposal, including the costs incurred
in transferring the Nycomed name to Nycomed Pharma.

Amounts written off investments

We have taken a charge in 2002 of £2.4 million against the carrying value of
listed investments following a reduction in their equity value in 2002.

Net interest payable

Interest costs of £7.1 million in 2002 were £1.6 million lower than in 2001 as
our net debt was held in currencies with lower interest rates compared to
2001.

Tax on profit on ordinary activities

In 2002, the taxation charge was £85.1 million compared to a charge of £96.5
million in 2001, representing an effective tax rate of 32.3% in 2002 compared
to 30.7% in 2001.

The taxation charge before exceptional items and goodwill amortization was
£94.3 million in 2002 compared to a charge of £97.0 million in 2001. The
effective tax rate before exceptional items and goodwill amortization of 31.4%
in 2002 was down from 34.7% in 2001. The 3.3% reduction in effective tax rate
before exceptional items and goodwill amortization reflects the tax benefits
derived following the purchase of the minority stake in Amersham Biosciences
and the favorable settlement of a number of prior year items, which contributed
approximately 1.1% to the reduction.

Following the introduction of FRS 19 Deferred Taxation during 2002, the 2001
tax charge was restated to £96.5 million, being previously £92.0 million,
increasing the effective tax rate in 2001 by 1.4% to 30.7%. This was primarily
as a result of the treatment of tax deductible goodwill required by FRS 19.
The 2001 taxation charge before exceptional items and goodwill amortization was
restated to £97.0 million from £92.5 million, increasing the effective tax rate
before exceptional items and goodwill amortization by 1.6% to 34.7%. The
impact of the introduction of this new accounting standard is disclosed in Note
37 of Item 18 Consolidated Financial Statements.

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Profit attributable to shareholders

Profit and losses attributable to minority interest relates primarily to the
45% interest that Pharmacia Corporation held in Amersham Biosciences. Profit
attributable to shareholders after charging exceptional items and goodwill
amortization was £178.7 million in 2002 and £210.7 million in 2001 (as restated
to reflect the introduction of FRS 19 Deferred Taxation).

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Financial year ended December 31, 2001 compared with the financial year ended
December 31, 2000

Turnover

Turnover increased by £224.9 million, or 16%, to £1,602.5 million in 2001,
compared to £1,377.6 million in 2000. This represents an increase of 13% at
constant exchange rates. For Amersham Health this calculation excludes
turnover of £6.8 million relating to the Amersham Medical Systems (NAMS)
business, which was sold in 2000, and £2.2 million relating to the discontinued
NMP in vitrobusiness. Overall, exchange rates had a favorable impact of £55.0
million or 3% on sales in 2001.

Excluding sales attributable to the 50% share of NMP, our joint venture with
Sumitomo Chemical Co Ltd. in Japan, Group turnover was £1,515.2 million in
2001, an increase of £232.4 million or 18%, on turnover of £1,282.8 million in
2000.

There was strong growth in turnover across all regions with the exception of
Amersham Health bulk sales in Japan, reflecting the difficult trading
conditions in this market due to the general economic situation and the
pharmaceutical pricing environment.

Turnover of our business segments for the following periods is stated below:

|                     |  |                         |         |      |  |  |         | 
|-------------------- |  | ----------------------- | ------- | ---- |  |  | ------- | 
|                     |  | Year ended December 31,
|                     |  |                        
|                     |  | 2000                    |         | 2001
|                     |  |                         |         |     
|                     |  | (in £millions)         
|Turnover             |  |                         |         |      |  |  |         | 
|Amersham Health(1)   |  |                         | 773.9   |      |  |  | 922.0   | 
|Amersham Biosciences |  |                         | 603.7   |      |  |  | 680.5   | 
|                     |  |                         |         |      |  |  |         | 
|                     |  |                         | 1,377.6 |      |  |  | 1,602.5 | 
|                     |  |                         |         |      |  |  |         | 



---

|(1) |  | Included within Health is the Groups share of NMP joint venture
turnover of £87.3 million (2000  £94.8 million)
|--- |  | -----------------------------------------------------------------------------------------------------------------

Amersham Health

Turnover increased by £148.1 million, or 19%, to £922.0 million in 2001
compared to £773.9 million in 2000. Excluding the loss of third party turnover
following the disposals of the NAMS business in 2000 and the discontinued NMP
in vitrobusiness and at constant exchange rates, turnover in 2001 increased by
13% compared to 2000.

Our patented medical diagnostic products maintained the growth trends of
earlier years, growing by £74.3 million, or 33%, from £224.7 million in 2000 to
£299.0 million in 2001. At constant exchange rates, this represents a growth
of 25%. Our cash generative, unpatented products grew by £52.9 million, or
18%, from £300.1 million to £353.0 million. At constant exchange rates, this
represents a growth rate of 10%.

The following table shows turnover within the Health segment split by modality.
2000 figures have been reclassified in line with changes during 2001.

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|                               |               |  |                         |      |      |  |       |       | 
|------------------------------ | ------------- |  | ----------------------- | ---- | ---- |  | ----- | ----- | 
|                               |               |  | Year ended December 31,
|                               |               |  |                        
|                               |               |  | 2000                    |      | 2001
|                               |               |  |                         |      |     
|                               |               |  | (in £millions)         
|Net turnover  Amersham Health |               |  |                         |      |      |  |       |      
|X-Ray: North America           |               |  | 166.6                   |      |      |  | 195.6 |      
|                               | Rest of world |  |                         | 99.8 |      |  |       | 128.5 | 
|                               |               |  |                         |      |      |  |       |      
|Total X-Ray                    |               |  | 266.4                   |      |      |  | 324.1 |      
|Radiopharmaceutical Imaging    |               |  | 191.0                   |      |      |  | 240.7 |      
|MRI                            |               |  | 66.4                    |      |      |  | 85.8  |      
|Bulk sales and royalties       |               |  | 68.1                    |      |      |  | 90.9  |      
|Therapy                        |               |  | 65.2                    |      |      |  | 78.0  |      
|NMP (50% Joint Venture)        |               |  | 94.8                    |      |      |  | 87.3  |      
|Other                          |               |  | 22.0                    |      |      |  | 15.2  |      
|                               |               |  |                         |      |      |  |       |      
|                               |               |  | 773.9                   |      |      |  | 922.0 |      
|                               |               |  |                         |      |      |  |       |      

In X-ray diagnostics, turnover in 2001 was £324.1 million, up 22% on 2000,
mainly due to turnover of Omnipaque and Visipaque, which increased in the
year by 21% and 36% respectively. At constant exchange rates, this represents
an increase over 2000 in total sales of X-ray diagnostics of 14%.

Sales in magnetic resonance imaging (MRI) grew by £19.4 million, or 29%, to
£85.8 million in 2001. At constant exchange rates, this represents an increase
in sales of 19%. Omniscan, our leading MRI product, is used in neurology for
detecting cancers of the brain and stroke.

The radiopharmaceuticals diagnostic segment grew by £49.7 million or 26% to
£240.7 million in 2001 from £191.0 million in 2000. At constant exchange
rates, this represents an increase in sales of 17%. Products within this
category include Myoview which grew by £29.8 million to £110.3 million in 2001.
Sales of our molecular diagnostic DaTSCAN made good progress since its launch
in Europe in 2000.

Bulk sales and royalties increased by £22.8 million, or 33%, to £90.9 million
in 2001 compared to £68.1 million in 2000. The majority of these sales were in
Japan. At constant exchange rates, this represents an increase in sales of 9%.

Therapy products returned to growth with sales up £12.8 million, or 20%, to
£78.0 million in 2001. At constant exchange rates, this represents an increase
of 9%. The full portfolio of brachytherapy seeds for prostate cancer treatment
achieved sales of £58.8 million in 2001, up 23% on 2000 sales. This growth was
driven by four new sole source contracts with US group purchasing organizations
in the first half of the year and by the addition of the echogenic EchoSeed
and the palladium product TheraSeed to the portfolio.

NMP, our joint venture with Sumitomo Chemical Company Ltd in Japan, gave rise
to turnover of £87.3 million in 2001, compared to £94.8 million in 2000, a
decrease of £7.5 million or 8%. During 2000, the in vitrobusiness of NMP was
discontinued which had a 6% impact on the sales growth. Excluding discontinued
NMP operations and at constant exchange rates (with exchange having an adverse
2% impact on sales growth), sales of NMP business remained flat compared to
2000.

Other turnover decreased by £6.8 million, or 30%, to £15.2 million in 2001
compared to £22.0 million in 2000, largely as a result of the loss in third
party sales following the closure of our NAMS business in France.

Amersham Biosciences

Turnover increased by £76.8 million, or 13%, to £680.5 million in 2001 compared
to £603.7 million in 2000. The 2000 figure was restated to take account of a
change in the Groups revenue recognition policies following the adoption of
FRS 18. At constant exchange rates, this represents an increase in sales of
12%.

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Throughout the year, the breadth of Amersham Biosciences innovative product
range and our geographical reach helped to underpin continued good growth
overall. At constant rates, growth in Japan was up 11% on 2000; in Europe, up
8% on 2000; in Asia Pacific, up 36% on 2000, and in Latin America, up 20% on
2000. North American turnover improved after a slow third quarter of 2000
giving good annual growth in 2001 of 11%.

The following table shows turnover within the Amersham Biosciences segment
split into individual business streams. Effective January 1, 2002, Amersham
Biosciences reorganized its business streams, creating discovery systems
consisting of the former drug discovery, laboratory products, and service,
agency and other business streams, and maintaining the protein separations
business stream. Segmental reporting has been restated as appropriate for
periods prior to January 1, 2002.

|                    |  |                         |       |      |  |  |       | 
|------------------- |  | ----------------------- | ----- | ---- |  |  | ----- | 
|                    |  | Year ended December 31,
|                    |  |                        
|                    |  | 2000                    |       | 2001
|                    |  |                         |       |     
|                    |  | (in £millions)         
|Turnover            |  |                         |       |      |  |  |       | 
|Discovery systems   |  |                         | 382.0 |      |  |  | 412.8 | 
|Protein separations |  |                         | 221.7 |      |  |  | 267.7 | 
|                    |  |                         |       |      |  |  |       | 
|                    |  |                         | 603.7 |      |  |  | 680.5 | 
|                    |  |                         |       |      |  |  |       | 

In the discovery systems stream, turnover increased to £412.8 million in 2001,
up £30.8 million, or 8%, from £382.0 million in 2000. At constant exchange
rates, this represents an increase in sales of 9% compared to 2000. Within
genomics the launch of new technologies, together with good sales in Asia
Pacific and Latin America, helped to offset the impact of the slowdown in the
US and European sequencing markets following the very high growth in 2000 as
scientists rushed to complete the draft human genome. Strong growth was seen
in sales of proteomics systems in 2001, driven by well-established market
leaders such as the 2D-electrophoresis systems for protein expression analysis
including 2D-DIGE. During the year, Amersham Biosciences added two new high
throughput systems to the Ettan range of protein systems, the Ettan LCMS
(liquid chromatography mass spectrometer) for protein identification, and the
Ettan Spot Handling Workstation, enabling researchers to integrate multiple
steps in their protein studies.

Sales in protein separations increased by £46.0 million, or 21%, to £267.7
million compared to £221.7 million in 2000. At constant exchange rates, this
represents an increase in sales of 18% compared to 2000. In laboratory
separations, Amersham Biosciences sold over 2,500 ÄKTA benchtop protein
purification systems. Several new products were launched in 2001, including
next generation Unicorn software used with our chromatography systems and
Primer Support 200, a media for large scale oligonucleotide synthesis. Good
progress was made in the ongoing development of new bioprocess media including
next generation Sepharose and Streamline.

Gross profit

Gross profit increased by £174.7 million, or 21%, to £1,015.6 million in 2001
compared to £840.9 million in 2000. Gross profit as a percentage of turnover
increased to 63.3% in 2001 compared to 61.0% in 2000. In 2001, exceptional
items amounted to a credit of £0.5 million relating to the net of a £8.5
million decommissioning provision and a £9.0 million pension refund. In 2000
exceptional items related to £10.9 million of costs associated with
manufacturing rationalization in the Health segment. Excluding these one-off
items, gross profit from continuing operations increased by £163.3 million, or
19%.

The increase in profitability of continuing operations was mainly due to
increased revenue from a better product mix including strong growth in high
margin patented products, partially offset by reduced sales of bulk products in
Japan.

Distribution, selling and administrative costs

Total Group distribution, selling and administration costs increased by £77.6
million, or 15%, to £595.8 million in 2001 compared to £518.2 million in 2000.
As a percentage of turnover, this represents a decrease from 37.6% in 2000 to
37.2% in 2001.

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Included in distribution, selling and administration costs in 2001 and 2000
were exceptional expenses of £9.2 million and £16.1 million respectively. In
2001, these related to costs incurred in the exit of the disease profiling
project and costs relating to the proposed partial flotation of Amersham
Biosciences. In 2000 these consisted of costs incurred in connection with the
disposal of Nycomed Pharma and the proposed partial flotation of Amersham
Biosciences. See Events impacting comparability.

Excluding exceptional items, costs from continuing operations increased by
£84.5 million, or 17%, from £502.1 million in 2000 to £586.6 million in 2001.
As a percentage of turnover, however, this represents an increase of only 0.2%
from 36.4% to 36.6%.

Higher costs were incurred in Amersham Health due to commissioning expenses for
the new plant in Lindesnes, Norway and the costs of building a sales team for
the promotion of the new ultrasound product Optison. Within Amersham
Biosciences in both 2000 and 2001 legal costs were incurred in the defense of
the Groups intellectual property in patent suits against Applied Biosystems
Group. The court mediated settlement with Applied Biosystems Group was
announced in February 2002 and includes a cross-licensing agreement covering
all patents involved in the litigation, and a co-development arrangement for
the joint development, supply and commercialization of certain new DNA analysis
technologies.

R&D expenses

R&D costs for the year ended December 31, 2001 were £173.8 million, an increase
of £24.8 million, or 17%, on 2000. R&D expenditure in Amersham Biosciences
increased by £14.9 million, or 21%, from £71.5 million in 2000 to £86.4 million
in 2001. This represents 13% of Amersham Biosciences turnover in 2001 compared
with 12% in 2000. Amersham Healths R&D expenditure increased by £9.1 million,
or 12%, to £83.0 million in 2001 compared to £73.9 million in 2000. This
represents 9% of Amersham Healths turnover in 2001 compared with 10% in 2000.
Within the Corporate and Other segment exceptional costs of £3.6 and £4.4
million were incurred in 2000 and 2001 relating to the disease profiling
project which was discontinued during 2001.

Amersham Health

Cardiology

Amersham Health made good progress in 2001 on its ultrasound product Sonazoid,
which was developed for the diagnosis of both heart and liver disease. In
cardiology, Sonazoid entered phase IIB dose ranging studies to assess blood
flow to the heart muscle following successful completion of phase IIA efficacy
studies. For the liver indication, phase IIB clinical trials on Sonazoid were
completed in Japan and phase III trials commenced in 2001. The prevalence of
primary liver cancer in East Asia is seven times higher than in the rest of the
world. In the US and Europe, phase IIB trials for the liver indication were
also completed in 2001, but, following independent evaluation, phase III trials
for using the product outside Japan which were planned for the second half of
2002 were suspended.


Phase IIB clinical trials were under way to extend the uses of its MRI product
Omniscan in diseases of the cardiac and vascular systems and were concluded in
the first half of 2002.

Our Health business pipeline aims to further expand physician knowledge. For
example, phase 1 clinical trials began in November 2001 on NC 100668, a
technetium-based molecular diagnostic for the detection of thrombus formation.
This product will target the important pulmonary embolism and deep vein
thrombosis markets.

Neurology

In the US, Amersham Health entered phase 1 clinical studies with Trodat, for
the diagnosis of Parkinsons Disease in 2001. In July 2001, Amersham Health
entered into an agreement with Neurochem to collaborate on a product for the
diagnosis of Alzheimers Disease. The goal for this innovative diagnostic will
be the early identification of amyloid plaques in the brains of Alzheimers
patients, even before the symptoms of the disease are observed.


Spin Signal

Amersham Health is developing a technology known as Spin Signal, which for the
first time allows high-resolution, high speed imaging of gases using MRI.


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Spin Signal is anticipated to have a wide range of applicability within both
medical diagnostics and in life sciences. Amersham Healths first target area
is in high-resolution ventilation imaging of the lungs. Our clinical program is
targeted at early detection, staging and monitoring of lung diseases and our
first product, Helispin, is in phase II.

R&D Partnerships

In August 2001, Amersham Health entered into a research agreement with Affitech
AS, in Oslo, Norway, for the discovery of human antibodies for diagnostic
applications. Affitech will combine its proprietary antibody library
technology and its automated affinity maturation process to generate human
antibodies to develop and test Amersham Healths novel concepts for molecular
diagnosis.


In November 2001, Amersham Health signed a broad collaborative research
agreement with GE Medical Systems to accelerate the development of new positron
emission tomography (PET) based molecular diagnostic imaging technologies and
systems. The first products to be developed will use a novel PET synthesis
system to produce a new generation of high pharmaceutical quality, targeted
molecular radiopharmaceuticals, FDG and F-DOPA, to aid the diagnosis and
evaluation of patients suffering from cancer and Parkinsons disease.

Through our Imanet initiative, we are working with leading pharmaceutical
companies to identify the role that PET can play in the creation of novel
diagnostic products that can complement new therapeutic drugs. In January
2002, Amersham Health announced a major research collaboration in this area
with Pfizer Inc.

Through collaborations such as these, Amersham Health is making a firm
commitment to become a global leader in the PET radiopharmaceutical market.

Amersham Biosciences

Amersham Biosciences completed in 2001 a sustained period of building
investment in R&D, particularly within the discovery systems business stream,
creating a broad portfolio from which to launch new products.

Discovery systems R&D expenditure increased to £69.4 million in 2001 compared
to £53.2 million in 2000, an increase of £16.2 million, or 30%. Split evenly
across the year, this was incurred in order to bring a range of new platforms
to market in 2001 particularly within the areas of Genomics and Proteomics.
Products launched in 2001 in genomics included our 384-capillary MegaBACE 4000,
TempliPhi, a new DNA template presentation kit, and, in Proteomics, two new
high throughput systems to add to the existing Ettan range.

Protein separations R&D expenditure decreased to £17.0 million in 2001 compared
to £18.3 million in 2000.

Group operating profit

|                                                             |  |                         |       |      |  |  |       |  
|------------------------------------------------------------ |  | ----------------------- | ----- | ---- |  |  | ----- | -
|                                                             |  | Year ended December 31,
|                                                             |  |                        
|                                                             |  | 2000                    |       | 2001
|                                                             |  |                         |       |     
|                                                             |  | (in £millions)         
|                                                             |  | Restated                |       |      |  | 
|Operating Profit                                             |  |                         |       |      |  |  |       |  
|Total continuing operating profit before non-recurring items |  |                         | 230.5 |      |  |  | 280.8 |  
|Exceptional items                                            |  |                         | (27.0 | )    |  |  | (8.7  | )
|                                                             |  |                         |       |      |  |  |       |  
|                                                             |  |                         | 203.5 |      |  |  | 272.1 |  
|                                                             |  |                         |       |      |  |  |       |  

Group operating profit increased by £68.6 million, or 34%, from £203.5 million
in 2000 to £272.1 million in 2001. As a percentage of sales this represents an
increase of 2.2% from 14.8% to 17.0%.

Excluding the impact of exchange, operating profit before exceptional items
increased by 8%. Exceptional items amounted to £8.7 million in 2001 and £27.0
million in 2000. See Events impacting comparability.

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|                     |  |                         |       |      |  |  |       |  
|-------------------- |  | ----------------------- | ----- | ---- |  |  | ----- | -
|                     |  | Year ended December 31,
|                     |  |                        
|                     |  | 2000                    |       | 2001
|                     |  |                         |       |     
|                     |  | (in £millions)         
|                     |  | Restated                |       |      |  | 
|Operating profit     |  |                         |       |      |  |  |       |  
|Amersham Health      |  |                         | 182.0 |      |  |  | 231.0 |  
|Amersham Biosciences |  |                         | 50.8  |      |  |  | 59.5  |  
|Corporate and Other  |  |                         | (29.3 | )    |  |  | (18.4 | )
|                     |  |                         |       |      |  |  |       |  
|                     |  |                         | 203.5 |      |  |  | 272.1 |  
|                     |  |                         |       |      |  |  |       |  

Operating profit of the Amersham Health segment increased by £49.0 million in
2001, giving an operating margin of 25% for the segment compared to 24% in
2000. In 2000 and 2001 respectively, goodwill amortization of £1.7 million and
£1.4 million and exceptional items of £10.9 million and £8.5 million were
attributable to the operating profit of Amersham Health. Excluding goodwill
amortization and exceptional items, Amersham Health increased operating profit
from £194.6 million in 2000 to £240.9 million in 2001 representing an increase
of 10% at constant exchange rates. Exchange rate fluctuations in 2001 had an
adverse impact on actual growth rates of 13%. Trading margins were strong
throughout as the benefits of product mix and exchange offset the costs of
commissioning the Norway plant and building the Optison sales force.

Operating profit of the Amersham Biosciences segment increased by £8.7 million,
or 17%, from £50.8 million in 2000 to £59.5 million in 2001. Operating margins
increased to 9% in 2001 from 8% in 2000. In 2000 and 2001 respectively,
goodwill amortization of £9.0 million and £10.3 million and exceptional items
of £3.5 million and £2.6 million were attributable to the operating profit of
Amersham Biosciences. Excluding goodwill amortization and exceptional items,
operating profit in 2001 was £72.4 million compared to £63.3 million in 2000
representing an increase of 6% at constant exchange rates. Exchange rate
fluctuations in 2001 had an adverse impact on actual growth rates of 8%.

In protein separations, operating profit before exceptional items and goodwill
amortization grew by £28.3 million, or 42%, to £96.0 million in 2001 compared
to £67.4 million in 2000 due to strong growth in turnover and continuing margin
improvement. In discovery systems, investment in R&D and in defending our
intellectual property and a change in product mix, resulted in an operating
loss before exceptional items and amortization of £36.5 million in 2001
compared to £16.6 million in 2000.

Goodwill amortization was £11.7 million compared to £10.7 million in 2000. The
increase in amortization primarily related to the acquisition of Dan-Process
A/S in August 2001, plus a full year of amortization for Praelux Inc., which
was acquired in mid February 2000.

Profit on sale of fixed asset investment

In September 2001, the Group sold its remaining investment in Nycomed Pharma,
which consisted of shares and warrants, for £72.4 million and realized £50.6
million for the outstanding Nycomed Pharma loan notes held by the Group. The
Group has recorded a profit on the transaction of £55.3 million after charging
costs associated with the disposal, including the costs incurred in
transferring the Nycomed name to Nycomed Pharma.

Amounts written off investments

We have also taken a charge of £4.4 million against the carrying value of
listed investments following a material reduction in their equity value in
2001.

Net interest payable

Interest costs in 2001 were £8.7 million compared to £10.0 million charged in
2000. Strong cash flow and the additional reduction in net debt following the
sale of the trade investment in Nycomed Pharma in September 2001 resulted in
the reduction in net interest expense by £1.3 million.

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Tax on profit on ordinary activities

In 2001, the taxation charge before exceptional items and goodwill amortization
was £97.0 million compared to a charge of £82.3 million in 2000. This
represents an effective tax rate of 34.7% in 2001 and 35.6% in 2000 before
exceptional items and goodwill amortization. The rate was lower principally as
a result of the favorable settlement of a number of outstanding tax items
relating to earlier years.

Profit attributable to shareholders

Profit attributable to minority interest relates primarily to the 45% interest
that Pharmacia Corporation held in Amersham Biosciences. Profit attributable
to shareholders after charging exceptional items and goodwill amortization was
£210.7 million in 2001 and £107.0 million in 2000.

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B.     Liquidity and Capital Resources

Cash flow

Net cash flow from operating activities was £345.5 million in 2002, £354.3
million in 2001 and £224.7 million in 2000. Before exceptional cash items
consisting of an inflow of £12.0 million in 2001 and an outflow of £14.8
million in 2000 and integration costs of £15.8 million in 2000, net cash inflow
from operating activities before exceptional items and integration costs was
£345.5 million in 2002, £342.3 million in 2001 and £255.3 million in 2000. The
increase in net cash flow in 2002 compared to 2001 of £3.2 million was driven
by growth in operating profit before charging amortization and depreciation
offset by additional working capital through the building of inventories in
Amersham Health. The increase in net cash flow in 2001 compared to 2000 of
£87.0 million was driven by operating profit growth and reduced working capital
with a significant increase in payables.

Capital expenditure in 2002 was £143.4 million. Capital expenditure was
increased in 2002 with a large investment to expand manufacturing capacity and
support our strategy of packaging differentiation in Amersham Health. £3.4
million was spent in 2002 on trade investments and £4.8 million on intangible
fixed assets. Capital expenditure in 2001 was £91.6 million, down from £123.5
million in 2000. This was due to the completion of the US manufacturing and
research expansion plan at the Piscataway site as well as IT projects in 2000.
During 2001, £4.9 million was spent on trade investments and £10.2 million on
intangible fixed assets. £123.0 million was raised from the disposal of the
investment in Nycomed Pharma and a further £22.1 million from the sale of fixed
assets including £21.7 million for the sale of the Torsten Almen Research
Center. Capital expenditure in 2000 was £123.5 million. During 2000, £10.5
million was spent on trade investments, and £16.5 million was used to acquire
shares of Amersham plc to fulfill obligations of share options granted to
employees.

Net cash outflow of £749.2 million in 2002 related to acquisitions and
disposals. This was primarily associated with the acquisition of the 45%
minority in Amersham Biosciences (£708.6 million including associated costs),
two filtration companies, AG Technology Corp and InnovaSep Technology
Corporation, and the net assets of the CodeLink pre-arrayed slides business
from Motorola Life Sciences. Net cash outflow of £3.9 million in 2001 related
to acquisitions and disposals. This was primarily associated with the
acquisition of Dan-Process A/S. Net cash outflow of £4.9 million in 2000
related to acquisitions and disposals. This was mainly in connection with the
acquisition of Praelux Inc and Imaging Research Inc, offset by the sale of
Nycomed Amersham Medical Systems SA.

Net debt increased to £182.3 million at December 31, 2002 due to a net cash
outflow of £249.1 million offset by favorable currency movements of £92.2
million during 2002. In February 2002, the Group repaid out of its cash
revenues $20 million aggregate principal amount on the series A of its fixed
rate US private placement unsecured loan notes. At December 31, 2001, net debt
was £25.4 million having decreased from £323.5 million at December 31, 2000 due
to a net cash inflow of £304.5 million offset by adverse currency movements of
£6.4 million.

Capital resource requirements

At December 31, 2002, shareholders equity was £1,172.0 million, an increase of
£575.7 million in 2002 primarily due to £121.4 million of retained earnings,
£47.8 million due to foreign currency translation of overseas net assets and
£407.7 million of new share capital and share premium. At December 31, 2001,
shareholders equity was £596.3 million, as restated for the introduction of
FRS 19 as outlined in Note 37 of Item 18 Consolidated Financial Statements.
This is an increase of £179.4 million in 2001 primarily due to £165.5 million
of retained earnings and £25.2 million of new share capital and share premium.
At December 31, 2000, shareholders equity was £416.9 million, as restated for
the introduction of FRS 19 as outlined in Note 37 of Item 18 Consolidated
Financial Statements, an increase of £53.2 million in 2000 primarily due to
£66.6 million of retained earnings, offset by £18.9 million of foreign exchange
losses arising on the retranslation of subsidiaries balance sheets into
sterling.

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The Group is of the opinion that, taking into account the $750 million Facility
committed to February 2007, the Group has sufficient working capital to cover
its requirements at least until December 31, 2003. Total unused lines of
credit at December 31, 2002 for cash advances under the $750 million facility
amounted to approximately £404.3 million.

Financial covenants contained in the $750 million Facility impose certain
limitations on Amersham. The $750 million Facility requires Amersham to cover
interest by at least three times EBITDA and restrict net debt to less than 3.5
times EBITDA. This is tested semi-annually for the previous rolling twelve
month accounting period. EBITDA is defined as consolidated profit before
interest and tax adding back exceptional items, minority interests,
depreciation and amortization. Additional covenants customary for such an
agreement also apply. Such covenants may have the effect of restricting
Amershams ability to incur certain indebtedness or interest costs or engage in
certain other activities. A breach of one of the financial covenants may result
in any outstanding drawing under the facility becoming due and payable
immediately and the total facility may be cancelled. Further, if the amounts
outstanding under the facility are greater than £30 million and are declared
due and payable and the company is unable to make those repayments, then the
outstanding amounts under the US private placement unsecured loan notes may
also become immediately due and payable. The Facility does not restrict the
Companys ability to pay dividends.

The $750 million Facility will expire on February 20, 2007. In order to repay
amounts outstanding under the Facility, Amersham may be required to refinance
such borrowings under other credit facilities, or by the issuance of
indebtedness in the private or public markets. The means by which the
principal due at maturity will be repaid will depend on market conditions at
the time of any such refinancing.

As at December 31, 2002, the Group had fixed rate debt obligations of three
series of US private placement unsecured loan notes with the following interest
rates and maturities:

|         |  |              |  |               |      |          |  |               |  |  |  | 
|-------- |  | ------------ |  | ------------- | ---- | -------- |  | ------------- |  |  |  | 
|Series   |  | Amount       |  | Interest Rate |      | Maturity
|         |  |              |  |               |      |         
|Series B |  | $15 million  |  |               | 8.79 | %        |  | February 2005
|Series C |  | $163 million |  |               | 8.77 | %        |  | November 2004
|Series D |  | $15 million  |  |               | 8.97 | %        |  | November 2009

The Series A notes were repaid in February 2002.

The private placements carry a number of financial covenants. The Group is
required to maintain a consolidated adjusted net worth balance of greater than
£500 million. For the purposes of this calculation, the Group is permitted to
reinstate 50% of the Nycomed goodwill merger reserve written off to reserves in
October 1997.

The maximum permitted gearing for Amersham under the covenants is 125% of
consolidated adjusted net worth. The underlying priority debt and the secured
loans are limited to 20% of the amount determined as the consolidated adjusted
net worth of the Group (as defined above). The limit of interest cover is four
times consolidated profit before interest and tax.

A private placement covenant limits the Group asset disposals to 15% of gross
assets (£395.8 million at December 31, 2002) in any 365 day period. If this
limit is exceeded, Amersham has 12 months to offer to prepay the private
placement notes, or to demonstrate to the note holders that the proceeds have
been reinvested in the business.

The Board believes that the Company is in full compliance with the covenants
contained in the $750 million Facility and the private placement unsecured loan
notes and that they do not presently impose undue restrictions on its
activities.

An analysis of the financial liabilities and assets of the Group are given in
Note 20 of Item 18 Consolidated Financial Statements.

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In addition to the financial liabilities disclosed above, the Group has granted
put options over shares in Corixa Corporation, Cimarron Software Inc, Imaging
Research Inc. Imaging Research Solutions Ltd and Uppsala Research Imaging
Solutions AB and holds call options over shares in Cimarron Software Inc.,
Imaging Research Inc, Imaging Research Solutions Ltd, Uppsala Research Imaging
Solutions AB and Analytica of Branford which meet the definition of financial
instruments. The maximum potential aggregate cash consideration under these
contracts is $71.5 million and £7.2 million. These options expire by 2006.

Going concern

After making enquiries the Directors have reasonable expectation that the
Company and the Group have adequate resources to continue in operational
existence for the foreseeable future, and that it is therefore appropriate to
adopt the going concern basis in preparing its financial statements. In
forming this view the Directors have reviewed the Annual Profit Plan for the
year ending 31 December 2003 and strategic plan projections for subsequent
years. The Directors have satisfied themselves that the Group is in a sound
financial position and that sufficient borrowing facilities will be available
to meet the Groups foreseeable cash requirements.

Capital Expenditure

Committed capital expenditure at December 31, 2002 amounted to £41.3 million.
The purpose of these commitments is modification and extension of manufacturing
and administrative facilities at the Groups existing sites. This expenditure
will be funded through working capital and headroom under the Groups existing
bank credit facilities. This is disclosed in Note 28 of Item 18 Consolidated
Financial Statements.

Treasury Policy

Our treasury activities are coordinated and managed by the Group treasury
department in accordance with policies approved by the Board. These policies
include the management of investments and counterparty risk, interest rate risk
and the hedging of currency risk are reviewed regularly and have not changed
significantly over the past year. Compliance with these policies is tested on
a regular basis. Treasury transactions are undertaken only with a small number
of financially strong counterparties under a mandate approved by the Board.
The majority of the Groups external debt has been lent to Amersham plc. This
is then lent to other Group companies as required. Surplus cash generated is
used to repay short term floating rate debt at the earliest opportunity. Short
term surpluses are invested by Group Treasury in US dollars, euros and
sterling.

Environmental and Regulatory Matters

Item 4, Information on the Company provides a description of environmental
and other regulatory matters related to the Group including a description of
the costs and liabilities associated with these matters.

Contractual Obligations

The following table shows the contractual obligations and commitments of
Amersham plc as at December 31, 2002:

|                          |  |       |       |      |  |                        |      |       |  |       |       |         |  |  |      |  |  |  |      | 
|------------------------- |  | ----- | ----- | ---- |  | ---------------------- | ---- | ----- |  | ----- | ----- | ------- |  |  | ---- |  |  |  | ---- | 
|                          |  |       |       |      |  | Payments due by period
|                          |  |       |       |      |  |                       
|                          |  |       |       |      |  | Less                   |      |       |  |       |       |         |  |  |      |  |  | 
|                          |  |       |       |      |  | than 1                 |      | 1 - 2 |  | 2 - 5 |       | After 5
|                          |  | Total |       | year |  | years                  |      | years |  | years
|Contractual Obligations   |  | £m    |       | £m   |  | £m                     |      | £m    |  | £m   
|                          |  |       |       |      |  |                        |      |       |  |      
|Long term debt            |  |       | 234.3 |      |  |                        | 44.3 |       |  |       | 105.9 |         |  |  | 75.0 |  |  |  | 9.1  | 
|Capital lease obligations |  |       | 2.8   |      |  |                        | 0.3  |       |  |       | 0.3   |         |  |  | 0.6  |  |  |  | 1.6  | 
|Operating leases          |  |       | 89.2  |      |  |                        | 29.3 |       |  |       | 25.0  |         |  |  | 23.2 |  |  |  | 11.7 | 
|                          |  |       |       |      |  |                        |      |       |  |       |       |         |  |  |      |  |  |  |      | 
|                          |  |       | 326.3 |      |  |                        | 73.9 |       |  |       | 131.2 |         |  |  | 98.8 |  |  |  | 22.4 | 
|                          |  |       |       |      |  |                        |      |       |  |       |       |         |  |  |      |  |  |  |      | 

For more information, please see Notes 18, 19, 20 and 29 of Item 18
Consolidated Financial Statements.

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The above table shows the ageing of long term debt as disclosed in Notes 18, 19
and 20 of Item 18 Consolidated Financial Statements, being the aggregate
amount of outstanding bank loans and overdrafts, unsecured loan notes and a
short term loan from the joint venture in NMP.

Of the operating lease commitments, £54.9 million relates to leases over land
and buildings and £34.7 million over plant and machinery, fixtures and
fittings, and motor vehicles.

|                        |  |       |       |      |  |                       |     |       |  |  |       |        |  |  |   | 
|----------------------- |  | ----- | ----- | ---- |  | --------------------- | --- | ----- |  |  | ----- | ------ |  |  | - | 
|                        |  |       |       |      |  | Amount of Commitment 
|                        |  |       |       |      |  | Expiration per Period
|                        |  |       |       |      |  |                      
|                        |  |       |       |      |  | Less than 1           |     |       |  |  |       | Over 5
|                        |  | Total |       | year |  | 1 - 5 years           |     | years
|Contractual Obligations |  | £m    |       | £m   |  | £m                    |     | £m   
|                        |  |       |       |      |  |                       |     |      
|Lines of credit         |  |       | 465.8 |      |  |                       |    |       |  |  | 465.8 |        |  |  |  | 
|Guarantees              |  |       | 8.2   |      |  |                       | 8.2 |       |  |  |      |        |  |  |  | 
|                        |  |       |       |      |  |                       |     |       |  |  |       |        |  |  |   | 
|                        |  |       | 474.0 |      |  |                       | 8.2 |       |  |  | 465.8 |        |  |  |  | 
|                        |  |       |       |      |  |                       |     |       |  |  |       |        |  |  |   | 

The line of credit shown above represents the $750 million facility described
above.

The largest guarantee reported within the £8.2 million total in the table above
is a £7.9 million counter-indemnity granted to a New York
bank in relation to their Irrevocable Letter of Credit to the Illinois Department of Nuclear Safety
on behalf of Medi-Physics, Inc.

C.     Research and Development, Patents and Licenses

For information on our research and development and intellectual property, see
Item 4 Information on the Company, and for associated risks, see Item 3. Key
Information  D. Risk Factors.

D.     Trend information

Going forward, Amersham is well placed to achieve further good growth in sales
and profit in 2003. The following guidance is given before the impact of
foreign exchange:



| |  |  | Amersham Health is expected to continue the good growth in medical
diagnostics excluding Japan, and operating margins are anticipated to
be at similar levels to those achieved in 2002. Amersham Health sales
in Japan are expected to decline at a lower rate than in 2002.    
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Protein separations is expected to see good growth with sales
growth again expected to be stronger in the second half of the year.
Increased investment in R&D will bring operating margins down slightly.                                                                       
|
| |  |  | Discovery systems is expected to see good sales growth in reagents,
consumables and software. Visibility for capital expenditure on
instrumentation remains low. The restructuring plans are expected to
bring benefits in 2003 moving the business to profitability during
2004.

E.     Off Balance sheet items

Other than operating leases disclosed in Note 29 of Item 18 Consolidated
Financial Statements, we do not engage in off-balance sheet financing
activities, and do not have any special purpose entities.

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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.     Directors and Senior Management

As at April 16, 2003 the Board comprised five Executive Directors, eight
independent Non-Executive Directors and an employee representative
Non-Executive Director. Throughout the reported period, the offices of
Chairman and Chief Executive have been held separately. The Chairman, Mr R D
Lapthorne, is a Non-Executive Director. The following are the Directors and
Executive Officers of the Group:

|                                                         |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |              
|-------------------------------------------------------- |  | --- | -- | ---------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------
|Name                                                     |  | Age |    | Position Details |  | Date appointed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                         |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Mr Richard D
Lapthorne, CBE, BCom,
FCMA, FCCA, FCT, CBIM |  |     | 59 |                  |  | Independent Non Executive Chairman
Chairman of the Board in 1996 and again since 1999, Deputy Chairman
from 1997 to 1999 and a board member since joining Amersham
International plc as a Non-Executive Director in 1988. Mr Lapthorne
will be retiring from the Board after the Annual General Meeting on
May 7, 2003.
Recruited as Finance Director of British Aerospace plc in July 1992,
becoming Vice Chairman in April 1998. Retired from British Aerospace
in September 1999.
Also serves as Non-Executive Chairman of Cable and Wireless plc from
January 10, 2003, Morse plc, Avecia Ltd, Tunstall Holdings Limited,
TI Automotive Limited and a Non-Executive Director of Oasis
International Leasing in Abu Dhabi.*# |  | December 1988
|                                                         |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |              
|Mr Johan Fr. Odfjell,
MBA , Siv. Øk                      |  |     | 54 |                  |  | Independent Non-Executive Deputy Chairman
Deputy Chairman of the Board since 1999. From 1997 to 1999 served as
Chairman of the Board, and since 1996 as a Non-Executive board member
of Nycomed ASA.
Served as Chief Executive of Vesta Insurance Group from 1986 to 1994.
From 1994 has combined his own consultancy and investment firm with
several Non-Executive board positions. Also Chairman of Orkla ASA,
Star Shipping A/S and Nera ASA. Co-Chairman of Det Norske Veritas;
and a board member of Bergesen ASA. *#                                                                                                                                                                                                     |  | October 1997 
|                                                         |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |              
|Sir William M Castell, BA, FCA                           |  |     | 55 |                  |  | Chief Executive (Executive Director and officer)
Chief Executive since 1989, when he joined Amersham International plc.
Previously Commercial Director Wellcome plc 1987-1989, following a
career in Wellcome spanning over twenty years.
Also serves as Chairman of The Princes Trust and Council Member of
the Medical Research Council, and is on the External Advisory Board
for the Life Sciences Institute at Michigan. Knighted in June 2000
for services to the life sciences industry.                                                                                                                                                                                                                                 |  | November 1989
|                                                         |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |              
|Mr Giles F B Kerr, BA, ACA                               |  |     | 43 |                  |  | Finance Director (Executive Director and officer)
Appointed Finance Director in 1997. Joined Amersham International plc
as Group Financial Controller 1991 to 1994, Commercial Controller
1994 to 1996, Company Secretary and Director of Corporate Development
1996 to 1997.
Worked for Arthur Andersen & Co from 1981, in positions including
Audit and Accounting Manager and Partner, Corporate Finance and
Investigations                                                                                                                                                                                                                                                                                                   |  | November 1997
|                                                         |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |              
|Dr Andrew Carr, Ph.D                                     |  |     | 43 |                  |  | President of Amersham Biosciences (Executive Director and officer)
Joined the Company in 1987 as Senior Development Scientist and has
held a number of senior management positions in research and
development, manufacturing, and sales and marketing. Appointed
President of Amersham Biosciences in 2000 and joined the Board in May
2002.                                                                                                                                                                                                                                                                                                                                                                                    |  | May 2002     

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|                                            |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |               
|------------------------------------------- |  | --- | -- | ---------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------
|Name                                        |  | Age |    | Position Details |  | Date appointed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                            |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Mr Peter Loescher, MBA                      |  |     | 45 |                  |  | President of Amersham Health (Executive Director and officer)
Joined the Company in December 2002. Previously with Hoechst AG and
its successor company Aventis working in a variety of roles in
Germany, Japan, Spain, UK, and US. From 1999 to 2002 served as
Chairman and Chief Executive Officer of Aventis Pharma in Japan,
having previously served as Chief Executive Officer of Hoechst Marion
Roussell Limited in the UK from 1997.                                                                                                                                                                                                                                                                                       |  | December 2002 
|                                            |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |               
|Mr George W Battersby, BSc                  |  |     | 56 |                  |  | Group Human Resources Director (Executive Director and officer)
Joined the Company in 2000 as Group Human Resources Director.
Previously with Laporte plc from 1996 to 2000 as Group Human
Resources Director, and Fisons plc from 1985 to 1996 as Group Human
Resources Director.
Earlier career included sales and marketing, consulting and human
resources appointments in companies including International Computers
Limited and Air Products and Chemicals Inc.                                                                                                                                                                                                                                                             |  | September 2000
|                                            |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |               
|Mr Donald H Brydon,
OBE, BSc                |  |     | 57 |                  |  | Independent Non-Executive Director (Chairman designate)
A Non-Executive Director since 1997 and will succeed Richard
Lapthorne as Chairman following the Annual General Meeting in May
2003.
Joined AXA Group in 1997 after a 20-year career with the Barclays
Group. Now serving as Chairman of AXA Investment Managers, and a
Non-Executive Director of Allied Domecq and Chairman of the Financial
Services Practitioner Panel. *#                                                                                                                                                                                                                                                                                             |  | June 1997     
|                                            |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |               
|Mr John H Johansen, MSc                     |  |     | 56 |                  |  | Non-Executive Director (Employee representative)
A Non-Executive Director since 1997, having served on the Hafslund
Nycomed ASA Board since 1994 as an elected employee representative.
Joined the Norwegian organization in 1980 as a Research Scientist,
peptide chemistry, holding management positions in chemistry research
and development. A Senior Research Scientist in Amersham Health from
1991 to the present. Appointed a member of the Board of Playboard
Magazine AS in 2001.                                                                                                                                                                                                                                       |  | October 1997  
|                                            |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |               
|Dr John S Patterson FRCP                    |  |     | 55 |                  |  | Independent Non-Executive Director
A Non-Executive Director since 2001.
Appointed Vice President for Clinical Research and Medical Affairs of
ICI Pharmaceuticals for the US in 1988 after a long career with the
company. In 1990 joined its Board as Medical Director. Appointed
Executive Vice President Product Strategy and Licensing for
AstraZeneca in 1999 and currently serves as Chair on its Portfolio
Management and Licensing Executive sub-committees. Also serves as a
Director of the British Pharmaceuticals Group and is President of the
Association of the British Pharmaceutical Industry. *#                                                                                                                |  | January 2001  
|                                            |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |               
|Sir Keith Peters MB BCh, FRCP, FRCPath, FRS |  |     | 64 |                  |  | Independent Non-Executive Director A Non-Executive Director since
2000. Also Chairman of the Amersham plc Science Advisory Board and
a member of the Amersham plc Portfolio Committee.
Became Regius Professor of Physic at the University of Cambridge in
1987. President, Academy of Medical Sciences; Honorary Consultant
Physician at Addenbrokes NHS Trust. Governing Trustee, The Nuffield
Trust; Trustee, Strangeways Research Laboratory. Member of Council
of Heads of Medical Schools and Dean of UK Faculties of Medicine;
member of Scientific Advisory Boards of the Gairdner Foundation,
Merck Institute, Merck Sharp & Dohme Research Laboratories
Neuroscience Research Centre and Cambridge Antibody Technology. |  | August
2000   

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|                           |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |              
|-------------------------- |  | --- | -- | ---------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------
|Name                       |  | Age |    | Position Details |  | Date appointed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                           |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Mr Jacques F Rejeange,
MBA |  |     | 63 |                  |  | Independent Non-Executive Director
A Non-Executive Director since 1997, having been a Non-Executive
board member of Hafslund Nycomed ASA since 1994.
From 1966 to 1992 was employed by the Sandoz Group, rising from
Management Trainee to President and Chief Executive of Sandoz
Pharmaceuticals Inc in the US.
Became President and Chief Executive of Sterling Winthrop Inc in 1994
and in 1998 until June 2002 was Chief Executive of NMT Management AG.
Also a Non-Executive Director of Antares Inc and Pozen Inc, both in
the US. *#                                        |  | October 1997 
|                           |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |              
|Prof Erik Thorsby, MD      |  |     | 64 |                  |  | Independent Non-Executive Director
A Non-Executive Director since 1997, having earlier that year joined
the Nycomed ASA Board as a Non-Executive member.
Held a number of positions in medical institutions, international
scientific societies and committees and in 1983 was appointed
Professor of Medicine at the University of Oslo. Currently Head of
the Institute of Immunology at The National Hospital and University
of Oslo. Also serves as President of the European Federation for
Immunogenetics and is Chairman of the Research Council at The
National Hospital. * |  | October 1997 
|                           |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |              
|Professor Mathias Uhlen    |  |     | 48 |                  |  | Independent Non-Executive Director
Appointed Non-Executive Director in May 2002, having served as a
Non-Executive Director of Amersham Biosciences since 1997 and a
member of the Amersham plc Portfolio Committee.
Professor of Biotechnology at the Royal Institute of Technology (KTH)
Stockholm since 1988. Serves on the Boards of Magnetic Biosolutions
AB, Prevas AB, Personal Chemistry AB, Skanditec AB, Affibody AB,
Pyrosequencing AB, Biovitrum AB and KTH Holding AB. *                                                                                                |  | May 2002     
|                           |  |     |    |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |              
|Mr Robert E B Allnutt, LLB |  |     | 48 |                  |  | Company Secretary (Officer)
Appointed Company Secretary in December 1997.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | December 1997



---

|* |  | Members of the Remuneration Committee, which is chaired by Mr R D
Lapthorne.
|- |  | ----------------------------------------------------------------------------
| 
|# |  | Members of the Audit Committee, which is chaired by Mr D H Brydon.          
| 
| |  | Members of the Nomination Committee, which is chaired by Mr J Fr. Odfjell   

There is no family relationship between any Director or officer and any other
Director or officer.

B.     Compensation

Remuneration policy for Executive Directors

In determining the remuneration policy for Executive Directors, the
Remuneration Committee has considered a number of factors including:



| |  | the importance of attracting, retaining and motivating management of the appropriate caliber to further the success of the
business;
|- |  | ------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | the linking of reward to both individual and business performance; and                                                              
| 
| |  | ensuring that the interests of the Directors are aligned with those of the shareholders.                                            

To this end, the Remuneration Committee seeks to pay Executive Directors base
salaries at a median level and incentives (in the form of bonuses and long term
option arrangements) at an upper quartile level when compared to compensation
levels and packages in other companies of comparable size and complexity, and
also in companies in the same business sector. The total

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package is aimed to lie between the median and upper quartile. For 2003, the
Committee aims to target 50% of total package in the form of fixed remuneration
(base salary and benefits) and 50% performance-related remuneration (target
annual bonus and Black Scholes value of annual share option awards). In 2002,
the ratio was 55% fixed and 45% performance-related remuneration.

In 2002, the Remuneration Committee considered a valuation of all elements of
Executive Directors remuneration to ensure that it was aware of the total
remuneration within the Company and its selected comparators. This valuation
approach included the use of the Black-Scholes option valuation technique for
assessing the value of long term incentives. The same approach will be used in
2003.

In establishing this policy, the Committee has appointed independent
consultants, New Bridge Street Consultants who provide advice on remuneration
and share plans both for Executive Directors and the wider executive
population. The Committee has also appointed Watson Wyatt who provide advice on
pensions both for Executive Directors and advice to the Company as a whole.
Neither New Bridge Street Consultants nor Watson Wyatt provide any other
services to the Company. In addition, the Committee is advised on reward
strategy by Mr Malcolm Saffin, Vice President of Compensation and Benefits for
Amersham.

The Remuneration Committee believes that the policy adopted in its remuneration
of executive directors and senior managers has contributed to the sustained
financial success and long term growth of the Company. This policy has enabled
the Company both to attract and keep a high caliber management team  essential
for a well run and growing business. The strong shareholder returns achieved by
the Company are a testament to this policy, which reflects best market
practice. This policy will continue to be reviewed in the light of changes in
market practice and legislation, which impact upon the Company.

The current elements of the remuneration packages can be summarized as follows:

Base salary and benefits

Base salaries for Executive Directors are reviewed by the Committee, normally
annually, having regard to competitive market practice and individual
performance for the financial year.

The general benefits provided to the Executive Directors are a fully expensed
car, pension, life, disability and health insurance and where appropriate
relocation expenses.

During the year, Peter Loescher joined the Company from Japan. The cost of his
relocation, his housing and his childrens education are being met by the
Company in line with the Companys expatriate policy. In addition, he received
a signing on bonus of euros 500,000 (£316,455) and the Company has agreed to
compensate Mr Loescher for the loss of the bonus he would have received from
his previous company had he not joined Amersham. Full details are given in Note
3 on page 98. All amounts are disclosed in the Directors Remuneration Table
on page 98.

Annual performance-related bonus

The annual performance-related bonus is dependent upon a number of factors.
The level of bonus is payable on a sliding scale between 0% and 100% of the
base salary. Bonus payments totaling £1,135,930 (2001  £1,125,420) have been
achieved, based on the financial performance measures attained for 2002, namely
sales and operating profit, cash flow, growth in earnings per share and
performance against a number of personal objectives for each Executive
Director.

In respect of the year ended December 31, 2003, it is proposed to pay a bonus
on a sliding scale of 0% to 150% of base salary. The actual payment will be
based on the same financial performance measures as used in 2002. Two-thirds of
the bonus shall be paid in cash and one-third in the form of restricted shares,
which will vest 50% on the second anniversary of the bonus payment date and 50%
on the third anniversary of the bonus payment date.

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In conjunction with the increased annual bonus opportunity, the Company has
introduced Share Ownership guidelines, which will require the Executive
Directors to hold shares equivalent in value to two times their base salary.
This holding must be acquired within five years.

Share Option Plans

Details of Directors share ownership in the Company and details of stock
options granted to the Directors for the year are disclosed in Item 6 E. Share
Ownership.

Pensions

Sir William Castell is entitled to a total target pension upon retirement at
age 60 of 60% of the average of the last three years basic salary. The
pension payable by the Company will be this target pension, less pension
benefits earned in previous employments. This pension will also include the
pension which could be notionally secured by Sir William Castell from past
remuneration supplements.

Approximately two-thirds of the total target pension is being funded, through a
combination of approved and unapproved arrangements. With effect from December
2002, this proportion will be increased over time with the objective that at
retirement, the whole of the target pension will be funded. Details of the
accrual of his pension are provided below.

Mr G W Battersby, Mr G F B Kerr and Mr P Loescher accrue pension benefits
through a combination of approved defined benefit arrangements and unapproved
defined contribution arrangements. Dr J M Padfield also accrued pension
benefits through a combination of approved defined benefit arrangements and
unapproved defined contribution arrangements up to his retirement on December
31, 2002. Details are shown below of the defined benefit accrual. The
contribution to the Funded Unapproved Retirement Benefits Scheme (FURBS)
element is identified in the column headed pension contributions in the table
on page 98. Dr A Carr accrues a defined benefit pension through both UK and
US pension arrangements.

In previous years accounts, disclosures of the accrual of defined benefits
have been made under the requirements of the Stock Exchange Listing Rules.
These Rules are still in place, but it is now also necessary to make disclosure
in accordance with the Directors Remuneration Report Regulations 2002. The
information below sets out the disclosures under the two sets of requirements.

|              |  |     |    |      |  |             |         |                 |  |                    |        |                   |  |                   |        |                 |  |                   |           |  |  |  |           |  |  |  |       |                |  |             |         |  
|------------- |  | --- | -- | ---- |  | ----------- | ------- | --------------- |  | ------------------ | ------ | ----------------- |  | ----------------- | ------ | --------------- |  | ----------------- | --------- |  |  |  | --------- |  |  |  | ----- | -------------- |  | ----------- | ------- | -
|              |  |     |    |      |  |             |         |                 |  |                    |        |                   |  |                   |        |                 |  |                   |           |  |  |  |           |  |  |  |       |                |  | Increase in
|              |  |     |    |      |  |             |         |                 |  |                    |        |                   |  | Increase in       |        |                 |  |                   |           |  |  |  |           |  |  |  |       | transfer value
|              |  |     |    |      |  | Accrued     |         | Increase in     |  | accrued pension    |        | Transfer value of |  | Transfer value of |        | Directors      |  | over the year,   
|              |  |     |    |      |  | Pension     |         | accrued pension |  | during the year    |        | accrued pension   |  | accrued pension   |        | contribution    |  | net of directors
|              |  |     |    |      |  | at 31.12.02 |         | during the year |  | (net of inflation) |        | at 31.12.02       |  | at 31.12.01       |        | during the year |  | contribution     
|Name          |  | Age |    | £ pa |  | £ pa        |         | £ pa            |  | £                  |        | £                 |  | £                 |        | £              
|              |  |     |    |      |  |             |         |                 |  |                    |        |                   |  |                   |        |                
|W M Castell   |  |     | 55 |      |  |             | 202,987 |                 |  |                    | 44,887 |                   |  |                   | 42,199 |                 |  |                   | 2,747,681 |  |  |  | 2,272,171 |  |  |  |      |                |  |             | 475,510 |  
|G W Battersby |  |     | 56 |      |  |             | 3,764   |                 |  |                    | 1,662  |                   |  |                   | 1,626  |                 |  |                   | 54,093    |  |  |  | 31,523    |  |  |  | 4,838 |                |  |             | 17,732  |  
|A Carr        |  |     | 43 |      |  |             | 89,233  |                 |  |                    | 15,189 |                   |  |                   | 14,093 |                 |  |                   | 479,131   |  |  |  | 554,573   |  |  |  |      |                |  |             | (75,442 | )
|G F B Kerr    |  |     | 43 |      |  |             | 26,233  |                 |  |                    | 5,212  |                   |  |                   | 4,855  |                 |  |                   | 189,651   |  |  |  | 186,208   |  |  |  | 4,838 |                |  |             | (1,395  | )
|P Loescher    |  |     | 45 |      |  |             | 275     |                 |  |                    | 275    |                   |  |                   | 275    |                 |  |                   | 2,081     |  |  |  |          |  |  |  | 405   |                |  |             | 1,676   |  
|J M Padfield  |  |     | 55 |      |  |             | 5,377   |                 |  |                    | 1,700  |                   |  |                   | 1,637  |                 |  |                   | 74,857    |  |  |  | 54,060    |  |  |  | 4,838 |                |  |             | 15,959  |  



---

Notes:



|(1) |  | The accrued pensions are the amounts which would be paid if the director
left service at the relevant date, but ignoring any vesting periods.                                                                                                                                                                                                                                                                                                                  
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The transfer value represents the lump sum capital value of the
directors pension benefits as at the year end, calculated using
assumptions certified by our actuary in accordance with actuarial guidance
note GN11. These assumptions include a link to current stock market
levels for younger members and bond markets for older members. Stock
markets have fallen during the year and the transfer values for younger
directors have fallen accordingly.

96



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Further information about the Directors pension benefits is given below.

|              |  |                   |        |       |                  |                                                                                                               |  |                                                                                                                |  |                                                                     
|------------- |  | ----------------- | ------ | ----- | ---------------- | ------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------
|              |  | Normal Retirement |        |       | Early Retirement |                                                                                                               |  |                                                                                                               
|Name          |  | Age               |        | Terms |                  | Dependant's Pension                                                                                           |  | Pension Increases                                                                                             
|              |  |                   |        |       |                  |                                                                                                               |  |                                                                                                               
|W M Castell   |  |                   | 60     |       |                  | Reduced by 4% for
each year earlier
than 60                                                                   |  | 66% of Members
Pension                                                                                        |  | RPI up to 5%                                                        
|              |  |                   |        |       |                  |                                                                                                               |  |                                                                                                                |  |                                                                     
|G W Battersby |  |                   | 63     |       |                  | Unreduced from age
60 and between age
50 and 60 reduced
by 4% each year
earlier than 60
(pro-rata for
months) |  | 50% of Members
Pension                                                                                        |  | RPI up to 7.5% plus
50% of RPI in
excess subject to
maximum of 8.75%
|              |  |                   |        |       |                  |                                                                                                               |  |                                                                                                                |  |                                                                     
|A Carr        |  |                   | US: 65 |       |                  | Unreduced from age
62 and between age
55 and 62 reduced
by 4% each year
earlier than 62                       |  | Any dependants
pension is provided
by reducing the
Directors own
pension by an
actuarially
equivalent amount |  | Nil                                                                 
|              |  |                   |        |       |                  |                                                                                                               |  |                                                                                                                |  |                                                                     
|A Carr        |  |                   | UK: 63 |       |                  | Unreduced from age
60 and between age
50 and 60 reduced
by 4% each year
earlier than 60
(pro-rata for
months) |  | 50% of Members
Pension                                                                                        |  | RPI up to 7.5% plus
50% of RPI in
excess subject to
maximum of 8.75%
|              |  |                   |        |       |                  |                                                                                                               |  |                                                                                                                |  |                                                                     
|G F B Kerr    |  |                   | 63     |       |                  | Unreduced from age
60 and between age
50 and 60 reduced
by 4% each year
earlier than 60
(pro-rata for
months) |  | 66% of Members
Pension                                                                                        |  | RPI up to 7.5% plus
50% of RPI in
excess subject to
maximum of 8.75%
|              |  |                   |        |       |                  |                                                                                                               |  |                                                                                                                |  |                                                                     
|P Loescher    |  |                   | 63     |       |                  | Unreduced from age
60 and between age
50 and 60 reduced
by 4% each year
earlier than 60
(pro-rata for
months) |  | 50% of Members
Pension                                                                                        |  | RPI up to 7.5% plus
50% of RPI in
excess subject to
maximum of 8.75%
|              |  |                   |        |       |                  |                                                                                                               |  |                                                                                                                |  |                                                                     
|J M Padfield  |  |                   | 63     |       |                  | Unreduced from age
60 and between age
50 and 60 reduced
by 4% each year
earlier than 60
(pro-rata for
months) |  | 50% of Members
Pension                                                                                        |  | RPI up to 7.5% plus
50% of RPI in
excess subject to
maximum of 8.75%

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Directors remuneration

The remuneration of each Director for the period ended December 31, 2002 is
analyzed as follows:

|                                         |  |          |           |           |  |       |         |               |  |               |           |                |  |                  |           |                  |  |                  |         |                  |  |  |         |              |  |              |           |  |  |  |           | 
|---------------------------------------- |  | -------- | --------- | --------- |  | ----- | ------- | ------------- |  | ------------- | --------- | -------------- |  | ---------------- | --------- | ---------------- |  | ---------------- | ------- | ---------------- |  |  | ------- | ------------ |  | ------------ | --------- |  |  |  | --------- | 
|                                         |  |          |           |           |  |       |         |               |  |               |           |                |  | Total            |           |                  |  |                  |         |                  |  |  |         |              |  |              |           |  |  | 
|                                         |  |          |           |           |  |       |         |               |  |               |           |                |  | remuneration     |           |                  |  |                  |         |                  |  |  |         |              |  |              |           |  |  | 
|                                         |  |          |           |           |  |       |         |               |  |               |           |                |  | for 12 months to |           |                  |  |                  |         |                  |  |  |         | Total        |  | Total       
|                                         |  |          |           |           |  |       |         |               |  |               |           |                |  | Dec 31, 2002     |           |                  |  |                  |         |                  |  |  |         | remuneration |  | remuneration
|                                         |  | Salary   |           |           |  |       |         |               |  |               |           | before pension |  | Pension          |           | Compensation for |  | for 12 months to |         | for 12 months to
|                                         |  | and fees |           | Benefits1 |  | Bonus |         | contributions |  | contributions |           | loss of office |  | Dec 31, 2002     |           | Dec 31, 2001    
|                                         |  | £        |           | £         |  | £     |         | £             |  | £             |           | £              |  | £                |           | £               
|                                         |  |          |           |           |  |       |         |               |  |               |           |                |  |                  |           |                 
|Executive Directors                      |  |          |           |           |  |       |         |               |  |               |           |                |  |                  |           |                  |  |                  |         |                  |  |  |         |              |  |              |           |  |  |  |           | 
|W
M Castell(Chief Executive)             |  |          | 575,000   |           |  |       | 88,395  |               |  |               | 397,200   |                |  |                  | 1,060,595 |                  |  |                  |        |                  |  |  |        |              |  |              | 1,060,595 |  |  |  | 963,485   | 
|G W Battersby                            |  |          | 266,250   |           |  |       | 32,659  |               |  |               | 182,050   |                |  |                  | 480,959   |                  |  |                  | 85,747  |                  |  |  |        |              |  |              | 566,706   |  |  |  | 589,030   | 
|A Carr2 (appointed
9 May 2002)           |  |          | 261,558   |           |  |       | 23,275  |               |  |               | 91,600    |                |  |                  | 376,433   |                  |  |                  | 2,349   |                  |  |  |        |              |  |              | 378,782   |  |  |  |          | 
|G F B Kerr                               |  |          | 302,500   |           |  |       | 93,717  |               |  |               | 198,710   |                |  |                  | 594,927   |                  |  |                  | 10,056  |                  |  |  |        |              |  |              | 604,983   |  |  |  | 557,739   | 
|P Loescher3
(appointed December 1, 2002) |  |          | 353,955   |           |  |       | 104,855 |               |  |               |          |                |  |                  | 458,810   |                  |  |                  |        |                  |  |  |        |              |  |              | 458,810   |  |  |  |          | 
|J M Padfield4                            |  |          | 386,364   |           |  |       | 46,925  |               |  |               | 266,370   |                |  |                  | 699,659   |                  |  |                  | 129,518 |                  |  |  | 841,035 |              |  |              | 1,670,212 |  |  |  | 788,173   | 
|                                         |  |          |           |           |  |       |         |               |  |               |           |                |  |                  |           |                  |  |                  |         |                  |  |  |         |              |  |              |           |  |  |  |           | 
|Total 
Executive                        |  |          | 2,145,627 |           |  |       | 389,826 |               |  |               | 1,135,930 |                |  |                  | 3,671,383 |                  |  |                  | 227,670 |                  |  |  | 841,035 |              |  |              | 4,740,088 |  |  |  | 2,898,427 | 
|                                         |  |          |           |           |  |       |         |               |  |               |           |                |  |                  |           |                  |  |                  |         |                  |  |  |         |              |  |              |           |  |  |  |           | 
|Non-ExecutiveDirectors                   |  |          |           |           |  |       |         |               |  |               |           |                |  |                  |           |                  |  |                  |         |                  |  |  |         |              |  |              |           |  |  |  |           | 
|R
D Lapthorne(Chairman)                  |  |          | 155,000   |           |  |       |        |               |  |               |          |                |  |                  | 155,000   |                  |  |                  |        |                  |  |  |        |              |  |              | 155,000   |  |  |  | 120,000   | 
|J Fr Odfjell                             |  |          | 66,353    |           |  |       |        |               |  |               |          |                |  |                  | 66,353    |                  |  |                  |        |                  |  |  |        |              |  |              | 66,353    |  |  |  | 60,000    | 
|D H Brydon                               |  |          | 41,667    |           |  |       |        |               |  |               |          |                |  |                  | 41,667    |                  |  |                  |        |                  |  |  |        |              |  |              | 41,667    |  |  |  | 30,000    | 
|J H Johansen5                            |  |          | 35,833    |           |  |       |        |               |  |               |          |                |  |                  | 35,833    |                  |  |                  |        |                  |  |  |        |              |  |              | 35,833    |  |  |  | 30,000    | 
|J Patterson                              |  |          | 35,833    |           |  |       |        |               |  |               |          |                |  |                  | 35,833    |                  |  |                  |        |                  |  |  |        |              |  |              | 35,833    |  |  |  | 29,348    | 
|K Peters6                                |  |          | 71,483    |           |  |       |        |               |  |               |          |                |  |                  | 71,483    |                  |  |                  |        |                  |  |  |        |              |  |              | 71,483    |  |  |  | 67,500    | 
|J F Rejeange                             |  |          | 35,833    |           |  |       |        |               |  |               |          |                |  |                  | 35,833    |                  |  |                  |        |                  |  |  |        |              |  |              | 35,833    |  |  |  | 30,000    | 
|E Thorsby                                |  |          | 35,833    |           |  |       |        |               |  |               |          |                |  |                  | 35,833    |                  |  |                  |        |                  |  |  |        |              |  |              | 35,833    |  |  |  | 30,000    | 
|M Uhlen7 (appointed
9 May 2002)          |  |          | 25,141    |           |  |       |        |               |  |               |          |                |  |                  | 25,141    |                  |  |                  |        |                  |  |  |        |              |  |              | 25,141    |  |  |  |          | 
|                                         |  |          |           |           |  |       |         |               |  |               |           |                |  |                  |           |                  |  |                  |         |                  |  |  |         |              |  |              |           |  |  |  |           | 
|Total 
Non-Executive                    |  |          | 502,976   |           |  |       |        |               |  |               |          |                |  |                  | 502,976   |                  |  |                  |        |                  |  |  |        |              |  |              | 502,976   |  |  |  | 396,848   | 
|                                         |  |          |           |           |  |       |         |               |  |               |           |                |  |                  |           |                  |  |                  |         |                  |  |  |         |              |  |              |           |  |  |  |           | 
|                                         |  |          |           |           |  |       |         |               |  |               |           |                |  |                  |           |                  |  |                  |         |                  |  |  |         |              |  |              |           |  |  |  |           | 
|Past Directors                           |  |          |           |           |  |       |         |               |  |               |           |                |  |                  |           |                  |  |                  |        |                  |  |  |        |              |  |              |           |  |  |  |           | 
|M J Crumpton8                            |  |          | 61,500    |           |  |       | 10,304  |               |  |               |          |                |  |                  | 71,804    |                  |  |                  |        |                  |  |  |        |              |  |              | 71,804    |  |  |  | 90,823    | 
|T V Jacobsen9                            |  |          |          |           |  |       | 77      |               |  |               |          |                |  |                  | 77        |                  |  |                  |        |                  |  |  |        |              |  |              | 77        |  |  |  | 136,866   | 
|R E Long10                               |  |          | 343,763   |           |  |       | 15,934  |               |  |               |          |                |  |                  | 359,697   |                  |  |                  |        |                  |  |  |        |              |  |              | 359,697   |  |  |  | 275,754   | 
|T F W McKillop                           |  |          |          |           |  |       |        |               |  |               |          |                |  |                  |          |                  |  |                  |        |                  |  |  |        |              |  |              |          |  |  |  | 2,500     | 
|                                         |  |          |           |           |  |       |         |               |  |               |           |                |  |                  |           |                  |  |                  |         |                  |  |  |         |              |  |              |           |  |  |  |           | 
|Total

Past Directors                   |  |          | 405,263   |           |  |       | 26,315  |               |  |               |          |                |  |                  | 431,578   |                  |  |                  |        |                  |  |  |        |              |  |              | 431,578   |  |  |  | 505,943   | 
|                                         |  |          |           |           |  |       |         |               |  |               |           |                |  |                  |           |                  |  |                  |         |                  |  |  |         |              |  |              |           |  |  |  |           | 
|Total                                    |  |          | 3,053,866 |           |  |       | 416,141 |               |  |               | 1,135,930 |                |  |                  | 4,605,937 |                  |  |                  | 227,670 |                  |  |  | 841,035 |              |  |              | 5,674,642 |  |  |  | 3,801,218 | 
|                                         |  |          |           |           |  |       |         |               |  |               |           |                |  |                  |           |                  |  |                  |         |                  |  |  |         |              |  |              |           |  |  |  |           | 



---

|1 |  | The figures shown for benefits include amounts payable in respect of private
medical insurance, permanent health insurance, the provision of company cars
and fuel and amounts received in cash for pensions.                                                                                                                                                                                                                                                                                                                    
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|2 |  | In addition to the figures shown in the table above in respect of Dr A Carr,
he received $196,153.83 (£130,769.22) in respect of his employment as President
of Amersham Biosciences prior to his appointment to the Board on May 9, 2002
(2001:$879,229 (£582,271)).                                                                                                                                                                                                                                                            
| 
|3 |  | Mr P Loescher received a signing-on bonus of euros 500,000 (£316,455). This
amount is included in the figures shown in the table above. The figure for Mr
P Loeschers benefits include the costs of his relocation from Japan and the
costs for his housing and childrens education. In addition, the Company has
agreed to compensate Mr Loescher for the loss of the bonus he would have
received from his previous company had he not joined Amersham. This amounts to
euros 325,000 and is not included in the table above.
| 
|4 |  | Dr J M Padfield received £841,035 in respect of his contractual entitlements
following his retirement on December 31, 2002. This amount is included in the
figures shown in the table above and explained in detail on page 99.                                                                                                                                                                                                                                                                                                  
| 
|5 |  | In addition to the fees shown in the table above Mr J H Johansen
received NOK 511,923 (£45,973) in salary and NOK 18,161 (£1,631) in benefits as
an employee.                                                                                                                                                                                                                                                                                                                                                                    

98



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##### Table of Contents



|6  |  | Professor Sir Keith Peters received fees of £35,650 in respect of his
services on the Science Advisory Board. This amount is included in the figures
shown in the table above.                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|7  |  | In addition to the figures shown in the table above in respect of Prof M
Uhlen, he received £7,141 in respect of his services as a Non-Executive
director of Amersham Biosciences Limited before his appointment to the Board on
May 9, 2002. In addition 1,200,000 SEK (£86,894) was paid to MU Bioteknik AB, a
company of which Mr Uhlen is the sole director and sole shareholder in respect
of royalty payments on patent rights. Payments have been made for the past
seven years. They are not regarded as material. The Board accordingly regards
Prof Uhlen as independent for corporate governance purposes.
|  
|8  |  | Mr Crumpton received consultancy fees during the year of £45,000 and £16,500
in respect of his services on the Science Advisory Board. In addition, he
received £10,304 in benefits.                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|9  |  | Mr Jacobsen resigned as a director of the Company on June 16, 1999. During
the year he received NOK 859 (£77) in benefits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|10 |  | Mr R E Long resigned as a director of the Company on March 23, 2001. During
the year, Mr R E Long has provided consultancy services to the Company for
which he has received £80,592 as fees and £15,934 in benefits. In addition,
£263,171 has been paid in consultancy fees to Scicona Limited, a company of
which he is a director. These figures are disclosed in the above table.                                                                                                                                                                                                                               

C.     Board practices

Service Contracts

Each of the Executive Directors are employed on a rolling contract subject to
one years notice if given by the Company and six months notice if given by the
Executive Director. This notice period was reduced in 2002 from two years and
new service contracts have been entered into as follows:

|              |  |                                 |  |                  
|------------- |  | ------------------------------- |  | -----------------
|Director      |  | Employing Company               |  | Date of Contract 
|              |  |                                 |  |                  
|G W Battersby |  | Amersham plc                    |  | March 1, 2002    
|A Carr        |  | Amersham Biosciences UK Limited |  | December 16, 2002
|W M Castell   |  | Amersham plc                    |  | March 1, 2002    
|G F B Kerr    |  | Amersham plc                    |  | March 1, 2002    
|P Loescher    |  | Amersham plc                    |  | December 1, 2002 

The Committee believes that in order to attract Executive Directors of the
right caliber and to compete for talent with our competitors, it is necessary
to offer service contracts with notice periods of one year, which explicitly
set out the provisions relating to termination of the contract.

Under the terms of the Executive Directors service contracts, on termination
of employment by the Company, except in the case of dismissal for cause, the
Company shall make a payment to the Executive Director equal to 95% of:



|a. |  | the Executives basic salary for the period of notice,                                                 
|-- |  | -------------------------------------------------------------------------------------------------------
|  
|b. |  | the cost of provision of pension and benefits for the notice period and                                
|  
|c. |  | the bonus applicable for the notice period, based on the actual bonus
paid in the previous three years.

Such payment shall be reduced proportionately in the event that the Executive
works part of his period of notice. When the Company has given notice of
termination, such payment shall be made within three months of the date of
notice. Any payment shall be entirely discretionary when the Executive has
given notice of termination. In the event that the employment is terminated for
any other reason, such payment shall be made forthwith. There are no special
provisions in the event of a change of control of the Company except for Mr
Battersby. In the event of a change of control of the Company, which leads to
Mr Battersby leaving the Company within a period of 12 months following such
change of control, the pension element of the Agreed Payment detailed above may
be enhanced by up to five years contributions. This enhancement shall reduce
progressively to zero by 2008 and was agreed at the time of his recruitment.

On December 31, 2002, Dr J M Padfield retired from the Board in order to
facilitate succession planning. He received a payment of £841,035 in respect of
his contractual entitlements, comprising 95% of the total of his salary
(£390,000), bonus (£300,300), pension benefits (£156,000) and other benefits
(£39,000). These figures are included in the remuneration table and notes on
page 98.

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Non-Executive Directors do not have service contracts but are employed under
letters of appointment for an initial period of three years. The remuneration
of the Non-Executive Directors is reviewed by the Chief Executive who makes
recommendations to the Board. The Board determines the remuneration of the
Non-Executive Directors within the limits set out in the Articles of
Association. The responsibilities of the role and the level of fees paid in UK
organizations of a similar size and complexity to Amersham are considered in
setting remuneration policy for Non-Executive Directors. Non-Executive
Directors are appointed for an initial period of three years, subject to
renewal by agreement. Details of when each Director was appointed are shown in
Item 6A Directors and Senior Management. There are no compensation provisions
for early termination of non Executive Director appointments.

Mr Johansen, an employee representative also has a service contract terminable
by either party on three months notice.

The Board

The Board comprises five Executive Directors and nine Non-Executive Directors.
Throughout the financial year, the offices of Chairman and Chief Executive have
been held separately. The Chairman, Mr R D Lapthorne, is an independent
Non-Executive Director, as deemed by the Board, who will be retiring from the
Board at the Annual General Meeting on May 7, 2003. The role of Chairman will
then be held by Mr D H Brydon, who is also deemed an independent Non-Executive
Director.

The Deputy Chairman, Mr J Fr Odfjell has been identified as the senior
independent Non-Executive Director.

Biographies of the Board members appear in Item 6 A. Directors and Senior
Management which also show the membership of the Nomination, Remuneration and
Audit Committees.

Apart from John Johansen, who is an employee, all the Non-Executive Directors
were independent of management and free from any business or other relationship
which could materially interfere with the exercise of independent judgment.
All Directors have access to the Company Secretary.

The Board has a schedule of matters reserved to it for decision and the
requirement for Board approval on these matters is communicated widely
throughout the Group. To enable the Board to function effectively and allow
Directors to discharge their responsibilities, full and timely access is given
to all relevant information and appropriate resources to discharge their
responsibilities.

Newly appointed Directors are given training appropriate to the level of their
previous experience. All are apprised of their roles and duties as Directors
of a public company.

The Board is responsible for the overall direction, strategy, performance and
management of the Group. Authority for implementing the Boards policies is
delegated to the Chief Executive within certain limits authorized by the Board.

The Nomination Committee

The Nomination Committee met six times during the year to review the
composition of, and succession to, the Board and make recommendations to the
Board on the appointment of Non-Executive and Executive Directors. The
Committee comprises seven of the independent Non-Executive Directors and is
chaired by Mr J Fr Odfjell, the Deputy Chairman of the Board. The Nomination
Committee reviews the composition of the Board in light of corporate governance
regulation and best practice both current and proposed.

Members of the Committee abstain when matters affecting their own appointments
are discussed. The Committee has available to it the services of external
advisers as it deems necessary and at the Companys expense. The Chief
Executive attends the meetings of the Nomination Committee.

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The Remuneration Committee

The Remuneration Committee met four times during the year. The Remuneration
Committee is responsible for determining the remuneration policy and the terms
and conditions of service of the Executive Directors. The Remuneration
Committee also determines Group policy relating to share option plans and the
level at which share options are granted to senior executives within the Group.
The Committee has available to it the services of independent advisers. The
Committee comprises six of the independent Non-Executive Directors including
the Chairman and Deputy Chairman of the Board and is chaired by Mr R D
Lapthorne, the Chairman of the Board. Following the retirement of Mr R D
Lapthorne at the Annual General Meeting held on May 7, 2003, the Remuneration
Committee will be chaired by Dr J S Patterson. The Chief Executive and the
Human Resources Director attend the meetings of the Committee to discuss the
performance of the other Executive Directors and to make proposals as necessary
but they are not present when their own remuneration is being considered.

The Audit Committee

The Audit Committee met four times
during the year. The Audit Committee
monitors and reviews the internal controls and accounts of the Group. It also
considers the Groups compliance with the Combined Code. The Committee is
chaired by Mr D H Brydon. The Committee comprises four further independent
Non-Executive Directors: Mr R D Lapthorne, Mr J Fr Odfjell, Dr J S Patterson
and Mr J F Rejeange. The Committee can request the external auditors, who are
normally present, Executive Directors and other officers of the Group to attend
its meetings. The Audit Committee receives regular reports from the Risk and
Operational Review department on all aspects of the Groups system of internal
control. The Audit Committee recommends the appointment of the external
auditors, reviews the external audit fee and audit plan and pre-approves all
non-audit work in respect of the external auditors prior to commitment.

Disclosure Committee

As recommended in the provisions of the US Sarbanes-Oxley Act, a Disclosure
Committee, chaired by Mr G F B Kerr (CFO) and comprising relevant senior
managers has been established to ensure a robust verification and disclosure
process throughout the Group. This will enable the Chief Executive and the
Finance Director (CFO) to make the required certifications. The Disclosure
Committee reports directly into the Chief Executive.

Appointments to the Board

Any Director appointed during the year is required, under the provisions of the
Companys Articles of Association, to retire and seek re-appointment by
shareholders at the next Annual General Meeting. The Articles also require
that one third of the Directors retire by rotation each year and seek
re-appointment at the Annual General Meeting. The Directors required to retire
will be those in office longest since their previous appointment or
re-appointment and this will usually mean that each Director retires at least
every three years. The Board has resolved that each Director will retire at
least every three years, even if this is not strictly required by the
application of the provisions of the Articles of Association.

D.     Employees

The following summarizes the weighted average number of employees for the last
three years, by type of activity:

|                           |  |                   |       |                   |  |                   |       |  |  |  |        | 
|-------------------------- |  | ----------------- | ----- | ----------------- |  | ----------------- | ----- |  |  |  | ------ | 
|                           |  | 12 months to      |       | 12 months to      |  | 12 months to     
|Type of Activity           |  | December 31, 2000 |       | December 31, 2001 |  | December 31, 2002
|                           |  |                   |       |                   |  |                  
|Production and development |  |                   | 4,201 |                   |  |                   | 4,587 |  |  |  | 4,962  | 
|Distribution and selling   |  |                   | 2,834 |                   |  |                   | 3,140 |  |  |  | 3,262  | 
|Administration             |  |                   | 1,720 |                   |  |                   | 1,792 |  |  |  | 1,827  | 
|                           |  |                   |       |                   |  |                   |       |  |  |  |        | 
|Total                      |  |                   | 8,755 |                   |  |                   | 9,519 |  |  |  | 10,051 | 
|                           |  |                   |       |                   |  |                   |       |  |  |  |        | 

Many of the Groups employees are represented by Trade Unions. The Group
considers its employee relations to be good and has not experienced any
material work stoppages in recent years.

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E.     Share Ownership

Directors interests in the Company

The Directors and their families beneficial interests in the share capital of
the Company are shown below:

|              |  |                    |         |                           |  |                    |         | 
|------------- |  | ------------------ | ------- | ------------------------- |  | ------------------ | ------- | 
|              |  |                    |         |                           |  | As at Dec 31, 2001
|              |  | Dec 31, 2002       |         | or at date of appointment
|              |  | Ordinary 5p Shares |         | Ordinary 5p Shares       
|              |  |                    |         |                          
|G W Battersby |  |                    | 25,000  |                           |  |                    | 25,000  | 
|D H Brydon    |  |                    | 2,585   |                           |  |                    | 2,585   | 
|A Carr        |  |                    | 1,958   |                           |  |                    | 1,566   | 
|W M Castell   |  |                    | 243,570 |                           |  |                    | 243,570 | 
|J H Johansen  |  |                    | 11,610  |                           |  |                    | 11,610  | 
|G F B Kerr    |  |                    | 10,000  |                           |  |                    | 10,000  | 
|R D Lapthorne |  |                    | 105,170 |                           |  |                    | 105,170 | 
|P Loescher    |  |                    |        |                           |  |                    |        | 
|J Fr Odfjell  |  |                    | 53,150  |                           |  |                    | 53,150  | 
|J M Padfield  |  |                    | 3,564   |                           |  |                    | 3,564   | 
|J Patterson   |  |                    | 2,923   |                           |  |                    | 2,923   | 
|K Peters      |  |                    | 3,111   |                           |  |                    |        | 
|J F Rejeange  |  |                    |        |                           |  |                    |        | 
|E Thorsby     |  |                    | 17,800  |                           |  |                    | 17,800  | 
|M Uhlen       |  |                    |        |                           |  |                    |        | 
|              |  |                    |         |                           |  |                    |         | 
|              |  |                    | 480,441 |                           |  |                    | 476,938 | 
|              |  |                    |         |                           |  |                    |         | 

Details of interests in conditional awards under the LTIP are detailed on page
105 of this Report. Each Director is deemed to be interested in all of the
Ordinary Shares held by the Amersham ESOP Trust which at December 31, 2002,
amounted to 545,282 Ordinary 5p shares (January 1, 2002, 550,287 Ordinary
Shares). Each Executive Director is deemed to be interested in all of the
shares held by Amersham Trustees Limited (the trustee of a UK Inland Revenue
tax approved QUEST) which amounted to 770,057 Ordinary Shares at December 31,
2002 (January 1, 2002, 1,607,294 Ordinary Shares).

On March 13, 2003, W M Castell and G F B Kerr acquired 27,041 and 15,939 shares
respectively on the exercise of awards made to them under the terms of the
LTIP.

Share Option Schemes

Tax approved and unapproved Executive Share Option Schemes are available to
Executive Directors and senior managers.

Options granted to Executive Directors prior to 2001 under the terms of the
1993 Executive Share Option Scheme are subject to the attainment of growth in
the Companys earnings per share of at least 6% more than the increase in the
Retail Prices Index over any three consecutive financial years prior to the
exercise of the option.

Options granted to Executive Directors from 2001 under the terms of the 2001
Executive Share Option Scheme are not normally exercisable until the third
anniversary of the date of grant and to the extent that the performance
conditions specified prior to the grant of the option have been satisfied. For
options granted to Executive Directors in 2002 (which are detailed in the
Interests in Share Options Table on page 104), 50% of each option grant will
vest if the Companys normalized earnings per share growth (as determined by
the Remuneration Committee) matches or exceeds the growth in the Retail Prices
Index plus 3% per annum. The entire option grant will vest if the Companys
normalized earnings per share growth matches or exceeds the growth in the
Retail Prices Index plus 5% per annum. There is proportionate vesting between
3% and 5%. Performance is always measured from the end of the financial year
prior to the grant of the option. 25% of the options may vest after one year
with a further 25% after two years and a further 50%

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after three years. To the extent that these targets are not achieved by those
times, the performance period will be extended, one financial year at a time.
To the extent that the performance conditions have not been met by the fifth
anniversary of the grant, the option lapses. Option grants made to Dr Carr in
2001 and 2002 are not subject to performance conditions as he was not an
Executive Director at the date of grant. Option grants made to all Executive
Directors in 2003 are subject to the same performance conditions as applied to
Executive Director option grants in 2001 and 2002.

Although performance conditions are not a common feature of option plans
operated by our international competitors, we recognize that as a company with
our primary listing in the UK, it is appropriate that options granted to our
Executive Directors are subject to performance conditions. The performance
conditions we have chosen mean that options will only vest when there has been
a correspondingly good return for our shareholders. More demanding performance
conditions would mean that the Black Scholes valuation of share options awarded
would be lower and therefore in order to maintain the same Black Scholes value
of award, higher option grants would need to be given.

Executive Directors are also entitled to participate in the UK Inland Revenue
approved Sharesave (SAYE) share option scheme, which is available to all UK
employees. The scheme is subject to a cumulative maximum investment of £250 per
month for each individual. The share option runs for three, five or seven
years. At the end of the chosen period, the shares may be purchased by the
employee at a 20 per cent discount to the share price at the start of the
period.

The beneficial interests of the Executive Directors in share options are shown
on page 104.

103



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##### Table of Contents



Interests in share options

The interests of the Directors in Amersham plc share options held under the
Executive Share Option Scheme (ESOS) and the Sharesave Scheme (SAYE) are set
out below. These options are exercisable from November 1996 to September 2012
and are held under the Companys plans referred to in Note 25 of Item 18
Consolidated Financial Statements. No options lapsed during the year.

Option Interests1

|              |  |                 |  |  |         |                         |         |                         |       |                           |       |                 |       |          |         |              |       |          |       |           |   |              |     |        |   |  |       |  |   |          |       |  |         |  |         |  |       |  |       | 
|------------- |  | --------------- |  |  | ------- | ----------------------- | ------- | ----------------------- | ----- | ------------------------- | ----- | --------------- | ----- | -------- | ------- | ------------ | ----- | -------- | ----- | --------- | - | ------------ | --- | ------ | - |  | ----- |  | - | -------- | ----- |  | ------- |  | ------- |  | ----- |  | ----- | 
|              |  |                 |  |  |         | At Dec 31, 2001 or date |         |                         |       |                           |       |                 |       |          |         |              |       |          |       |           |   |              |     |        |   |  |       |  |   |          |       |  |         | 
|              |  |                 |  |  |         | of appointment          |         | Granted during the year |       | Exercised during the year |       | At Dec 31, 2002
|              |  |                 |  |  |         |                         |         |                         |       |                           |       |                
|              |  |                 |  |  |         |                         |         |                         |       | Weighted                  |       |                 |       |          |         | Weighted     |       |          |       |           |   | Weighted     |     | Market |   |  |       |  |   | Weighted
|              |  |                 |  |  |         | Number                  |         | average                 |       | Number of                 |       | average         |       | Number   |         | average      |       | price on |       | Number of |   | average     
|              |  |                 |  |  |         | ordinary                |         | subscription            |       | ordinary                  |       | subscription    |       | ordinary |         | subscription |       | date of  |       | ordinary  |   | subscription
|              |  |                 |  |  |         | shares                  |         | price                   |       | shares                    |       | price           |       | shares   |         | price        |       | exercise |       | shares    |   | price       
|              |  |                 |  |  |         |                         |         |                         |       |                           |       |                 |       |          |         |              |       |          |       |           |   |             
|G W Battersby |  | ESOS 1993       |  |  |        | a                       |         |                         |      |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  |        |  |         |  |      | 
|              |  |                 |  |  |         |                         | 128,618 | b                       |       |                           | £6.22 |                 |       |          |        |              |       |          |      |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 128,618 |  |       |  | £6.22 | 
|              |  | ESOS 2001       |  |  |        | a                       |         |                         |      |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  |        |  |         |  |      | 
|              |  |                 |  |  |         |                         | 85,716  | b                       |       |                           | £5.60 |                 |       |          |        |              |       |          |      |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 85,716  |  |       |  | £5.60 | 
|              |  |                 |  |  |         |                         |        |                         |       |                           |      |                 |       |          | 67,136  | b            |       |          | £7.15 |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 67,136  |  |       |  | £7.15 | 
|              |  | SAYE            |  |  | 3,402   | a                       |         |                         | £4.96 |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  | 3,402   |  |         |  | £4.96 | 
|             
|A Carr        |  | ESOS 1993       |  |  | 83,654  | a                       |         |                         | £4.43 |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  | 83,654  |  |         |  | £4.43 | 
|              |  |                 |  |  |         |                         |        | b                       |       |                           |      |                 |       |          |        |              |       |          |      |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  |        |  |       |  |      | 
|              |  | ESOS 2001       |  |  |        | a                       |         |                         |      |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  |        |  |         |  |      | 
|              |  |                 |  |  |         |                         | 289,948 | b                       |       |                           | £5.60 |                 |       |          |        |              |       |          |      |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 289,948 |  |       |  | £5.60 | 
|              |  |                 |  |  |         |                         |        |                         |       |                           |      |                 |       |          | 102,756 | b            |       |          | £7.15 |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 102,756 |  |       |  | £7.15 | 
|              |  | SAYE            |  |  | 3,045   | a                       |         |                         | £4.47 |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  | 3,045   |  |         |  | £4.47 | 
|              |  |                 |  |  |         |                         | 392     | a                       |       |                           | £2.46 |                 |       |          |        |              |       |          |      |           |   |              | 392 |        |   |  | £2.46 |  |   |          | £5.52 |  |         |  |        |  |       |  |      | 
|              |  | Options for all |  |  | 1,000   | b                       |         |                         | £6.35 |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  | 1,000   |  |         |  | £6.35 | 
|             
|W M Castell   |  | ESOS 1993       |  |  | 116,988 | a                       |         |                         | £4.82 |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  | 116,988 |  |         |  | £4.82 | 
|              |  |                 |  |  |         |                         | 186,934 | b                       |       |                           | £6.23 |                 |       |          |        |              |       |          |      |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 186,934 |  |       |  | £6.23 | 
|              |  | ESOS 2001       |  |  |        | a                       |         |                         |      |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  |        |  |         |  |      | 
|              |  |                 |  |  |         |                         | 178,572 | b                       |       |                           | £5.60 |                 |       |          |        |              |       |          |      |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 178,572 |  |       |  | £5.60 | 
|              |  |                 |  |  |         |                         |        |                         |       |                           |      |                 |       |          | 139,864 | b            |       |          | £7.15 |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 139,864 |  |       |  | £7.15 | 
|              |  | SAYE            |  |  | 2,679   | a                       |         |                         | £3.30 |                           |       |                 | 1,001 |          |         |              | £4.49 |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  | 3,680   |  |         |  | £3.62 | 
|             
|G F B Kerr    |  | ESOS 1993       |  |  | 244,918 | a                       |         |                         | £4.18 |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  | 244,918 |  |         |  | £4.18 | 
|              |  |                 |  |  |         |                         | 37,913  | b                       |       |                           | £6.23 |                 |       |          |        |              |       |          |      |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 37,913  |  |       |  | £6.23 | 
|              |  | ESOS 2001       |  |  |        | a                       |         |                         |      |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  |        |  |         |  |      | 
|              |  |                 |  |  |         |                         | 100,000 | a                       |       |                           | £5.60 |                 |       |          |        |              |       |          |      |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 100,000 |  |       |  | £5.60 | 
|              |  |                 |  |  |         |                         |        |                         |       |                           |      |                 |       |          | 78,324  | b            |       |          | £7.15 |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 78,324  |  |       |  | £7.15 | 
|              |  | SAYE            |  |  |        |                         |         |                         |      |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  |        |  |         |  |      | 
|             
|P Loescher    |  | ESOS 2001       |  |  |        | a                       |         |                         |      |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  |        |  |         |  |      | 
|              |  |                 |  |  |         |                         |        |                         |       |                           |      |                 |       |          | 309,280 | b            |       |          | £5.82 |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 309,280 |  |       |  | £5.82 | 
|             
|J M Padfield  |  | ESOS 1993       |  |  | 349,662 | a                       |         |                         | £4.29 |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  | 349,662 |  |         |  | £4.29 | 
|              |  |                 |  |  |         |                         | 57,785  | b                       |       |                           | £6.23 |                 |       |          |        |              |       |          |      |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 57,785  |  |       |  | £6.23 | 
|              |  | ESOS 2001       |  |  |        | a                       |         |                         |      |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  |        |  |         |  |      | 
|              |  |                 |  |  |         |                         | 121,432 | b                       |       |                           | £5.60 |                 |       |          |        |              |       |          |      |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 121,432 |  |       |  | £5.60 | 
|              |  |                 |  |  |         |                         |        |                         |       |                           |      |                 |       |          | 95,108  | b            |       |          | £7.15 |           |   |              |    |        |   |  |      |  |   |          |      |  |         |  | 95,108  |  |       |  | £7.15 | 
|              |  | SAYE            |  |  | 5,568   | a                       |         |                         | £3.30 |                           |       |                 |      |          |         |              |      |          |       |           |  |              |     |        |  |  |       |  |  |          |       |  | 5,568   |  |         |  | £3.30 | 



---

|1 |  | Options granted under ESOS and ESOS 2001 are exercisable between 3 and 10
years from the date of grant and options granted under SAYE are
exercisable, 3, 5 or 7 years from the date of grant. These options are
subject to the performance conditions explained on pages 102 to 103.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|  |  | Options granted where the market share price on December 31, 2002 (£5.56) was
above the grant price are marked with an a.                                                                                                                                                            
| 
|  |  | Options granted where the market share price on December 31, 2002 (£5.56) is
below the grant prices are marked with a b.                                                                                                                                                             

104



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On March 3, 2003, additional grants of options were made to the undernoted
Directors of the company under the terms of the Executive Share Option Scheme
2001.

|              |  |                           |         |                    |  |  |       | 
|------------- |  | ------------------------- | ------- | ------------------ |  |  | ----- | 
|              |  | Number of options granted |         | Subscription price
|              |  |                           |         |                   
|G W Battersby |  |                           | 125,572 |                    |  |  | £4.38 | 
|A Carr        |  |                           | 171,236 |                    |  |  | £4.38 | 
|W M Castell   |  |                           | 273,976 |                    |  |  | £4.38 | 
|G F B Kerr    |  |                           | 141,536 |                    |  |  | £4.38 | 
|P Loescher    |  |                           | 205,480 |                    |  |  | £4.38 | 

No other Directors have been granted options over the shares of the Company or
any other Group companies.

Restricted Shares

On December 4, 2002, 77,320 restricted shares were awarded to P Loescher on his
joining the Company. 50% of these shares vest on December 4, 2004 and the
remaining 50% of the shares on December 4, 2005, subject to his still being an
employee of the Company.

The share price on the date of the award was £5.69. The shares for the award to
P Loescher will be supplied by the Amersham ESOP Trust. The Remuneration
Committee concluded that such awards were necessary to recruit P Loescher and
therefore the committee made such an award relying on the exemption in chapter
13.13A of the UKLA Listing Rules. In the event that P Loescher ceases to be
employed by the Company, his awards will lapse, unless the Remuneration
Committee determine otherwise, except in the circumstances of his death, when
his personal representatives may exercise his awards. The Remuneration
Committee will not make amendments to the arrangements established for P
Loescher that are to his advantage, without seeking the consent of
shareholders. No benefits under the arrangements are pensionable.

Long term incentive plan

In previous years, the Company has operated a long term incentive plan (the
Plan or LTIP) which was intended to provide a long term incentive to Executives
and to further align their interests with those of the shareholders.

Following the introduction of the new Executive Share Option Scheme in 2001, it
is not proposed to make any further awards under the Plan. No awards were made
under this Plan in 2002.

The following grants of awards of ordinary shares each have been made to
Executive Directors under the Plan:

|              |  |           |        |         |     |           |  |           |         |              |  |                |     |           |       |              |     |        |        |  |     |           |     |              |     |  |     |  |     |  |  | 
|------------- |  | --------- | ------ | ------- | --- | --------- |  | --------- | ------- | ------------ |  | -------------- | --- | --------- | ----- | ------------ | --- | ------ | ------ |  | --- | --------- | --- | ------------ | --- |  | --- |  | --- |  |  | 
|              |  |           |        |         |     |           |  |           |         |              |  |                |     |           |       |              |     |        |        |  |     | Number of |     |              |     |  |     |  |     | 
|              |  |           |        |         |     |           |  |           |         | Market value |  |                |     |           |       | Market value |     | awards |        |  |     |           |     | Market value
|              |  | Number of |        | Date    |     | on date   |  | Date      |         | on vesting   |  | vesting during |     | Date      |       | on exercise 
|              |  | awards1   |        | granted |     | of grant  |  | vested2,3 |         | date         |  | the year4      |     | exercised |       | date        
|              |  |           |        |         |     |           |  |           |         |              |  |                |     |           |       |             
|G W Battersby |  | Nil       |        |         | N/A |           |  |           | N/A     |              |  |                | N/A |           |       |              | N/A |        |        |  | N/A |           |     |              | N/A |  |     |  | N/A | 
|A Carr        |  |           | 8,381  |         |     | 31-Mar-00 |  |           | £5.1544 |              |  |                | N/A |           |       |              | N/A |        |        |  | N/A |           |     |              | N/A |  |     |  | N/A | 
|W M Castell   |  |           | 27,041 |         |     | 17-Jun-99 |  |           | £4.8075 |              |  | 17-Jun-02      |     |           | £5.80 |              |     |        | 24,336 |  |     |           | N/A |              |     |  | N/A | 
|              |  |           | 29,878 |         |     | 31-Mar-00 |  |           | £5.1544 |              |  |                | N/A |           |       |              | N/A |        |        |  | N/A |           |     |              | N/A |  |     |  | N/A | 
|G F B Kerr    |  |           | 15,939 |         |     | 22-Apr-98 |  |           | £4.2656 |              |  | 22-Apr-01      |     |           | £4.77 |              |     | Nil    |        |  | N/A |           |     |              | N/A | 
|              |  |           | 15,809 |         |     | 17-Jun-99 |  |           | £4.8075 |              |  | 17-Jun-02      |     |           | £5.80 |              |     |        | 14,228 |  |     |           | N/A |              |     |  | N/A | 
|              |  |           | 17,461 |         |     | 31-Mar-00 |  |           | £5.1544 |              |  |                | N/A |           |       |              | N/A |        |        |  | N/A |           |     |              | N/A |  |     |  | N/A | 
|P Loescher    |  | Nil       |        |         | N/A |           |  |           | N/A     |              |  |                | N/A |           |       |              | N/A |        |        |  | N/A |           |     |              | N/A |  |     |  | N/A | 
|J M Padfield  |  |           | 23,281 |         |     | 31-Mar-00 |  |           | £5.1544 |              |  |                | N/A |           |       |              | N/A |        |        |  | N/A |           |     |              | N/A |  |     |  | N/A | 
|              |  |           |        |         |     |           |  |           |         |              |  |                |     |           |       |             

105



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##### Table of Contents



Under the Plan, awards of Ordinary Shares have been made to participants in the
Plan by the trustees of the Amersham plc ESOP Trust, a trust established by the
Company and operated by an independent firm of trustees.



---

|1 |  | No awards were made in 2002                                                                                                                                                                                                                                                                                                        
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|2 |  | Awards vest 3 years from the date of grant, subject to performance
conditions. The receipt of Ordinary Shares by the participants
depends upon the performance of the Company over a three year period, which is
measured by the growth in the total shareholder return of the Company
relative to the FTSE 100 index of companies.
| 
|3 |  | Awards will only vest if the Companys Total Shareholder Return would
place it in at least 60th position amongst the FTSE 100 companies ranked
by Total Shareholder Return and the maximum number of Ordinary Shares will
vest only if the performance would rank it at 20th place or better.                                      
| 
|4 |  | The awards made in 1999 vested as to 90% in 2002 as the Company was
ranked 25th out of the 100 companies in its comparator group.                                                                                                                                                                                                  

On March 13, 2003, W M Castell and G F B Kerr exercised their awards made in
June 1999 and April 1998 in respect of 27,041 and 15,939 shares respectively.

The Companys register of Directors interests, which is open for inspection,
contains full details of Directors share interests, options to subscribe for
shares and awards of restricted shares.

106



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##### Table of Contents






ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.     Major Shareholders

Amersham is not, to its knowledge, directly or indirectly owned or controlled
by another corporation or by any government, and there are no arrangements
known to the Company where the operation of which may, at a subsequent date,
result in a change of control of the Company.

As of April 16, 2003, two registered shareholders hold more than 5% of the
Companys outstanding shares, one of which is HSBC Global Custody Nominee
Limited, the Authorized Depositary of the VPS system (through which all
holdings on the Norwegian sub-register are held). To the Companys knowledge,
no other person owns more than 5% of the Companys outstanding shares.

|                                               |  |                                           |  |                    |       |  
|---------------------------------------------- |  | ----------------------------------------- |  | ------------------ | ----- | -
|                                               |  | Number of                                 |  | % of              
|Parties                                        |  | Ordinary 5p Shares                        |  | Total Issued Share
|Interested                                     |  | Outstanding                               |  | Capital           
|                                               |  |                                           |  |                   
|HSBC Global Custody
Nominee Limited
A/C 866616 |  | 101,200,609 ordinary 5p shares            |  |                    | 14.41 | %
|Wellington
Management Company                  |  | 36,009,900 ordinary 5p shares
90,402 ADRs |  |                    | 5.19  | %

Under the UK Companies Act, holders of voting securities of a listed UK company
must notify the company of the level of their holding whenever it reaches,
exceeds or falls below specified thresholds. These thresholds are 3%
(beneficial) and 10% (non-beneficial) and every one percent movement in the
number of shares held which have voting rights. The following table sets
forth, as of April 16, 2003, the number of ordinary shares held by holders of
more than 3% and their percentage ownership which have been notified to the
Company in accordance with the provisions noted above.

|                                           |  |                  |            |   |  |  |      | 
|------------------------------------------ |  | ---------------- | ---------- | - |  |  | ---- | 
|                                           |  | Number of shares |            | %
|                                           |  |                  |            |  
|Legal and General Investment               |  |                  | 21,453,876 |   |  |  | 3.06 | 
|Folketrygdfondet                           |  |                  | 21,620,300 |   |  |  | 3.08 | 
|Lazard Asset Management                    |  |                  | 21,658,981 |   |  |  | 3.09 | 
|Fidelity Investments                       |  |                  | 23,269,146 |   |  |  | 3.31 | 
|Franklin Resources Inc. and its affiliates |  |                  | 34,629,982 |   |  |  | 4.93 | 

The Companys major shareholders do not benefit from different voting rights
from other shareholders in the same class.

The proportion of each class of the Companys securities held in the US and the
number of record holders in the US are given under Item 9, The Offer and
Listing.

B.     Related Party Transactions

Related party transactions have been disclosed in Note 35 of Item 18
Consolidated Financial Statements. Apart from the transactions disclosed
within this Note there were no other material items requiring disclosure.

107



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##### Table of Contents






ITEM 8. FINANCIAL INFORMATION

A.     Consolidated Statements and Other Financial Information

Financial Statements

See Item 18 Consolidated Financial Statements.

Export Sales

Total sales from continuing operations in 2002 were £1,618 million including a
£81 million share of joint venture sales of NMP. Exports from the United
Kingdom amounted to £203 million, representing 13% of total sales from
continuing operations.

Legal Proceedings

The Company is involved in various disputes of a nature considered typical for
its business, including those relating to product liability and infringements
of intellectual property rights and validity of patents. Although there can be
no assurance regarding the outcome of any of the disputes referred to in this
section, the Company believes that they will not have a material adverse effect
on the Companys financial condition or results of operations.

Dividends

See Item 3 Key Information for the Companys policy on dividends and
historical information on aggregate dividends paid in each fiscal period.

B.     Significant Changes

On February 26, 2003, the Group announced a restructuring of its discovery
systems business area. The restructuring program, which is intended to deliver
a more efficient manufacturing cost base and focus R&D on fewer sites, will
result in the net loss of approximately 400 jobs. The Group will incur one-off
costs in the range of £45-50 million, which are expected to result in savings
running at the rate of £30-35 million per annum by the end of 2004. The
restructuring plans are expected to bring benefits in 2003 moving the business
to profitability during 2004.

On April 22, 2003 we announced an intended merger of our brachytherapy business
with the urology business of Galil Medical to create a stand-alone marketing
company. The combined sales of both businesses would have been approximately
£57 million ($90 million) in 2002. The new company, which is 75% owned by
Amersham, will be accounted for as a joint venture.

On April 30, 2003 we reported sales of £381 million for the first three months
of 2003 (2002: £381 million), up 6% at constant exchange and excluding
discontinued business. We confirmed that our outlook for the year is unchanged
and that the restructuring of our discovery systems business area is on track
to deliver profitability during 2004.

The full text of our press release can be found on our internet site
www.amersham.com

108



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##### Table of Contents






ITEM 9. THE OFFER AND LISTING

Market Value Data

The London Stock Exchange (LSE) is the principal trading market for the
Companys Ordinary Shares, nominal value of 5p each. As of June 10, 1998 the
Non-voting Shares, nominal value 25p each, (together with the Companys
Ordinary Shares nominal value of 25p each) were converted into Ordinary Shares
with a nominal value of 5p and are no longer listed on the LSE. The Companys
Ordinary Shares are also listed on the Oslo Stock Exchange and on the New York
Stock Exchange (NYSE) in the form of American Depositary Shares (ADSs),
each representing five Ordinary Shares. The ADSs are evidenced by American
Depositary Receipts (ADRs) issued by Citibank N.A. as the depositary.

As of April 16, 2003 there were 13,432 holders of record of 702,084,809
Ordinary Shares of which 62 (0.46%) had registered addresses in the US and held
a total of 151,563 (0.022%) Ordinary Shares. Because certain of the Ordinary
Shares and ADSs are held by brokers or other nominees, the number of holders of
record or registered holders in the US is not representative of the number of
beneficial holders or of the residence of beneficial holders.

109



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##### Table of Contents



London Stock Exchange

The table below sets out, for the quarters indicated the reported high and low
middle-market closing quotations (in pence) of Amershams Ordinary Shares
(after adjusting for the share split in June 1998) on the LSE as reported in
The Daily Official List. The middle-market closing quotation of a security is
the standard method of describing the price of a security listed on the LSE,
and is the mean of (i) the highest price offered by any registered market maker
to purchase the security (the bid price); and (ii) the lowest price required by
any registered market maker to sell the security (the offer price), as at the
close of business on a given day.

| |      |  |  |                                                      |  |                  |        |     |  |  |        | 
| | ---- |  |  | ---------------------------------------------------- |  | ---------------- | ------ | --- |  |  | ------ | 
| |      |  |  |                                                      |  | Ordinary Shares*
| |      |  |  |                                                      |  |                 
| |      |  |  |                                                      |  | High             |        | Low
| |      |  |  |                                                      |  |                  |        |    
| |      |  |  |                                                      |  | (p)              |        | (p)
| | 2003 |  |  | Quarter ended June 30, 2003 (through April 16, 2003) |  |                  | 434.50 |     |  |  | 411.00 | 
| |      |  |  | Quarter ended March 31, 2003                         |  |                  | 561.50 |     |  |  | 363.00 | 
| | 2002 |  |  | Quarter ended December 31, 2002                      |  |                  | 599.00 |     |  |  | 507.50 | 
| |      |  |  | Quarter ended September 30, 2002                     |  |                  | 598.50 |     |  |  | 455.50 | 
| |      |  |  | Quarter ended June 30, 2002                          |  |                  | 768.50 |     |  |  | 558.00 | 
| |      |  |  | Quarter ended March 31, 2002                         |  |                  | 768.50 |     |  |  | 638.00 | 
| | 2001 |  |  | Quarter ended December 31, 2001                      |  |                  | 673.50 |     |  |  | 560.00 | 
| |      |  |  | Quarter ended September 30, 2001                     |  |                  | 635.00 |     |  |  | 502.00 | 
| |      |  |  | Quarter ended June 30, 2001                          |  |                  | 580.00 |     |  |  | 460.00 | 
| |      |  |  | Quarter ended March 31, 2001                         |  |                  | 600.00 |     |  |  | 428.50 | 
| | 2000 |  |  | Quarter ended December 31, 2000                      |  |                  | 671.00 |     |  |  | 512.00 | 
| |      |  |  | Quarter ended September 30, 2000                     |  |                  | 700.00 |     |  |  | 583.00 | 
| |      |  |  | Quarter ended June 30, 2000                          |  |                  | 602.50 |     |  |  | 471.00 | 
| |      |  |  | Quarter ended March 31, 2000                         |  |                  | 732.00 |     |  |  | 361.25 | 
| | 1999 |  |  | Quarter ended December 31, 1999                      |  |                  | 421.25 |     |  |  | 350.00 | 
| |      |  |  | Quarter ended September 30, 1999                     |  |                  | 485.00 |     |  |  | 356.00 | 
| |      |  |  | Quarter ended June 30, 1999                          |  |                  | 540.00 |     |  |  | 421.00 | 
| |      |  |  | Quarter ended March 31, 1999                         |  |                  | 540.00 |     |  |  | 378.00 | 
| | 1998 |  |  | Quarter ended December 31, 1998                      |  |                  | 443.50 |     |  |  | 332.00 | 
| |      |  |  | Quarter ended September 30, 1998                     |  |                  | 461.00 |     |  |  | 340.00 | 
| |      |  |  | Quarter ended June 30, 1998                          |  |                  | 450.00 |     |  |  | 355.00 | 
| |      |  |  | Quarter ended March 31, 1998                         |  |                  | 490.14 |     |  |  | 410.44 | 
| | 1997 |  |  | Quarter ended December 31, 1997                      |  |                  | 474.47 |     |  |  | 389.75 | 
| |      |  |  | Quarter ended September 30, 1997                     |  |                  | 419.73 |     |  |  | 318.67 | 
| |      |  |  | Quarter ended June 30, 1997                          |  |                  | 310.73 |     |  |  | 234.53 | 
| |      |  |  | Quarter ended March 31, 1997                         |  |                  | 310.73 |     |  |  | 235.11 | 

| |      |  |  |                                               |  |                 |        |     |  |  |        | 
| | ---- |  |  | --------------------------------------------- |  | --------------- | ------ | --- |  |  | ------ | 
| |      |  |  |                                               |  | Ordinary Shares
| |      |  |  |                                               |  |                
| |      |  |  |                                               |  | High            |        | Low
| |      |  |  |                                               |  |                 |        |    
| |      |  |  |                                               |  | (p)             |        | (p)
| | 2003 |  |  | Month ended April 30, 2003 (through April 16) |  |                 | 434.50 |     |  |  | 411.00 | 
| |      |  |  | Month ended March 31, 2003                    |  |                 | 430.50 |     |  |  | 363.00 | 
| |      |  |  | Month ended February 28, 2003                 |  |                 | 498.00 |     |  |  | 424.00 | 
| |      |  |  | Month ended January 31, 2003                  |  |                 | 561.50 |     |  |  | 459.00 | 



---

|* |  | The market prices of the Ordinary shares in issue prior to June 10, 1998 have
been adjusted to take account of the sub-division of the Ordinary 25p shares
into Ordinary 5p shares and the 3.4% bonus issue on June 10, 1998.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

110



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Oslo Stock Exchange

The table below sets out, for the period following the date of the merger, i.e.
from October 22, 1997, the reported high and low middle-market quotations in
Norwegian kroner (NOK) of Amershams Ordinary Shares on The Oslo Stock Exchange
as reported on the Norwegian Official List.

| |      |  |  |                                                        |  |                   |       |       |  |  |       | 
| | ---- |  |  | ------------------------------------------------------ |  | ----------------- | ----- | ----- |  |  | ----- | 
| |      |  |  |                                                        |  | Ordinary Shares *
| |      |  |  |                                                        |  |                  
| |      |  |  |                                                        |  | High              |       | Low  
| |      |  |  |                                                        |  |                   |       |      
| |      |  |  |                                                        |  | (NOK)             |       | (NOK)
| | 2003 |  |  | Quarter ended June 30, 2003 (through April 16, 2003)   |  |                   | 51.00 |       |  |  | 47.50 | 
| |      |  |  | Quarter ended March 31, 2003                           |  |                   | 63.00 |       |  |  | 43.00 | 
| | 2002 |  |  | Quarter ended December 31, 2002                        |  |                   | 68.00 |       |  |  | 59.00 | 
| |      |  |  | Quarter ended September 30, 2002                       |  |                   | 70.00 |       |  |  | 51.00 | 
| |      |  |  | Quarter ended June 30, 2002                            |  |                   | 95.50 |       |  |  | 64.00 | 
| |      |  |  | Quarter ended March 31, 2002                           |  |                   | 93.50 |       |  |  | 90.00 | 
| | 2001 |  |  | Quarter ended December 31, 2001                        |  |                   | 86.00 |       |  |  | 75.50 | 
| |      |  |  | Quarter ended September 30, 2001                       |  |                   | 81.50 |       |  |  | 64.00 | 
| |      |  |  | Quarter ended June 30, 2001                            |  |                   | 75.00 |       |  |  | 60.00 | 
| |      |  |  | Quarter ended March 31, 2001                           |  |                   | 76.00 |       |  |  | 55.50 | 
| | 2000 |  |  | Quarter ended December 31, 2000                        |  |                   | 88.50 |       |  |  | 65.00 | 
| |      |  |  | Quarter ended September 30, 2000                       |  |                   | 95.00 |       |  |  | 77.50 | 
| |      |  |  | Quarter ended June 30, 2000                            |  |                   | 80.50 |       |  |  | 63.00 | 
| |      |  |  | Quarter ended March 31, 2000                           |  |                   | 97.25 |       |  |  | 48.30 | 
| | 1999 |  |  | Quarter ended December 31, 1999                        |  |                   | 53.75 |       |  |  | 45.35 | 
| |      |  |  | Quarter ended September 30, 1999                       |  |                   | 53.75 |       |  |  | 45.70 | 
| |      |  |  | Quarter ended June 30, 1999                            |  |                   | 66.75 |       |  |  | 54.00 | 
| |      |  |  | Quarter ended March 31,1999                            |  |                   | 67.00 |       |  |  | 47.00 | 
| | 1998 |  |  | Quarter ended December 31, 1998                        |  |                   | 54.00 |       |  |  | 39.00 | 
| |      |  |  | Quarter ended September 30, 1998                       |  |                   | 58.00 |       |  |  | 42.00 | 
| |      |  |  | Quarter ended June 30, 1998                            |  |                   | 58.00 |       |  |  | 44.00 | 
| |      |  |  | Quarter ended March 31, 1998                           |  |                   | 65.00 |       |  |  | 49.00 | 
| | 1997 |  |  | Period from October 22, 1997 through
December 31, 1997 |  |                   | 54.00 |       |  |  | 53.00 | 

| |      |  |  |                                               |  |                 |       |       |  |  |       | 
| | ---- |  |  | --------------------------------------------- |  | --------------- | ----- | ----- |  |  | ----- | 
| |      |  |  |                                               |  | Ordinary Shares
| |      |  |  |                                               |  |                
| |      |  |  |                                               |  | High            |       | Low  
| |      |  |  |                                               |  |                 |       |      
| |      |  |  |                                               |  | (NOK)           |       | (NOK)
| | 2003 |  |  | Month ended April 30, 2003 (through April 16) |  |                 | 51.00 |       |  |  | 47.50 | 
| |      |  |  | Month ended March 31, 2003                    |  |                 | 50.50 |       |  |  | 43.00 | 
| |      |  |  | Month ended February 28, 2003                 |  |                 | 57.00 |       |  |  | 47.00 | 
| |      |  |  | Month ended January 31, 2003                  |  |                 | 63.50 |       |  |  | 52.00 | 
| | 2002 |  |  | Month ended December 31, 2002                 |  |                 | 68.00 |       |  |  | 63.50 | 
| |      |  |  | Month ended November 30, 2002                 |  |                 | 68.00 |       |  |  | 60.50 | 



---

|* |  | The market prices of the ordinary shares in issue dated prior to June 10,
1998 have been adjusted to take account of the sub-division of the ordinary 25p
shares into ordinary 5p shares and the 3.4% bonus issue on June 10, 1998.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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New York Stock Exchange

The table below sets out, for the period following the date of the merger, i.e.
from October 22, 1997, the reported sales prices (in US dollars) of Amershams
ADSs on The New York Stock Exchange as reported on the NYSE composite tape.

| |      |  |  |                                                        |  |      |         |     |  |  |         | 
| | ---- |  |  | ------------------------------------------------------ |  | ---- | ------- | --- |  |  | ------- | 
| |      |  |  |                                                        |  | ADSs
| |      |  |  |                                                        |  |     
| |      |  |  |                                                        |  | High |         | Low
| |      |  |  |                                                        |  |      |         |    
| |      |  |  |                                                        |  | ($)  |         | ($)
| | 2003 |  |  | Quarter ended June 30, 2003 (through April
16, 2003)   |  |      | 33.9000 |     |  |  | 32.5100 | 
| |      |  |  | Quarter ended March 31, 2003                           |  |      | 39.7000 |     |  |  | 32.5500 | 
| | 2002 |  |  | Quarter ended December 31, 2002                        |  |      | 45.0500 |     |  |  | 44.4000 | 
| |      |  |  | Quarter ended September 30, 2002                       |  |      | 44.0600 |     |  |  | 42.0100 | 
| |      |  |  | Quarter ended June 30, 2002                            |  |      | 48.2100 |     |  |  | 44.3600 | 
| |      |  |  | Quarter ended March 31, 2002                           |  |      | 54.5000 |     |  |  | 44.1000 | 
| | 2001 |  |  | Quarter ended December 31, 2001                        |  |      | 47.8100 |     |  |  | 41.6500 | 
| |      |  |  | Quarter ended September 30, 2001                       |  |      | 45.7500 |     |  |  | 36.0000 | 
| |      |  |  | Quarter ended June 30, 2001                            |  |      | 41.4000 |     |  |  | 36.3000 | 
| |      |  |  | Quarter ended March 31, 2001                           |  |      | 42.4000 |     |  |  | 34.6000 | 
| | 2000 |  |  | Quarter ended December 31, 2000                        |  |      | 45.3750 |     |  |  | 40.7500 | 
| |      |  |  | Quarter ended September 30, 2000                       |  |      | 48.5000 |     |  |  | 45.0625 | 
| |      |  |  | Quarter ended June 30, 2000                            |  |      | 45.0000 |     |  |  | 38.0000 | 
| |      |  |  | Quarter ended March 31, 2000                           |  |      | 58.8750 |     |  |  | 29.7500 | 
| | 1999 |  |  | Quarter ended December 31, 1999                        |  |      | 33.2500 |     |  |  | 29.4375 | 
| |      |  |  | Quarter ended September 30, 1999                       |  |      | 34.0000 |     |  |  | 30.5000 | 
| |      |  |  | Quarter ended June 30, 1999                            |  |      | 42.6250 |     |  |  | 34.7500 | 
| |      |  |  | Quarter ended March 31, 1999                           |  |      | 40.7500 |     |  |  | 31.0000 | 
| | 1998 |  |  | Quarter ended December 31, 1998                        |  |      | 36.0000 |     |  |  | 27.8100 | 
| |      |  |  | Quarter ended September 30, 1998                       |  |      | 37.0000 |     |  |  | 29.6300 | 
| |      |  |  | Quarter ended June 30, 1998                            |  |      | 37.8600 |     |  |  | 31.0400 | 
| |      |  |  | Quarter ended March 31, 1998                           |  |      | 41.5000 |     |  |  | 33.8700 | 
| | 1997 |  |  | Period from October 22, 1997 through December 31, 1997 |  |      | 40.3700 |     |  |  | 34.7500 | 

| |      |  |  |                                               |  |      |         |     |  |  |         | 
| | ---- |  |  | --------------------------------------------- |  | ---- | ------- | --- |  |  | ------- | 
| |      |  |  |                                               |  | ADSs
| |      |  |  |                                               |  |     
| |      |  |  |                                               |  | High |         | Low
| |      |  |  |                                               |  |      |         |    
| |      |  |  |                                               |  | ($)  |         | ($)
| | 2003 |  |  | Month ended April 30, 2003 (through April 16) |  |      | 33.9000 |     |  |  | 32.5100 | 
| |      |  |  | Month ended March 31, 2003                    |  |      | 34.0900 |     |  |  | 29.8500 | 
| |      |  |  | Month ended February 28, 2003                 |  |      | 40.1000 |     |  |  | 34.2500 | 
| |      |  |  | Month ended January 31, 2003                  |  |      | 44.7900 |     |  |  | 37.8900 | 
| | 2002 |  |  | Month ended December 31, 2002                 |  |      | 45.6000 |     |  |  | 43.2400 | 
| |      |  |  | Month ended November 30, 2002                 |  |      | 46.1500 |     |  |  | 43.9000 | 

The implementation of the Sub-division and the Enfranchisement proposals in
full in June 1998 resulted in the following:



| |  | each A ADS and each B ADS converted into the right to receive five new
Ordinary Shares, nominal value 5p and five New Non-voting Shares,
nominal value 5p, respectively;
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | each holder of B ADSs became entitled to receive one New ADS for each
B ADS surrendered. Each A ADS represent one New ADS;                                              
| 
| |  | a holder of 1,000 A ADSs on the Record Date of June 5, 1998 received a
bonus issue of 34 New ADSs.                                                                      

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ITEM 10. ADDITIONAL INFORMATION

A.     Share Capital

Not applicable.

B.     Memorandum and Articles of Association

The description of the material rights of holders of the Companys ordinary
shares under the provisions of the Companys memorandum and articles of
association and English law is incorporated by reference to the Annual Report
on Form 20-F filed by Amersham on June 26, 2002, since when there have been no
changes.

C.     Material Contracts

There are no material contracts outside of the Companys ordinary course of
business.

D.     Exchange Controls

There are currently no US, UK or Norwegian decrees or regulations restricting
the import or export of capital or affecting the remittance of dividends or
other payments to the holders of the Amersham shares who are non-residents of
the UK.

E.     Taxation

US and UK Tax Considerations of Ownership and Disposition of Amersham Shares or
Amersham ADSs as evidenced by Amersham ADRs.

The following is a summary of certain United Kingdom taxation and United States
federal income tax considerations that may be relevant to a US holder of
Amersham shares (Shares) or Amersham ADSs (ADSs) as evidenced by Amersham ADRs
(ADRs). This summary only applies to a shareholder that holds Shares or ADSs
as capital assets, is a citizen or resident of the United States or a domestic
corporation or that is otherwise subject to United States federal income
taxation on a net income basis in respect of the Shares or ADSs, and is not
resident in the United Kingdom for UK tax purposes and does not hold shares for
the purposes of a trade, profession or vocation that is carried on in the
United Kingdom through a branch or agency.

Shareholders who are subject to special rules or who are in any doubt about
their taxation position should consult their own professional advisors.

The new UK/US Double Tax Treaty (the New Treaty) was signed on 24 July 2001,
was ratified on 31 March 2003 and came into force from that date. The
statements regarding the United Kingdom and United States tax laws and
practices set out below are based on those laws and practices in force on the
date of this report.

For the purposes of the New Treaty and for the purposes of the US Internal
Revenue Code 1986, as amended (the Code), US holders of ADSs will generally be
treated as the owners of the Shares underlying those ADSs.

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Taxation of Dividends

For US federal income tax purposes, distributions paid with respect to Shares
or ADSs (other than certain distributions of capital stock of the Company or
rights to subscribe for shares of capital stock of the Company) will be treated
as a dividend to the extent paid out of current or accumulated earnings and
profits (as determined under US federal income tax principles). Such dividends
will not be eligible for the dividends received deduction generally allowed
to corporations under the Code. To the extent that a distribution exceeds the
Companys current and accumulated earnings and profits, it will be treated as a
non taxable return of capital to the extent of the US holders tax basis in the
ordinary shares or ADSs, and thereafter as capital gain. The amount of the
distribution will equal the US dollar value of the pounds sterling received,
calculated by reference to the exchange rate in effect on the date such
distribution is received (which for holders of ADSs, will be the date such
distribution is received by the Depository), whether or not the Depository or
the US holder in fact converts any pounds sterling received into US dollars at
that time. Any gains or losses resulting from the conversion of pounds
sterling into US dollars will be treated as ordinary income or loss, as the
case may be, of the US holder and will be US source.

Under the New Treaty, US holders will not be eligible to claim foreign tax
credits in respect of dividends paid on or after May 1, 2003. However, it may
be possible for US holders to elect to have the provisions of the previous
Double Tax Treaty (in effect before the New Treaty entered into force) applied
in their entirety for a period of 12 months from the date on which the New
Treaty otherwise would have effect. In such a case where the previous Double
Tax Treaty is applied, US holders may be eligible, subject to generally
applicable limitations, to receive a special US foreign tax credit equal to
one-ninth of the amount of cash dividends they receive on the ADSs so long as
they make an election to include in their income, as an additional notional
dividend, an amount equal to the tax credit. The US Treasury has expressed
concerns that parties to whom ADSs are released may be taking actions that are
inconsistent with the claiming of foreign tax credits for US holders of ADSs.
Accordingly, the analysis of the creditability of UK taxes could be affected by
future actions that may be taken by the US Treasury. Instead of claiming a
credit, US holders applying the previous Double Tax Treaty may, at their
election, deduct one-ninth of the amount of cash dividends they receive on the
ADSs. Each US holders own tax position will determine whether effective use
can be made of special US foreign tax credits against the US tax liability and
US holders should consult their own professional advisers in this respect.

Taxation of Capital Gains

Generally, US holders will not be subject to UK capital gains tax, but will be
subject to US tax on capital gains realized on the sale or other disposal of
Shares or ADSs.

A US holder will, upon the sale, exchange or redemption of a Share or ADS,
generally recognize the capital gain or loss for US federal income tax purposes
in an amount equal to the difference between the US dollar value of the amount
realized (excluding in the case of a redemption any amount treated as a
dividend for US federal income tax purposes) and the US holders tax basis
(determined in US dollars) in the Share or ADS.

Stamp Duty & Stamp Duty Reserve Tax

United Kingdom stamp duty or, as the case may be, stamp duty reserve tax will,
subject to certain exemptions, be payable on any issue or transfer of Shares to
the ADR custodian or depository at a rate of 1.5 per cent of their price (if
issued) the amount of any consideration provided (if transferred on sale), or
their value (if transferred for no consideration).

No United Kingdom stamp duty should be payable on the transfer of an ADS
provided that the ADR and any separate instrument of transfer is executed and
remains at all times outside the United Kingdom. Any stamp duty on the
transfer of the ADS would be payable at a rate of 0.5 per cent of the
consideration for the transfer. Any sale of the underlying shares would result
in a liability to UK stamp duty at a rate of 0.5 per cent. There is a minimum
charge of £5 where a stamp duty liability arises.

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Stamp duty reserve tax at a rate of 0.5% of the consideration would be payable
on any transfer of any Shares or any interest therein unless an instrument
transferring the Shares is executed and stamped within six years of the
transfer, in which event any stamp duty reserve tax paid will be refundable and
any stamp duty reserve tax not paid will cease to be due. No stamp duty
reserve tax would be payable on the transfer of an ADS evidenced by an ADR.

F.     Dividends and Paying Agents

Not applicable.

G.     Statement by Experts

Not applicable.

H.     Documents on Display

The Companys UK statutory books are on display at its registered address. See
Item 4 Information on the Company for the Companys registered address.

I.     Subsidiary Information

Information concerning material subsidiaries of Amersham plc can be found
within Item 4.C Organizational Structure and within Note 31 of Item 18
Consolidated Financial Statements.

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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market rate sensitive instruments and risk management

The following discussion about the Groups risk management activities includes
forward-looking statements which are based on current expectations regarding
important risk factors. Actual results may differ materially from those
projected in the statements.

The analysis below presents the sensitivity of the market value of the
derivative and financial instruments held by the Group at December 31, 2002, to
changes in interest rates and foreign exchange rates. The Group uses interest
rate swaps, forward foreign exchange contracts and, sometimes, currency options
to manage these primary market exposures associated with underlying assets,
liabilities, and transactions. The Group uses these instruments to reduce risk
by essentially creating offsetting market exposures. The Group does not hold
or issue financial instruments for trading purposes. For further discussion of
the Groups accounting policies for financial instruments and further
disclosures relating to financial instruments see Notes 1 and 20 of Item 18
Consolidated Financial Statements.

In the normal course of business, the Group also faces risks that are
non-financial or non-quantifiable. Such risks principally include country
risk, credit risk and legal risk, and are not included in the following
analysis.

Interest rate risk management and sensitivity analysis

The Groups interest charge is exposed to movements in interest rates as well
as debt levels. The Group maintains a policy of holding between 30% and 70% of
debt at fixed rates. The Group uses currency and interest rate swaps to manage
its interest rate exposures on debt and cash positions. The interest rate
profile of the Group is shown in Note 20 of Item 18 Consolidated Financial
Statements. Under an interest swap, the Group agrees with another party to
exchange, at specified intervals, the difference between fixed rate and
floating rate interest amounts based on an agreed upon notional principal
amount, without the trade of underlying notional principal amounts. Under a
currency swap the principal amounts are also exchanged at the start and end of
the agreement period. The net payments or receipts from interest rate swaps
are recorded as part of interest expense.

At December 31, 2002, the effect of the Groups interest rate swap agreements
was to convert a portion (£31.1 million) of the outstanding fixed rate debt to
floating rate debt for a period of time.

For floating rate debt, interest rate changes generally do not affect the fair
market value but do impact future earnings and cash flows, assuming other
factors are held constant. Conversely, for fixed rate debt, interest rate
changes affect the fair market value but do not impact earnings or cash flows.

The Groups net debt position as at December 31, 2002, after interest rate
swaps included a net liability exposure of £94.2 million
(2001 net asset 
£91.8 million, 2000 net liability  £189.6 million) to floating interest rates.
Based on the Groups 2002 year end level and composition of net debt, holding
other variables (such as foreign exchange rates) constant, an increase in
average interest rates of 1% per annum, would result in a decrease in future
earnings, before tax, of £0.9 million (in 2001, an increase in £0.9 million; in
2000, a decrease of £1.9 million) per annum, and a decrease in the fair market
value of the fixed rate debt of £3.4 million (2001  £4.2 million; 2000  £5.5
million).

Foreign exchange risk management and sensitivity analysis

The Groups principal financial exposures are to movements in currency exchange
rates. These comprise transaction exposures arising from currency cash flows
and translation exposures arising from the conversion of the results of foreign
subsidiaries. Transaction exposures are hedged on a rolling six month basis,
primarily by forward foreign exchange transactions. In

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addition, where sterling has deviated significantly from its long term
purchasing power parity rates, strategic hedging is partly undertaken for
anticipated net sales for periods of up to three years. Translation exposures
on the net monetary assets of foreign subsidiaries are hedged partly by
borrowings in those currencies and partly by financial instruments including
forward foreign exchange contracts.

As at December 31, 2002, the Group had outstanding foreign exchange contracts
with a fair market value of £29.6 million (2001  £9.6 million; 2000  £25.0
million). With all other variables held constant (such as interest rates), a
10% appreciation of sterling would result in a decrease in the fair market
value of foreign exchange contracts of £15.9 million (2001 decrease, £19.0
million; 2000 increase, £2.1 million).

In addition to these foreign exchange contracts, the Group is exposed to
foreign exchange movements on its net debt position. With all other variables
held constant, a 10% appreciation of sterling would result in a decrease in the
carrying value of foreign denominated debt and currency swaps of £10.6 million
(2001  £1.9 million; 2000  £29.7 million). Further information can be found
in Note 20(d) of Item 18 Consolidated Financial Statements.




ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

117



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PART II




ITEM 13. DEFAULTS, DIVIDEND ARREARS AND DELINQUENCIES

None.




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

None.




ITEM 15. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

The Chief Executive and the Finance Director, after evaluating the
effectiveness of the Companys disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14(c) and 15-d-14(c)) as of a date (the Evaluation
Date) within 90 days of the filing date of this Annual Report, have concluded
that as of the Evaluation Date, the Companys disclosure controls and
procedures were adequate and designed to ensure that material information
relating to the Company and its consolidated subsidiaries would be made known
to them by others within those entities.

Changes in internal controls

There were no significant changes in the Companys internal controls or, to the
knowledge of the Chief Executive or Finance Director, in other factors that
could significantly affect the Companys internal controls subsequent to the
Evaluation Date.




ITEM 16. [Reserved]

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PART III




ITEM 17. FINANCIAL STATEMENTS

The registrant has responded to Item 18 in lieu of responding to this item.




ITEM 18. CONSOLIDATED FINANCIAL STATEMENTS

Reference is made to pages F-1 through F- 74.

The following financial statements are filed as part of this Form 20-F:

|                                                            |  |      |     | 
|----------------------------------------------------------- |  | ---- | --- | 
|                                                            |  | Page
|                                                            |  |     
|Report of Independent Accountants                           |  |      | F-2 | 
|Consolidated Financial Statements                           |  |      |     | 
|Consolidated Profit and Loss Account                        |  |      | F-3 | 
|Consolidated Statement of Total Recognized Gains and Losses |  |      | F-4 | 
|Consolidated Balance Sheet                                  |  |      | F-5 | 
|Consolidated Cash Flow Statement                            |  |      | F-6 | 
|Notes to the Consolidated Financial Statements              |  |      | F-7 | 




ITEM 19. EXHIBITS

The following exhibits are filed as part of this Form 20-F:



|Exhibit 4.1.  |  | Employment Agreement between Amersham plc and Peter Hans Loescher dated September 17, 2002.                                                                      
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|             
|Exhibit 4.1a. |  | Letter dated December 4, 2002 confirming effective date of Peter Hans Loescher service contract.                                                                 
|             
|Exhibit 4.2.  |  | Letter dated December 4, 2002 from Amersham Biosciences UK Limited to Dr Andrew Carr amending
the Employment Agreement between the two parties dated May 1, 2001.
|             
|Exhibit 4.2a. |  | Letter dated September 9, 2002 from Amersham plc to Dr Andrew Carr regarding his UK pension
arrangements.                                                        
|             
|Exhibit 4.3.  |  | Letter dated January 27, 2003 from Amersham plc to Dr Andrew Carr setting out the basis on which
he will provide services as a Director of Amersham plc.         
|             
|Exhibit 4.4.  |  | Letter dated February 20, 2003 from Amersham plc to W M Castell advising of increase in salary.                                                                  
|             
|Exhibit 4.5.  |  | Letter dated February 20, 2003 from Amersham plc to G W Battersby advising of increase in salary.                                                                
|             
|Exhibit 4.6.  |  | Letter dated February 20, 2003 from Amersham plc to A Carr advising of increase in salary.                                                                       
|             
|Exhibit 4.7.  |  | Letter dated February 20, 2003 from Amersham plc to G F B Kerr advising of increase in salary.                                                                   
|             
|Exhibit 4.8.  |  | Letter dated February 20, 2003 from Amersham plc to P Loescher advising of increase in salary.                                                                   
|             
|Exhibit 12.1. |  | Certification required by Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                         
|             
|Exhibit 12.2. |  | Consent of Independent Accountants.                                                                                                                              

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SIGNATURE

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

| |  |              |  |                                    
| |  | ------------ |  | -----------------------------------
| |  | AMERSHAM PLC
| |  |              |  |                                    
| |  | By:          |  |                                    
| |  |              |  | /s/ Giles F B Kerr
Finance Director

Date: 23 May, 2003





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##### Table of Contents






CERTIFICATIONS

I, Sir William Castell, Chief Executive of Amersham plc, certify that:

1.     I have reviewed this Annual Report on Form 20-F of Amersham plc;

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

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

4.     The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| | (a) | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this Annual Report is
being prepared;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this Annual Report (the Evaluation Date); and                                                                                                  
|
| | (c) | presented in this Annual Report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrants auditors and the audit committee of
registrants Board of directors (or persons performing the equivalent
function):



| | (a) | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        

6.     The registrants other certifying officer and I have indicated in this
Annual Report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: 23 May, 2003



| | /s/ Sir William Castell
Chief Executive, Amersham plc
| | -----------------------------------------------------





---



##### Table of Contents



I, Giles F B Kerr, Finance Director of Amersham plc, certify that:

1.     I have reviewed this Annual Report on Form 20-F of Amersham plc;

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

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

4.     The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| | (a) | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this Annual Report is
being prepared;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this Annual Report (the Evaluation Date); and                                                                                                  
|
| | (c) | presented in this Annual Report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrants auditors and the audit committee of
registrants Board of directors (or persons performing the equivalent
function):



| | (a) | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        

6.     The registrants other certifying officer and I have indicated in this
Annual Report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: 23 May, 2003



| | /s/ Giles F B Kerr
Finance Director, Amersham plc
| | -------------------------------------------------





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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
STATEMENT OF DIRECTORS RESPONSIBILITIES

The following statements, which should be read in conjunction with the Report
of Independent Accountants set out on page F-2 and are an excerpt from the
December 31, 2002 Annual Report of Amersham plc dated February 26, 2003, are
made with a view to distinguishing for shareholders the respective
responsibilities of the Directors and of the Auditors in relation to the
consolidated financial statements.

The Directors are required by the Companies Act 1985 to prepare consolidated
financial statements for each financial year which give a true and fair view
of the state of affairs of the Company (Amersham plc) and the Group (the
Company and its subsidiary undertakings) as at the end of the financial period
and of the profit or loss of the Group for that period. It is also the
Directors responsibility to keep proper accounting records and to take
reasonable steps to safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.

The Directors confirm that suitable accounting policies, consistently applied
and supported by reasonable and prudent judgements and estimates, have been
used in the preparation of the financial statements and that applicable
accounting standards have been followed.

CORPORATE GOVERNANCE

The Board is committed to high standards of corporate governance throughout
the Group.

The Board of Directors has overall responsibility for the Groups system of
internal control. The Groups system of internal control is designed to
provide reasonable, but not absolute, assurance that assets are safeguarded,
transactions authorized and properly recorded and that material errors or
irregularities are either prevented or would be detected within a timely
period.

The full Board meets regularly and has put in place an organization structure
with clearly defined lines of responsibility and delegations of authority.
There are established procedures for, inter alia, capital expenditure approval
and Treasury Management. Other written internal control procedures have been
prepared and approved by business and subsidiary management, and by the Board
where appropriate. There is a comprehensive budgeting system with an annual
budget approved by the Board. Monthly results are reported against budget and
revised forecasts for the year are prepared regularly.

The internal control system is monitored and supported by an internal audit
function that operates on a global basis, and reports to management and the
Audit Committee on the Groups operations. The Audit Committee receives
reports from internal and external auditors on a regular basis and has
reviewed the operation and effectiveness of the Groups system of internal
control for the period.

GOING CONCERN

After making inquiries the Directors have reasonable expectation that the
Company and the Group have adequate resources to continue in operational
existence for the foreseeable future, and that it is therefore appropriate to
adopt the going concern basis in preparing the financial statements. In
forming this view the Directors have reviewed the Annual Profit Plan for the
year ended December 31, 2003 and longer-range cash flow projections. The
Directors have satisfied themselves that the Group is in a sound financial
position and that sufficient borrowing facilities will be available to meet
the Groups foreseeable cash requirements.

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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and the Shareholders of Amersham plc

In our opinion, the accompanying consolidated balance sheets and the related
consolidated profit and loss accounts, cash flows and total recognized gains
and losses present fairly, in all material respects, the financial position of
Amersham plc and its subsidiaries (together, the Group) at December 31, 2002
and December 31, 2001, and the results of their operations and their cash
flows for each of the three periods, the year ended December 31, 2002, the
year ended December 31, 2001 and the year ended December 31, 2000, in
conformity with generally accepted accounting principles in the United
Kingdom. 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 of these statements
in accordance with auditing standards generally accepted in the United States.
These 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, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.

Accounting principles generally accepted in the United Kingdom vary in certain
respects from accounting principles generally accepted in the United States.
The application of the latter would have affected the determination of
consolidated profit, as restated, expressed in sterling for the year ended
December 31, 2002, December 31, 2001 and December 31, 2000 and the
determination of consolidated shareholders equity, as restated, also
expressed in sterling at December 31, 2002 and December 31, 2001 to the extent
summarized in Note 38 to the consolidated financial statements.

As discussed in Notes 1 and 37 to the consolidated financial statements,
following the introduction of UK Financial Reporting Standard 19, Deferred
Taxation in 2002, the Group changed its accounting policy with respect to
deferred taxation. This change has been accounted for by restating
comparative information at December 31, 2001 and 2000, and for the years then
ended.

/s/ PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
London, England
February 26, 2003

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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES

CONSOLIDATED PROFIT AND LOSS ACCOUNT

|                                                                          |  |       |     |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|------------------------------------------------------------------------- |  | ----- | --- | -- |  | ------------ | ------- | ------------ |  | ----------------------- | ------- | - |  | ----------- | ------- | - |  |  | ------- | -
|                                                                          |  |       |     |    |  | 12 months to |         | 12 months to |  |                         |         |   |  |             |         |   | 
|                                                                          |  |       |     |    |  | Dec 31, 00   |         | Dec 31, 01   |  | 12 months to Dec 31, 02
|                                                                          |  |       |     |    |  | (restated)*  |         | (restated)*  |  |                         |         |   |  | (unaudited)
|                                                                          |  | Notes |     | £m |  | £m           |         | £m           |  | $m**                   
|                                                                          |  |       |     |    |  |              |         |              |  |                        
|Sales including share of joint venture                                    |  |       | 2   |    |  |              | 1,377.6 |              |  |                         | 1,602.5 |   |  |             | 1,618.2 |   |  |  | 2,605.3 |  
|Less share of joint venture sales                                         |  |       |     |    |  |              | (94.8   | )            |  |                         | (87.3   | ) |  |             | (80.5   | ) |  |  | (129.6  | )
|                                                                          |  |       |     |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|Group turnover                                                            |  |       |     |    |  |              | 1,282.8 |              |  |                         | 1,515.2 |   |  |             | 1,537.7 |   |  |  | 2,475.7 |  
|                                                                          |  |       |     |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|Group operating profit before exceptional items and
goodwill amortization |  |       |     |    |  |              | 211.4   |              |  |                         | 266.4   |   |  |             | 286.6   |   |  |  | 461.4   |  
|Exceptional items charged to operating profit                             |  |       | 3   |    |  |              | (27.0   | )            |  |                         | (8.7    | ) |  |             |        |   |  |  |        |  
|Goodwill amortization                                                     |  |       |     |    |  |              | (10.7   | )            |  |                         | (11.7   | ) |  |             | (36.6   | ) |  |  | (58.9   | )
|                                                                          |  |       |     |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|Group operating profit                                                    |  |       |     |    |  |              | 173.7   |              |  |                         | 246.0   |   |  |             | 250.0   |   |  |  | 402.5   |  
|Share of operating profit of joint venture and associates                 |  |       |     |    |  |              | 29.8    |              |  |                         | 26.1    |   |  |             | 23.2    |   |  |  | 37.4    |  
|                                                                          |  |       |     |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|Total operating profit                                                    |  |       | 2,4 |    |  |              | 203.5   |              |  |                         | 272.1   |   |  |             | 273.2   |   |  |  | 439.9   |  
|Profit on disposal of fixed asset investment                              |  |       | 3   |    |  |              |        |              |  |                         | 55.3    |   |  |             |        |   |  |  |        |  
|Amounts written off investments                                           |  |       |     |    |  |              |        |              |  |                         | (4.4    | ) |  |             | (2.4    | ) |  |  | (3.9    | )
|                                                                          |  |       |     |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|Profit before interest and taxation                                       |  |       |     |    |  |              | 203.5   |              |  |                         | 323.0   |   |  |             | 270.8   |   |  |  | 436.0   |  
|Net interest payable                                                      |  |       | 7   |    |  |              | (10.0   | )            |  |                         | (8.7    | ) |  |             | (7.1    | ) |  |  | (11.4   | )
|                                                                          |  |       |     |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|Profit on ordinary activities before taxation                             |  |       |     |    |  |              | 193.5   |              |  |                         | 314.3   |   |  |             | 263.7   |   |  |  | 424.6   |  
|Tax on profit on ordinary activities                                      |  |       | 8   |    |  |              | (79.9   | )            |  |                         | (96.5   | ) |  |             | (85.1   | ) |  |  | (137.0  | )
|                                                                          |  |       |     |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|Profit on ordinary activities after taxation                              |  |       |     |    |  |              | 113.6   |              |  |                         | 217.8   |   |  |             | 178.6   |   |  |  | 287.6   |  
|                                                                          |  |       |     |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|(Profit)/loss attributable to equity minority interests                   |  |       |     |    |  |              | (3.7    | )            |  |                         | (4.2    | ) |  |             | 0.7     |   |  |  | 1.1     |  
|Profit attributable to non-equity minority interests                      |  |       |     |    |  |              | (2.9    | )            |  |                         | (2.9    | ) |  |             | (0.6    | ) |  |  | (0.9    | )
|                                                                          |  |       |     |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|(Profit)/loss attributable to minority interests                          |  |       |     |    |  |              | (6.6    | )            |  |                         | (7.1    | ) |  |             | 0.1     |   |  |  | 0.2     |  
|                                                                          |  |       |     |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|Profit for the financial year attributable to
shareholders                |  |       |     |    |  |              | 107.0   |              |  |                         | 210.7   |   |  |             | 178.7   |   |  |  | 287.8   |  
|Dividends paid and proposed                                               |  |       | 9   |    |  |              | (40.4   | )            |  |                         | (45.2   | ) |  |             | (57.3   | ) |  |  | (92.3   | )
|                                                                          |  |       |     |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|Retained profit for the financial year                                    |  |       |     |    |  |              | 66.6    |              |  |                         | 165.5   |   |  |             | 121.4   |   |  |  | 195.5   |  
|                                                                          |  |       |     |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|Earnings per ordinary share                                               |  |       | 10  |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|- basic                                                                   |  |       |     |    |  |              | 17.0    | p            |  |                         | 33.2    | p |  |             | 26.1    | p |  |  | 42.0    | c
|- before exceptional items and goodwill amortization                      |  |       |     |    |  |              | 21.9    | p            |  |                         | 26.6    | p |  |             | 29.9    | p |  |  | 48.1    | c
|- average number of shares                                                |  |       |     |    |  |              | 630.9   | m            |  |                         | 634.4   | m |  |             | 684.7   | m |  |  | 684.7   | m
|Diluted earnings per ordinary share                                       |  |       |     |    |  |              |         |              |  |                         |         |   |  |             |         |   |  |  |         |  
|- after exceptional items and goodwill amortization                       |  |       |     |    |  |              | 16.8    | p            |  |                         | 33.0    | p |  |             | 25.9    | p |  |  | 41.7    | c
|Dividends per ordinary share                                              |  |       | 9   |    |  |              | 6.4     | p            |  |                         | 7.1     | p |  |             | 7.8     | p |  |  | 12.6    | c



---

| |   | All results are derived from continuing operations.                                                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |   | The Groups share of turnover
from its joint venture in NMP is £80.5m, (2001 
£87.3m, 2000  £94.8m). The Groups share of
gross profit is £29.3m, (2001 
£32.6m, 2000  £36.0m), and the Groups share of profit from continuing
operations before exceptional items is £23.2m, (2001  £26.1m, 2000  £29.8m).
The Groups share of net income is £6.5m, (2001  £8.4m, 2000  £11.6m).
|
| | * | Figures for the 12 months to December 31, 2000 and the 12 months to December 31, 2001 and have been restated following the introduction of FRS19 as
explained in note 37.                                                                                                                                                                                                                  
|
| |   | See ** on the following page                                                                                                                                                                                                                                                                                                                                                               

The accompanying notes are an integral part of these consolidated financial statements.

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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF TOTAL RECOGNIZED GAINS AND LOSSES

|                                                                |  |              |       |              |  |              |       |      |  |             |       |   |  |  |       |  
|--------------------------------------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ----- | ---- |  | ----------- | ----- | - |  |  | ----- | -
|                                                                |  | 12 months to |       | 12 months to |  | 12 months to
|                                                                |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|                                                                |  | (restated)   |       | (restated)   |  |              |       |      |  | (unaudited)
|                                                                |  | £m           |       | £m           |  | £m           |       | $m**
|                                                                |  |              |       |              |  |              |       |     
|Profit for the period attributable to shareholders              |  |              | 107.0 |              |  |              | 210.7 |      |  |             | 178.7 |   |  |  | 287.8 |  
|Tax (charge)/credit on foreign currency hedge loan              |  |              | 3.5   |              |  |              | 0.3   |      |  |             | (5.4  | ) |  |  | (8.7  | )
|Foreign currency translation of net investment in
subsidiaries  |  |              | (22.3 | )            |  |              | (4.0  | )    |  |             | 53.4  |   |  |  | 86.0  |  
|Foreign currency translation of net investment in
joint venture |  |              | (0.1  | )            |  |              | (0.2  | )    |  |             | (0.2  | ) |  |  | (0.3  | )
|                                                                |  |              |       |              |  |              |       |      |  |             |       |   |  |  |       |  
|Total recognized gains for the period                           |  |              | 88.1  |              |  |              | 206.8 |      |  |             | 226.5 |   |  |  | 364.8 |  
|                                                                |  |              |       |              |  |              |       |      |  |             |       |   |  |  |       |  
|Prior year adjustment                                           |  |              |       |              |  |              |       |      |  |             | 4.4   |   |  |  | 7.0   |  
|                                                                |  |              |       |              |  |              |       |      |  |             |       |   |  |  |       |  
|Total gains recognized since last Annual Report                 |  |              |       |              |  |              |       |      |  |             | 230.9 |   |  |  | 371.8 |  
|                                                                |  |              |       |              |  |              |       |      |  |             |       |   |  |  |       |  



---

|** |  | For illustrative purposes, the consolidated results for the year ended
December 31, 2002 shown above in U.S. dollars, which are solely for the
convenience of the reader, have been translated at the December 31, 2002
noon buying rate of £1 = $1.61. Such translations should not be construed
as representations that the pound sterling amounts represent, have been or
could be converted into US dollars at that or any rate. No adjustments
have been made to restate the financial statements to comply with U.S.
generally accepted accounting principles (US GAAP). A summary of the
significant adjustments that would be required to restate net income for
the periods ended December 31, 2000, 2001, and 2002 in accordance with US
GAAP is presented in note 38.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of these consolidated financial statements.

F-4



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET

|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |       |  
|--------------------------------------- | ----------------------------------------------- |  | ----- | -- | -- |  | ------------- | ----- | ------------- |  | ------- | ----- | ----------- |  | ------- | ----- | -
|                                        |                                                 |  |       |    |    |  | At Dec 31, 01 |       | At Dec 31, 02
|                                        |                                                 |  |       |    |    |  | (restated)    |       |               |  |         |       | (unaudited)
|                                        |                                                 |  | Notes |    | £m |  | £m            |       | $m*          
|                                        |                                                 |  |       |    |    |  |               |       |              
|Fixed assets                            |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Intangible assets                       |                                                 |  | 11    |    |    |  | 152.7         |       |               |  | 751.2   |       |             |  | 1,209.4 |      
|Tangible assets                         |                                                 |  | 12    |    |    |  | 533.1         |       |               |  | 640.8   |       |             |  | 1,031.7 |      
|Investments                             |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|                                        | Investment in joint venture:                    |  |       |    |    |  |               |       |               |  |         |       |             |  |         |       |  
|                                        | - Share of gross assets                         |  |       |    |    |  |               | 93.7  |               |  |         | 105.2 |             |  |         | 169.4 |  
|                                        | - Share of gross liabilities                    |  |       |    |    |  |               | (26.6 | )             |  |         | (32.2 | )           |  |         | (51.9 | )
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|                                        | - Share of net assets                           |  |       | 13 |    |  |               | 67.1  |               |  |         | 73.0  |             |  |         | 117.5 |  
|                                        | Investments in associates and other investments |  |       | 13 |    |  |               | 35.0  |               |  |         | 26.4  |             |  |         | 42.5  |  
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|                                        |                                                 |  | 13    |    |    |  | 102.1         |       |               |  | 99.4    |       |             |  | 160.0   |      
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|                                        |                                                 |  |       |    |    |  | 787.9         |       |               |  | 1,491.4 |       |             |  | 2,401.1 |      
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Current assets                          |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Stocks                                  |                                                 |  | 14    |    |    |  | 180.6         |       |               |  | 208.0   |       |             |  | 334.9   |      
|Debtors - amounts due within one year   |                                                 |  | 15    |    |    |  | 360.8         |       |               |  | 349.2   |       |             |  | 562.2   |      
|Debtors - amounts due after one year    |                                                 |  | 16    |    |    |  | 55.4          |       |               |  | 61.3    |       |             |  | 98.7    |      
|Short term deposits and investments     |                                                 |  | 17    |    |    |  | 99.4          |       |               |  | 22.1    |       |             |  | 35.6    |      
|Cash at bank and in hand                |                                                 |  |       |    |    |  | 56.9          |       |               |  | 32.7    |       |             |  | 52.6    |      
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|                                        |                                                 |  |       |    |    |  | 753.1         |       |               |  | 673.3   |       |             |  | 1,084.0 |      
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Creditors  amounts due within one year |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Loans                                   |                                                 |  | 18    |    |    |  | (30.8         | )     |               |  | (44.6   | )     |             |  | (71.8   | )    
|Other creditors                         |                                                 |  | 18    |    |    |  | (452.5        | )     |               |  | (482.2  | )     |             |  | (776.3  | )    
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|                                        |                                                 |  |       |    |    |  | (483.3        | )     |               |  | 526.8   |       |             |  | (848.1  | )    
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Net current assets                      |                                                 |  |       |    |    |  | 269.8         |       |               |  | 146.5   |       |             |  | 235.9   |      
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Total assets less current liabilities   |                                                 |  |       |    |    |  | 1,057.7       |       |               |  | 1,637.9 |       |             |  | 2,637.0 |      
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Creditors  amounts due after one year  |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Loans                                   |                                                 |  | 19    |    |    |  | (148.0        | )     |               |  | (192.5  | )     |             |  | (310.0  | )    
|Other creditors                         |                                                 |  | 19    |    |    |  | (6.4          | )     |               |  | (11.5   | )     |             |  | (18.5   | )    
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|                                        |                                                 |  |       |    |    |  | (154.4        | )     |               |  | (204.0  | )     |             |  | (328.5  | )    
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Provisions for liabilities and charges  |                                                 |  | 22    |    |    |  | (240.8        | )     |               |  | (253.5  | )     |             |  | (408.1  | )    
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Accruals and deferred income            |                                                 |  |       |    |    |  | (3.6          | )     |               |  | (3.5    | )     |             |  | (5.6    | )    
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Total net assets                        |                                                 |  |       |    |    |  | 658.9         |       |               |  | 1,176.9 |       |             |  | 1,894.8 |      
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Equity capital and reserves             |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Share capital                           |                                                 |  | 25    |    |    |  | 32.1          |       |               |  | 35.1    |       |             |  | 56.5    |      
|Share premium account                   |                                                 |  | 26    |    |    |  | 64.3          |       |               |  | 469.0   |       |             |  | 755.1   |      
|Other reserves                          |                                                 |  | 26    |    |    |  | 94.0          |       |               |  | 94.0    |       |             |  | 151.3   |      
|Profit and loss account                 |                                                 |  | 26    |    |    |  | 405.9         |       |               |  | 573.9   |       |             |  | 924.0   |      
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Equity shareholders funds              |                                                 |  |       |    |    |  | 596.3         |       |               |  | 1,172.0 |       |             |  | 1,886.9 |      
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|Minority interests                      |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|                                        | Equity                                          |  |       |    |    |  |               | 20.0  |               |  |         | 4.9   |             |  |         | 7.9   |  
|                                        | Non-equity                                      |  |       |    |    |  |               | 42.6  |               |  |         |      |             |  |         |      |  
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|                                        |                                                 |  |       |    |    |  | 62.6          |       |               |  | 4.9     |       |             |  | 7.9     |      
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      
|                                        |                                                 |  |       |    |    |  | 658.9         |       |               |  | 1,176.9 |       |             |  | 1,894.8 |      
|                                        |                                                 |  |       |    |    |  |               |       |               |  |         |       |             |  |         |      



---

|* |  | For illustrative purposes, the consolidated balance sheet at December 31,
2002 shown above in U.S. dollars, which are solely for the convenience of
the reader, have been translated at the December 31, 2002 noon buying rate
of £1= $1.61. Such translations should not be construed as
representations that the pound sterling amounts represent, have been or
could be converted into US dollars at that or any rate. No adjustments
have been made to restate the financial statements to comply with U.S.
generally accepted accounting principles (US GAAP). A summary of the
significant adjustments that would be required to restate equity
shareholders funds at December 31, 2001 and 2002 in accordance with US
GAAP is presented in note 38.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|  |  | Included within the Groups share of the net assets of NMP are current assets
of £65.2m, (2001  £54.1m), current liabilities of £13.1m, (2001  £13.7m),
non-current assets of £40.0m, (2001  £39.6m), non-current liabilities of
£19.1m, (2001  £12.9m).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

The accompanying notes are an integral part of these consolidated financial statements

F-5



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENT

|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|--------------------------------------------------------------------- |  | ----- | -- | -- |  | ------------ | ------ | ------------ |  | ---- | ------ | - |  | ----------- | ------------ | - |  |  | -------- | -
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             | 12 months to
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             | Dec 31, 02  
|                                                                      |  |       |    |    |  | 12 months to |        | 12 months to |  |     
|                                                                      |  |       |    |    |  | Dec 31, 00   |        | Dec 31, 01   |  |      |        |   |  | (unaudited)
|                                                                      |  | Notes |    | £m |  | £m           |        | £m           |  | $m**
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |  
|Net cash flow from operating activities before exceptional
items      |  |       | 32 |    |  |              | 255.3  |              |  |      | 342.3  |   |  |             | 345.5        |   |  |  | 556.3    |  
|Integration costs                                                     |  |       |    |    |  |              | (15.8  | )            |  |      |       |   |  |             |             |   |  |  |         |  
|Other exceptional items                                               |  |       |    |    |  |              | (14.8  | )            |  |      | 12.0   |   |  |             |             |   |  |  |         |  
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Net cash inflow from operating activities                             |  |       | 32 |    |  |              | 224.7  |              |  |      | 354.3  |   |  |             | 345.5        |   |  |  | 556.3    |  
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Dividend received from joint venture                                  |  |       |    |    |  |              | 3.9    |              |  |      | 4.8    |   |  |             | 5.4          |   |  |  | 8.7      |  
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Returns on investments and servicing of finance                       |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Interest paid                                                         |  |       |    |    |  |              | (30.5  | )            |  |      | (19.7  | ) |  |             | (9.2         | ) |  |  | (14.8    | )
|Interest received                                                     |  |       |    |    |  |              | 13.5   |              |  |      | 10.3   |   |  |             | 4.9          |   |  |  | 7.9      |  
|Dividends paid by subsidiary undertakings to minority interests       |  |       |    |    |  |              | (1.4   | )            |  |      | (1.7   | ) |  |             | (1.7         | ) |  |  | (2.7     | )
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|                                                                      |  |       |    |    |  |              | (18.4  | )            |  |      | (11.1  | ) |  |             | (6.0         | ) |  |  | (9.6     | )
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Taxation                                                              |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|UK corporation tax (paid)/received                                    |  |       |    |    |  |              | (2.7   | )            |  |      | 4.5    |   |  |             | (2.1         | ) |  |  | (3.4     | )
|Overseas tax paid                                                     |  |       |    |    |  |              | (13.1  | )            |  |      | (52.1  | ) |  |             | (55.1        | ) |  |  | (88.7    | )
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|                                                                      |  |       |    |    |  |              | (15.8  | )            |  |      | (47.6  | ) |  |             | (57.2        | ) |  |  | (92.1    | )
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Capital expenditure and financial investment                          |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Purchases of tangible fixed assets                                    |  |       |    |    |  |              | (123.5 | )            |  |      | (91.6  | ) |  |             | (143.4       | ) |  |  | (230.9   | )
|Purchases of intangible fixed assets                                  |  |       |    |    |  |              | (4.5   | )            |  |      | (10.2  | ) |  |             | (4.8         | ) |  |  | (7.7     | )
|Sales of tangible fixed assets                                        |  |       |    |    |  |              | 0.3    |              |  |      | 22.1   |   |  |             | 1.3          |   |  |  | 2.1      |  
|Sales of investments                                                  |  |       |    |    |  |              | 4.2    |              |  |      |       |   |  |             | 1.4          |   |  |  | 2.2      |  
|Purchases of trade investments                                        |  |       |    |    |  |              | (10.5  | )            |  |      | (4.9   | ) |  |             | (3.4         | ) |  |  | (5.5     | )
|Purchase of own shares                                                |  |       |    |    |  |              | (16.5  | )            |  |      |       |   |  |             |             |   |  |  |         |  
|Cash received on disposal of investment in Nycomed Pharma             |  |       |    |    |  |              |       |              |  |      | 123.0  |   |  |             |             |   |  |  |         |  
|Costs associated with the disposal of investment in Nycomed
Pharma    |  |       |    |    |  |              |       |              |  |      | (4.9   | ) |  |             | (3.5         | ) |  |  | (5.6     | )
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|                                                                      |  |       |    |    |  |              | (150.5 | )            |  |      | 33.5   |   |  |             | (152.4       | ) |  |  | (245.4   | )
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Acquisitions and disposals                                            |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Purchase of 45% minority in Amersham Biosciences                      |  |       | 24 |    |  |              |       |              |  |      |       |   |  |             | (704.1       | ) |  |  | (1,133.6 | )
|Cost associated with purchase of 45% minority in Amersham
Biosciences |  |       | 24 |    |  |              |       |              |  |      |       |   |  |             | (4.5         | ) |  |  | (7.2     | )
|Other acquisitions                                                    |  |       |    |    |  |              | (4.9   | )            |  |      | (3.9   | ) |  |             | (40.6        | ) |  |  | (65.4    | )
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|                                                                      |  |       |    |    |  |              | (4.9   | )            |  |      | (3.9   | ) |  |             | (749.2       | ) |  |  | (1,206.2 | )
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Equity dividends paid                                                 |  |       |    |    |  |              | (38.2  | )            |  |      | (41.7  | ) |  |             | (51.6        | ) |  |  | (83.1    | )
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Net cash flow before use of liquid resources* and financing           |  |       |    |    |  |              | 0.8    |              |  |      | 288.3  |   |  |             | (665.5       | ) |  |  | (1,071.4 | )
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Management of liquid resources*                                       |  |       | 34 |    |  |              | 64.1   |              |  |      | (91.4  | ) |  |             | 74.5         |   |  |  | 119.9    |  
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Financing                                                             |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Issue of share capital                                                |  |       |    |    |  |              | 6.2    |              |  |      | 16.2   |   |  |             | 413.2        |   |  |  | 665.3    |  
|Costs associated with issue of share capital                          |  |       |    |    |  |              |       |              |  |      |       |   |  |             | (5.5         | ) |  |  | (8.9     | )
|Loans and finance leases                                              |  |       | 34 |    |  |              | (70.3  | )            |  |      | (205.3 | ) |  |             | 161.9        |   |  |  | 260.7    |  
|Repayment of long term loan                                           |  |       | 34 |    |  |              |       |              |  |      |       |   |  |             | (13.6        | ) |  |  | (21.9    | )
|Capital contribution by minority interest in Amersham
Biosciences     |  |       |    |    |  |              |       |              |  |      |       |   |  |             | 8.7          |   |  |  | 14.0     |  
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|                                                                      |  |       |    |    |  |              | (64.1  | )            |  |      | (189.1 | ) |  |             | 564.7        |   |  |  | 909.2    |  
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  
|Cash flow in the year                                                 |  |       | 34 |    |  |              | 0.8    |              |  |      | 7.8    |   |  |             | (26.3        | ) |  |  | (42.3    | )
|                                                                      |  |       |    |    |  |              |        |              |  |      |        |   |  |             |              |   |  |  |          |  



---

|*  |  | Liquid resources are defined as short term deposits with banks and
current asset investments in bonds and equities. These are shown in the
consolidated balance sheet as short term deposits £22.1m (2001  £96.5m,
2000  £2.5m) and interest bearing and other investments
£nil (2001 
£nil, 2000  £2.2m).                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|** |  | For illustrative purposes, the consolidated cash flows for the year ended
December 31, 2002 shown above in U.S. dollars, which are solely for the
convenience of the reader, have been translated at the December 31, 2002
noon buying rate of £1= $1.61. Such translations should not be construed
as representations that the pound sterling amounts represent, have been or
could be converted into US dollars at that or any rate. No adjustments
have been made to restate the financial statements to comply with U.S.
generally accepted accounting principles (US GAAP). Summary statements of
cash flows for the 12 month periods ended December 31, 2000, 2001 and 2002
presented in accordance with US GAAP are presented in note 38.

The accompanying notes are an integral part of these consolidated financial statements

F-6



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Nature of business and organization

Amersham plc (the Company) and its subsidiary undertakings (together, the
Group) are engaged in the worldwide development, manufacture and sale of
specialized products for research-based biotechnology supply and for the
diagnosis and treatment of disease. In September 2001 the Group sold its
remaining trade investment in Nycomed Pharma and subsequent to the transaction
the Company changed its name from Nycomed Amersham plc to Amersham plc.
Details of the transaction are included in note 3. In March 2002 the Group
purchased the 45% minority interest in Amersham Biosciences through the
acquisition of Pharmacia Biosystems AB which held 39% and the direct
acquisition of the remaining 6% thereby taking 100% ownership of Amersham
Biosciences. Details of the transaction are included in note 24.

1. ACCOUNTING POLICIES

The main Group accounting policies are set out below. The accounts are
prepared in accordance with the historical cost convention, and all applicable
United Kingdom accounting standards. As the profit and loss account is already
at historical cost, no separate note of historical cost profit and loss account
is included as allowed by Financial Reporting Standard (FRS) 3
Reporting
Financial Performance.

Changes in presentation of financial information

Where necessary prior year information has been reclassified to ensure
comparability.

New accounting policies

The following new accounting standard, issued by the UK Accounting Standards
Board, has been adopted this year:

Financial Reporting Standard (FRS) 19 Deferred Taxation

The change to existing accounting policies arising from the adoption of FRS 19
is described in note 37 below.

Basis of consolidation

The consolidated accounts include the accounts of the Company and all its
subsidiary undertakings made up to December 31, 2002, December 31, 2001 and
December 31, 2000. The results of subsidiaries sold or acquired are included
in the consolidated profit and loss account up to, or from, the date control
passes. Intra-Group sales and profits are eliminated fully on consolidation.

On acquisition of a subsidiary, all of the subsidiarys assets and liabilities
that exist at the date of acquisition are recorded at their fair values
reflecting their condition at that date. All changes to those assets and
liabilities, and the resulting gains and losses that arise after the Group
gains control of the subsidiary, are dealt with in the post acquisition profit
and loss account.

Foreign currencies

The results of the overseas subsidiary, joint venture and associated
undertakings are translated at the average exchange rates of the period during
which they arise. Overseas subsidiary undertakings assets and liabilities and
the net investments in joint venture and associated undertakings are translated
at the year end exchange rates. Differences arising on translation together
with differences on foreign currency liabilities of the Group which match
investments are dealt with through reserves.

F-7



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Derivatives and other financial instruments

The Group enters into derivative instruments primarily to manage exposures to
fluctuations in interest rates and foreign currency exchange rates. Interest
differentials under currency and interest rate swap instruments and forward
rate agreements (FRAs) are recognized on an accruals basis.

It is the Groups policy, where appropriate, to protect the sterling value of
its estimated future foreign currency receivables through the use of forward
contracts or purchased currency options. Net revenues and related net
receivables covered by forward exchange contracts or options are translated
into sterling at contract rates. No account is taken of the potential but
unrealized profits or losses on open forward exchange contracts or options
which are intended as a hedge against future transactions; such profits and
losses are accounted for so as to match the exchange differences arising on the
underlying currency transactions.

Amersham plc currently uses four types of derivative instruments as part of an
overall risk management strategy. The Company does not enter into derivative
instruments for trading purposes. The accounting treatment depends upon the
risk that is hedged.

Interest rate swaps are used to change the duration of the underlying debt.
Interest differentials of the swap are accrued to the profit and loss account
on a time-apportioned basis. If the underlying debt were to be repaid, the
swap would be either closed out or reversed with the allied cost or benefit
attributed to and accounted for in the same manner as the unexpected event
causing the debt to be repaid.

Interest on currency swaps is treated as above. Currency revaluations of the
outstanding principal to the period end rates would be transferred to reserves
if the swap were specifically hedging Group net assets; otherwise, revaluations
pass through the profit and loss account. If the underlying asset or liability
being hedged was sold or repaid, the cost or benefit of selling or reversing
the currency swap would be attributed to and accounted for in the same manner
as the underlying event.

Forward foreign exchange contracts are used to hedge equity investments abroad.
Normally the Group borrows in currencies to hedge net equity investments
abroad. Where the need for hedges exceeds the need for debt, short-term
foreign exchange contracts are entered into and designated as equity investment
hedges. The forward premium or discount in the contract is accrued to interest
payable on a time-apportioned basis. The revaluation of the outstanding
currency flows is taken to reserves. If the underlying investments were to be
sold, such that the hedge was no longer required, the cost of reversing the
hedge would be attributed to and accounted for in the same manner as the
disposal of the underlying assets.

Forward foreign exchange contracts used to hedge forecast trading flows of the
Group are accounted for through the profit and loss account either upon
maturity of the contract or deferred and recognized in operating profit when
the hedged transaction has itself been reflected in the Groups financial
statements. The forward premium or discount for these contracts is not
accounted for as interest but as part of the hedge rate achieved. If
underlying forecast flows do not materialize as envisaged, the hedges would
either be reversed or swapped forward to a future financing period. The
adjusting hedges would still be accounted for through the profit and loss
account on a realized basis.

Forward foreign exchange contracts are used to hedge Group monetary assets and
liabilities. The forward premium or discount in the contract is recognized on
an accruals basis through interest. The unrealized profit or losses on these
open forward exchange contracts is taken to the profit and loss account each
month as are the related hedged monetary assets or liabilities.

Currency options are sometimes purchased to hedge forecast trading flows.
These are accounted for in the same manner as the forward foreign exchange
contracts above except that the premium paid is deferred to the point of
exercise or lapse of the option.

F-8



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Research and development expenditure

Research and development expenditure is written off as it is incurred.

Fixed assets

Fixed assets are stated at cost less depreciation and provision for impairment,
where appropriate. Cost includes appropriate labor and overheads associated
with own manufactured assets. It is not the policy of the Group to capitalize
interest associated with the funding of capital projects. Directly acquired
intangible assets, comprising patents, patent applications, trademarks and
know-how, are stated at cost less amortization. Intangible assets, other than
goodwill, acquired in a business combination which are not separable,
identifiable and measurable are not capitalized. When fixed assets are retired
or sold, their costs and related accumulated depreciation are written off and
the resulting gain or loss is included in the profit and loss account. Repair
and maintenance costs are expensed as incurred.

Goodwill arising on consolidation represents the excess of the fair value of
the consideration given over the fair value of the identifiable net assets
acquired. Goodwill arising on the acquisition of subsidiary undertakings,
joint venture and associated undertakings prior to December 31, 1997 was
written off immediately against reserves. Goodwill arising on acquisitions
after January 1, 1998 is capitalized and amortized over its estimated useful
economic life where the goodwill is regarded as having a limited useful
economic life. In accordance with the requirement of FRS 10, Goodwill and
intangible assets, capitalized goodwill is reviewed for evidence of impairment
at the end of the first full financial year following the initial date of
recognition.

Depreciation and amortization are calculated as follows:

|                                                             |  |                                                                                                                                                                                                                                                                                                                                              
|------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Intangible assets                                            |  | Amortized on a straight-line basis at rates currently from 5% to 36% p.a.                                                                                                                                                                                                                                                                    
|                                                             |  |                                                                                                                                                                                                                                                                                                                                              
|Goodwill                                                     |  | Amortized on a straight-line basis at rates currently from 5% to 14% p.a.                                                                                                                                                                                                                                                                    
|                                                             |  |                                                                                                                                                                                                                                                                                                                                              
|Tangible assets                                              |  | Depreciation is calculated by the straight-line method at the following
annual rates:                                                                                                                                                                                                                                                        
|                                                             |  |                                                                                                                                                                                                                                                                                                                                              
|Land                                                         |  | Nil                                                                                                                                                                                                                                                                                                                                          
|                                                             |  |                                                                                                                                                                                                                                                                                                                                              
|Buildings                                                    |  | 2.5%                                                                                                                                                                                                                                                                                                                                         
|                                                             |  |                                                                                                                                                                                                                                                                                                                                              
|Plant and machinery,
fixtures,
fittings, tools and
equipment |  | At varying rates calculated to write-off the assets over their expected
useful lives. A substantial part of the Groups plant represents
production support facilities depreciated at the same rate, 2.5% p.a.,
as the buildings in which they are contained. Most of the other assets
are depreciated at rates currently from 9% to 12% p.a.
|                                                             |  |                                                                                                                                                                                                                                                                                                                                              
|Assets under construction                                    |  | Nil                                                                                                                                                                                                                                                                                                                                          

Investments

(a)  Trade investments

Trade investments are valued at cost, less any provision for impairment,
restated to year end exchange rates if the underlying investment is denominated
in foreign currency.

(b)  Investments in joint ventures and associated undertakings

A joint venture is an undertaking which the Group controls jointly with one or
more other venturers.

An associated undertaking is one in which the Group has a long term
participating interest, usually from 20% to 50%, and over which it exercises
significant influence.

The Groups share of the profits less losses of joint ventures and associated
undertakings is included in the consolidated profit and loss account and its
interest in their net assets is included in investments in the consolidated
balance sheet.

(c)  Company investments

Investments in subsidiary and other undertakings are held at original cost less
any provision for impairment, except where they are foreign currency
investments hedged in whole or in part by related foreign currency borrowings
or other hedging instruments. Hedged investments are held at cost less
provision for impairment, where appropriate, but are retranslated for foreign
exchange movements to the extent that they are hedged.

F-9



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Where the amount of a foreign currency hedge is in excess of cost, the
investment is stated at the underlying foreign currency net asset value.

Turnover

Turnover consists of royalties and sales of goods and services at invoiced
values net of discounts, returns and value added tax. Sales between Group
companies are excluded.

Revenues are recognized once the realization of the consideration is reasonably
assured and the provision of goods and services is substantially complete with
respect to the delivery of the specific product or performance of the related
service. This will normally be the case when there are no material
uncertainties or performance duties outstanding which could prevent the Group
from enforcing the sales transaction and collectability is reasonably assured.

The Group recognizes revenue principally on five types of transactions, namely
sales of consumable products, sales of instruments, agreements which provide
access to or license of certain of the Groups proprietary technology and
know-how, contracts for ongoing service and support of instruments sold to
customers, and royalty income on third party use of the Groups patents.

Revenues on sales of instruments in the United States and on sales of
consumable products in all markets are recognized upon transfer of title and
risk of loss to the customer, which is generally upon delivery to the carrier.
In markets outside of the United States, sales of instruments are made with a
reservation of title until payment in full by the customer for the equipment.
For these sales, revenue is recognized upon transfer of risk of loss to the
customer, which is generally upon delivery to the carrier, as the reservation
of title is solely for credit protection purposes.

Revenues earned under agreements which provide access to or license the Groups
proprietary technology and know-how are recognized on a straight line basis
over the life of the agreement based on the total fees received under the
agreement over the period the access to the technology and know-how is
provided.

Revenues earned under contracts for ongoing service are recognized pro-rata
over the term of the service agreements.

Revenues earned from royalties on patents are recognized pro-rata over the life
of the royalty agreement.

Stocks

Stocks are stated at the lower of cost and net realizable value. Cost is
determined on a first in, first out basis and includes all direct expenditure
and, in the case of manufactured items, production overheads based on the
normal level of business activity. Net realizable value is the price at which
the stocks can be realized in the normal course of business after allowing for
the costs of realization and, where appropriate, the costs of conversion.
Provision is made for obsolescent and slow moving stocks and for radioactive
decay.

Effluent costs

The costs associated with radioactive waste arising from operations for which
an authorized disposal route is available, principally low level and very low
level waste, are written off in the year in which they are incurred. Provision
is also made as incurred for the eventual disposal costs of the Groups
intermediate level waste which arises from its operations. These provisions
are based on the latest technical assessment of the process and methods likely
to be used to dispose of this waste and on industry estimates of the likely
costs of the necessary disposal facilities under the relevant Governments
preferred disposal route. They are stated in the balance sheet at current
price levels, with the restatement of provisions made in prior years to reflect
current price levels included as a charge in the profit and loss account for
the year.

Radioactive decommissioning costs

The Group recognizes in full a provision, (discounted), for the cost of
radioactive decommissioning when the relevant fixed asset becomes operational
and an equivalent asset is recognized. The cost of radioactive decommissioning
is determined on a going concern basis on the basis that the manufacture or
handling of radioactive products continues at the relevant plant or facility on
which the asset is operated for the foreseeable future. In the unlikely event
that the Company is required to totally discontinue activities at one of its
nuclear

F-10



---



##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

operating sites, the full costs of exiting and decommissioning would be higher.
The relevant decommissioning asset is capitalized in the balance sheet in
association with the fixed asset to which it relates, and is amortized over the
life of the asset. The unwinding of the discount on the decommissioning
provision is charged in the profit and loss account as part of the interest
charge.

Government grants

Investment grants have been treated as deferred income and are released to the
profit and loss account at the same rate as the depreciation charge on the
assets to which they relate. Revenue grants are matched with the related
expenditure.

Taxation

Taxation charged against profits is calculated at the appropriate local rate of
tax for each Group company. Except for timing differences relating to
revaluations, rolled over taxable gains and unremitted income, provision is
made for all timing differences that would give rise to a deferred tax
liability. Deferred tax assets are recognized to the extent that it is more
likely than not they will be recoverable.

Pensions

The Group operates defined benefit and defined contribution pension schemes
under arrangements, which have been separately established by each Group
company. In respect of the defined benefit schemes, actuarial valuations are
made regularly and the contributions payable are adjusted as appropriate.
Pension costs are accounted for on the basis of charging the expected cost of
providing pensions over the period during which the Group benefits from the
employees services. The effects of variations from regular cost are spread
over the expected remaining service lives of members of the scheme. In respect
of defined contribution pension schemes, costs are charged as incurred.

Leases

Rentals payable under operating leases are charged over the lease term on a
straight-line basis or on the basis of actual rentals payable where this fairly
reflects usage. Rentals receivable are treated as income in the periods to
which they relate.

Where assets are financed by leasing arrangements that give rights
approximating to ownership (finance leases), the assets are treated as if they
had been purchased outright and the corresponding liability to the leasing
company is included as an obligation under finance leases.

F-11



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

2. SEGMENTAL ANALYSIS

Segmental analysis by business sector

In 1998, the Group adopted SFAS No. 131 Disclosures about Segments of an
Enterprise and Related Information. SFAS 131 supersedes SFAS 14 replacing
the industry segment approach with the management approach. The
management approach designates the internal organization that is used by
management for making operating decisions and assessing performance as the
source of the Groups reportable segments.

The Groups operations are managed through Amersham Health (development,
manufacture and supply of in-vivodiagnostic imaging agents and radiotherapy
products) and Amersham Biosciences (development, manufacture and sale of
specialized products and services for life science research and manufacture of
biopharmaceuticals). Inter-segment sales are small. The Group evaluates the
performance of its segments and allocates resources to them based on profit
before interest and tax.

The sales, profit before interest and tax both before and after exceptional
items and goodwill amortization, and net assets of the various activities of
the Group are set out below.

Amersham plc incurs costs for services which are common to all divisions.
These shared service costs are allocated on the most appropriate basis for the
category of cost.

|                     |  |              |         |              |  |              |         |  |  |  |         | 
|-------------------- |  | ------------ | ------- | ------------ |  | ------------ | ------- |  |  |  | ------- | 
|                     |  | 12 months to |         | 12 months to |  | 12 months to
|                     |  | Dec 31, 00   |         | Dec 31, 01   |  | Dec 31, 02  
|                     |  | £m           |         | £m           |  | £m          
|                     |  |              |         |              |  |             
|(a) Sales            |  |              |         |              |  |              |         |  |  |  |         | 
|Amersham Health      |  |              | 773.9   |              |  |              | 922.0   |  |  |  | 947.7   | 
|Amersham Biosciences |  |              | 603.7   |              |  |              | 680.5   |  |  |  | 670.5   | 
|                     |  |              |         |              |  |              |         |  |  |  |         | 
|                     |  |              | 1,377.6 |              |  |              | 1,602.5 |  |  |  | 1,618.2 | 
|                     |  |              |         |              |  |              |         |  |  |  |         | 

Included within Amersham Health is the Groups share of the joint venture
Nihon Medi-Physics Company Ltd (NMP) sales for the year of
£80.5m (2001 
£87.3m, 2000  £94.8m).

|                                                                              |  |              |       |              |  |              |       |   |  |  |       |  
|----------------------------------------------------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ----- | - |  |  | ----- | -
|                                                                              |  | 12 months to |       | 12 months to |  | 12 months to
|                                                                              |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|                                                                              |  | £m           |       | £m           |  | £m          
|                                                                              |  |              |       |              |  |             
|(b) Total
operating profit before exceptional items and goodwill amortization |  |              |       |              |  |              |       |   |  |  |       |  
|Amersham Health                                                               |  |              | 194.6 |              |  |              | 240.9 |   |  |  | 255.6 |  
|Amersham Biosciences                                                          |  |              | 63.3  |              |  |              | 72.4  |   |  |  | 75.3  |  
|Corporate and other                                                           |  |              | (16.7 | )            |  |              | (20.8 | ) |  |  | (21.1 | )
|                                                                              |  |              |       |              |  |              |       |   |  |  |       |  
|                                                                              |  |              | 241.2 |              |  |              | 292.5 |   |  |  | 309.8 |  
|                                                                              |  |              |       |              |  |              |       |   |  |  |       |  

F-12



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table shows total operating profit after exceptional items and
goodwill amortization. The exceptional items charged in 2002 relate £nil
(2001  £8.5m, 2000  £10.9m) to Amersham Health,
£nil (2001  £2.6m, 2000 
£3.5m) to Amersham Biosciences and £nil (2001  £2.4 income, 2000  £12.6m
charge) to Corporate and other. Goodwill charged in 2002 relates £0.9m, (2001
 £1.4m, 2000  £1.7m), to Amersham Health, and
£35.7m, (2001  £10.3m, 2000 
£9.0m) to Amersham Biosciences.

|                                                                         |  |              |       |              |  |              |       |   |  |  |       |  
|------------------------------------------------------------------------ |  | ------------ | ----- | ------------ |  | ------------ | ----- | - |  |  | ----- | -
|                                                                         |  | 12 months to |       | 12 months to |  | 12 months to
|                                                                         |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|                                                                         |  | £m           |       | £m           |  | £m          
|                                                                         |  |              |       |              |  |             
|Total operating profit after exceptional items and goodwill
amortization |  |              |       |              |  |              |       |   |  |  |       |  
|Amersham Health                                                          |  |              | 182.0 |              |  |              | 231.0 |   |  |  | 254.7 |  
|Amersham Biosciences                                                     |  |              | 50.8  |              |  |              | 59.5  |   |  |  | 39.6  |  
|Corporate and other                                                      |  |              | (29.3 | )            |  |              | (18.4 | ) |  |  | (21.1 | )
|                                                                         |  |              |       |              |  |              |       |   |  |  |       |  
|                                                                         |  |              | 203.5 |              |  |              | 272.1 |   |  |  | 273.2 |  
|                                                                         |  |              |       |              |  |              |       |   |  |  |       |  

Included within Amersham Health is the Groups share of the NMP joint venture
total operating profit after exceptional items and goodwill amortization for
the year of £23.2m, (2001  £26.1m, 2000  £29.8m).

|                              |  |            |        |            |  |  |         |  
|----------------------------- |  | ---------- | ------ | ---------- |  |  | ------- | -
|                              |  | Dec 31, 01 |        |            |  | 
|                              |  | (restated) |        | Dec 31, 02
|                              |  | £m         |        | £m        
|                              |  |            |        |           
|(c) Net assets                |  |            |        |            |  |  |         |  
|Amersham Health               |  |            | 451.5  |            |  |  | 559.9   |  
|Amersham Biosciences          |  |            | 413.2  |            |  |  | 1,032.6 |  
|Corporate and other           |  |            | (20.2  | )          |  |  | (33.7   | )
|                              |  |            |        |            |  |  |         |  
|Net operating assets          |  |            | 844.5  |            |  |  | 1,558.8 |  
|Unallocated net liabilities   |  |            |        |            |  |  |         |  
|Current and deferred taxation |  |            | (129.9 | )          |  |  | (163.6  | )
|Dividends payable             |  |            | (30.3  | )          |  |  | (36.0   | )
|Net debt                      |  |            | (25.4  | )          |  |  | (182.3  | )
|                              |  |            |        |            |  |  |         |  
|                              |  |            | 658.9  |            |  |  | 1,176.9 |  
|                              |  |            |        |            |  |  |         |  

The net operating assets of Amersham Biosciences include goodwill at a net
book value of £630.6m at December 31, 2002 arising from the purchase of the
45% minority interest in Amersham Biosciences.

Included within the net operating assets of Amersham Health is the Groups
share of the NMP joint venture assets of £73.0m, (2001  £67.1m).

F-13



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Segmental analysis by geographical sector

The figures set out below for each geographical area show the sales, total
operating profit both before and after exceptional items and goodwill
amortization, net assets and long lived assets of the subsidiary undertakings
located in that area. Export sales and related profits are included in the
area from which those sales are made. Transfers between Group companies are
charged at commercial rates.

|                         |  |    |         |    |  |              |         |              |  |              |         |   |  |  |  | 
|------------------------ |  | -- | ------- | -- |  | ------------ | ------- | ------------ |  | ------------ | ------- | - |  |  |  | 
|                         |  |    |         |    |  | 12 months to |         | 12 months to |  | 12 months to
|                         |  |    |         |    |  | Dec 31, 00   |         | Dec 31, 01   |  | Dec 31, 02  
|By origin                |  | £m |         | £m |  | £m          
|                         |  |    |         |    |  |             
|(a) Sales                |  |    |         |    |  |              |         |              |  |              |         |  
|Europe                   |  |    | 766.5   |    |  |              | 722.1   |              |  |              | 903.9   |  
|North America            |  |    | 743.4   |    |  |              | 853.7   |              |  |              | 871.8   |  
|Japan                    |  |    | 206.8   |    |  |              | 202.1   |              |  |              | 187.8   |  
|Asia Pacific             |  |    | 58.2    |    |  |              | 77.5    |              |  |              | 84.0    |  
|Rest of the World        |  |    | 6.9     |    |  |              | 6.7     |              |  |              | 5.2     |  
|                         |  |    |         |    |  |              |         |              |  |              |         |   |  |  |  | 
|                         |  |    | 1,781.8 |    |  |              | 1,862.1 |              |  |              | 2,052.7 |  
|Less inter-segment sales |  |    | (404.2  | )  |  |              | (259.6  | )            |  |              | (434.5  | )
|                         |  |    |         |    |  |              |         |              |  |              |         |   |  |  |  | 
|                         |  |    | 1,377.6 |    |  |              | 1,602.5 |              |  |              | 1,618.2 |  
|                         |  |    |         |    |  |              |         |              |  |              |         |   |  |  |  | 

Included within Japan is the Groups share of NMP joint venture sales during
the year of £80.5m (2001  £87.3m, 2000  £94.8m).

Sales from the UK to external
customers totaled £91.7m (2001  £85.1m, 2000 
£81.5m).

|                                                                              |  |              |       |              |  |              |       |   |  |  |       |  
|----------------------------------------------------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ----- | - |  |  | ----- | -
|                                                                              |  | 12 months to |       | 12 months to |  | 12 months to
|                                                                              |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|                                                                              |  | £m           |       | £m           |  | £m          
|                                                                              |  |              |       |              |  |             
|(b) Total operating
profit before
exceptional items and
goodwill amortization |  |              |       |              |  |              |       |   |  |  |       |  
|Europe                                                                        |  |              | 146.9 |              |  |              | 193.0 |   |  |  | 219.3 |  
|North America                                                                 |  |              | 74.5  |              |  |              | 89.7  |   |  |  | 80.3  |  
|Japan                                                                         |  |              | 34.6  |              |  |              | 30.4  |   |  |  | 31.9  |  
|Asia Pacific                                                                  |  |              | 1.8   |              |  |              | (0.3  | ) |  |  | (0.9  | )
|Rest of the World                                                             |  |              | 0.1   |              |  |              | 0.5   |   |  |  | 0.3   |  
|Corporate                                                                     |  |              | (16.7 | )            |  |              | (20.8 | ) |  |  | (21.1 | )
|                                                                              |  |              |       |              |  |              |       |   |  |  |       |  
|                                                                              |  |              | 241.2 |              |  |              | 292.5 |   |  |  | 309.8 |  
|                                                                              |  |              |       |              |  |              |       |   |  |  |       |  

The following table shows total operating profit after exceptional items and
goodwill amortization. The exceptional items charged in 2002 relate £nil (2001
- £10.0m, 2000  £11.8m) to Europe, £nil (2001  £1.1m, 2000  £2.6m) to North
America and £nil (2001  £2.4 income, 2000  £12.6m charge) to Corporate and
Other.

F-14



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

|                                                                         |  |              |       |              |  |              |       |   |  |  |       |  
|------------------------------------------------------------------------ |  | ------------ | ----- | ------------ |  | ------------ | ----- | - |  |  | ----- | -
|                                                                         |  | 12 months to |       | 12 months to |  | 12 months to
|                                                                         |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|                                                                         |  | £m           |       | £m           |  | £m          
|                                                                         |  |              |       |              |  |             
|Total operating profit after exceptional items and goodwill
amortization |  |              |       |              |  |              |       |   |  |  |       |  
|Europe                                                                   |  |              | 135.1 |              |  |              | 182.7 |   |  |  | 210.4 |  
|North America                                                            |  |              | 61.2  |              |  |              | 77.2  |   |  |  | 57.6  |  
|Japan                                                                    |  |              | 34.6  |              |  |              | 30.4  |   |  |  | 26.9  |  
|Asia Pacific                                                             |  |              | 1.8   |              |  |              | (0.3  | ) |  |  | (0.9  | )
|Rest of the World                                                        |  |              | 0.1   |              |  |              | 0.5   |   |  |  | 0.3   |  
|Corporate                                                                |  |              | (29.3 | )            |  |              | (18.4 | ) |  |  | (21.1 | )
|                                                                         |  |              |       |              |  |              |       |   |  |  |       |  
|                                                                         |  |              | 203.5 |              |  |              | 272.1 |   |  |  | 273.2 |  
|                                                                         |  |              |       |              |  |              |       |   |  |  |       |  

Included within Japan is the Groups share of NMP joint venture profit before
interest and tax for the year of £23.2m (2001  £26.1m, 2000  £29.8m).

|                              |  |  |              |   |              |  |         |   | 
|----------------------------- |  |  | ------------ | - | ------------ |  | ------- | - | 
|                              |  |  | 12 months to |   |              |  |        
|                              |  |  | Dec 31, 01   |   | 12 months to
|                              |  |  | (restated)   |   | Dec 31, 02  
|                              |  |  | £m           |   | £m          
|                              |  |  |              |   |             
|(c) Net assets                |  |  |              |   |              |  |         |  
|Europe                        |  |  | 383.1        |   |              |  | 709.3   |  
|North America                 |  |  | 322.4        |   |              |  | 603.0   |  
|Japan                         |  |  | 107.8        |   |              |  | 228.9   |  
|Asia Pacific                  |  |  | 49.8         |   |              |  | 49.5    |  
|Rest of the World             |  |  | 1.6          |   |              |  | 1.8     |  
|Corporate                     |  |  | (20.2        | ) |              |  | (33.7   | )
|                              |  |  |              |   |              |  |         |  
|Net operating assets          |  |  | 844.5        |   |              |  | 1,558.8 |  
|Unallocated net liabilities   |  |  |              |   |              |  |         |  
|Current and deferred taxation |  |  | (129.9       | ) |              |  | (163.6  | )
|Dividends payable             |  |  | (30.3        | ) |              |  | (36.0   | )
|Net debt                      |  |  | (25.4        | ) |              |  | (182.3  | )
|                              |  |  |              |   |              |  |         |  
|                              |  |  | 658.9        |   |              |  | 1,176.9 |  
|                              |  |  |              |   |              |  |         |  

Net operating assets include goodwill at a net book value of £630.6m at
December 31, 2002 arising from the purchase of the 45% minority interest in
Amersham Biosciences. The goodwill is allocated to Europe, (£207.1m), North
America (£304.1m) and Japan (£119.4m) based on expected revenues arising in
these territories.

Included within the net operating assets of Japan is the Groups share of NMP
joint venture assets of £73.0m, (2001  £67.1m).

F-15



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

|                                       |  |            |       |            |  |  |         | 
|-------------------------------------- |  | ---------- | ----- | ---------- |  |  | ------- | 
|                                       |  | Dec 31, 01 |       | Dec 31, 02
|                                       |  | £m         |       | £m        
|                                       |  |            |       |           
|(d) Long lived assets                  |  |            |       |            |  |  |         | 
|Europe                                 |  |            | 441.4 |            |  |  | 764.9   | 
|North America                          |  |            | 257.7 |            |  |  | 521.2   | 
|Japan                                  |  |            | 77.7  |            |  |  | 202.3   | 
|Asia Pacific                           |  |            | 26.1  |            |  |  | 21.7    | 
|Rest of World                          |  |            | 0.6   |            |  |  | 0.5     | 
|Corporate assets                       |  |            | 9.8   |            |  |  | 9.1     | 
|                                       |  |            |       |            |  |  |         | 
|                                       |  |            | 813.3 |            |  |  | 1,519.7 | 
|Unallocated assets  Deferred Taxation |  |            |      |            |  |  | 32.9    | 
|                                       |  |            |       |            |  |  |         | 
|Total long lived assets                |  |            | 813.3 |            |  |  | 1,552.6 | 
|                                       |  |            |       |            |  |  |         | 

Included within Europe are long lived
assets in the UK of £212.2m (2001 
£166.0m)

|                           |  |              |         |              |  |              |         |  |  |  |         | 
|-------------------------- |  | ------------ | ------- | ------------ |  | ------------ | ------- |  |  |  | ------- | 
|                           |  | 12 months to |         | 12 months to |  | 12 months to
|                           |  | Dec 31, 00   |         | Dec 31, 01   |  | Dec 31, 02  
|                           |  | £m           |         | £m           |  | £m          
|                           |  |              |         |              |  |             
|(e) Sales  by
destination |  |              |         |              |  |              |         |  |  |  |         | 
|Europe                     |  |              | 346.6   |              |  |              | 392.0   |  |  |  | 427.8   | 
|North America              |  |              | 647.2   |              |  |              | 767.7   |  |  |  | 798.5   | 
|Japan                      |  |              | 279.5   |              |  |              | 290.7   |  |  |  | 264.1   | 
|Asia Pacific               |  |              | 58.1    |              |  |              | 80.4    |  |  |  | 80.6    | 
|Rest of the World          |  |              | 46.2    |              |  |              | 71.7    |  |  |  | 47.2    | 
|                           |  |              |         |              |  |              |         |  |  |  |         | 
|                           |  |              | 1,377.6 |              |  |              | 1,602.5 |  |  |  | 1,618.2 | 
|                           |  |              |         |              |  |              |         |  |  |  |         | 

Included within Japan is the Groups share of NMP joint venture sales during
the year of £80.5m (2001  £87.3m, 2000  £94.8m).

F-16



---



##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. EXCEPTIONAL ITEMS

|                                                                |  |              |       |              |  |              |      |   |  |  |     | 
|--------------------------------------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ---- | - |  |  | --- | 
|                                                                |  | 12 months to |       | 12 months to |  | 12 months to
|                                                                |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|                                                                |  | £m           |       | £m           |  | £m          
|                                                                |  |              |       |              |  |             
|Costs associated with the disposal of Nycomed Pharma            |  |              | (9.7  | )            |  |              |     |   |  |  |    | 
|Costs of manufacturing rationalization in Amersham Health       |  |              | (10.9 | )            |  |              |     |   |  |  |    | 
|Costs of the proposed partial flotation of Amersham Biosciences |  |              | (6.4  | )            |  |              | (3.4 | ) |  |  |    | 
|Transfer of pension assets                                      |  |              |      |              |  |              | 9.0  |   |  |  |    | 
|Costs of exiting the disease profiling project                  |  |              |      |              |  |              | (5.8 | ) |  |  |    | 
|Costs of exiting Harwell site                                   |  |              |      |              |  |              | (8.5 | ) |  |  |    | 
|                                                                |  |              |       |              |  |              |      |   |  |  |     | 
|Charged to operating profit                                     |  |              | (27.0 | )            |  |              | (8.7 | ) |  |  |    | 
|Profit on disposal of 29% of Nycomed Pharma                     |  |              |      |              |  |              | 55.3 |   |  |  |    | 
|                                                                |  |              |       |              |  |              |      |   |  |  |     | 
|Profit on disposal of fixed asset investment                    |  |              |      |              |  |              | 55.3 |   |  |  |    | 
|                                                                |  |              |       |              |  |              |      |   |  |  |     | 
|Tax credit relating to Group reorganization                     |  |              |      |              |  |              |     |   |  |  | 9.2 | 
|                                                                |  |              |       |              |  |              |      |   |  |  |     | 
|Total exceptional items                                         |  |              | (27.0 | )            |  |              | 46.6 |   |  |  | 9.2 | 
|                                                                |  |              |       |              |  |              |      |   |  |  |     | 
|Tax credit/(charge) related to exceptional items                |  |              |       |              |  |              |      |   |  |  |     | 
|- tax on exceptional items charged to operating profit          |  |              | 2.4   |              |  |              | (2.2 | ) |  |  |    | 
|-
tax on disposal of fixed assets  continuing operations       |  |              |      |              |  |              | 2.7  |   |  |  |    | 
|                                                                |  |              |       |              |  |              |      |   |  |  |     | 
|                                                                |  |              | 2.4   |              |  |              | 0.5  |   |  |  |    | 
|                                                                |  |              |       |              |  |              |      |   |  |  |     | 

The minority interest impact is £nil (2001  £2.0m, 2000  £nil), relating to
the exceptional items charged to operating profit.

(a)  Tax credit relating to
Group reorganization
As a result of the formation of a consolidated tax group in the US on 31 July
2002, the Group has recognized a deferred taxation asset of £9.2m primarily
related to the future utilization of tax losses arising from prior periods.

(b)  Proposed partial flotation of Amersham Biosciences
Costs of £nil (2001  £3.4m, 2000  £6.4m) were incurred in relation to the
proposed partial flotation of Amersham Biosciences. The costs related
primarily to adviser fees and other related costs in preparing the prospectus
for flotation and in relocating the business to the US.

(c)  Transfer of pension assets
In 2001 the Company received £22.5m related to a transfer of assets from
former pension plans. Of this amount, £13.5m has been applied against ongoing
liabilities primarily for employees who have transferred into Amersham pension
schemes and the balance of £9.0m has been recognized as exceptional income,
where the Company has no further liability.

(d)  Costs of exiting the disease profiling project
Cash costs of £4.1m and non-cash write offs of £1.7m have been incurred in the
second half of 2001 in concluding research on, and winding up the operation
of, an early stage investment in disease profiling. An investment of £4.0m
was made in the research project in the first half of 2001 and £3.7m in the
year ended December 31, 2000, which was charged to operating activities.

(e)  Cost of exiting the Harwell site
In 2001, costs of £8.5m have been accrued in relation to the decision to
terminate the Groups lease at the Harwell site following a complete cessation
of the Groups activities at this site. The costs relate primarily to asset
write offs and decommissioning costs.

(f)  Nycomed Pharma
The sale of Nycomed Pharma to a new company formed for the purpose of the
transaction was completed on May 14, 1999. The Group recorded a pre tax gain
of £11.5m in the year ended December 31, 1999 after adding back attributable
goodwill previously written off to reserves. The tax charge on the disposal
amounted

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

to £9.5m. Further costs of £9.7m, with a related tax credit of £1.1m,
associated with exiting from the Pharma business, have been accounted for in
the year ended December 31, 2000 giving a total loss associated with the
disposal of £6.6m after tax in 1999 and 2000. In September 2001 the Group
sold its remaining investment in Nycomed Pharma, which consisted of shares and
warrants, for £72.4m and realized £50.6m for the outstanding Nycomed Pharma
loan notes held by the Group. The Group has recorded a profit on the
transaction of £55.3m after charging costs associated with the disposal,
including the costs incurred in transferring the Nycomed name to Nycomed
Pharma. Subsequent to the transaction the Company changed its name from
Nycomed Amersham plc to Amersham plc. The shares in Nycomed Pharma were owned
by a legal entity in Holland and under Dutch tax law, the gain on their
disposal is not taxable.

(g)  Manufacturing rationalization in Amersham Health
In 2000, Amersham Health recorded a charge of £10.9m for the costs of
rationalizing its radiopharmaceutical production capacity at specific sites in
the US and Europe. The costs of the rationalization comprise severance and
other cash costs of £8.4m and non-cash write offs of £2.5m. No further costs
associated with the rationalization are expected.

4. TOTAL OPERATING PROFIT

|                                                           |  |                    |         |                   |  |       |   |  |  |  |         |  
|---------------------------------------------------------- |  | ------------------ | ------- | ----------------- |  | ----- | - |  |  |  | ------- | -
|                                                           |  | Before exceptional |         |                   |  |       |   |  |  | 
|                                                           |  | items              |         | Exceptional items |  | Total
|Total operating profit 2002                                |  | £m                 |         | £m                |  | £m   
|                                                           |  |                    |         |                   |  |      
|Turnover                                                   |  |                    | 1,537.7 |                   |  |       |  |  |  |  | 1,537.7 |  
|Cost of sales                                              |  |                    | (481.0  | )                 |  |       |  |  |  |  | (481.0  | )
|                                                           |  |                    |         |                   |  |       |   |  |  |  |         |  
|Gross profit                                               |  |                    | 1,056.7 |                   |  |       |  |  |  |  | 1,056.7 |  
|Distribution and selling costs                             |  |                    | (419.7  | )                 |  |       |  |  |  |  | (419.7  | )
|Administrative expenses                                    |  |                    | (387.0  | )                 |  |       |  |  |  |  | (387.0  | )
|                                                           |  |                    |         |                   |  |       |   |  |  |  |         |  
|Group operating profit                                     |  |                    | 250.0   |                   |  |       |  |  |  |  | 250.0   |  
|Share of operating profits of
joint venture and associates |  |                    | 23.2    |                   |  |       |  |  |  |  | 23.2    |  
|                                                           |  |                    |         |                   |  |       |   |  |  |  |         |  
|Total operating profit                                     |  |                    | 273.2   |                   |  |       |  |  |  |  | 273.2   |  
|                                                           |  |                    |         |                   |  |       |   |  |  |  |         |  

|                                                           |  |                    |         |                   |  |       |      |   |  |  |         |  
|---------------------------------------------------------- |  | ------------------ | ------- | ----------------- |  | ----- | ---- | - |  |  | ------- | -
|                                                           |  | Before exceptional |         |                   |  |       |      |   |  | 
|                                                           |  | items              |         | Exceptional items |  | Total
|Total operating profit 2001                                |  | £m                 |         | £m                |  | £m   
|                                                           |  |                    |         |                   |  |      
|Turnover                                                   |  |                    | 1,515.2 |                   |  |       |     |   |  |  | 1,515.2 |  
|Cost of sales                                              |  |                    | (500.1  | )                 |  |       | 0.5  |   |  |  | (499.6  | )
|                                                           |  |                    |         |                   |  |       |      |   |  |  |         |  
|Gross profit                                               |  |                    | 1,015.1 |                   |  |       | 0.5  |   |  |  | 1,015.6 |  
|Distribution and selling costs                             |  |                    | (401.8  | )                 |  |       |     |   |  |  | (401.8  | )
|Administrative expenses                                    |  |                    | (358.6  | )                 |  |       | (9.2 | ) |  |  | (367.8  | )
|                                                           |  |                    |         |                   |  |       |      |   |  |  |         |  
|Group operating profit                                     |  |                    | 254.7   |                   |  |       | (8.7 | ) |  |  | 246.0   |  
|Share of operating profits of
joint venture and associates |  |                    | 26.1    |                   |  |       |     |   |  |  | 26.1    |  
|                                                           |  |                    |         |                   |  |       |      |   |  |  |         |  
|Total operating profit                                     |  |                    | 280.8   |                   |  |       | (8.7 | ) |  |  | 272.1   |  
|                                                           |  |                    |         |                   |  |       |      |   |  |  |         |  

|                                                           |  |                    |         |                   |  |       |       |   |  |  |         |  
|---------------------------------------------------------- |  | ------------------ | ------- | ----------------- |  | ----- | ----- | - |  |  | ------- | -
|                                                           |  | Before exceptional |         |                   |  |       |       |   |  | 
|                                                           |  | items              |         | Exceptional items |  | Total
|Total operating profit 2000                                |  | £m                 |         | £m                |  | £m   
|                                                           |  |                    |         |                   |  |      
|Turnover                                                   |  |                    | 1,282.8 |                   |  |       |      |   |  |  | 1,282.8 |  
|Cost of sales                                              |  |                    | (431.0  | )                 |  |       | (10.9 | ) |  |  | (441.9  | )
|                                                           |  |                    |         |                   |  |       |       |   |  |  |         |  
|Gross profit                                               |  |                    | 851.8   |                   |  |       | (10.9 | ) |  |  | 840.9   |  
|Distribution and selling costs                             |  |                    | (365.9  | )                 |  |       | (3.4  | ) |  |  | (369.3  | )
|Administrative expenses                                    |  |                    | (285.2  | )                 |  |       | (12.7 | ) |  |  | (297.9  | )
|                                                           |  |                    |         |                   |  |       |       |   |  |  |         |  
|Group operating profit                                     |  |                    | 200.7   |                   |  |       | (27.0 | ) |  |  | 173.7   |  
|Share of operating profits of
joint venture and associates |  |                    | 29.8    |                   |  |       |      |   |  |  | 29.8    |  
|                                                           |  |                    |         |                   |  |       |       |   |  |  |         |  
|Total operating profit                                     |  |                    | 230.5   |                   |  |       | (27.0 | ) |  |  | 203.5   |  
|                                                           |  |                    |         |                   |  |       |       |   |  |  |         |  

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

|                                                     |                                                    |              |      |              |  |              |      |     |  |  |      |     | 
|---------------------------------------------------- | -------------------------------------------------- | ------------ | ---- | ------------ |  | ------------ | ---- | --- |  |  | ---- | --- | 
|                                                     |                                                    | 12 months to |      | 12 months to |  | 12 months to
|                                                     |                                                    | Dec 31, 00   |      | Dec 31, 01   |  | Dec 31, 02  
|                                                     |                                                    | £m           |      | £m           |  | £m          
|                                                     |                                                    |              |      |              |  |             
|Total operating profit is arrived at after charging: |                                                    |              |      |              |  |              |      |     |  |  |      |    
|Remuneration of the Groups auditors                 |                                                    |              |      |              |  |              |      |     |  |  |      |    
|- Audit fees                                         |                                                    |              | 1.2  |              |  |              | 1.3  |     |  |  | 1.6  |    
|- Other services to the Group                        | - in the UK                                        |              |      | 0.4          |  |              |      | 0.2 |  |  |      | 0.1 | 
|                                                     | - in rest of world (primarily related to taxation) |              |      | 1.4          |  |              |      | 0.2 |  |  |      | 0.4 | 
|Operating lease rentals                              |                                                    |              |      |              |  |              |      |     |  |  |      |    
|- Hire of plant and machinery                        |                                                    |              | 12.2 |              |  |              | 13.9 |     |  |  | 14.5 |    
|- Hire of land and buildings and other fixed assets  |                                                    |              | 11.5 |              |  |              | 14.3 |     |  |  | 15.1 |    
|Amortization of government grants                    |                                                    |              | (0.3 | )            |  |              | (0.2 | )   |  |  | (0.2 | )  
|Depreciation of tangible fixed assets                |                                                    |              |      |              |  |              |      |     |  |  |      |    
|- Owned                                              |                                                    |              | 50.0 |              |  |              | 61.1 |     |  |  | 72.0 |    
|- Held under finance leases                          |                                                    |              | 0.5  |              |  |              | 0.4  |     |  |  | 0.3  |    
|Amortization of intangible fixed assets              |                                                    |              |      |              |  |              |      |     |  |  |      |    
|- Goodwill                                           |                                                    |              | 10.7 |              |  |              | 11.7 |     |  |  | 36.6 |    
|- Other intangibles                                  |                                                    |              | 10.7 |              |  |              | 6.8  |     |  |  | 7.7  |    
|Loss on disposal of tangible fixed assets            |                                                    |              | 1.1  |              |  |              | 0.3  |     |  |  | 1.5  |    
|                                                     |                                                    |              |      |              |  |              |      |     |  |  |      |    

Research and development costs included in administrative expenses of £184.2m
(2001  £173.8m, 2000  £149.0m), relate to
Amersham Health £95.1m (2001  £83.0m, 2000 
£73.9m), Amersham Biosciences £88.0m (2001 
£86.4m, 2000  £71.5m), and Corporate and other £1.1m (2001  £4.4m, 2000  £3.6m).

Goodwill amortization charged to administrative expenses in 2002 is £36.6m
(2001  £11.7m, 2000  £10.7m).

5. DIRECTORS EMOLUMENTS

|                                                                       |  |              |     |              |  |              |     |  |  |  |     | 
|---------------------------------------------------------------------- |  | ------------ | --- | ------------ |  | ------------ | --- |  |  |  | --- | 
|                                                                       |  | 12 months to |     | 12 months to |  | 12 months to
|                                                                       |  | Dec 31, 00   |     | Dec 31, 01   |  | Dec 31, 02  
|                                                                       |  | £m           |     | £m           |  | £m          
|                                                                       |  |              |     |              |  |             
|Basic salary                                                           |  |              | 1.3 |              |  |              | 1.4 |  |  |  | 2.2 | 
|Fees                                                                   |  |              | 0.4 |              |  |              | 0.4 |  |  |  | 0.5 | 
|Benefits                                                               |  |              | 0.2 |              |  |              | 0.3 |  |  |  | 0.4 | 
|Annual bonuses                                                         |  |              | 0.9 |              |  |              | 1.1 |  |  |  | 1.2 | 
|Payments of pension contributions                                      |  |              | 0.1 |              |  |              | 0.2 |  |  |  | 0.2 | 
|Compensation for loss of office                                        |  |              |    |              |  |              |    |  |  |  | 0.8 | 
|Payments to past directors                                             |  |              | 0.2 |              |  |              | 0.4 |  |  |  | 0.4 | 
|                                                                       |  |              |     |              |  |              |     |  |  |  |     | 
|                                                                       |  |              | 3.1 |              |  |              | 3.8 |  |  |  | 5.7 | 
|Gains made on exercise of share
options and long term incentive
shares |  |              | 0.4 |              |  |              | 1.4 |  |  |  |    | 
|                                                                       |  |              |     |              |  |              |     |  |  |  |     | 
|                                                                       |  |              | 3.5 |              |  |              | 5.2 |  |  |  | 5.7 | 
|                                                                       |  |              |     |              |  |              |     |  |  |  |     | 

Detailed disclosures of Directors individual remuneration, pension
entitlements, share options and long term incentives are given within Item 6
Directors, Senior Management and Employees.

F-19



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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

6. EMPLOYEE INFORMATION

The weighted average number of persons (including Executive Directors) employed
by the Group during the year is analyzed below by type of work:

|                           |  |              |       |              |  |              |       |  |  |  |        | 
|-------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ----- |  |  |  | ------ | 
|                           |  | 12 months to |       | 12 months to |  | 12 months to
|                           |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|                           |  | Number       |       | Number       |  | Number      
|                           |  |              |       |              |  |             
|Production and development |  |              | 4,201 |              |  |              | 4,587 |  |  |  | 4,962  | 
|Distribution and selling   |  |              | 2,834 |              |  |              | 3,140 |  |  |  | 3,262  | 
|Administration             |  |              | 1,720 |              |  |              | 1,792 |  |  |  | 1,827  | 
|                           |  |              |       |              |  |              |       |  |  |  |        | 
|                           |  |              | 8,755 |              |  |              | 9,519 |  |  |  | 10,051 | 
|                           |  |              |       |              |  |              |       |  |  |  |        | 

|                                                                     |  |              |       |              |  |              |       |  |  |  |       | 
|-------------------------------------------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ----- |  |  |  | ----- | 
|                                                                     |  | 12 months to |       | 12 months to |  | 12 months to
|                                                                     |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|                                                                     |  | £m           |       | £m           |  | £m          
|                                                                     |  |              |       |              |  |             
|Group employment costs  all employees including Executive
Directors |  |              |       |              |  |              |       |  |  |  |       | 
|Aggregate gross wages and salaries                                   |  |              | 301.1 |              |  |              | 337.3 |  |  |  | 376.2 | 
|Employers National Insurance contributions or foreign equivalents    |  |              | 43.2  |              |  |              | 55.3  |  |  |  | 72.5  | 
|Employers pension costs under Group pension schemes                 |  |              | 17.9  |              |  |              | 20.9  |  |  |  | 27.1  | 
|                                                                     |  |              |       |              |  |              |       |  |  |  |       | 
|Total direct costs of employment                                     |  |              | 362.2 |              |  |              | 413.5 |  |  |  | 475.8 | 
|                                                                     |  |              |       |              |  |              |       |  |  |  |       | 

7. NET INTEREST PAYABLE

|                                                                 |  |              |       |              |  |              |       |   |  |  |       |  
|---------------------------------------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ----- | - |  |  | ----- | -
|                                                                 |  | 12 months to |       | 12 months to |  | 12 months to
|                                                                 |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|                                                                 |  | £m           |       | £m           |  | £m          
|                                                                 |  |              |       |              |  |             
|Interest payable and similar charges                             |  |              |       |              |  |              |       |   |  |  |       |  
|On bank loans and overdrafts                                     |  |              | (9.7  | )            |  |              | (3.5  | ) |  |  | (1.9  | )
|On other loans                                                   |  |              | (9.5  | )            |  |              | (13.3 | ) |  |  | (6.9  | )
|Unwinding of discount on decommissioning provision               |  |              | (2.2  | )            |  |              | (2.1  | ) |  |  | (2.8  | )
|                                                                 |  |              |       |              |  |              |       |   |  |  |       |  
|                                                                 |  |              | (21.4 | )            |  |              | (18.9 | ) |  |  | (11.6 | )
|Interest receivable and similar income                           |  |              |       |              |  |              |       |   |  |  |       |  
|Interest on short term deposits and interest bearing investments |  |              | 11.4  |              |  |              | 10.2  |   |  |  | 4.5   |  
|                                                                 |  |              |       |              |  |              |       |   |  |  |       |  
|Net interest payable                                             |  |              | (10.0 | )            |  |              | (8.7  | ) |  |  | (7.1  | )
|                                                                 |  |              |       |              |  |              |       |   |  |  |       |  

Included within interest payable and similar charges, relating to the unwind of
the decommissioning provision, is £0.6m (2001  £0.6m, 2000  £0.6m),
attributable to the Groups joint venture in NMP.

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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. TAX ON PROFIT ON ORDINARY ACTIVITIES

|                                                   |  |              |       |              |  |              |       |   |  |  |       |  
|-------------------------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ----- | - |  |  | ----- | -
|                                                   |  | 12 months to |       | 12 months to |  | 12 months to
|                                                   |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|                                                   |  | (restated)   |       | (restated)   |  |             
|                                                   |  | £m           |       | £m           |  | £m          
|                                                   |  |              |       |              |  |             
|UK corporation tax at 30% (2001  30%, 2000  30%) |  |              |       |              |  |              |       |   |  |  |       |  
|Current                                            |  |              | 11.9  |              |  |              | 23.0  |   |  |  | 4.0   |  
|Double tax relief                                  |  |              | (11.1 | )            |  |              | (15.4 | ) |  |  | (8.2  | )
|                                                   |  |              |       |              |  |              |       |   |  |  |       |  
|                                                   |  |              | 0.8   |              |  |              | 7.6   |   |  |  | (4.2  | )
|Overseas taxation                                  |  |              | 62.1  |              |  |              | 69.3  |   |  |  | 83.9  |  
|Over-provision in respect of prior years           |  |              | (4.9  | )            |  |              | (0.6  | ) |  |  | (18.6 | )
|Share of joint venture and associates              |  |              | 13.3  |              |  |              | 11.7  |   |  |  | 10.1  |  
|                                                   |  |              |       |              |  |              |       |   |  |  |       |  
|Total current tax                                  |  |              | 71.3  |              |  |              | 88.0  |   |  |  | 71.2  |  
|                                                   |  |              |       |              |  |              |       |   |  |  |       |  
|Deferred tax                                       |  |              |       |              |  |              |       |   |  |  |       |  
|Origination and reversal of timing differences     |  |              | 8.8   |              |  |              | 13.8  |   |  |  | 7.1   |  
|Prior year deferred tax movement                   |  |              | 2.2   |              |  |              | (4.8  | ) |  |  | 16.0  |  
|                                                   |  |              |       |              |  |              |       |   |  |  |       |  
|                                                   |  |              | 11.0  |              |  |              | 9.0   |   |  |  | 23.1  |  
|                                                   |  |              |       |              |  |              |       |   |  |  |       |  
|Tax before exceptional items                       |  |              | 82.3  |              |  |              | 97.0  |   |  |  | 94.3  |  
|Exceptional items                                  |  |              | (2.4  | )            |  |              | (0.5  | ) |  |  | (9.2  | )
|                                                   |  |              |       |              |  |              |       |   |  |  |       |  
|                                                   |  |              | 79.9  |              |  |              | 96.5  |   |  |  | 85.1  |  
|                                                   |  |              |       |              |  |              |       |   |  |  |       |  

The Groups tax charge for the 12 months ended December 31, 2002 has benefited
from a net over-provision in respect of prior years of £2.6m (net movement
between current and deferred tax). This is principally as a result of the
favorable settlement of earlier years taxation issues. Furthermore, as a
result of the purchase of the 45% minority interest in Amersham Biosciences in
the 12 months ended December 31, 2002 and the subsequent formation of a US
consolidated tax group, it has been possible to recognize certain tax losses in
the US. The deferred tax benefit arising has been treated as an exceptional
item.

Profit on ordinary activities before taxes as shown in the consolidated profit
and loss account is analyzed over its component parts as follows:

|               |  |              |       |              |  |              |       |  |  |  |       | 
|-------------- |  | ------------ | ----- | ------------ |  | ------------ | ----- |  |  |  | ----- | 
|               |  | 12 months to |       | 12 months to |  | 12 months to
|               |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|               |  | £m           |       | £m           |  | £m          
|               |  |              |       |              |  |             
|United Kingdom |  |              | 10.3  |              |  |              | 12.8  |  |  |  | 13.5  | 
|Overseas       |  |              | 183.2 |              |  |              | 301.5 |  |  |  | 250.2 | 
|               |  |              |       |              |  |              |       |  |  |  |       | 
|               |  |              | 193.5 |              |  |              | 314.3 |  |  |  | 263.7 | 
|               |  |              |       |              |  |              |       |  |  |  |       | 

At December 31, 2002, certain worldwide subsidiaries had tax loss
carry-forwards, the combined tax effect of which is approximately £25.7m.
These carry forward amounts expire as follows:

|                    |  |    |      | 
|------------------- |  | -- | ---- | 
|Year                |  | £m
|                    |  |   
|2003                |  |    |     | 
|2004                |  |    |     | 
|2005                |  |    | 0.5  | 
|2006                |  |    | 1.2  | 
|2007                |  |    | 0.3  | 
|2008 and thereafter |  |    | 23.7 | 
|                    |  |    |      | 
|Total               |  |    | 25.7 | 
|                    |  |    |      | 

F-21



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Reconciliation of current tax charge to statuto rate on profits

|                                                                                                                           |  |              |       |              |  |              |       |   |  |  |       |  
|-------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ----- | - |  |  | ----- | -
|                                                                                                                           |  | 12 months to |       | 12 months to |  | 12 months to
|                                                                                                                           |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|                                                                                                                           |  | (restated)   |       | (restated)   |  |             
|                                                                                                                           |  | £m           |       | £m           |  | £m          
|                                                                                                                           |  |              |       |              |  |             
|Profit on ordinary activities before tax before exceptional
items                                                          |  |              | 220.5 |              |  |              | 267.7 |   |  |  | 263.7 |  
|Profit on ordinary activities multiplied by the standard rate
of corporation tax in the UK of 30% (2001  30%, 2000  30%) |  |              | 66.2  |              |  |              | 80.3  |   |  |  | 79.1  |  
|Effects of:                                                                                                                |  |              |       |              |  |              |       |   |  |  |       |  
|Adjustments in respect of prior period                                                                                     |  |              | (4.9  | )            |  |              | (0.6  | ) |  |  | (18.6 | )
|Adjustments in respect of foreign tax rates                                                                                |  |              | 3.5   |              |  |              | 4.6   |   |  |  | 7.4   |  
|Expenses not deductible for tax purposes:                                                                                  |  |              |       |              |  |              |       |   |  |  |       |  
|Non tax deductible goodwill                                                                                                |  |              | 3.8   |              |  |              | 5.1   |   |  |  | 11.7  |  
|Other                                                                                                                      |  |              | 2.3   |              |  |              | 0.8   |   |  |  | 1.7   |  
|Timing differences:                                                                                                        |  |              |       |              |  |              |       |   |  |  |       |  
|Capital allowances in excess of depreciation                                                                               |  |              | (0.2  | )            |  |              | (0.8  | ) |  |  | (8.0  | )
|Tax deductible goodwill                                                                                                    |  |              | (3.8  | )            |  |              | (3.8  | ) |  |  | (3.8  | )
|Unrealized stock profit                                                                                                    |  |              | 6.7   |              |  |              | (0.1  | ) |  |  | 4.8   |  
|Research and development credits                                                                                           |  |              | (5.0  | )            |  |              | (3.9  | ) |  |  | (3.9  | )
|Unutilized tax losses                                                                                                      |  |              | 2.7   |              |  |              | 6.4   |   |  |  | 0.8   |  
|                                                                                                                           |  |              |       |              |  |              |       |   |  |  |       |  
|                                                                                                                           |  |              | 71.3  |              |  |              | 88.0  |   |  |  | 71.2  |  
|Exceptional items                                                                                                          |  |              | (2.4  | )            |  |              | (0.5  | ) |  |  |      |  
|                                                                                                                           |  |              |       |              |  |              |       |   |  |  |       |  
|                                                                                                                           |  |              | 68.9  |              |  |              | 87.5  |   |  |  | 71.2  |  
|                                                                                                                           |  |              |       |              |  |              |       |   |  |  |       |  

9. DIVIDENDS PAID AND PROPOSED

|                                                                         |  |              |      |              |  |              |      |  |  |  |      | 
|------------------------------------------------------------------------ |  | ------------ | ---- | ------------ |  | ------------ | ---- |  |  |  | ---- | 
|                                                                         |  | 12 months to |      | 12 months to |  | 12 months to
|                                                                         |  | Dec 31, 00   |      | Dec 31, 01   |  | Dec 31, 02  
|                                                                         |  | £m           |      | £m           |  | £m          
|                                                                         |  |              |      |              |  |             
|Paid  interim dividend of 2.65p per
share(2001  2.35p; 2000  2.15p)   |  |              | 13.5 |              |  |              | 14.9 |  |  |  | 21.3 | 
|Proposed  final dividend of 5.15p
per share(2001  4.75p; 2000  4.25p) |  |              | 26.9 |              |  |              | 30.3 |  |  |  | 36.0 | 
|                                                                         |  |              |      |              |  |              |      |  |  |  |      | 
|                                                                         |  |              | 40.4 |              |  |              | 45.2 |  |  |  | 57.3 | 
|                                                                         |  |              |      |              |  |              |      |  |  |  |      | 

Dividends paid of £21.3m for the 12 months to December 31, 2002, contains £2.9m
relating to the final 2001 dividend paid to holders of the 57.5m new ordinary
shares which were issued by means of a placing on March 18, 2002.

A final dividend of 5.15p per share is proposed, bringing the total dividend
for the year to 7.8p per share.

F-22



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

10. EARNINGS PER ORDINARY SHARE

Basic earnings per ordinary share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue in the year, excluding those held by employee share
trusts. For diluted earnings per ordinary share, the weighted average number
of ordinary shares is adjusted to assume conversion of all potentially dilutive
ordinary shares.

The calculation of basic and diluted earnings per ordinary share and earnings
per ordinary share before exceptional items and goodwill amortization is based
on the following attributable profit and weighted average number of shares.

|                                                                                       |  |              |        |              |  |              |       |   |  |    |        |   |  |  |       |   |  |  |        |   |  |  |       |  
|-------------------------------------------------------------------------------------- |  | ------------ | ------ | ------------ |  | ------------ | ----- | - |  | -- | ------ | - |  |  | ----- | - |  |  | ------ | - |  |  | ----- | -
|                                                                                       |  | 12 months to |        | 12 months to |  | 12 months to
|                                                                                       |  | Dec 31, 00   |        | Dec 31, 01   |  | Dec 31, 02  
|                                                                                       |  | (restated)   |        | (restated)   |  |             
|                                                                                       |  |              |        |              |  |             
|                                                                                       |  | £m           |        | p            |  | £m           |       | p |  | £m |        | p
|                                                                                       |  |              |        |              |  |              |       |   |  |    |        |  
|Attributable profit                                                                    |  |              |        |              |  |              |       |   |  |    |        |   |  |  |       |   |  |  |        |   |  |  |       |  
|Profit attributable to shareholders  basic                                            |  |              | 107.0  |              |  |              | 17.0  |   |  |    | 210.7  |   |  |  | 33.2  |   |  |  | 178.7  |   |  |  | 26.1  |  
|                                                                                       |  |              |        |              |  |              |       |   |  |    |        |   |  |  |       |   |  |  |        |   |  |  |       |  
|Add back the following items:                                                          |  |              |        |              |  |              |       |   |  |    |        |   |  |  |       |   |  |  |        |   |  |  |       |  
|Exceptional items                                                                      |  |              | 27.0   |              |  |              | 4.3   |   |  |    | (46.6  | ) |  |  | (7.3  | ) |  |  |       |   |  |  |      |  
|Goodwill amortization                                                                  |  |              | 10.7   |              |  |              | 1.7   |   |  |    | 11.7   |   |  |  | 1.9   |   |  |  | 36.6   |   |  |  | 5.3   |  
|Adjust for related amounts of:                                                         |  |              |        |              |  |              |       |   |  |    |        |   |  |  |       |   |  |  |        |   |  |  |       |  
|Taxation                                                                               |  |              | (2.4   | )            |  |              | (0.4  | ) |  |    | (0.5   | ) |  |  | (0.1  | ) |  |  | (9.2   | ) |  |  | (1.3  | )
|Minority interest                                                                      |  |              | (4.2   | )            |  |              | (0.7  | ) |  |    | (6.7   | ) |  |  | (1.1  | ) |  |  | (1.3   | ) |  |  | (0.2  | )
|                                                                                       |  |              |        |              |  |              |       |   |  |    |        |   |  |  |       |   |  |  |        |   |  |  |       |  
|Profit attributable to shareholders before
exceptional items and goodwill amortization |  |              | 138.1  |              |  |              | 21.9  |   |  |    | 168.6  |   |  |  | 26.6  |   |  |  | 204.8  |   |  |  | 29.9  |  
|                                                                                       |  |              |        |              |  |              |       |   |  |    |        |   |  |  |       |   |  |  |        |   |  |  |      
|Average number of shares                                                               |  |              |        |              |  |              |       |   |  |    |        |   |  |  |       |   |  |  |        |   |  |  |       |  
|Basic                                                                                  |  |              | 630.9m |              |  |              |       |   |  |    | 634.4m |   |  |  |       |   |  |  | 684.7m |   |  |  |       |  
|Dilution effect of outstanding share options                                           |  |              | 7.4m   |              |  |              |       |   |  |    | 4.3m   |   |  |  |       |   |  |  | 4.0m   |   |  |  |       |  
|                                                                                       |  |              |        |              |  |              |       |   |  |    |        |   |  |  |       |   |  |  |        |   |  |  |       |  
|Diluted                                                                                |  |              | 638.3m |              |  |              |       |   |  |    | 638.7m |   |  |  |       |   |  |  | 688.7m |   |  |  |       |  
|                                                                                       |  |              |        |              |  |              |       |   |  |    |        |   |  |  |       |   |  |  |        |   |  |  |      
|Earnings per ordinary share                                                            |  |              |        |              |  |              |       |   |  |    |        |   |  |  |       |   |  |  |        |   |  |  |       |  
|- Basic                                                                                |  |              |        |              |  |              | 17.0p |   |  |    |        |   |  |  | 33.2p |   |  |  |        |   |  |  | 26.1p |  
|- Before exceptional items and goodwill
amortization                                   |  |              |        |              |  |              | 21.9p |   |  |    |        |   |  |  | 26.6p |   |  |  |        |   |  |  | 29.9p |  
|- Diluted (after exceptional items and
goodwill amortization)                          |  |              |        |              |  |              | 16.8p |   |  |    |        |   |  |  | 33.0p |   |  |  |        |   |  |  | 25.9p |  
|                                                                                       |  |              |        |              |  |              |       |   |  |    |        |   |  |  |       |   |  |  |        |   |  |  |       |  

Earnings per ordinary share before exceptional items and goodwill amortization
are presented in order to show the impact on earnings of non-recurring items
and goodwill.

F-23



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

11. INTANGIBLE FIXED ASSETS

|                                                                                   |  |          |       |                   |  |       |      |   |  |  |       |  
|---------------------------------------------------------------------------------- |  | -------- | ----- | ----------------- |  | ----- | ---- | - |  |  | ----- | -
|                                                                                   |  | Goodwill |       | Other Intangibles |  | Total
|                                                                                   |  | £m       |       | £m                |  | £m   
|                                                                                   |  |          |       |                   |  |      
|Cost                                                                               |  |          |       |                   |  |       |      |   |  |  |       |  
|At December 31, 2000                                                               |  |          | 137.2 |                   |  |       | 61.2 |   |  |  | 198.4 |  
|Foreign currency translation                                                       |  |          | 3.2   |                   |  |       | 0.1  |   |  |  | 3.3   |  
|Additions                                                                          |  |          | 6.5   |                   |  |       | 12.0 |   |  |  | 18.5  |  
|Disposals                                                                          |  |          |      |                   |  |       | (0.3 | ) |  |  | (0.3  | )
|                                                                                   |  |          |       |                   |  |       |      |   |  |  |       |  
|At December 31, 2001                                                               |  |          | 146.9 |                   |  |       | 73.0 |   |  |  | 219.9 |  
|                                                                                   |  |          |       |                   |  |       |      |   |  |  |       |  
|Foreign currency translation                                                       |  |          | (54.6 | )                 |  |       | 11.5 |   |  |  | (43.1 | )
|Acquisitions of subsidiaries                                                       |  |          |      |                   |  |       | 3.9  |   |  |  | 3.9   |  
|Goodwill subsumed on purchase
of 45% minority interest in
Amersham Biosciences     |  |          | (79.3 | )                 |  |       |     |   |  |  | (79.3 | )
|Additions                                                                          |  |          | 744.5 |                   |  |       | 6.4  |   |  |  | 750.9 |  
|Disposals                                                                          |  |          |      |                   |  |       | (6.3 | ) |  |  | (6.3  | )
|                                                                                   |  |          |       |                   |  |       |      |   |  |  |       |  
|At December 31, 2002                                                               |  |          | 757.5 |                   |  |       | 88.5 |   |  |  | 846.0 |  
|                                                                                   |  |          |       |                   |  |       |      |   |  |  |       |  
|Amortization                                                                       |  |          |       |                   |  |       |      |   |  |  |       |  
|At December 31, 2000                                                               |  |          | 23.8  |                   |  |       | 25.1 |   |  |  | 48.9  |  
|Foreign currency translation                                                       |  |          | (0.2  | )                 |  |       |     |   |  |  | (0.2  | )
|Disposals                                                                          |  |          |      |                   |  |       |     |   |  |  |      |  
|Charge for the year                                                                |  |          | 11.7  |                   |  |       | 6.8  |   |  |  | 18.5  |  
|                                                                                   |  |          |       |                   |  |       |      |   |  |  |       |  
|At December 31, 2001                                                               |  |          | 35.3  |                   |  |       | 31.9 |   |  |  | 67.2  |  
|                                                                                   |  |          |       |                   |  |       |      |   |  |  |       |  
|Foreign currency translation                                                       |  |          | (3.2  | )                 |  |       | 6.4  |   |  |  | 3.2   |  
|Disposals                                                                          |  |          |      |                   |  |       | (4.5 | ) |  |  | (4.5  | )
|Amortization subsumed on
purchase of 45% minority
interest in Amersham
Biosciences |  |          | (15.4 | )                 |  |       |     |   |  |  | (15.4 | )
|Charge for the year                                                                |  |          | 36.6  |                   |  |       | 7.7  |   |  |  | 44.3  |  
|                                                                                   |  |          |       |                   |  |       |      |   |  |  |       |  
|At December 31, 2002                                                               |  |          | 53.3  |                   |  |       | 41.5 |   |  |  | 94.8  |  
|                                                                                   |  |          |       |                   |  |       |      |   |  |  |       |  
|                                                                                   |  |          |       |                   |  |       |      |   |  |  |       |  
|Net book value                                                                     |  |          |       |                   |  |       |      |   |  |  |       |  
|At December 31, 2002                                                               |  |          | 704.2 |                   |  |       | 47.0 |   |  |  | 751.2 |  
|                                                                                   |  |          |       |                   |  |       |      |   |  |  |       |  
|At December 31, 2001                                                               |  |          | 111.6 |                   |  |       | 41.1 |   |  |  | 152.7 |  
|                                                                                   |  |          |       |                   |  |       |      |   |  |  |       |  

Additions to goodwill during the year to December 31, 2002 amounted to £744.5m;
£692.3m arose on the purchase of the 45% minority interest in Amersham
Biosciences, (including 45% of Amersham Biosciences goodwill of £63.9m), and
£52.2m arose on other acquisitions see note 24.

Additions to goodwill during the year to December 31, 2001 primarily arose on
the acquisition of Dan-Process A/S.

Additions to other intangibles of £6.4m (2001  £12.0m) comprise a number of
patents acquired and license agreements entered into by the Group.

F-24



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

12. TANGIBLE FIXED ASSETS

|                                  |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|--------------------------------- |  | --------- | ----- | --------- |  | -------------- | ----- | ------------ |  | ------ | ----- | - |  |  | ----- | - |  |  | ----- | -
|                                  |  |           |       |           |  | Plant          |       | Fixtures,    |  | Assets |       |   |  | 
|                                  |  | Land and  |       | and       |  | fittings tools |       | under        |  |        |       |  
|                                  |  | buildings |       | machinery |  | and equipment  |       | construction |  | Total 
|                                  |  | £m        |       | £m        |  | £m             |       | £m           |  | £m    
|                                  |  |           |       |           |  |                |       |              |  |       
|Cost                              |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|At December 31, 2000              |  |           | 249.8 |           |  |                | 232.2 |              |  |        | 122.9 |   |  |  | 72.5  |   |  |  | 677.4 |  
|Foreign currency translation      |  |           | (1.0  | )         |  |                | (2.1  | )            |  |        | (1.7  | ) |  |  | 0.1   |   |  |  | (4.7  | )
|Transfers                         |  |           | 9.9   |           |  |                | 21.6  |              |  |        | 16.3  |   |  |  | (47.8 | ) |  |  |      |  
|Additions                         |  |           | 9.3   |           |  |                | 22.2  |              |  |        | 30.3  |   |  |  | 32.7  |   |  |  | 94.5  |  
|Disposals                         |  |           | (8.2  | )         |  |                | (22.6 | )            |  |        | (17.7 | ) |  |  | (0.4  | ) |  |  | (48.9 | )
|                                  |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|At December 31, 2001              |  |           | 259.8 |           |  |                | 251.3 |              |  |        | 150.1 |   |  |  | 57.1  |   |  |  | 718.3 |  
|                                  |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|Foreign currency translation      |  |           | 9.7   |           |  |                | 14.3  |              |  |        | 0.7   |   |  |  | 3.2   |   |  |  | 27.9  |  
|Adjustment relating to fair value |  |           | 10.2  |           |  |                | 3.2   |              |  |        |      |   |  |  |      |   |  |  | 13.4  |  
|Acquisition of subsidiaries       |  |           |      |           |  |                | 3.4   |              |  |        | 2.8   |   |  |  |      |   |  |  | 6.2   |  
|Transfers                         |  |           | 12.1  |           |  |                | 18.2  |              |  |        | 2.2   |   |  |  | (32.5 | ) |  |  |      |  
|Transfers to current assets       |  |           |      |           |  |                |      |              |  |        | (2.4  | ) |  |  |      |   |  |  | (2.4  | )
|Additions                         |  |           | 12.7  |           |  |                | 17.2  |              |  |        | 28.1  |   |  |  | 93.3  |   |  |  | 151.3 |  
|Disposals                         |  |           | (1.2  | )         |  |                | (13.7 | )            |  |        | (13.3 | ) |  |  |      |   |  |  | (28.2 | )
|                                  |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|At December 31, 2002              |  |           | 303.3 |           |  |                | 293.9 |              |  |        | 168.2 |   |  |  | 121.1 |   |  |  | 886.5 |  
|                                  |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|                                  |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|Depreciation                      |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|At December 31, 2000              |  |           | 47.0  |           |  |                | 75.5  |              |  |        | 31.4  |   |  |  |      |   |  |  | 153.9 |  
|Foreign currency translation      |  |           | (2.7  | )         |  |                | (1.5  | )            |  |        | (1.1  | ) |  |  |      |   |  |  | (5.3  | )
|Disposals                         |  |           | (2.2  | )         |  |                | (9.8  | )            |  |        | (12.9 | ) |  |  |      |   |  |  | (24.9 | )
|Charge for the year               |  |           | 11.8  |           |  |                | 22.1  |              |  |        | 27.6  |   |  |  |      |   |  |  | 61.5  |  
|                                  |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|At December 31, 2001              |  |           | 53.9  |           |  |                | 86.3  |              |  |        | 45.0  |   |  |  |      |   |  |  | 185.2 |  
|                                  |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|Foreign currency translation      |  |           | 3.9   |           |  |                | 8.2   |              |  |        | 1.9   |   |  |  |      |   |  |  | 14.0  |  
|Transfers                         |  |           |      |           |  |                | 0.7   |              |  |        | (0.7  | ) |  |  |      |   |  |  |      |  
|Transfers to current assets       |  |           |      |           |  |                |      |              |  |        | (1.5  | ) |  |  |      |   |  |  | (1.5  | )
|Disposals                         |  |           | (1.7  | )         |  |                | (10.9 | )            |  |        | (11.7 | ) |  |  |      |   |  |  | (24.3 | )
|Charge for the year               |  |           | 12.4  |           |  |                | 27.2  |              |  |        | 32.7  |   |  |  |      |   |  |  | 72.3  |  
|                                  |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|At December 31, 2002              |  |           | 68.5  |           |  |                | 111.5 |              |  |        | 65.7  |   |  |  |      |   |  |  | 245.7 |  
|                                  |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|                                  |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|Net book value                    |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|At December 31, 2002              |  |           | 234.8 |           |  |                | 182.4 |              |  |        | 102.5 |   |  |  | 121.1 |   |  |  | 640.8 |  
|                                  |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  
|At December 31, 2001              |  |           | 205.9 |           |  |                | 165.0 |              |  |        | 105.1 |   |  |  | 57.1  |   |  |  | 533.1 |  
|                                  |  |           |       |           |  |                |       |              |  |        |       |   |  |  |       |   |  |  |       |  

The net book value of the Groups freehold land and buildings is £232.6m (2001
 £203.6m). Included in the cost of land and buildings is
£3.2m (2001  £3.0m), plant and machinery £nil, (2001  £nil), and £0.8m (2001  £0.8m) in
fixtures, fittings, tools and equipment, in respect of assets held under
finance leases for the Group. Depreciation on assets held under finance
leases amounted to £0.3m (2001  £0.4m). Accumulated depreciation on assets
held under finance leases amounted to £1.4m in 2002 (2001  £1.8m).

The £0.9m (2001  £nil) net book value transferred to current assets relates
to demonstration equipment reclassified to within finished goods stock.

F-25



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

13. FIXED ASSET INVESTMENTS

|                                                                        |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  
|----------------------------------------------------------------------- |  | ------------- | ---- | ------------- |  | ---------- | ---- | ----------- |  | ----- | ---- | - |  |  | ---- | - |  |  | ----- | -
|                                                                        |  | Investment in |      | Joint venture |  | Associates |      | Trade       |  | Total
|                                                                        |  | own shares    |      |               |  |            |      | investments |  |      
|                                                                        |  | £m            |      | £m            |  | £m         |      | £m          |  | £m   
|                                                                        |  |               |      |               |  |            |      |             |  |      
|Cost or valuation                                                       |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  
|At December 31, 2000                                                    |  |               | 18.6 |               |  |            | 66.1 |             |  |       | 3.8  |   |  |  | 18.4 |   |  |  | 106.9 |  
|Foreign currency translation                                            |  |               | 0.8  |               |  |            | (7.4 | )           |  |       | (0.1 | ) |  |  | (0.3 | ) |  |  | (7.0  | )
|Transfers to employees                                                  |  |               | (3.0 | )             |  |            |     |             |  |       |     |   |  |  |     |   |  |  | (3.0  | )
|Additions                                                               |  |               | 4.9  |               |  |            |     |             |  |       |     |   |  |  | 7.3  |   |  |  | 12.2  |  
|Disposals                                                               |  |               |     |               |  |            |     |             |  |       |     |   |  |  | (6.0 | ) |  |  | (6.0  | )
|Share of retained profit                                                |  |               |     |               |  |            | 8.4  |             |  |       |     |   |  |  |     |   |  |  | 8.4   |  
|                                                                        |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  
|At December 31, 2001                                                    |  |               | 21.3 |               |  |            | 67.1 |             |  |       | 3.7  |   |  |  | 19.4 |   |  |  | 111.5 |  
|                                                                        |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  
|Foreign currency translation                                            |  |               | (0.9 | )             |  |            | (0.6 | )           |  |       |     |   |  |  | (0.9 | ) |  |  | (2.4  | )
|Transfers to employees                                                  |  |               | (3.9 | )             |  |            |     |             |  |       |     |   |  |  |     |   |  |  | (3.9  | )
|Fair value adjustments
relating to the purchase of
Amersham Biosciences |  |               |     |               |  |            |     |             |  |       |     |   |  |  | (1.2 | ) |  |  | (1.2  | )
|Transfer to subsidiary                                                  |  |               |     |               |  |            |     |             |  |       |     |   |  |  | (2.6 | ) |  |  | (2.6  | )
|Additions                                                               |  |               | 1.8  |               |  |            |     |             |  |       |     |   |  |  | 3.4  |   |  |  | 5.2   |  
|Disposals                                                               |  |               |     |               |  |            |     |             |  |       |     |   |  |  | (5.3 | ) |  |  | (5.3  | )
|Share of retained profit                                                |  |               |     |               |  |            | 6.5  |             |  |       |     |   |  |  |     |   |  |  | 6.5   |  
|                                                                        |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  
|At December 31, 2002                                                    |  |               | 18.3 |               |  |            | 73.0 |             |  |       | 3.7  |   |  |  | 12.8 |   |  |  | 107.8 |  
|                                                                        |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  
|                                                                        |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  
|Provision                                                               |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  
|At December 31, 2000                                                    |  |               | 0.9  |               |  |            |     |             |  |       | 1.5  |   |  |  | 0.8  |   |  |  | 3.2   |  
|Charge for the year                                                     |  |               | 0.6  |               |  |            |     |             |  |       | 1.2  |   |  |  | 4.4  |   |  |  | 6.2   |  
|                                                                        |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  
|At December 31, 2001                                                    |  |               | 1.5  |               |  |            |     |             |  |       | 2.7  |   |  |  | 5.2  |   |  |  | 9.4   |  
|                                                                        |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  
|Foreign currency translation                                            |  |               |     |               |  |            |     |             |  |       |     |   |  |  | (0.2 | ) |  |  | (0.2  | )
|Disposals                                                               |  |               |     |               |  |            |     |             |  |       |     |   |  |  | (3.2 | ) |  |  | (3.2  | )
|Charge for the year                                                     |  |               | 0.4  |               |  |            |     |             |  |       | 1.0  |   |  |  | 1.0  |   |  |  | 2.4   |  
|                                                                        |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  
|At December 31, 2002                                                    |  |               | 1.9  |               |  |            |     |             |  |       | 3.7  |   |  |  | 2.8  |   |  |  | 8.4   |  
|                                                                        |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  
|Net book value                                                          |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  
|At December 31, 2002                                                    |  |               | 16.4 |               |  |            | 73.0 |             |  |       |     |   |  |  | 10.0 |   |  |  | 99.4  |  
|                                                                        |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  
|At December 31, 2001                                                    |  |               | 19.8 |               |  |            | 67.1 |             |  |       | 1.0  |   |  |  | 14.2 |   |  |  | 102.1 |  
|                                                                        |  |               |      |               |  |            |      |             |  |       |      |   |  |  |      |   |  |  |       |  

Investment in own shares
Investment in own shares is held through a Qualifying Employee Share Ownership
Trust (QUEST), through the Amersham ESOP Trust (A ESOP), and by the Amersham US
Stock Option Plan Trust 2000.

Shares held by the QUEST are issued by the Company and held on trust for
employees. The shares are transferred to employees on the exercise of options
under an authorized Save As You Earn Scheme (Sharesave)

Shares held by A ESOP and the Amersham US Stock Option Plan Trust 2000 are
purchased in the market using funds advanced by the Company and are held on
trust for the employees eligible under the Companys long term incentive plan,
cash options under the Amersham Executive Share Option Scheme 1993 and options
under the Amersham US Stock Option Plan 2000.

The cost of the funds advanced to A ESOP that relate to the Companys long term
incentive plans (LTIP) is amortized in the profit and loss account over the
three-year life of the scheme.

770,057 shares are held by the QUEST, with a market value at December 31, 2002
of £4.3m and a nominal value of £0.04m.

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

545,282 shares are held by the A ESOP, with a market valuation at December 31,
2002 of £3.0m and a nominal value of £0.03m.

2,251,315 shares are held by the Amersham US Stock Option Plan Trust 2000 with
a market valuation at December 31, 2002 of £12.5m and a nominal value of £0.1m.

Dividends have been partially waived for all schemes. 100% of the shares held
by the AESOP and the Amersham US Stock Option Plan Trust 2000 are under option
to employees. None of the QUEST shares are under option to employees.

Transfer to subsidiary
The £2.6m transfer to subsidiary relates to the existing trade investment in
Cimarron Software Inc, which became a subsidiary undertaking in the year.

Market value of listed investments
The market value of listed investments at December 31, 2002 is
£3.6m (2001 
£4.9m) and the carrying value after provisions is £5.5m (2001  £6.3m).

14. STOCKS

|                                    |  |            |       |            |  |  |       | 
|----------------------------------- |  | ---------- | ----- | ---------- |  |  | ----- | 
|                                    |  | Dec 31, 01 |       | Dec 31, 02
|                                    |  | £m         |       | £m        
|                                    |  |            |       |           
|Raw materials and consumables       |  |            | 46.5  |            |  |  | 53.0  | 
|Work in progress                    |  |            | 45.5  |            |  |  | 56.7  | 
|Finished goods and goods for resale |  |            | 88.6  |            |  |  | 98.3  | 
|                                    |  |            |       |            |  |  |       | 
|                                    |  |            | 180.6 |            |  |  | 208.0 | 
|                                    |  |            |       |            |  |  |       | 

The replacement cost of stocks is not materially different from original cost.

15. DEBTORS  AMOUNTS DUE WITHIN ONE YEAR

|                                             |  |            |       |            |  |  |       | 
|-------------------------------------------- |  | ---------- | ----- | ---------- |  |  | ----- | 
|                                             |  | Dec 31, 01 |       | Dec 31, 02
|                                             |  | (restated) |       |           
|                                             |  | £m         |       | £m        
|                                             |  |            |       |           
|Trade debtors                                |  |            | 298.2 |            |  |  | 301.7 | 
|Amounts owed by joint venture and associates |  |            | 1.3   |            |  |  | 1.0   | 
|Other debtors                                |  |            | 34.7  |            |  |  | 21.2  | 
|Prepayments and accrued income               |  |            | 26.6  |            |  |  | 25.3  | 
|                                             |  |            |       |            |  |  |       | 
|                                             |  |            | 360.8 |            |  |  | 349.2 | 
|                                             |  |            |       |            |  |  |       | 

Trade debtors are shown net of the provision for doubtful debts of £7.4m (2001
 £8.1m).

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

16. DEBTORS  AMOUNTS DUE AFTER ONE YEAR

|                               |  |            |      |            |  |  |      | 
|------------------------------ |  | ---------- | ---- | ---------- |  |  | ---- | 
|                               |  | Dec 31, 01 |      |           
|                               |  | (restated) |      | Dec 31,
02
|                               |  | £m         |      | £m        
|                               |  |            |      |           
|Other debtors                  |  |            | 16.7 |            |  |  | 17.3 | 
|Prepayments and accrued income |  |            | 8.7  |            |  |  | 11.1 | 
|Deferred taxation assets       |  |            | 30.0 |            |  |  | 32.9 | 
|                               |  |            |      |            |  |  |      | 
|                               |  |            | 55.4 |            |  |  | 61.3 | 
|                               |  |            |      |            |  |  |      | 

17. SHORT TERM DEPOSITS AND INTEREST BEARING INVESTMENTS

|                                                       |  |            |      |            |  |  |      | 
|------------------------------------------------------ |  | ---------- | ---- | ---------- |  |  | ---- | 
|                                                       |  | Dec 31, 01 |      | Dec 31, 02
|                                                       |  | £m         |      | £m        
|                                                       |  |            |      |           
|Short term deposits included in net debt (see note 33) |  |            | 96.5 |            |  |  | 22.1 | 
|Loan notes                                             |  |            | 2.9  |            |  |  |     | 
|                                                       |  |            |      |            |  |  |      | 
|                                                       |  |            | 99.4 |            |  |  | 22.1 | 
|                                                       |  |            |      |            |  |  |      | 

18. CREDITORS  AMOUNTS DUE WITHIN ONE YEAR

|                                                  |  |            |       |            |  |  |       | 
|------------------------------------------------- |  | ---------- | ----- | ---------- |  |  | ----- | 
|                                                  |  | Dec 31, 01 |       | Dec 31, 02
|                                                  |  | £m         |       | £m        
|                                                  |  |            |       |           
|Loans                                             |  |            |       |            |  |  |       | 
|Short term loan from joint venture and associates |  |            |      |            |  |  | 26.2  | 
|Bank loans and overdrafts                         |  |            | 14.8  |            |  |  | 16.2  | 
|Finance lease obligations                         |  |            | 0.3   |            |  |  | 0.3   | 
|Unsecured loan notes                              |  |            | 15.7  |            |  |  | 1.9   | 
|                                                  |  |            |       |            |  |  |       | 
|                                                  |  |            | 30.8  |            |  |  | 44.6  | 
|                                                  |  |            |       |            |  |  |       | 
|Other creditors                                   |  |            |       |            |  |  |       | 
|Trade creditors                                   |  |            | 86.4  |            |  |  | 71.2  | 
|Amounts owed to joint venture and associates      |  |            | 0.1   |            |  |  | 0.1   | 
|United Kingdom corporation tax                    |  |            | 9.9   |            |  |  | 6.1   | 
|Overseas subsidiary taxation                      |  |            | 108.1 |            |  |  | 128.9 | 
|Other taxes and social security                   |  |            | 19.7  |            |  |  | 27.0  | 
|Other creditors                                   |  |            | 42.9  |            |  |  | 63.0  | 
|Accruals and deferred income                      |  |            | 155.1 |            |  |  | 149.9 | 
|Dividends payable                                 |  |            | 30.3  |            |  |  | 36.0  | 
|                                                  |  |            |       |            |  |  |       | 
|                                                  |  |            | 452.5 |            |  |  | 482.2 | 
|                                                  |  |            |       |            |  |  |       | 
|                                                  |  |            | 483.3 |            |  |  | 526.8 | 
|                                                  |  |            |       |            |  |  |       | 

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

19. CREDITORS  AMOUNTS DUE AFTER ONE YEAR

|                               |  |            |       |            |  |  |       | 
|------------------------------ |  | ---------- | ----- | ---------- |  |  | ----- | 
|                               |  | Dec 31, 01 |       | Dec 31, 02
|                               |  | £m         |       | £m        
|                               |  |            |       |           
|Bank loans and overdrafts      |  |            | 8.7   |            |  |  | 68.5  | 
|Finance lease obligations      |  |            | 2.7   |            |  |  | 2.5   | 
|Unsecured loan notes           |  |            | 136.6 |            |  |  | 121.5 | 
|                               |  |            |       |            |  |  |       | 
|                               |  |            | 148.0 |            |  |  | 192.5 | 
|Other creditors                |  |            | 6.4   |            |  |  | 11.5  | 
|                               |  |            |       |            |  |  |       | 
|                               |  |            | 154.4 |            |  |  | 204.0 | 
|                               |  |            |       |            |  |  |       | 
|Repayments are due as follows: |  |            |       |            |  |  |       | 
|Between one and two years      |  |            | 7.9   |            |  |  | 108.6 | 
|Between two and three years    |  |            | 118.6 |            |  |  | 16.8  | 
|Between three and four years   |  |            | 14.6  |            |  |  | 0.9   | 
|Between four and five years    |  |            | 1.1   |            |  |  | 66.6  | 
|In five years or more          |  |            | 12.2  |            |  |  | 11.1  | 
|                               |  |            |       |            |  |  |       | 
|                               |  |            | 154.4 |            |  |  | 204.0 | 
|                               |  |            |       |            |  |  |       | 

The Company has US$193.0m (2001 
US$213.0m) equivalent to £123.4m (2001 
£152.3m) of private placement unsecured loan notes (see note 20). The
carrying value of these notes includes a fair value adjustment of £3.5m (2001
 £5.4m). The fair value adjustment arose on the acquisition of the notes at
the time of the merger with Nycomed. Of the carrying value,
£1.9m (2001 
£15.7m) is reported in amounts due within one year.

20. DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS

A discussion of the Groups objectives and policies with regard to the use of
financial instruments is found in the Treasury Policy and Liquidity section of
Item 5 Operating and Financial Review and Prospects. Where permitted by
FRS13, disclosures in this note exclude short term debtors and creditors.

(a)  Currency and interest rate composition of financial liabilities of the Group
The following table analyses the currency and interest rate composition of the
Groups financial liabilities at December 31 after taking into account interest
rate and currency swaps. The financial liabilities comprise bank loans and
overdrafts plus any long term contractual obligations to deliver cash or other
financial assets to third parties.

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

|                 |  |              |       |              |  |          |      |       |  |      |     |       |  |          |       |          |  |  |       |  |  |  |      |      |  |  |     |  |  |  |       | 
|---------------- |  | ------------ | ----- | ------------ |  | -------- | ---- | ----- |  | ---- | --- | ----- |  | -------- | ----- | -------- |  |  | ----- |  |  |  | ---- | ---- |  |  | --- |  |  |  | ----- | 
|                 |  | Dec 31, 2002 |       | Dec 31, 2001
|                 |  |              |       |             
|                 |  |              |       |              |  |          |      |       |  | Non- |     |       |  |          |       |          |  |  |       |  |  |  |      | Non- |  |  |     | 
|                 |  | Fixed        |       | Floating     |  | interest |      |       |  |      |     | Fixed |  | Floating |       | interest |  |  |       | 
|                 |  | rate         |       | rate         |  | bearing  |      | Total |  | rate |     | rate  |  | bearing  |       | Total   
|                 |  | £m           |       | £m           |  | £m       |      | £m    |  | £m   |     | £m    |  | £m       |       | £m      
|                 |  |              |       |              |  |          |      |       |  |      |     |       |  |          |       |         
|Sterling         |  |              | 0.3   |              |  |          | 15.6 |       |  |      | 0.1 |       |  |          | 16.0  |          |  |  | 42.6  |  |  |  | 4.2  |      |  |  |    |  |  |  | 46.8  | 
|US dollars       |  |              | 99.2  |              |  |          | 77.7 |       |  |      | 5.1 |       |  |          | 182.0 |          |  |  | 135.5 |  |  |  | 17.8 |      |  |  | 5.2 |  |  |  | 158.5 | 
|Euro             |  |              | 0.8   |              |  |          | 2.6  |       |  |      | 0.2 |       |  |          | 3.6   |          |  |  |      |  |  |  | 2.6  |      |  |  | 0.2 |  |  |  | 2.8   | 
|Danish krone     |  |              | 1.4   |              |  |          | 0.3  |       |  |      | 0.8 |       |  |          | 2.5   |          |  |  | 3.6   |  |  |  | 0.1  |      |  |  | 0.8 |  |  |  | 4.5   | 
|Norwegian kroner |  |              | 0.4   |              |  |          |     |       |  |      | 2.8 |       |  |          | 3.2   |          |  |  | 0.5   |  |  |  | 0.4  |      |  |  |    |  |  |  | 0.9   | 
|Swedish krona    |  |              |      |              |  |          | 0.3  |       |  |      |    |       |  |          | 0.3   |          |  |  |      |  |  |  |     |      |  |  |    |  |  |  |      | 
|Other currencies |  |              | 13.3  |              |  |          | 0.2  |       |  |      |    |       |  |          | 13.5  |          |  |  | 11.3  |  |  |  | 0.8  |      |  |  | 0.2 |  |  |  | 12.3  | 
|                 |  |              |       |              |  |          |      |       |  |      |     |       |  |          |       |          |  |  |       |  |  |  |      |      |  |  |     |  |  |  |       | 
|                 |  |              | 115.4 |              |  |          | 96.7 |       |  |      | 9.0 |       |  |          | 221.1 |          |  |  | 193.5 |  |  |  | 25.9 |      |  |  | 6.4 |  |  |  | 225.8 | 
|                 |  |              |       |              |  |          |      |       |  |      |     |       |  |          |       |          |  |  |       |  |  |  |      |      |  |  |     |  |  |  |       | 

Within financial liabilities of £221.1m (2001  £225.8), £210.9m (2001 -
£178.8m) is included within net debt, £nil (2001  £42.6m) represents the
minority interest share of non-equity redeemable cumulative preference shares
of Amersham Biosciences, and £10.2m (2001  £4.4m) represents other financial
liabilities. In addition a short term loan from the Groups joint venture of
£26.2m (2001  £nil) is included within the analysis of net debt.

The average interest rates for the financial liabilities of the Group at
December 31, together with the periods for which the rates were fixed, are set
out in the table below:

|                 |  |                    |     |                   |  |                   |     |                    |  |                   |     |                   |  |  |     |  |  |  |     |  |  |  |     | 
|---------------- |  | ------------------ | --- | ----------------- |  | ----------------- | --- | ------------------ |  | ----------------- | --- | ----------------- |  |  | --- |  |  |  | --- |  |  |  | --- | 
|                 |  | Dec 31, 2002       |     | Dec 31, 2001     
|                 |  |                    |     |                   | 
|                 |  |                    |     |                   |  | Average years to  |     |                    |  |                   |     | Average years to 
|                 |  | Average interest   |     |                   |  | maturity of       |     |                    |  |                   |     | maturity of      
|                 |  | rate of fixed rate |     | Average years to  |  | non-interest      |     | Average interest   |  | Average years to  |     | non-interest     
|                 |  | liabilities        |     | maturity of fixed |  | bearing financial |     | rate of fixed rate |  | maturity of fixed |     | bearing financial
|                 |  | %                  |     | rate liabilities  |  | liabilities       |     | %                  |  | rate liabilities  |     | liabilities      
|                 |  |                    |     |                   |  |                   |     |                    |  |                   |     |                  
|Sterling         |  |                    | 5.0 |                   |  |                   | 0.0 |                    |  |                   | 1.5 |                   |  |  | 8.0 |  |  |  | n/a |  |  |  |    | 
|US dollars       |  |                    | 8.6 |                   |  |                   | 2.4 |                    |  |                   | 0.0 |                   |  |  | 7.3 |  |  |  | 3.2 |  |  |  | 0.0 | 
|Euro             |  |                    | 3.4 |                   |  |                   | 6.4 |                    |  |                   | 0.5 |                   |  |  |    |  |  |  |    |  |  |  | 1.3 | 
|Danish krone     |  |                    | 6.0 |                   |  |                   | 1.2 |                    |  |                   | 2.7 |                   |  |  | 6.0 |  |  |  | 0.5 |  |  |  | 3.7 | 
|Norwegian kroner |  |                    | 3.9 |                   |  |                   | 1.5 |                    |  |                   | 2.4 |                   |  |  | 4.3 |  |  |  | 1.1 |  |  |  |    | 
|Other currencies |  |                    | 5.5 |                   |  |                   | 1.2 |                    |  |                   |    |                   |  |  | 5.9 |  |  |  | 2.3 |  |  |  |    | 
|                 |  |                    |     |                   |  |                   |     |                    |  |                   |     |                   |  |  |     |  |  |  |     |  |  |  |     | 
|                 |  |                    | 4.2 |                   |  |                   | 1.5 |                    |  |                   | 0.9 |                   |  |  | 7.3 |  |  |  | 2.4 |  |  |  | 0.5 | 
|                 |  |                    |     |                   |  |                   |     |                    |  |                   |     |                   |  |  |     |  |  |  |     |  |  |  |     | 

Financial liabilities are analysed as:

|                                 |  |              |       |              |  |          |      |       |  |      |     |       |  |          |       |          |  |  |       |   |  |  |      |      |  |  |     |  |  |  |       | 
|-------------------------------- |  | ------------ | ----- | ------------ |  | -------- | ---- | ----- |  | ---- | --- | ----- |  | -------- | ----- | -------- |  |  | ----- | - |  |  | ---- | ---- |  |  | --- |  |  |  | ----- | 
|                                 |  | Dec 31, 2002 |       | Dec 31, 2001
|                                 |  |              |       |             
|                                 |  |              |       |              |  |          |      |       |  | Non- |     |       |  |          |       |          |  |  |       |   |  |  |      | Non- |  |  |     | 
|                                 |  | Fixed        |       | Floating     |  | interest |      |       |  |      |     | Fixed |  | Floating |       | interest |  |  |       |  
|                                 |  | rate         |       | rate         |  | bearing  |      | Total |  | rate |     | rate  |  | bearing  |       | Total   
|                                 |  | £m           |       | £m           |  | £m       |      | £m    |  | £m   |     | £m    |  | £m       |       | £m      
|                                 |  |              |       |              |  |          |      |       |  |      |     |       |  |          |       |         
|Bank loans and overdrafts        |  |              | 15.3  |              |  |          | 62.8 |       |  |      | 6.6 |       |  |          | 84.7  |          |  |  | 12.2  |   |  |  | 5.7  |      |  |  | 5.6 |  |  |  | 23.5  | 
|Finance lease obligations        |  |              |      |              |  |          | 2.8  |       |  |      |    |       |  |          | 2.8   |          |  |  |      |   |  |  | 3.0  |      |  |  |    |  |  |  | 3.0   | 
|Unsecured loan notes             |  |              | 123.4 |              |  |          |     |       |  |      |    |       |  |          | 123.4 |          |  |  | 152.3 |   |  |  |     |      |  |  |    |  |  |  | 152.3 | 
|Currency and interest rate swaps |  |              | (31.1 | )            |  |          | 31.1 |       |  |      |    |       |  |          |      |          |  |  | (17.2 | ) |  |  | 17.2 |      |  |  |    |  |  |  |      | 
|Other financial liabilities      |  |              | 7.8   |              |  |          |     |       |  |      | 2.4 |       |  |          | 10.2  |          |  |  | 3.6   |   |  |  |     |      |  |  | 0.8 |  |  |  | 4.4   | 
|Non-equity minority interest     |  |              |      |              |  |          |     |       |  |      |    |       |  |          |      |          |  |  | 42.6  |   |  |  |     |      |  |  |    |  |  |  | 42.6  | 
|                                 |  |              |       |              |  |          |      |       |  |      |     |       |  |          |       |          |  |  |       |   |  |  |      |      |  |  |     |  |  |  |       | 
|                                 |  |              | 115.4 |              |  |          | 96.7 |       |  |      | 9.0 |       |  |          | 221.1 |          |  |  | 193.5 |   |  |  | 25.9 |      |  |  | 6.4 |  |  |  | 225.8 | 
|                                 |  |              |       |              |  |          |      |       |  |      |     |       |  |          |       |          |  |  |       |   |  |  |      |      |  |  |     |  |  |  |       | 

Floating rate interest on bank loans and overdrafts is based on local bank base
rates, and the floating rate interest on swaps is based on LIBOR.

The Groups principal fixed rate debt obligations are three series of US
private placement unsecured loan notes with the following rates and maturities:

F-30



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

|         |  |        |     |               |  |          |      |  |  |              
|-------- |  | ------ | --- | ------------- |  | -------- | ---- |  |  | -------------
|         |  | Amount |     | Interest Rate |  |         
|Series   |  | $ m    |     | %             |  | Maturity
|         |  |        |     |               |  |         
|Series B |  |        | 15  |               |  |          | 8.79 |  |  | February 2005
|Series C |  |        | 163 |               |  |          | 8.77 |  |  | November 2004
|Series D |  |        | 15  |               |  |          | 8.97 |  |  | November 2009

The carrying value of Series C and D notes includes a fair value adjustment of
£3.5m (2001  £5.4m), which arose on the acquisition of the debt instruments at
the time of the merger with Nycomed. The interest rate of US Dollar fixed
rate liabilities is adjusted for the partial unwinding of this fair value
adjustment during the periods reported.

(b)  Currency and interest rate composition of financial assets of the group
The following tables analyse the currency and interest rate composition of the
Groups financial assets at 31 December. The financial assets comprise cash at
bank, short term deposits, trade investments and interest bearing investments
plus any long term contractual rights to receive cash or other financial assets
from third parties.

|                 |  |                      |     |                      |  |         |      |       |  |        |     |      |  |      |      |       |  |          |      |         |  |  |      |  |  |  |       |        |  |  |      |  |  |  |      |  |  |  |       | 
|---------------- |  | -------------------- | --- | -------------------- |  | ------- | ---- | ----- |  | ------ | --- | ---- |  | ---- | ---- | ----- |  | -------- | ---- | ------- |  |  | ---- |  |  |  | ----- | ------ |  |  | ---- |  |  |  | ---- |  |  |  | ----- | 
|                 |  | Dec 31, 2002         |     | Dec 31, 2001        
|                 |  |                      |     |                     
|                 |  | Non interest bearing |     | Non interest bearing
|                 |  |                      |     |                     
|                 |  |                      |     |                      |  |         |      |       |  | Equity |     |      |  |      |      |       |  |          |      |         |  |  |      |  |  |  |       | Equity |  |  |      |  |  |  |      | 
|                 |  | Fixed                |     | Floating             |  | invest- |      |       |  |        |     |      |  |      |      | Fixed |  | Floating |      | invest- |  |  |      |  |  |  |       |       
|                 |  | rate                 |     | rate                 |  | ments   |      | Other |  | Total  |     | rate |  | Rate |      | ments |  | Other    |      | Total  
|                 |  | £m                   |     | £m                   |  | £m      |      | £m    |  | £m     |     | £m   |  | £m   |      | £m    |  | £m       |      | £m     
|                 |  |                      |     |                      |  |         |      |       |  |        |     |      |  |      |      |       |  |          |      |        
|Sterling         |  |                      | 0.2 |                      |  |         | 1.9  |       |  |        | 0.1 |      |  |      | 17.5 |       |  |          | 19.7 |         |  |  | 0.5  |  |  |  | 3.4   |        |  |  |     |  |  |  | 2.3  |  |  |  | 6.2   | 
|US dollars       |  |                      | 0.8 |                      |  |         | 7.9  |       |  |        | 8.0 |      |  |      | 7.4  |       |  |          | 24.1 |         |  |  | 0.9  |  |  |  | 71.5  |        |  |  | 11.8 |  |  |  | 13.7 |  |  |  | 97.9  | 
|Japanese yen     |  |                      |    |                      |  |         | 0.1  |       |  |        |    |      |  |      | 0.1  |       |  |          | 0.2  |         |  |  |     |  |  |  | 7.5   |        |  |  |     |  |  |  |     |  |  |  | 7.5   | 
|Euro             |  |                      | 0.6 |                      |  |         | 4.9  |       |  |        |    |      |  |      | 2.0  |       |  |          | 7.5  |         |  |  | 3.3  |  |  |  | 19.8  |        |  |  |     |  |  |  | 2.4  |  |  |  | 25.5  | 
|Norwegian kroner |  |                      | 0.1 |                      |  |         | 6.5  |       |  |        |    |      |  |      | 0.1  |       |  |          | 6.7  |         |  |  | 18.9 |  |  |  | 6.3   |        |  |  |     |  |  |  |     |  |  |  | 25.2  | 
|Danish krone     |  |                      |    |                      |  |         | 0.5  |       |  |        |    |      |  |      |     |       |  |          | 0.5  |         |  |  | 0.7  |  |  |  | 0.2   |        |  |  |     |  |  |  |     |  |  |  | 0.9   | 
|Swedish krona    |  |                      | 0.1 |                      |  |         | 1.6  |       |  |        |    |      |  |      | 0.3  |       |  |          | 2.0  |         |  |  |     |  |  |  | 0.7   |        |  |  | 1.0  |  |  |  | 0.8  |  |  |  | 2.5   | 
|Other currencies |  |                      | 0.7 |                      |  |         | 5.3  |       |  |        |    |      |  |      | 1.3  |       |  |          | 7.3  |         |  |  | 0.6  |  |  |  | 8.3   |        |  |  |     |  |  |  | 0.9  |  |  |  | 9.8   | 
|                 |  |                      |     |                      |  |         |      |       |  |        |     |      |  |      |      |       |  |          |      |         |  |  |      |  |  |  |       |        |  |  |      |  |  |  |      |  |  |  |       | 
|                 |  |                      | 2.5 |                      |  |         | 28.7 |       |  |        | 8.1 |      |  |      | 28.7 |       |  |          | 68.0 |         |  |  | 24.9 |  |  |  | 117.7 |        |  |  | 12.8 |  |  |  | 20.1 |  |  |  | 175.5 | 
|                 |  |                      |     |                      |  |         |      |       |  |        |     |      |  |      |      |       |  |          |      |         |  |  |      |  |  |  |       |        |  |  |      |  |  |  |      |  |  |  |       | 

Within financial assets of £68.0m (2001  £175.5m), £54.8m (2001  £153.4m) is
included within net debt and £13.2m (2001  £22.1m), represents other financial
assets.

The interest rates on the majority of floating rate financial assets are based
on local market floating rates.

The average interest rates for the financial assets of the group at December
31, together with the period for which the rates were fixed, are as follows:

|                 |  |                    |     |                   |  |                   |     |                    |  |                   |     |                   |  |  |     |  |  |  |     |  |  |  |     | 
|---------------- |  | ------------------ | --- | ----------------- |  | ----------------- | --- | ------------------ |  | ----------------- | --- | ----------------- |  |  | --- |  |  |  | --- |  |  |  | --- | 
|                 |  | Dec 31, 2002       |     | Dec 31, 2001     
|                 |  |                    |     |                   | 
|                 |  |                    |     |                   |  | Average years to  |     |                    |  |                   |     | Average years to 
|                 |  | Average interest   |     |                   |  | maturity of       |     |                    |  |                   |     | maturity of      
|                 |  | rate of fixed rate |     | Average years to  |  | non-interest      |     | Average interest   |  | Average years to  |     | non-interest     
|                 |  | assets             |     | maturity of fixed |  | bearing financial |     | rate of fixed rate |  | maturity of fixed |     | bearing financial
|                 |  | %                  |     | rate assets       |  | Assets            |     | %                  |  | rate assets       |     | assets           
|                 |  |                    |     |                   |  |                   |     |                    |  |                   |     |                  
|Sterling         |  |                    | 3.7 |                   |  |                   | 0.0 |                    |  |                   | 0.0 |                   |  |  | 3.7 |  |  |  | 0.1 |  |  |  | 0.1 | 
|US dollars       |  |                    | 3.9 |                   |  |                   | 0.3 |                    |  |                   | 0.4 |                   |  |  | 8.2 |  |  |  | 1.8 |  |  |  | 0.6 | 
|Japanese yen     |  |                    |    |                   |  |                   |    |                    |  |                   | 0.0 |                   |  |  |    |  |  |  |    |  |  |  |    | 
|Euro             |  |                    | 2.0 |                   |  |                   | 0.0 |                    |  |                   | 0.2 |                   |  |  | 6.8 |  |  |  | 4.3 |  |  |  | 0.0 | 
|Norwegian kroner |  |                    | 2.8 |                   |  |                   | 0.3 |                    |  |                   | 0.8 |                   |  |  | 6.7 |  |  |  | 0.1 |  |  |  |    | 
|Danish krone     |  |                    |    |                   |  |                   |    |                    |  |                   |    |                   |  |  | 1.9 |  |  |  | 8.9 |  |  |  | 0.0 | 
|Swedish krona    |  |                    | 0.2 |                   |  |                   | 0.0 |                    |  |                   | 0.0 |                   |  |  |    |  |  |  |    |  |  |  |    | 
|Other currencies |  |                    | 3.8 |                   |  |                   | 0.0 |                    |  |                   | 0.0 |                   |  |  | 1.8 |  |  |  | 0.1 |  |  |  | 0.0 | 
|                 |  |                    |     |                   |  |                   |     |                    |  |                   |     |                   |  |  |     |  |  |  |     |  |  |  |     | 
|                 |  |                    | 3.3 |                   |  |                   | 0.1 |                    |  |                   | 0.1 |                   |  |  | 6.4 |  |  |  | 1.0 |  |  |  | 0.4 | 
|                 |  |                    |     |                   |  |                   |     |                    |  |                   |     |                   |  |  |     |  |  |  |     |  |  |  |     | 

F-31



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Financial assets are analysed as follows:

|                             |  |              |     |              |  |          |      |       |  |      |      |       |  |          |      |          |  |  |      |  |  |  |       |      |  |  |      |  |  |  |       | 
|---------------------------- |  | ------------ | --- | ------------ |  | -------- | ---- | ----- |  | ---- | ---- | ----- |  | -------- | ---- | -------- |  |  | ---- |  |  |  | ----- | ---- |  |  | ---- |  |  |  | ----- | 
|                             |  | Dec 31, 2002 |     | Dec 31, 2001
|                             |  |              |     |             
|                             |  |              |     |              |  |          |      |       |  | Non- |      |       |  |          |      |          |  |  |      |  |  |  |       | Non- |  |  |      | 
|                             |  | Fixed        |     | Floating     |  | interest |      |       |  |      |      | Fixed |  | Floating |      | interest |  |  |      | 
|                             |  | rate         |     | rate         |  | bearing  |      | Total |  | rate |      | rate  |  | bearing  |      | Total   
|                             |  | £m           |     | £m           |  | £m       |      | £m    |  | £m   |      | £m    |  | £m       |      | £m      
|                             |  |              |     |              |  |          |      |       |  |      |      |       |  |          |      |         
|Cash at bank and in hand     |  |              | 1.7 |              |  |          | 24.3 |       |  |      | 6.7  |       |  |          | 32.7 |          |  |  | 1.2  |  |  |  | 43.3  |      |  |  | 12.4 |  |  |  | 56.9  | 
|Short term deposits          |  |              | 0.4 |              |  |          | 4.4  |       |  |      | 17.3 |       |  |          | 22.1 |          |  |  | 20.0 |  |  |  | 74.4  |      |  |  | 2.1  |  |  |  | 96.5  | 
|Interest bearing investments |  |              |    |              |  |          |     |       |  |      |     |       |  |          |     |          |  |  | 2.9  |  |  |  |      |      |  |  |     |  |  |  | 2.9   | 
|Equity investments           |  |              |    |              |  |          |     |       |  |      | 8.1  |       |  |          | 8.1  |          |  |  |     |  |  |  |      |      |  |  | 12.8 |  |  |  | 12.8  | 
|Other financial assets       |  |              | 0.4 |              |  |          |     |       |  |      | 4.7  |       |  |          | 5.1  |          |  |  | 0.8  |  |  |  |      |      |  |  | 5.6  |  |  |  | 6.4   | 
|                             |  |              |     |              |  |          |      |       |  |      |      |       |  |          |      |          |  |  |      |  |  |  |       |      |  |  |      |  |  |  |       | 
|                             |  |              | 2.5 |              |  |          | 28.7 |       |  |      | 36.8 |       |  |          | 68.0 |          |  |  | 24.9 |  |  |  | 117.7 |      |  |  | 32.9 |  |  |  | 175.5 | 
|                             |  |              |     |              |  |          |      |       |  |      |      |       |  |          |      |          |  |  |      |  |  |  |       |      |  |  |      |  |  |  |       | 

In addition to the financial liabilities and financial assets disclosed above,
the Group has granted put options over shares in Corixa Corporation, Cimarron
Software Inc, Imaging Research Inc. Imaging Research Solutions Ltd and Uppsala
Research Imaging Solutions AB and holds call options over shares in Cimarron
Software Inc., Imaging Research Inc, Imaging Research Solutions Ltd, Uppsala
Research Imaging Solutions AB and Analytica of Branford which meet the
definition of financial instruments. The maximum potential aggregate cash
consideration under these contracts is $71.5 million and £7.2 million. These
options expire by 2006.

(c)  Maturity of financial liabilities
The maturity of the Groups financial liabilities at December 31 is analysed as
follows:

|                                 |  |                |      |               |  |            |     |                 |  |            |       |       |  |  |      |  |  |  |   |  |  |  |       | 
|-------------------------------- |  | -------------- | ---- | ------------- |  | ---------- | --- | --------------- |  | ---------- | ----- | ----- |  |  | ---- |  |  |  | - |  |  |  | ----- | 
|                                 |  |                |      |               |  |            |     |                 |  | Non-equity |       |       |  | 
|                                 |  | Bank loans and |      | Finance lease |  | Unsecured  |     | Other financial |  | minority   |       |      
|                                 |  | overdrafts     |      | obligations   |  | loan notes |     | liabilities     |  | interest   |       | Total
|December 31, 2002                |  | £m             |      | £m            |  | £m         |     | £m              |  | £m         |       | £m   
|                                 |  |                |      |               |  |            |     |                 |  |            |       |      
|Analysis by year of repayment    |  |                |      |               |  |            |     |                 |  |            |       |       |  |  |      |  |  |  |   |  |  |  |       | 
|Due within one year or on demand |  |                | 16.2 |               |  |            | 0.3 |                 |  |            | 1.9   |       |  |  | 1.5  |  |  |  |  |  |  |  | 19.9  | 
|                                 |  |                |      |               |  |            |     |                 |  |            |       |       |  |  |      |  |  |  |   |  |  |  |       | 
|Between one and two years        |  |                | 3.0  |               |  |            | 0.3 |                 |  |            | 102.9 |       |  |  | 1.5  |  |  |  |  |  |  |  | 107.7 | 
|Between two and five years       |  |                | 65.2 |               |  |            | 0.6 |                 |  |            | 9.8   |       |  |  | 7.2  |  |  |  |  |  |  |  | 82.8  | 
|In five years or more            |  |                | 0.3  |               |  |            | 1.6 |                 |  |            | 8.8   |       |  |  |     |  |  |  |  |  |  |  | 10.7  | 
|                                 |  |                |      |               |  |            |     |                 |  |            |       |       |  |  |      |  |  |  |   |  |  |  |       | 
|Due after more than one year     |  |                | 68.5 |               |  |            | 2.5 |                 |  |            | 121.5 |       |  |  | 8.7  |  |  |  |  |  |  |  | 201.2 | 
|                                 |  |                |      |               |  |            |     |                 |  |            |       |       |  |  |      |  |  |  |   |  |  |  |       | 
|Total repayments                 |  |                | 84.7 |               |  |            | 2.8 |                 |  |            | 123.4 |       |  |  | 10.2 |  |  |  |  |  |  |  | 221.1 | 
|                                 |  |                |      |               |  |            |     |                 |  |            |       |       |  |  |      |  |  |  |   |  |  |  |       | 

|                                 |  |                |      |               |  |            |     |                 |  |            |       |       |  |  |     |  |  |  |      |  |  |  |       | 
|-------------------------------- |  | -------------- | ---- | ------------- |  | ---------- | --- | --------------- |  | ---------- | ----- | ----- |  |  | --- |  |  |  | ---- |  |  |  | ----- | 
|                                 |  |                |      |               |  |            |     |                 |  | Non-equity |       |       |  | 
|                                 |  | Bank loans and |      | Finance lease |  | Unsecured  |     | Other financial |  | minority   |       |      
|                                 |  | overdrafts     |      | obligations   |  | loan notes |     | liabilities     |  | interest   |       | Total
|December 31, 2001                |  | £m             |      | £m            |  | £m         |     | £m              |  | £m         |       | £m   
|                                 |  |                |      |               |  |            |     |                 |  |            |       |      
|Analysis by year of repayment    |  |                |      |               |  |            |     |                 |  |            |       |       |  |  |     |  |  |  |      |  |  |  |       | 
|Due within one year or on demand |  |                | 14.8 |               |  |            | 0.3 |                 |  |            | 15.7  |       |  |  | 2.2 |  |  |  |     |  |  |  | 33.0  | 
|                                 |  |                |      |               |  |            |     |                 |  |            |       |       |  |  |     |  |  |  |      |  |  |  |       | 
|Between one and two years        |  |                | 2.0  |               |  |            | 0.3 |                 |  |            | 2.0   |       |  |  | 0.7 |  |  |  |     |  |  |  | 5.0   | 
|Between two and five years       |  |                | 6.7  |               |  |            | 0.7 |                 |  |            | 124.7 |       |  |  | 1.5 |  |  |  |     |  |  |  | 133.6 | 
|In five years or more            |  |                |     |               |  |            | 1.7 |                 |  |            | 9.9   |       |  |  |    |  |  |  | 42.6 |  |  |  | 54.2  | 
|                                 |  |                |      |               |  |            |     |                 |  |            |       |       |  |  |     |  |  |  |      |  |  |  |       | 
|Due after more than one year     |  |                | 8.7  |               |  |            | 2.7 |                 |  |            | 136.6 |       |  |  | 2.2 |  |  |  | 42.6 |  |  |  | 192.8 | 
|                                 |  |                |      |               |  |            |     |                 |  |            |       |       |  |  |     |  |  |  |      |  |  |  |       | 
|Total repayments                 |  |                | 23.5 |               |  |            | 3.0 |                 |  |            | 152.3 |       |  |  | 4.4 |  |  |  | 42.6 |  |  |  | 225.8 | 
|                                 |  |                |      |               |  |            |     |                 |  |            |       |       |  |  |     |  |  |  |      |  |  |  |       | 

The Group has undrawn committed borrowing facilities available to it at
December 31 as follows:

|                                           |  |              |       |              |  |  |       | 
|------------------------------------------ |  | ------------ | ----- | ------------ |  |  | ----- | 
|                                           |  | Dec 31, 2002 |       | Dec 31, 2001
|                                           |  | £m           |       | £m          
|                                           |  |              |       |             
|Expiring within one year                   |  |              |      |              |  |  | 430.0 | 
|Expiring between four years and five years |  |              | 404.3 |              |  |  |      | 
|                                           |  |              |       |              |  |  |       | 
|                                           |  |              | 404.3 |              |  |  | 430.0 | 
|                                           |  |              |       |              |  |  |       | 

(d)  Currency risk exposure
The following table shows the currency exposure of the net monetary assets and
(liabilities) of Group companies at December 31.

F-32



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

The exposures arise where monetary assets and liabilities are denominated in
currencies other than the functional currency of the operating company in which
they are held. The gains or losses on these monetary assets and liabilities
are recorded in the profit and loss account.

|                                         |  |          |      |            |  |     |       |      |  |          |       |       |  |       |      |           |  |         |      |   |  |  |      |   |  |  |       |   |  |  |       |  
|---------------------------------------- |  | -------- | ---- | ---------- |  | --- | ----- | ---- |  | -------- | ----- | ----- |  | ----- | ---- | --------- |  | ------- | ---- | - |  |  | ---- | - |  |  | ----- | - |  |  | ----- | -
|                                         |  |          |      |            |  |     |       |      |  | Japanese |       |       |  |       |      | Norwegian |  | Swedish |      |   |  |  |      |   |  | 
|                                         |  | Sterling |      | US dollars |  | yen |       | Euro |  | kroner   |       | krona |  | Other |      | Total    
|December 31, 2002                        |  | £m       |      | £m         |  | £m  |       | £m   |  | £m       |       | £m    |  | £m    |      | £m       
|                                         |  |          |      |            |  |     |       |      |  |          |       |       |  |       |      |          
|Functional currency of
operating company |  |          |      |            |  |     |       |      |  |          |       |       |  |       |      |           |  |         |      |   |  |  |      |   |  |  |       |   |  |  |       |  
|Sterling                                 |  |          |     |            |  |     | 8.9   |      |  |          | 1.8   |       |  |       | (1.8 | )         |  |         | 7.6  |   |  |  | (0.6 | ) |  |  | (3.2  | ) |  |  | 12.7  |  
|US dollars                               |  |          |     |            |  |     |      |      |  |          |      |       |  |       |     |           |  |         |     |   |  |  |     |   |  |  | (0.1  | ) |  |  | (0.1  | )
|Japanese yen                             |  |          | (0.3 | )          |  |     | 1.6   |      |  |          |      |       |  |       |     |           |  |         |     |   |  |  |     |   |  |  |      |   |  |  | 1.3   |  
|Euro                                     |  |          | 0.9  |            |  |     | 5.6   |      |  |          |      |       |  |       |     |           |  |         | (1.2 | ) |  |  |     |   |  |  | 0.3   |   |  |  | 5.6   |  
|Norwegian kroner                         |  |          | 7.5  |            |  |     | 1.8   |      |  |          | (16.1 | )     |  |       | (6.5 | )         |  |         |     |   |  |  | (0.1 | ) |  |  | (9.4  | ) |  |  | (22.8 | )
|Swedish krona                            |  |          | (3.8 | )          |  |     | (9.8  | )    |  |          | (1.8  | )     |  |       | 7.4  |           |  |         |     |   |  |  |     |   |  |  | 0.2   |   |  |  | (7.8  | )
|Other currencies                         |  |          | (0.1 | )          |  |     | (13.5 | )    |  |          |      |       |  |       | (0.7 | )         |  |         | (5.0 | ) |  |  | (0.1 | ) |  |  |      |   |  |  | (19.4 | )
|                                         |  |          |      |            |  |     |       |      |  |          |       |       |  |       |      |           |  |         |      |   |  |  |      |   |  |  |       |   |  |  |       |  
|                                         |  |          | 4.2  |            |  |     | (5.4  | )    |  |          | (16.1 | )     |  |       | (1.6 | )         |  |         | 1.4  |   |  |  | (0.8 | ) |  |  | (12.2 | ) |  |  | (30.5 | )
|                                         |  |          |      |            |  |     |       |      |  |          |       |       |  |       |      |           |  |         |      |   |  |  |      |   |  |  |       |   |  |  |       |  

|                                         |  |          |      |            |  |     |       |      |  |          |      |       |  |       |       |           |  |         |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|---------------------------------------- |  | -------- | ---- | ---------- |  | --- | ----- | ---- |  | -------- | ---- | ----- |  | ----- | ----- | --------- |  | ------- | ---- | - |  |  | ---- | - |  |  | ---- | - |  |  | ---- | -
|                                         |  |          |      |            |  |     |       |      |  | Japanese |      |       |  |       |       | Norwegian |  | Swedish |      |   |  |  |      |   |  | 
|                                         |  | Sterling |      | US dollars |  | yen |       | Euro |  | kroner   |      | krona |  | Other |       | Total    
|December 31, 2001                        |  | £m       |      | £m         |  | £m  |       | £m   |  | £m       |      | £m    |  | £m    |       | £m       
|                                         |  |          |      |            |  |     |       |      |  |          |      |       |  |       |       |          
|Functional currency of
operating company |  |          |      |            |  |     |       |      |  |          |      |       |  |       |       |           |  |         |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|Sterling                                 |  |          |     |            |  |     | 15.3  |      |  |          | (0.9 | )     |  |       | (11.9 | )         |  |         | 7.0  |   |  |  | 9.7  |   |  |  | (3.0 | ) |  |  | 16.2 |  
|US dollars                               |  |          | 3.4  |            |  |     |      |      |  |          |     |       |  |       |      |           |  |         |     |   |  |  |     |   |  |  | 1.6  |   |  |  | 5.0  |  
|Japanese yen                             |  |          |     |            |  |     | (1.7  | )    |  |          |     |       |  |       |      |           |  |         |     |   |  |  |     |   |  |  |     |   |  |  | (1.7 | )
|Euro                                     |  |          | (0.4 | )          |  |     | 3.7   |      |  |          |     |       |  |       |      |           |  |         | 0.1  |   |  |  | 0.3  |   |  |  | 0.1  |   |  |  | 3.8  |  
|Norwegian kroner                         |  |          | 3.0  |            |  |     | (5.5  | )    |  |          | 2.7  |       |  |       | 4.5   |           |  |         |     |   |  |  | (0.1 | ) |  |  | 0.4  |   |  |  | 5.0  |  
|Swedish krona                            |  |          | 4.0  |            |  |     | (11.6 | )    |  |          | 3.9  |       |  |       | 3.3   |           |  |         | (0.3 | ) |  |  |     |   |  |  | (1.8 | ) |  |  | (2.5 | )
|Other currencies                         |  |          |     |            |  |     | (3.2  | )    |  |          |     |       |  |       |      |           |  |         | 4.0  |   |  |  |     |   |  |  |     |   |  |  | 0.8  |  
|                                         |  |          |      |            |  |     |       |      |  |          |      |       |  |       |       |           |  |         |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|                                         |  |          | 10.0 |            |  |     | (3.0  | )    |  |          | 5.7  |       |  |       | (4.1  | )         |  |         | 10.8 |   |  |  | 9.9  |   |  |  | (2.7 | ) |  |  | 26.6 |  
|                                         |  |          |      |            |  |     |       |      |  |          |      |       |  |       |       |           |  |         |      |   |  |  |      |   |  |  |      |   |  |  |      |  

(e)  Fair values and disclosures
The estimated book values and fair values of the Groups financial instruments
at December 31 are set out below:

Primary financial instruments held or issued to finance the Groups operations

|                              |  |              |        |              |  |            |        |            |  |  |        |   |  |  |        |  
|----------------------------- |  | ------------ | ------ | ------------ |  | ---------- | ------ | ---------- |  |  | ------ | - |  |  | ------ | -
|                              |  | Dec 31, 2002 |        | Dec 31, 2001
|                              |  |              |        |             
|                              |  | Book value   |        | Fair value   |  | Book value |        | Fair value
|                              |  | £m           |        | £m           |  | £m         |        | £m        
|                              |  |              |        |              |  |            |        |           
|Cash at bank1                 |  |              | 32.7   |              |  |            | 32.7   |            |  |  | 56.9   |   |  |  | 56.9   |  
|Short term deposits1          |  |              | 22.1   |              |  |            | 22.1   |            |  |  | 96.5   |   |  |  | 96.5   |  
|Interest bearing investments1 |  |              |       |              |  |            |       |            |  |  | 2.9    |   |  |  | 2.9    |  
|Equity investments2           |  |              | 8.1    |              |  |            | 6.2    |            |  |  | 12.8   |   |  |  | 11.4   |  
|Other financial assets3       |  |              | 5.1    |              |  |            | 5.1    |            |  |  | 6.4    |   |  |  | 6.6    |  
|Bank loans and overdrafts1    |  |              | (84.7  | )            |  |            | (84.7  | )          |  |  | (23.5  | ) |  |  | (23.5  | )
|Non-equity minority interest4 |  |              |       |              |  |            |       |            |  |  | (42.6  | ) |  |  | (42.6  | )
|Finance lease obligations1    |  |              | (2.8   | )            |  |            | (2.8   | )          |  |  | (3.0   | ) |  |  | (3.0   | )
|Other financial liabilities5  |  |              | (10.2  | )            |  |            | (10.2  | )          |  |  | (4.4   | ) |  |  | (4.4   | )
|Unsecured loan notes6         |  |              | (123.4 | )            |  |            | (140.0 | )          |  |  | (152.3 | ) |  |  | (171.0 | )



---

|1 |  | The fair values of cash, short term deposits, interest bearing investments
(excluding subordinated loan notes) and overdrafts approximate to carrying
values due to the short maturity period of these financial assets. The
difference between carrying value and fair value is also considered to be
immaterial for floating rate bank loans and finance lease obligations.
Interest bearing investments included subordinated loan notes that were valued
by discounting the associated future cash flows to December 31 2001. The
difference between carrying value and fair value is considered immaterial.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|2 |  | Equity investments represent equity holdings in trade investments. The fair
value of listed investments is equal to the year end market price.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)



|3 |  | Other financial assets include investments in unit trusts and capital funds
that are valued at market value.                                                                                                                                                                                             
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|4 |  | The non-equity minority interest represents 45% of the 8% non-equity
redeemable cumulative preference shares of Amersham Biosciences, which was
extinguished in 2002 on the purchase of the 45% minority in Amersham
Biosciences.                                                                        
| 
|5 |  | Other financial liabilities largely comprise discounted deferred
consideration on acquisitions, for which book value is not materially different
to fair value.                                                                                                                                          
| 
|6 |  | The book value of the unsecured loan notes includes a fair value adjustment of
£3.5m (2001  £5.4m), that arose as a result of the acquisition of the notes at
the time of the merger with Nycomed. The fair value quoted at December 31 is
based on the present value of future cash flows of the notes.

Derivative financial instruments held to manage interest rate and currency
exposures7

|                                   |  |              |       |              |  |              |      |              |  |           |        |       |  |           |     |       |  |  |       |  |  |  |      |  |  |  |        |   |  |  |      |  
|---------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ---- | ------------ |  | --------- | ------ | ----- |  | --------- | --- | ----- |  |  | ----- |  |  |  | ---- |  |  |  | ------ | - |  |  | ---- | -
|                                   |  | Assets       |       | Liabilities  |  | Assets       |      | Liabilities 
|                                   |  | Dec 31, 2002 |       | Dec 31, 2002 |  | Dec 31, 2001 |      | Dec 31, 2001
|                                   |  |              |       |              |  |              |      |             
|                                   |  | Notional     |       | Fair         |  | Notional     |      | Fair         |  | Notional  |        | Fair  |  | Notional  |     | Fair 
|                                   |  | principal    |       | value        |  | principal    |      | value        |  | principal |        | value |  | principal |     | value
|                                   |  | £m           |       | £m           |  | £m           |      | £m           |  | £m        |        | £m    |  | £m        |     | £m   
|                                   |  |              |       |              |  |              |      |              |  |           |        |       |  |           |     |      
|Interest rate swaps                |  |              | 31.1  |              |  |              |     |              |  |           | (31.1  | )     |  |           | 3.2 |       |  |  | 51.7  |  |  |  | 3.2  |  |  |  | (34.5  | ) |  |  | (1.3 | )
|Forward foreign exchange contracts |  |              | 923.4 |              |  |              | 26.5 |              |  |           | (890.6 | )     |  |           | 3.1 |       |  |  | 900.6 |  |  |  | 17.7 |  |  |  | (873.1 | ) |  |  | (8.1 | )
|                                   |  |              |       |              |  |              |      |              |  |           |        |       |  |           |     |       |  |  |       |  |  |  |      |  |  |  |        |   |  |  |      |  
|Total for financial assets         |  |              | 954.5 |              |  |              | 26.5 |              |  |           |        |       |  |           |     |       |  |  | 952.3 |  |  |  | 20.9 |  |  |  |        |   |  |  |      |  
|                                   |  |              |       |              |  |              |      |              |  |           |        |       |  |           |     |       |  |  |       |  |  |  |      |  |  |  |        |   |  |  |      |  
|Total for financial liabilities    |  |              |       |              |  |              |      |              |  |           | (921.7 | )     |  |           | 6.3 |       |  |  |       |  |  |  |      |  |  |  | (907.6 | ) |  |  | (9.4 | )
|                                   |  |              |       |              |  |              |      |              |  |           |        |       |  |           |     |       |  |  |       |  |  |  |      |  |  |  |        |   |  |  |      |  



|7 |  | Interest rate swaps and forward foreign exchange contracts are stated at
current market values.
|- |  | -----------------------------------------------------------------------------------------------

(f)  Hedges
As explained in Item 5 Operating and Financial Review and Prospects on pages
62  90, the Groups policy is to hedge exposures to interest rate risk and
currency exposures using a variety of derivative financial instruments. Gains
and losses on these instruments are not recognized until the exposure that is
being hedged is itself recognized.

Gains or losses on the fair value of financial instruments are classified as
unrecognized where they have not yet been recorded in the financial statements.
Where gains or losses have crystallized, but are carried forward in the
balance sheet pending their recognition in the profit and loss account in a
future period, they are treated as deferred.

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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table analyses the movement in unrecognized and deferred gains or
losses on hedge instruments during the year to December 31, 2002.

|                                                                               |  |              |       |          |  |          |      |       |  |        |      |          |  |  |       |   |  |  |       |        |  |  |      |  
|------------------------------------------------------------------------------ |  | ------------ | ----- | -------- |  | -------- | ---- | ----- |  | ------ | ---- | -------- |  |  | ----- | - |  |  | ----- | ------ |  |  | ---- | -
|                                                                               |  | Dec 31, 2002
|                                                                               |  |             
|                                                                               |  | Unrecognized |       | Deferred
|                                                                               |  |              |       |         
|                                                                               |  |              |       |          |  |          |      |       |  | Net    |      |          |  |  |       |   |  |  |       | Net   
|                                                                               |  |              |       |          |  |          |      |       |  | gains/ |      |          |  |  |       |   |  |  |       | gains/
|                                                                               |  | Gains        |       | Losses   |  | (losses) |      | Gains |  | Losses |      | (losses)
|                                                                               |  | £m           |       | £m       |  | £m       |      | £m    |  | £m     |      | £m      
|                                                                               |  |              |       |          |  |          |      |       |  |        |      |         
|Unrecognized gains/(losses) on hedges                                          |  |              |       |          |  |          |      |       |  |        |      |          |  |  |       |   |  |  |       |        |  |  |      |  
|At January 1, 2002                                                             |  |              | 13.8  |          |  |          | (8.3 | )     |  |        | 5.5  |          |  |  | 21.9  |   |  |  | (10.8 | )      |  |  | 11.1 |  
|Gains/(losses) arising in previous years that
were recognized in 2002          |  |              | (12.0 | )        |  |          | 8.3  |       |  |        | (3.7 | )        |  |  | (12.7 | ) |  |  | 6.0   |        |  |  | (6.7 | )
|                                                                               |  |              |       |          |  |          |      |       |  |        |      |          |  |  |       |   |  |  |       |        |  |  |      |  
|Gains/(losses) arising before January 1, 2003
that were not recognized in 2002 |  |              | 1.8   |          |  |          |     |       |  |        | 1.8  |          |  |  | 9.2   |   |  |  | (4.8  | )      |  |  | 4.4  |  
|Gains/(losses) arising in 2002 that were not
recognized in 2002                |  |              | 17.5  |          |  |          | (1.0 | )     |  |        | 16.5 |          |  |  | 14.2  |   |  |  | 1.0   |        |  |  | 15.2 |  
|                                                                               |  |              |       |          |  |          |      |       |  |        |      |          |  |  |       |   |  |  |       |        |  |  |      |  
|Unrecognized gains/(losses) on hedges at
December 31, 2002                     |  |              | 19.3  |          |  |          | (1.0 | )     |  |        | 18.3 |          |  |  | 23.4  |   |  |  | (3.8  | )      |  |  | 19.6 |  
|                                                                               |  |              |       |          |  |          |      |       |  |        |      |          |  |  |       |   |  |  |       |        |  |  |      |  
|Of which                                                                       |  |              |       |          |  |          |      |       |  |        |      |          |  |  |       |   |  |  |       |        |  |  |      |  
|Gains/(losses) expected to be recognized in 2003                               |  |              | 17.9  |          |  |          | (1.0 | )     |  |        | 16.9 |          |  |  | 15.5  |   |  |  | (3.8  | )      |  |  | 11.7 |  
|Gains/(losses) expected to be recognized in
2004 or later                      |  |              | 1.4   |          |  |          |     |       |  |        | 1.4  |          |  |  | 7.9   |   |  |  |      |        |  |  | 7.9  |  
|                                                                               |  |              |       |          |  |          |      |       |  |        |      |          |  |  |       |   |  |  |       |        |  |  |      |  

As at December 31, the Company has outstanding foreign exchange contracts with
commercial banks, as set out in the following table

|                                      |  |              |       |              |  |       |        |            |  |           |      |           |  |  |       |  |  |  |        |   |  |  |      | 
|------------------------------------- |  | ------------ | ----- | ------------ |  | ----- | ------ | ---------- |  | --------- | ---- | --------- |  |  | ----- |  |  |  | ------ | - |  |  | ---- | 
|                                      |  | Dec 31, 2002 |       | Dec 31, 2001
|                                      |  |              |       |             
|                                      |  | Principal    |       | Principal    |  |       |        |            |  | Principal |      | Principal |  |  |       | 
|                                      |  | receivable   |       | payable      |  | Total |        | receivable |  | payable   |      | Total    
|                                      |  | £m           |       | £m           |  | £m    |        | £m         |  | £m        |      | £m       
|                                      |  |              |       |              |  |       |        |            |  |           |      |          
|Held to manage
assets and
liabilities |  |              | 525.4 |              |  |       | (507.9 | )          |  |           | 17.5 |           |  |  | 425.8 |  |  |  | (416.9 | ) |  |  | 8.9  | 
|Held to manage
transaction
exposures  |  |              | 398.0 |              |  |       | (382.7 | )          |  |           | 15.3 |           |  |  | 474.8 |  |  |  | (456.2 | ) |  |  | 18.6 | 
|                                      |  |              |       |              |  |       |        |            |  |           |      |           |  |  |       |  |  |  |        |   |  |  |      | 
|                                      |  |              | 923.4 |              |  |       | (890.6 | )          |  |           | 32.8 |           |  |  | 900.6 |  |  |  | (873.1 | ) |  |  | 27.5 | 
|                                      |  |              |       |              |  |       |        |            |  |           |      |           |  |  |       |  |  |  |        |   |  |  |      | 

The contracts held to manage assets and liabilities at 31 December can be
analysed as follows

|                 |  |              |       |              |  |       |        |            |  |           |        |           |  |  |       |  |  |  |        |   |  |  |        |  
|---------------- |  | ------------ | ----- | ------------ |  | ----- | ------ | ---------- |  | --------- | ------ | --------- |  |  | ----- |  |  |  | ------ | - |  |  | ------ | -
|                 |  | Dec 31, 2002 |       | Dec 31, 2001
|                 |  |              |       |             
|                 |  | Principal    |       | Principal    |  |       |        |            |  | Principal |        | Principal |  |  |       | 
|                 |  | receivable   |       | payable      |  | Total |        | receivable |  | payable   |        | Total    
|                 |  | £m           |       | £m           |  | £m    |        | £m         |  | £m        |        | £m       
|                 |  |              |       |              |  |       |        |            |  |           |        |          
|US Dollars       |  |              | 43.5  |              |  |       | (250.1 | )          |  |           | (206.6 | )         |  |  | 41.5  |  |  |  | (197.8 | ) |  |  | (156.3 | )
|Japanese yen     |  |              | 2.9   |              |  |       | (79.2  | )          |  |           | (76.3  | )         |  |  | 5.2   |  |  |  | (99.9  | ) |  |  | (94.7  | )
|Sterling         |  |              | 58.2  |              |  |       | (110.1 | )          |  |           | (51.9  | )         |  |  | 52.3  |  |  |  | (35.7  | ) |  |  | 16.6   |  
|Euros            |  |              | 36.0  |              |  |       | (15.1  | )          |  |           | 20.9   |           |  |  | 99.7  |  |  |  | (44.4  | ) |  |  | 55.3   |  
|Norwegian kroner |  |              | 372.6 |              |  |       | (11.9  | )          |  |           | 360.7  |           |  |  | 154.3 |  |  |  | (15.3  | ) |  |  | 139.0  |  
|Other currencies |  |              | 12.2  |              |  |       | (41.5  | )          |  |           | (29.3  | )         |  |  | 72.1  |  |  |  | (23.8  | ) |  |  | 48.3   |  
|                 |  |              |       |              |  |       |        |            |  |           |        |           |  |  |       |  |  |  |        |   |  |  |        |  
|                 |  |              | 525.4 |              |  |       | (507.9 | )          |  |           | 17.5   |           |  |  | 425.1 |  |  |  | (416.9 | ) |  |  | 8.2    |  
|                 |  |              |       |              |  |       |        |            |  |           |        |           |  |  |       |  |  |  |        |   |  |  |        |  

F-35



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

21 FINANCIAL COMMITMENTS

The Group has commitments to make research and development milestone payments
and payments under license agreements to third parties subject to achievement
of agreed stages of product development. At December 31, 2002 the maximum
amounts payable under these agreements was £10.2m (2001  £24.2m).

22. PROVISIONS FOR LIABILITIES AND CHARGES

|                                                         |  |          |      |              |  |             |      |          |  |            |       |       |  |  |       |   |  |  |      |   |  |  |       |  
|-------------------------------------------------------- |  | -------- | ---- | ------------ |  | ----------- | ---- | -------- |  | ---------- | ----- | ----- |  |  | ----- | - |  |  | ---- | - |  |  | ----- | -
|                                                         |  |          |      |              |  | Decomm-     |      |          |  |            |       |       |  |  |       |   |  |  |      |   |  | 
|                                                         |  |          |      |              |  | issioning   |      | Pensions |  |            |       |       |  |  |       |   |  |  |      |  
|                                                         |  | Deferred |      | and effluent |  | and similar |      | Disposal |  | Other      |       |       |  | 
|                                                         |  | tax      |      | costs        |  | obligations |      | costs    |  | provisions |       | Total
|                                                         |  | £m       |      | £m           |  | £m          |      | £m       |  | £m         |       | £m   
|                                                         |  |          |      |              |  |             |      |          |  |            |       |      
|At December 31, 2000 as previously stated                |  |          | 20.6 |              |  |             | 53.7 |          |  |            | 81.9  |       |  |  | 23.4  |   |  |  | 23.3 |   |  |  | 202.9 |  
|Foreign currency translation                             |  |          | (0.8 | )            |  |             | (0.1 | )        |  |            | (1.6  | )     |  |  | 0.1   |   |  |  |     |   |  |  | (2.4  | )
|Reclassification                                         |  |          |     |              |  |             |     |          |  |            | (3.1  | )     |  |  |      |   |  |  | 3.1  |   |  |  |      |  
|Deferred tax asset in debtors at
January 1, 2001         |  |          | (4.6 | )            |  |             |     |          |  |            |      |       |  |  |      |   |  |  |     |   |  |  | (4.6  | )
|Charged to profit and loss                               |  |          | 4.5  |              |  |             | 12.4 |          |  |            | 13.0  |       |  |  | 8.8   |   |  |  | 6.4  |   |  |  | 45.1  |  
|Utilized during the year                                 |  |          |     |              |  |             | (2.8 | )        |  |            | (9.0  | )     |  |  | (12.6 | ) |  |  | (5.0 | ) |  |  | (29.4 | )
|Transfer of assets                                       |  |          |     |              |  |             |     |          |  |            | 7.0   |       |  |  |      |   |  |  |     |   |  |  | 7.0   |  
|Net transfer of deferred tax assets                      |  |          | 1.4  |              |  |             |     |          |  |            |      |       |  |  |      |   |  |  |     |   |  |  | 1.4   |  
|                                                         |  |          |      |              |  |             |      |          |  |            |       |       |  |  |       |   |  |  |      |   |  |  |       |  
|At December 31, 2001                                     |  |          | 21.1 |              |  |             | 63.2 |          |  |            | 88.2  |       |  |  | 19.7  |   |  |  | 27.8 |   |  |  | 220.0 |  
|Prior year adjustment                                    |  |          | 20.8 |              |  |             |     |          |  |            |      |       |  |  |      |   |  |  |     |   |  |  | 20.8  |  
|                                                         |  |          |      |              |  |             |      |          |  |            |       |       |  |  |       |   |  |  |      |   |  |  |       |  
|At December 31, 2001 as restated                         |  |          | 41.9 |              |  |             | 63.2 |          |  |            | 88.2  |       |  |  | 19.7  |   |  |  | 27.8 |   |  |  | 240.8 |  
|Foreign currency translation                             |  |          | (0.5 | )            |  |             | 1.1  |          |  |            | 0.2   |       |  |  | (1.0  | ) |  |  | 0.2  |   |  |  |      |  
|Transfer of deferred tax assets                          |  |          | 2.9  |              |  |             |     |          |  |            |      |       |  |  |      |   |  |  |     |   |  |  | 2.9   |  
|Transfer to current tax creditor                         |  |          | (2.1 | )            |  |             |     |          |  |            |      |       |  |  |      |   |  |  |     |   |  |  | (2.1  | )
|Adjustment relating to fair value                        |  |          |     |              |  |             |     |          |  |            | (0.3  | )     |  |  |      |   |  |  |     |   |  |  | (0.3  | )
|Charge to profit and loss                                |  |          | 23.1 |              |  |             | 5.1  |          |  |            | 14.7  |       |  |  | 0.2   |   |  |  | 2.3  |   |  |  | 45.4  |  
|Charge to statement of total recognized
gains and losses |  |          | 5.4  |              |  |             |     |          |  |            |      |       |  |  |      |   |  |  |     |   |  |  | 5.4   |  
|Utilized during the year                                 |  |          |     |              |  |             | (3.9 | )        |  |            | (11.3 | )     |  |  | (9.3  | ) |  |  | (4.9 | ) |  |  | (29.4 | )
|Exceptional item                                         |  |          | (9.2 | )            |  |             |     |          |  |            |      |       |  |  |      |   |  |  |     |   |  |  | (9.2  | )
|                                                         |  |          |      |              |  |             |      |          |  |            |       |       |  |  |       |   |  |  |      |   |  |  |       |  
|At December 31, 2002                                     |  |          | 61.5 |              |  |             | 65.5 |          |  |            | 91.5  |       |  |  | 9.6   |   |  |  | 25.4 |   |  |  | 253.5 |  
|                                                         |  |          |      |              |  |             |      |          |  |            |       |       |  |  |       |   |  |  |      |   |  |  |       |  

A further analysis of the deferred taxation provision is given in note 23. The
prior year adjustment relates to the introduction of FRS19, Deferred
Taxation, as explained in note 37.

Provisions for decommissioning and effluent costs relate to the costs
determined on a going concern basis, associated with decommissioning
radioactive facilities and with the eventual disposal of the Groups
intermediate level waste which arises from operations. Decommissioning costs
will be incurred after the facilities are withdrawn from use in radioactive
operations and extend out to 2036. Total decommissioning and effluent costs to
be incurred in the next 10 years amount to approximately £37.4m. The
provisions are based on the latest technical assessment of the process and
methods likely to be used, and are stated at current prices and discounted
using a real discount rate of 4%.

The provisions for pensions and similar obligations primarily relate to pension
schemes, details of which are given in note 30. A transfer of assets was
received from former pension plans during the 12 months ended December 31,
2001. The proportion of the transfer relating to current employees of the
Group is included in provisions and is being spread over the remaining service
life of the employees.

The £9.6m provision for disposal costs related to sale of businesses comprises
£0.8m for the disposal of the Tomojet business in 2002, £0.8m for the closure
of the disease profiling project in 2001, £7.3m for the disposal

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

of Nycomed Pharma, £0.3m for the sale of Puerto Rico Plant in 1998, and £0.4m
for the sale of Puridec arising in 1996. These provisions are for legal or
constructive obligations arising from the sale of businesses and are expected
to be incurred within the next five years.

Other provisions are principally insurance claims, warranties and costs
associated with the rationalisation of radiopharmaceutical production within
Amersham Health. The provision at December 31, 2002 of £25.4m (2001  £27.4m)
is made up of £8.0m (2001  £5.5m) relating to
insurance reserves, £2.4m (2001  £3.0m) relating to warranties, £3.8m (2001  £4.5m) relating to
radiopharmaceutical rationalisation costs and £11.2m (2001  £14.8m) of legal
and other provisions.

23. DEFERRED TAXATION

|                                      |  |      |    |            |  |              |       |   |  |  |       |  
|------------------------------------- |  | ---- | -- | ---------- |  | ------------ | ----- | - |  |  | ----- | -
|                                      |  |      |    |            |  | Dec 31, 2001 |       |   |  | 
|                                      |  |      |    | (restated) |  | Dec 31, 2002
|                                      |  | Note |    | £m         |  | £m          
|                                      |  |      |    |            |  |             
|Provision for deferred tax comprises: |  |      |    |            |  |              |       |   |  |  |       |  
|Accelerated capital allowances        |  |      |    |            |  |              | 10.7  |   |  |  | 22.4  |  
|Tax deductible goodwill               |  |      |    |            |  |              | 25.2  |   |  |  | 26.2  |  
|Capital gains held over               |  |      |    |            |  |              | 2.2   |   |  |  | 6.6   |  
|Unrealized stock profit               |  |      |    |            |  |              | (18.1 | ) |  |  | (22.2 | )
|Other short term timing differences   |  |      |    |            |  |              | (8.1  | ) |  |  | (4.4  | )
|                                      |  |      |    |            |  |              |       |   |  |  |       |  
|                                      |  |      |    |            |  |              | 11.9  |   |  |  | 28.6  |  
|Transfer to deferred taxation assets  |  |      | 16 |            |  |              | 30.0  |   |  |  | 32.9  |  
|                                      |  |      |    |            |  |              |       |   |  |  |       |  
|                                      |  |      | 22 |            |  |              | 41.9  |   |  |  | 61.5  |  
|                                      |  |      |    |            |  |              |       |   |  |  |       |  

The Group has a potential deferred tax asset of £28.8m in the US Biosciences
business of which £9.2m has been recognized, as an exceptional item, based on
future financial projections which forecast future taxable profits in excess
of those arising from the reversal of deferred tax liabilities. The remaining
£19.6m is not recognized as there is insufficient evidence, at this time, that
the asset will be recoverable in the foreseeable future.

In addition, the Group has further unrecognized deferred tax assets of £13.5m
arising in other territories. These relate primarily to tax losses in those
territories. There is insufficient evidence, at this time, that these assets
will be recoverable. The unrecognized assets will be recoverable when
sufficient evidence becomes available to support that recoverability.

Deferred tax is measured on a non-discounted basis at the tax rates that are
expected to apply in the periods in which timing differences reverse, based on
tax rates and laws substantively enacted at the balance sheet date.

24. ACQUISITIONS

During the year the Group made acquisitions with a total consideration of
£767.9m, of which £708.6m related to the purchase of the 45% minority interest
in Amersham Biosciences from Pharmacia Corp.

(a)  Purchase of 45% minority interest holding in Amersham Biosciences
On March 21, 2002 the Group completed the purchase of the 45% minority interest
holding in Amersham Biosciences that it did not already own.

The purchase consideration was £704.1m of cash, plus costs associated with the
purchase of £4.5m. The purchase was financed by a placing of 57.5m new
ordinary shares on March 18, 2002, which generated £397.0m after costs of
issue, together with the use of existing cash resources and drawings under the
Groups committed bank facilities.

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

The transaction was accounted for using acquisition accounting.

Goodwill of £692.3m arose on the transaction, and will be amortized over 20
years from the date of the purchase. The 20 year useful life reflects the
continuing investment in the development of the business.

The values ascribed to the net assets acquired in Amersham Biosciences, and
details of the fair value adjustments, which are provisional, are set out
below:

|                                                           |  |                 |        |             |  |       |      |                 |  |  |        |            |  |  |        |  
|---------------------------------------------------------- |  | --------------- | ------ | ----------- |  | ----- | ---- | --------------- |  |  | ------ | ---------- |  |  | ------ | -
|                                                           |  | Book value      |        |             |  |       |      |                 |  |  |        | Fair value
|                                                           |  | At Mar 21, 2002 |        | Revaluation |  | Other |      | At Mar 21, 2002
|                                                           |  | £m              |        | £m          |  | £m    |      | £m             
|                                                           |  |                 |        |             |  |       |      |                
|Tangible fixed assets (including investments)              |  |                 | 205.0  |             |  |       | 27.2 |                 |  |  |       |            |  |  | 232.2  |  
|Intangible fixed assets                                    |  |                 | 146.9  |             |  |       |     |                 |  |  | (142.0 | )          |  |  | 4.9    |  
|                                                           |  |                 |        |             |  |       |      |                 |  |  |        |            |  |  |        |  
|                                                           |  |                 | 351.9  |             |  |       | 27.2 |                 |  |  | (142.0 | )          |  |  | 237.1  |  
|Current assets (including intra-group
deposits of £60m)    |  |                 | 353.4  |             |  |       |     |                 |  |  |       |            |  |  | 353.4  |  
|Current liabilities (including intra-group
loans of £339m) |  |                 | (482.1 | )           |  |       |     |                 |  |  |       |            |  |  | (482.1 | )
|                                                           |  |                 |        |             |  |       |      |                 |  |  |        |            |  |  |        |  
|Net current liabilities                                    |  |                 | (128.7 | )           |  |       |     |                 |  |  |       |            |  |  | (128.7 | )
|Total assets less current liabilities                      |  |                 | 223.2  |             |  |       | 27.2 |                 |  |  | (142.0 | )          |  |  | 108.4  |  
|Non-current liabilities                                    |  |                 | (25.2  | )           |  |       |     |                 |  |  |       |            |  |  | (25.2  | )
|Provisions for liabilities and charges                     |  |                 | (47.6  | )           |  |       | 0.6  |                 |  |  |       |            |  |  | (47.0  | )
|                                                           |  |                 |        |             |  |       |      |                 |  |  |        |            |  |  |        |  
|                                                           |  |                 | 150.4  |             |  |       | 27.8 |                 |  |  | (142.0 | )          |  |  | 36.2   |  
|                                                           |  |                 |        |             |  |       |      |                 |  |  |        |            |  |  |        |  
|Net assets acquired (45%)                                  |  |                 |        |             |  |       |      |                 |  |  |        |            |  |  | 16.3   |  
|Cost of acquisition  cash consideration                   |  |                 |        |             |  |       |      |                 |  |  |        |            |  |  | 704.1  |  
|Acquisition expenses  professional fees and tax costs     |  |                 |        |             |  |       |      |                 |  |  |        |            |  |  | 4.5    |  
|                                                           |  |                 |        |             |  |       |      |                 |  |  |        |            |  |  |        |  
|Goodwill arising on acquisition                            |  |                 |        |             |  |       |      |                 |  |  |        |            |  |  | 692.3  |  
|                                                           |  |                 |        |             |  |       |      |                 |  |  |        |            |  |  |        |  

The other adjustment relates to goodwill in the Amersham Biosciences balance
sheet eliminated on the purchase of the minority interest. No accounting
policy alignment adjustments are required as Amersham Biosciences accounting
policies are consistent with those of the Amersham Group. Tangible fixed assets
have been revalued to their fair value and listed investments have been written
down to their market value. Adjustments within provisions for liabilities and
charges relate to the funded status of pensions, primarily unrecognized
actuarial gains. A 45% share of the revaluation and other adjustment has been
recognized in the Group accounts.

As the purchase of Amersham Biosciences is an increase in stake, the profits
and cash flows of Amersham Biosciences are already contained within the
consolidated profit and loss account and cash flow statement of the Amersham
Group for the current and prior year.

The minority interest for the period to March 21, 2002 was £0.8m credit,
represented by a £0.6m charge for non-equity minority interests and £1.4m
credit for equity minority interests.

The purchase of the 45% minority interest was partly achieved by the Group
acquiring a 100% interest in Pharmacia Biosystems AB, (now known as Amersham
Biosystems AB), a former trading company in the Pharmacia Corporation group.
At the date of the purchase this company had no assets or liabilities, apart
from the investment in Amersham Biosciences. Full warranties and indemnities
were received from Pharmacia Corporation in respect of this company.

(b)  Other Acquisitions
On January 31, 2002, the Group acquired 100% of the issued share capital of two
filtration companies, AG Technology Corp and InnovaSep Technology Corp. The
fair value of the total consideration is £38.1m, of which £11.8m is deferred
consideration and £6.7m is the Groups best estimate of deferred contingent
consideration. The deferred contingent consideration is dependent on the
acquired companies reaching technological milestones and on performance
conditions. The ultimate amount of deferred and contingent consideration
payable is expected to be in the range of $15-33m. Goodwill arising of £36.9m
is being amortized over ten years.

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

On April 29, 2002, the Group acquired 100% of the issued share capital of
Synthia Lab Systems (Sweden) AB. Goodwill arising of £0.5m is being amortized
over seven years.

On May 10, 2002, the Group acquired a further 16% holding in Cimarron Software
Inc, taking the Groups total holding at acquisition to 35%. Cimarron Software
Inc is being consolidated as a subsidiary undertaking as the group controls the
company through a shareholders agreement. Goodwill arising of £6.3m is being
amortized over seven years.

Since May 10, 2002, the Group has subscribed for additional allotted share
capital in Cimarron Software Inc, taking its holding at the year end to 44%.
Goodwill recognized on the post-acquisition allotments of share capital amounts
to £1.7m. The Group has obligations to subscribe for a further 7% of share
capital over the next three years, and has options to acquire the remaining 49%
of the company for a maximum consideration of $33m, the total consideration
payable being contingent on performance conditions.

On July 11, 2002, the Group acquired the net assets of Motorolas Codelink
Pre-Arrayed Slide business. Goodwill arising of £6.8m is being amortized over
ten years.

All transactions were accounted for using acquisition accounting. The Groups
estimated useful life for these acquisitions reflects the period over which the
Group expects to receive benefit based on acquired patents and technology.

Set out below is a summary of the net assets acquired and provisional fair
value adjustments:

|                                |  |            |     |             |  |            |      |   |  |  |      |  
|------------------------------- |  | ---------- | --- | ----------- |  | ---------- | ---- | - |  |  | ---- | -
|                                |  | Book value |     | Revaluation |  | Fair value
|                                |  | £m         |     | £m          |  | £m        
|                                |  |            |     |             |  |           
|Fixed assets                    |  |            | 6.2 |             |  |            | 3.9  |   |  |  | 10.1 |  
|Net current assets              |  |            | 1.8 |             |  |            | (2.8 | ) |  |  | (1.0 | )
|                                |  |            |     |             |  |            |      |   |  |  |      |  
|Net assets                      |  |            | 8.0 |             |  |            | 1.1  |   |  |  | 9.1  |  
|                                |  |            |     |             |  |            |      |   |  |  |      |  
|Net assets acquired             |  |            |     |             |  |            |      |   |  |  | 8.8  |  
|                                |  |            |     |             |  |            |      |   |  |  |      |  
|Cost of acquisition:            |  |            |     |             |  |            |      |   |  |  |      |  
|Cash consideration              |  |            |     |             |  |            |      |   |  |  | 38.2 |  
|Deferred consideration          |  |            |     |             |  |            |      |   |  |  | 18.5 |  
|Existing trade investment       |  |            |     |             |  |            |      |   |  |  | 2.6  |  
|                                |  |            |     |             |  |            |      |   |  |  |      |  
|                                |  |            |     |             |  |            |      |   |  |  | 59.3 |  
|                                |  |            |     |             |  |            |      |   |  |  |      |  
|Goodwill arising on acquisition |  |            |     |             |  |            |      |   |  |  | 50.5 |  
|                                |  |            |     |             |  |            |      |   |  |  |      |  

Adjustments to fixed assets relate to recognition of intangible assets relating
to patented technology acquired and the adjustment to net current assets
relates to the recognition of liabilities assumed on acquisition. No accounting
policy alignment adjustments have been recorded as the acquired entities
accounting policies are consistent with those of the Amersham Group.

As discussed above, goodwill of £1.7m arose on the acquisition of additional
holdings in Cimarron Software Inc. Total goodwill arising on other
acquisitions during the year was £52.2m.

Included within cash paid for acquisitions during the year of £40.6m in the
consolidated cash flow statement is £2.4m for milestone payments relating to
prior year acquisitions.

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

25 CALLED UP SHARE CAPITAL

|                                  |  |                    |       |            |  |  |       | 
|--------------------------------- |  | ------------------ | ----- | ---------- |  |  | ----- | 
|                                  |  | Ordinary 5p shares
|                                  |  |                   
|                                  |  | 5p                 |       | 5p        
|                                  |  | Dec 31, 01         |       | Dec 31, 02
|                                  |  | m                  |       | m         
|                                  |  |                    |       |           
|Authorized:                       |  |                    |       |            |  |  |       | 
|Value                             |  |                    | £45.0 |            |  |  | £45.0 | 
|Number                            |  |                    | 900.0 |            |  |  | 900.0 | 
|                                  |  |                    |       |            |  |  |       | 
|Issued, called up and fully paid: |  |                    |       |            |  |  |       | 
|Value                             |  |                    | £32.1 |            |  |  | £35.1 | 
|Number                            |  |                    | 641.7 |            |  |  | 701.8 | 
|                                  |  |                    |       |            |  |  |       | 

By ordinary resolution passed on May 15, 1998 each 25p ordinary share and each
25p non-voting share (whether issued or unissued) was subdivided into five 5p
ordinary shares and five 5p non-voting shares respectively with effect from
June 10, 1998. Pursuant to the enfranchisement of the non-voting shares,
holders of existing ordinary 25p shares were allotted new ordinary 5p shares in
the proportion of 170 new ordinary 5p shares for every 1,000 existing ordinary
shares of 25p each held on June 5 (i.e. a 3.4% bonus issue to the holders of
the 25p ordinary shares). Each 5p non-voting share was converted into one 5p
ordinary share with effect from June 10, 1998. As a result, the authorized
share capital of the Company is £45 million divided into 900 million ordinary
shares of 5p each.

During the 12 months ended December 31, 2002 a total of 60,101,551 ordinary
shares of 5p each (nominal value £3m) were issued for an aggregate net cash
consideration of £407.7m.

Of these, 57,500,000 shares were issued on March 18, 2002, in connection with
the placing of shares on March 12, 2002, to finance the purchase of the
outstanding shares in Amersham Biosciences Limited for cash consideration of
£397.0m, net of issue costs of £5.5m.

The shares were issued at a price of £7.00 per share, and the market price on
the March 12, 2002 was £7.365 per share. The 57,500,000 shares were allotted,
as follows:



| |  | 50,000,000 placing shares to persons nominated by Morgan Stanley
Securities Limited and Hoare Govett Limited;      
|- |  | -------------------------------------------------------------------------------------------------------------------
| 
| |  | 7,500,000 shares issued to Morgan Stanley Securities Limited, pursuant to
the exercise of an over-allotment option.

The 50,000,000 placing shares were ultimately allotted to institutional
investors.

A further 438,890 shares were issued to the Qualifying Employee Share Ownership
Trust (QUEST) for an aggregate net cash consideration of £2.5m. The remaining
2,162,661 ordinary shares of 5p each were issued in connection with employee
share option schemes for an aggregate net cash consideration of £8.2m.

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Share option schemes

The following options remained exercisable at the year end.

|                        |       |                     |  |                                  |           |            |           |           |           |              |           |  |           |  |           | 
|----------------------- | ----- | ------------------- |  | -------------------------------- | --------- | ---------- | --------- | --------- | --------- | ------------ | --------- |  | --------- |  | --------- | 
|                        |       |                     |  |                                  |           | Ordinary   |           | Ordinary  |           | No of shares
|                        |       |                     |  |                                  |           | 5p shares  |           | 5p shares |           | exercisable 
|Option price            |       | Options exercisable |  | Dec 31, 01                       |           | Dec 31, 02 |           | 2003     
|                        |       |                     |  |                                  |           |            |           |          
|Save As You Earn Scheme
|                        | £1.38 |                     |  | February 2000 or February 2002   |           |            | 170,812   |           |           |              |          |  |           |  |          | 
|                        | £1.39 |                     |  | September 2000 or September 2002 |           |            | 204,865   |           |           |              | 3,304     |  |           |  | 3,304     | 
|                        | £1.54 |                     |  | September 2001 or September 2003 |           |            | 262,363   |           |           |              | 215,058   |  |           |  | 215,058   | 
|                        | £2.46 |                     |  | September 2002 or September 2004 |           |            | 1,137,938 |           |           |              | 185,302   |  |           |  | 27,243    | 
|                        | £3.00 |                     |  | December 2003 or December 2005   |           |            | 1,551,095 |           |           |              | 1,463,643 |  |           |  | 1,218,791 | 
|                        | £3.30 |                     |  | December 2004 or December 2006   |           |            | 898,809   |           |           |              | 855,627   |  |           |  |          | 
|                        | £4.96 |                     |  | December 2005 or December 2007   |           |            | 975,260   |           |           |              | 910,294   |  |           |  |          | 
|                        | £4.80 |                     |  | December 2004,December 2006      |           |            | 808,109   |           |           |              | 770,955   |  |           |  |          | 
|                        |       |                     |  | or December 2008                 |           |            |           |           |           |              |           |  |           |  |           | 
|                        | £4.49 |                     |  | December 2005, December 2007     |           |            |          |           |           |              | 1,077,315 |  |           |  |          | 
|                        |       |                     |  | or December 2009                 |           |            |           |           |           |              |           |  |           |  |           | 
|                        |       |                     |  |                                  |           |            |           |           |           |              |           |  |           |  |          
|Total                   |       |                     |  |                                  | 6,009,251 |            |           |           | 5,481,498 |              |           |  | 1,464,396 | 
|                        |       |                     |  |                                  |           |            |           |           |           |              |           |  |           |  |          

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

|                                                                                   |       |                     |  |                                  |           |                    |           |                  |           |  |           |  |           |  |           | 
|---------------------------------------------------------------------------------- | ----- | ------------------- |  | -------------------------------- | --------- | ------------------ | --------- | ---------------- | --------- |  | --------- |  | --------- |  | --------- | 
|Option Price                                                                       |       | Options exercisable |  | Ordinary 5p shares               |           | Ordinary 5p shares |           | No of shares    
|                                                                                   |       |                     |  | Dec 31, 01                       |           | Dec 31, 02         |           | exercisable 2003
|                                                                                   |       |                     |  |                                  |           |                    |           |                 
|Executive Share Option Scheme 1993                                                 |       |                     |  |                                  |           |                    |           |                  |           |  |           |  |           | 
|                                                                                   | £1.13 |                     |  | November 1995 to November 2002   |           |                    | 18,250    |                  |           |  |          |  |           |  |          | 
|                                                                                   | £1.49 |                     |  | June 1996 to June 2003           |           |                    | 20,731    |                  |           |  | 20,731    |  |           |  | 20,731    | 
|                                                                                   | £1.83 |                     |  | November 1996 to November 2003   |           |                    | 15,663    |                  |           |  | 3,979     |  |           |  | 3,979     | 
|                                                                                   | £1.87 |                     |  | July 1997 to July 2004           |           |                    | 29,261    |                  |           |  | 29,261    |  |           |  | 29,261    | 
|                                                                                   | £1.72 |                     |  | November 1997 to November 2004   |           |                    | 91,250    |                  |           |  | 17,061    |  |           |  | 17,061    | 
|                                                                                   | £1.74 |                     |  | June 1998 to June 2005           |           |                    | 59,741    |                  |           |  | 59,741    |  |           |  | 59,741    | 
|                                                                                   | £1.69 |                     |  | November 1998 to November 2005   |           |                    | 103,692   |                  |           |  | 77,157    |  |           |  | 77,157    | 
|                                                                                   | £1.89 |                     |  | July 1999 to July 2006           |           |                    | 68,809    |                  |           |  | 68,809    |  |           |  | 68,809    | 
|                                                                                   | £3.42 |                     |  | July 2000 to July 2007           |           |                    | 305,493   |                  |           |  | 163,374   |  |           |  | 163,374   | 
|                                                                                   | £3.92 |                     |  | December 2000 to November 2007   |           |                    | 130,112   |                  |           |  | 130,112   |  |           |  | 130,112   | 
|                                                                                   | £3.80 |                     |  | May 2001 to April 2008           |           |                    | 793,940   |                  |           |  | 529,569   |  |           |  | 529,569   | 
|                                                                                   | £3.56 |                     |  | September 2001 to September 2008 |           |                    | 571,685   |                  |           |  | 241,519   |  |           |  | 241,519   | 
|                                                                                   | £4.38 |                     |  | May 2002 to May 2009             |           |                    | 1,615,781 |                  |           |  | 1,252,833 |  |           |  | 1,252,833 | 
|                                                                                   | £4.66 |                     |  | June 2002 to June 2009           |           |                    | 63,523    |                  |           |  |          |  |           |  |          | 
|                                                                                   | £3.74 |                     |  | August 2002 to August 2009       |           |                    | 913,689   |                  |           |  | 696,789   |  |           |  | 696,789   | 
|                                                                                   | £4.11 |                     |  | September 2002 to September 2009 |           |                    | 291,970   |                  |           |  | 291,970   |  |           |  | 291,970   | 
|                                                                                   | £4.12 |                     |  | September 2002 to September 2009 |           |                    | 71,750    |                  |           |  | 55,750    |  |           |  | 55,750    | 
|                                                                                   | £5.20 |                     |  | March 2003 to February 2010      |           |                    | 2,045,799 |                  |           |  | 1,902,573 |  |           |  | 1,902,573 | 
|                                                                                   | £6.19 |                     |  | April 2003 to April 2010         |           |                    | 13,942    |                  |           |  | 13,942    |  |           |  | 13,942    | 
|                                                                                   | £6.23 |                     |  | August 2003 to August 2010       |           |                    | 453,153   |                  |           |  | 453,153   |  |           |  | 453,153   | 
|                                                                                   | £6.22 |                     |  | September 2003 to September 2010 |           |                    | 128,618   |                  |           |  | 128,618   |  |           |  | 128,618   | 
|                                                                                   |       |                     |  |                                  |           |                    |           |                  |           |  |           |  |           |  |          
|Total                                                                              |       |                     |  |                                  | 7,806,852 |                    |           |                  | 6,136,941 |  |           |  | 6,136,941 | 
|                                                                                   |       |                     |  |                                  |           |                    |           |                  |           |  |           |  |           |  |          
|Nycomed
ShareOption Plan                                                          
|$                                                                                  | 4.02  |                     |  | July 1997 to April 2002          |           |                    | 83,910    |                  |           |  |          |  |           |  |          | 
|                                                                                   |       |                     |  |                                  |           |                    |           |                  |           |  |           |  |           |  |          
|Total                                                                              |       |                     |  |                                  | 83,910    |                    |           |                  |          |  |           |  |          | 
|                                                                                   |       |                     |  |                                  |           |                    |           |                  |           |  |           |  |           |  |          
|Options awarded under the Nycomed Share Option Plan are denominated in US dollars.
|                                                                                  
|Amersham US Stock Option Plan 2000                                                
|                                                                                   | £6.19 |                     |  | March 2001 to March 2010         |           |                    | 2,334,832 |                  |           |  | 1,908,914 |  |           |  | 477,229   | 
|                                                                                   | £6.19 |                     |  | June 2001 to June 2010           |           |                    | 6,500     |                  |           |  | 5,500     |  |           |  | 1,375     | 
|                                                                                   | £6.23 |                     |  | August 2001 to August 2010       |           |                    | 53,056    |                  |           |  | 50,193    |  |           |  | 12,548    | 
|                                                                                   | £6.31 |                     |  | October 2001 to October 2010     |           |                    | 1,500     |                  |           |  | 1,500     |  |           |  | 375       | 
|                                                                                   | £5.45 |                     |  | December 2001 to December 2010   |           |                    | 9,000     |                  |           |  | 5,000     |  |           |  | 1,250     | 
|                                                                                   |       |                     |  |                                  |           |                    |           |                  |           |  |           |  |           |  |          
|Total                                                                              |       |                     |  |                                  | 2,404,888 |                    |           |                  | 1,971,107 |  |           |  | 492,777   | 
|                                                                                   |       |                     |  |                                  |           |                    |           |                  |           |  |           |  |           |  |          

Amersham US Stock Option Plan options are subject to phased vesting of 25% per
year from date of grant.

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

|                       |       |                     |  |                                  |  |            |           |                  |  |  |            |  |  |  |           | 
|---------------------- | ----- | ------------------- |  | -------------------------------- |  | ---------- | --------- | ---------------- |  |  | ---------- |  |  |  | --------- | 
|Option Price           |       |                     |  | Ordinary                         |  | Ordinary   |           |                  |  | 
|Executive Share Option |       |                     |  | 5p shares                        |  | 5p shares  |           | No of shares    
|Scheme 2001            |       | Options exercisable |  | Dec 31, 01                       |  | Dec 31, 02 |           | exercisable 2003
|                       |       |                     |  |                                  |  |            |           |                 
|                       | £5.60 |                     |  | May 2002 to May 2011             |  |            | 6,324,060 |                  |  |  | 5,968,731  |  |  |  | 1,310,496 | 
|                       | £5.61 |                     |  | May 2002 to May 2011             |  |            | 10,076    |                  |  |  | 10,076     |  |  |  | 2,519     | 
|                       | £5.57 |                     |  | June 2002 to May 2011            |  |            | 102,336   |                  |  |  | 102,336    |  |  |  | 25,584    | 
|                       | £6.09 |                     |  | August 2002 to August 2011       |  |            | 287,460   |                  |  |  | 287,460    |  |  |  | 71,865    | 
|                       | £6.06 |                     |  | September 2002 to September 2011 |  |            | 20,272    |                  |  |  | 20,272     |  |  |  | 5,068     | 
|                       | £5.95 |                     |  | September 2002 to September 2011 |  |            | 9,988     |                  |  |  | 9,988      |  |  |  | 2,497     | 
|                       | £7.15 |                     |  | March 2003 to March 2012         |  |            |          |                  |  |  | 7,159,214  |  |  |  | 1,669,007 | 
|                       | £7.28 |                     |  | March 2003 to March 2012         |  |            |          |                  |  |  | 38,864     |  |  |  | 9,716     | 
|                       | £7.63 |                     |  | April 2003 to April 2012         |  |            |          |                  |  |  | 13,376     |  |  |  | 3,344     | 
|                       | £5.58 |                     |  | August 2003 to August 2012       |  |            |          |                  |  |  | 864,500    |  |  |  | 216,125   | 
|                       | £5.68 |                     |  | September 2003 to September 2012 |  |            |          |                  |  |  | 23,768     |  |  |  | 5,942     | 
|                       | £5.82 |                     |  | December 2003 to December 2012   |  |            |          |                  |  |  | 309,280    |  |  |  |          | 
|                       |       |                     |  |                                  |  |            |           |                  |  |  |            |  |  |  |          
|                       |       |                     |  |                                  |  |            | 6,754,192 |                  |  |  | 14,807,865 |  |  |  | 3,322,163 | 
|                       |       |                     |  |                                  |  |            |           |                  |  |  |            |  |  |  |          

2001 options are subject to 25% vesting from date of grant, except Directors
options which usually vest three years after date of grant. The exercise of
these options is subject to performance conditions.

Options for All

| |       |  |  |                              |  |  |           |  |  |  |           |  |  |  |   | 
| | ----- |  |  | ---------------------------- |  |  | --------- |  |  |  | --------- |  |  |  | - | 
| | £6.35 |  |  | October 2004 to October 2007 |  |  | 9,150,000 |  |  |  | 8,581,352 |  |  |  |  | 

26 SHARE PREMIUM ACCOUNT AND RESERVES

|                                                                           |  |         |       |          |  |          |       |          |  |  |      |  |  |  |      | 
|-------------------------------------------------------------------------- |  | ------- | ----- | -------- |  | -------- | ----- | -------- |  |  | ---- |  |  |  | ---- | 
|                                                                           |  | Share   |       | Profit   |  |          |       |          |  |  |      | 
|                                                                           |  | premium |       | and loss |  | Merger   |       | Other   
|                                                                           |  | account |       | account  |  | reserves |       | reserves
|                                                                           |  | £m      |       | £m       |  | £m       |       | £m      
|                                                                           |  |         |       |          |  |          |       |         
|At December 31, 2000                                                       |  |         | 39.4  |          |  |          | 243.2 |          |  |  | 73.0 |  |  |  | 21.0 | 
|Prior year adjustment                                                      |  |         |      |          |  |          | 8.5   |          |  |  |     |  |  |  |     | 
|                                                                           |  |         |       |          |  |          |       |          |  |  |      |  |  |  |      | 
|At December 31, 2000 as restated                                           |  |         | 39.4  |          |  |          | 251.7 |          |  |  | 73.0 |  |  |  | 21.0 | 
|Foreign currency translation                                               |  |         |      |          |  |          | (3.9  | )        |  |  |     |  |  |  |     | 
|Shares issued in the year                                                  |  |         | 24.9  |          |  |          |      |          |  |  |     |  |  |  |     | 
|Contribution relating to
Qualifying Employee Share
Ownership Trust (QUEST) |  |         |      |          |  |          | (7.4  | )        |  |  |     |  |  |  |     | 
|Retained profit for the year                                               |  |         |      |          |  |          | 165.5 |          |  |  |     |  |  |  |     | 
|                                                                           |  |         |       |          |  |          |       |          |  |  |      |  |  |  |      | 
|At December 31, 2001 as restated                                           |  |         | 64.3  |          |  |          | 405.9 |          |  |  | 73.0 |  |  |  | 21.0 | 
|Foreign currency translation                                               |  |         |      |          |  |          | 47.8  |          |  |  |     |  |  |  |     | 
|Issue costs                                                                |  |         | (5.5  | )        |  |          |      |          |  |  |     |  |  |  |     | 
|Shares issued in the year                                                  |  |         | 410.2 |          |  |          |      |          |  |  |     |  |  |  |      | 
|Contribution to Qualifying
Employees Share Ownership
Trust (QUEST)         |  |         |      |          |  |          | (1.2  | )        |  |  |     |  |  |  |     | 
|Retained profit for the year                                               |  |         |      |          |  |          | 121.4 |          |  |  |     |  |  |  |     | 
|                                                                           |  |         |       |          |  |          |       |          |  |  |      |  |  |  |      | 
|At December 31, 2002                                                       |  |         | 469.0 |          |  |          | 573.9 |          |  |  | 73.0 |  |  |  | 21.0 | 
|                                                                           |  |         |       |          |  |          |       |          |  |  |      |  |  |  |      | 

The amounts included in other reserves relate to foreign subsidiary
undertakings and represent amounts which cannot be distributed under local
company law, and negative goodwill arising on the acquisition of Pharmacia
Biotech.

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

The cumulative value of goodwill
written off amounts to £1,439.9m (2001 
£1,439.9m, 2000  £1,439.9m).

The Companys profit attributable to shareholders is £72.8m (2001  £66.0m,
2000  £31.6m).

In accordance with the Groups accounting policy, an exchange gain of £46.4m
(2001  £6.4m, 2000  £9.7m loss) on the foreign currency loan hedging Group
investments has been matched with the exchange loss on those investments in
reserves. A related tax charge of £5.4m (2001  £0.3m credit, 2000  £3.5m
credit) has also been offset in reserves.

At December 31, 2002, the cumulative translation adjustments to equity were
£23.8m loss (2001  £71.6m loss, 2000  £67.7m loss).

27 RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS FUNDS

|                                                                           |  |              |       |              |  |              |       |   |  |  |         |  
|-------------------------------------------------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ----- | - |  |  | ------- | -
|                                                                           |  | 12 months to |       | 12 months to |  | 12 months to
|                                                                           |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|                                                                           |  | (restated)   |       | (restated)   |  |             
|                                                                           |  | £m           |       | £m           |  | £m          
|                                                                           |  |              |       |              |  |             
|Profit for the year                                                        |  |              | 107.0 |              |  |              | 210.7 |   |  |  | 178.7   |  
|Dividends                                                                  |  |              | (40.4 | )            |  |              | (45.2 | ) |  |  | (57.3   | )
|                                                                           |  |              |       |              |  |              |       |   |  |  |        
|Retained earnings                                                          |  |              | 66.6  |              |  |              | 165.5 |   |  |  | 121.4   |  
|Foreign currency translation                                               |  |              | (18.9 | )            |  |              | (3.9  | ) |  |  | 47.8    |  
|New share capital and premium                                              |  |              | 6.2   |              |  |              | 25.2  |   |  |  | 413.2   |  
|Costs associated with share issue                                          |  |              |      |              |  |              |      |   |  |  | (5.5    | )
|Loss related to Qualifying Employee Share Ownership Trust (QUEST)          |  |              | (0.7  | )            |  |              | (7.4  | ) |  |  | (1.2    | )
|                                                                           |  |              |       |              |  |              |       |   |  |  |        
|Net increase in equity shareholders funds                                 |  |              | 53.2  |              |  |              | 179.4 |   |  |  | 575.7   |  
|                                                                           |  |              |       |              |  |              |       |   |  |  |        
|Equity shareholders funds at the start of the year as
previously reported |  |              | 351.4 |              |  |              | 408.4 |   |  |  | 591.9   |  
|Prior year adjustments                                                     |  |              |       |              |  |              |       |   |  |  |         |  
|- deferred taxation                                                        |  |              | 12.3  |              |  |              | 8.5   |   |  |  | 4.4     |  
|                                                                           |  |              |       |              |  |              |       |   |  |  |        
|Restated                                                                   |  |              | 363.7 |              |  |              | 416.9 |   |  |  | 596.3   |  
|                                                                           |  |              |       |              |  |              |       |   |  |  |        
|Equity shareholders funds at the end of the year                          |  |              | 416.9 |              |  |              | 596.3 |   |  |  | 1,172.0 |  
|                                                                           |  |              |       |              |  |              |       |   |  |  |         |  

28 CAPITAL COMMITMENTS

|                       |  |            |      |            |  |  |      | 
|---------------------- |  | ---------- | ---- | ---------- |  |  | ---- | 
|                       |  | Dec 31, 01 |      | Dec 31, 02
|                       |  | £m         |      | £m        
|                       |  |            |      |           
|Expenditure contracted |  |            | 22.7 |            |  |  | 41.3
|                      

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

29 OPERATING AND FINANCE LEASE COMMITMENTS

Operating leases

Payments which the Group is committed to make during the following year against
operating leases are as follows:

|                                    |  |            |      |            |  |  |      | 
|----------------------------------- |  | ---------- | ---- | ---------- |  |  | ---- | 
|                                    |  | Dec 31, 01 |      | Dec 31, 02
|                                    |  | £m         |      | £m        
|                                    |  |            |      |           
|Land and buildings:                 |  |            |      |            |  |  |      | 
|Expiring within one year            |  |            | 1.9  |            |  |  | 1.3  | 
|Expiring between two and five years |  |            | 7.6  |            |  |  | 10.3 | 
|Expiring after more than five years |  |            | 4.3  |            |  |  | 3.1  | 
|                                    |  |            |      |            |  |  |      | 
|                                    |  |            | 13.8 |            |  |  | 14.7 | 
|                                    |  |            |      |            |  |  |      | 
|Other leases:                       |  |            |      |            |  |  |      | 
|Expiring within one year            |  |            | 1.8  |            |  |  | 1.4  | 
|Expiring between two and five years |  |            | 13.8 |            |  |  | 12.9 | 
|Expiring after more than five years |  |            |     |            |  |  | 0.3  | 
|                                    |  |            |      |            |  |  |      | 
|                                    |  |            | 15.6 |            |  |  | 14.6 | 
|                                    |  |            |      |            |  |  |      | 

Finance lease commitments

The finance lease obligations to which the Group is committed are as follows:

|                                                 |  |            |      |            |  |  |      |  
|------------------------------------------------ |  | ---------- | ---- | ---------- |  |  | ---- | -
|                                                 |  | Dec 31, 01 |      | Dec 31, 02
|                                                 |  | £m         |      | £m        
|                                                 |  |            |      |           
|Payable within one year                          |  |            | 0.4  |            |  |  | 0.5  |  
|Payable between two and five years               |  |            | 1.5  |            |  |  | 1.4  |  
|Payable after 5 years                            |  |            | 2.1  |            |  |  | 1.9  |  
|                                                 |  |            |      |            |  |  |      |  
|                                                 |  |            | 4.0  |            |  |  | 3.8  |  
|Less finance charges allocated to future periods |  |            | (1.0 | )          |  |  | (1.0 | )
|                                                 |  |            |      |            |  |  |      |  
|                                                 |  |            | 3.0  |            |  |  | 2.8  |  
|                                                 |  |            |      |            |  |  |      |  

30 PENSIONS

The Company participates in a variety of pension arrangements on behalf of its
UK employees. The principal scheme is the Amersham Pension Scheme, which is a
defined benefit arrangement, the assets of which are held in a separate trustee
administered fund.

An actuarial valuation of this scheme as at March 31, 2000 was made by Watson
Wyatt, an independent firm of actuaries, using the projected unit method. The
main assumptions adopted in that valuation for the purposes of the UK Statement
of Standard Accounting Practice SSAP 24, Accounting for Pension Costs, were
that over the long term the rate of return on investments would be 6.9% pa, the
increase in pensionable pay 5% pa and pensions in payment 3% pa. On the basis
of these assumptions the market value of the schemes assets as at 31 March
2000 represented 112% of the value of the benefits to members at that date
including allowance for future salary and pension increases. The market value
of the schemes assets on March 31, 2000 was £209m.

The pension cost in the Companys financial statements and the associated
amounts of prepayment are set out below:

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

|                            |  |              |      |              |  |  |       |  
|--------------------------- |  | ------------ | ---- | ------------ |  |  | ----- | -
|                            |  | Dec 31, 2001 |      | Dec 31, 2002
|                            |  | £m           |      | £m          
|                            |  |              |      |             
|Prepayment at start of year |  |              | 6.8  |              |  |  | 8.7   |  
|Regular cost                |  |              | (9.0 | )            |  |  | (10.3 | )
|Variation from regular cost |  |              | 1.6  |              |  |  | 1.6   |  
|Contributions paid          |  |              | 9.3  |              |  |  | 10.7  |  
|                            |  |              |      |              |  |  |       |  
|Prepayment at end of year   |  |              | 8.7  |              |  |  | 10.7  |  
|                            |  |              |      |              |  |  |       |  

Overseas schemes

The Group operates a number of pension schemes overseas, which have been
developed in line with, and are funded under, local practices. The principal
overseas schemes are in the US, Norway and Sweden and are mainly of the defined
benefit type funded via separately administered trusts or guaranteed by
insurance policies. The scheme in Sweden is an unfunded arrangement and there
is an unfunded arrangement in Norway in addition to the funded scheme. These
are provided for in the Group financial statements and secured on the ongoing
business.

Watson Wyatt have prepared pension costs using actuarial valuations carried out
in accordance with local requirements, for the purposes of Group reporting
under SSAP 24. A surplus or deficit is amortized over the average remaining
service lives of the relevant employees using the straight-line method. The
review was made as at January 1, 2002, using the projected unit method and
using the following principal assumptions.

|                                |  |    |     |        |  |        |     |  |  |  |     | 
|------------------------------- |  | -- | --- | ------ |  | ------ | --- |  |  |  | --- | 
|                                |  | US |     | Norway |  | Sweden
|                                |  | %  |     | %      |  | %     
|                                |  |    |     |        |  |       
|Return on investment            |  |    | 7.5 |        |  |        | 6.5 |  |  |  | 7.0 | 
|Increase in pensionable salary  |  |    | 4.5 |        |  |        | 3.5 |  |  |  | 4.0 | 
|Increase in pensions in payment |  |    |    |        |  |        | 2.0 |  |  |  | 2.5 | 

The pension cost in the Groups financial statements and associated amounts of
provision are set out below, in aggregate, for these principal overseas funded
and unfunded schemes.

|                             |  |              |      |              |  |         |      |          |  |  |      |   |  |  |      |  
|---------------------------- |  | ------------ | ---- | ------------ |  | ------- | ---- | -------- |  |  | ---- | - |  |  | ---- | -
|                             |  | Dec 31, 2001 |      | Dec 31, 2002
|                             |  |              |      |             
|                             |  | Funded       |      | Unfunded     |  | Funded  |      | Unfunded
|                             |  | Schemes      |      | Schemes      |  | Schemes |      | Schemes 
|                             |  | £m           |      | £m           |  | £m      |      | £m      
|                             |  |              |      |              |  |         |      |         
|Provision at start of year   |  |              | 18.8 |              |  |         | 41.5 |          |  |  | 18.6 |   |  |  | 43.2 |  
|Foreign currency translation |  |              | 0.5  |              |  |         | (1.6 | )        |  |  | (1.6 | ) |  |  | 2.3  |  
|Pension cost                 |  |              | 5.3  |              |  |         | 4.0  |          |  |  | 7.2  |   |  |  | 4.6  |  
|Contributions/pensions paid  |  |              | (6.0 | )            |  |         | (0.7 | )        |  |  | (8.2 | ) |  |  | (1.3 | )
|                             |  |              |      |              |  |         |      |          |  |  |      |   |  |  |      |  
|Provision at end of year     |  |              | 18.6 |              |  |         | 43.2 |          |  |  | 16.0 |   |  |  | 48.8 |  
|                             |  |              |      |              |  |         |      |          |  |  |      |   |  |  |      |  

On the basis of the above assumptions the actuarial value of the scheme assets
for the principal overseas funded schemes was £76.0m (2001  £76.5m) and
represents 80% (2001  87%) of the actuarial value of benefits to members as
at January 1, 2002, including allowance for future salary and pension
increases.

In addition to the schemes included in the above analysis the Group also
operates defined benefit schemes in other territories, principally Japan and
Germany.

FRS 17

In November 2000, the Accounting Standards Board published FRS 17 Retirement
Benefits to replace the existing standard SSAP 24 Accounting for Pension
costs. Although the new standard does not become mandatory until accounting
periods beginning on or after January 1, 2005, it sets down transitional
arrangements which require footnote disclosures in the interim period up to
full adoption.

The most recent actuarial valuations have been updated by Watson Wyatt to take
account of the requirements of FRS 17 in order to assess the liabilities of the
schemes at December 31, 2002. For the principal overseas schemes this latest
valuation was at December 31, 2001 including both the US and Norway and at
December 31, 1999 for Sweden. Scheme assets are stated at their market value
at December 31, 2002.

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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

The future agreed contribution rate for the UK scheme is currently 15.2%. This
is subject to review during 2003. For the overseas schemes the contribution
rate will be assessed on a year on year basis. All of the Group pension
schemes are open as at December 31, 2002.

Main assumptions for FRS 17 purposes

|                                        |  |     |      |      |  |        |      |       |  |  |      |  |  |  |      | 
|--------------------------------------- |  | --- | ---- | ---- |  | ------ | ---- | ----- |  |  | ---- |  |  |  | ---- | 
|                                        |  | UK  |      | US   |  | Norway |      | Other
|December 31, 2002                       |  | %pa |      | % pa |  | % pa   |      | % pa 
|                                        |  |     |      |      |  |        |      |      
|Rate of increase in salaries            |  |     | 4.25 |      |  |        | 4.25 |       |  |  | 3.50 |  |  |  | 3.75 | 
|Rate of increase in pensions in payment |  |     | 2.25 |      |  |        | 0.00 |       |  |  | 2.00 |  |  |  | 2.00 | 
|Discount rate                           |  |     | 5.50 |      |  |        | 6.75 |       |  |  | 6.50 |  |  |  | 5.50 | 
|Inflation                               |  |     | 2.25 |      |  |        | 3.00 |       |  |  | 2.50 |  |  |  | 2.50 | 

|                                        |  |     |      |      |  |        |      |       |  |  |      |  |  |  |      | 
|--------------------------------------- |  | --- | ---- | ---- |  | ------ | ---- | ----- |  |  | ---- |  |  |  | ---- | 
|                                        |  | UK  |      | US   |  | Norway |      | Other
|December 31, 2001                       |  | %pa |      | % pa |  | % pa   |      | % pa 
|                                        |  |     |      |      |  |        |      |      
|Rate of increase in salaries            |  |     | 4.25 |      |  |        | 4.25 |       |  |  | 3.50 |  |  |  | 3.25 | 
|Rate of increase in pensions in payment |  |     | 2.25 |      |  |        | 0.00 |       |  |  | 2.00 |  |  |  | 2.25 | 
|Discount rate                           |  |     | 5.75 |      |  |        | 7.25 |       |  |  | 7.00 |  |  |  | 5.00 | 
|Inflation                               |  |     | 2.25 |      |  |        | 3.00 |       |  |  | 2.50 |  |  |  | 2.50 | 

The market value of assets in the schemes at December 31, 2002 and the long term expected rates of return at that date were:

|                                                              |  |          |       |       |  |       |      |       |  |  |      |  |  |  |       | 
|------------------------------------------------------------- |  | -------- | ----- | ----- |  | ----- | ---- | ----- |  |  | ---- |  |  |  | ----- | 
|December 31, 2002                                             |  | Equities |       | Bonds |  | Other |      | Total
|                                                              |  |          |       |       |  |       |      |      
|Long term rate of return expected at December 31, 2002 (% pa) |  |          |       |       |  |       |      |       |  |  |      |  |  |  |       | 
|UK                                                            |  |          | 8.50  |       |  |       | 5.00 |       |  |  | 6.00 |  |  |  |      | 
|US                                                            |  |          | 8.75  |       |  |       | 6.25 |       |  |  | 4.50 |  |  |  |      | 
|Norway                                                        |  |          | 8.75  |       |  |       | 6.00 |       |  |  | 5.00 |  |  |  |      | 
|Other                                                         |  |          | 5.50  |       |  |       | 2.50 |       |  |  | 2.00 |  |  |  |      | 
|Value at December 31, 2002 (£m)                               |  |          |       |       |  |       |      |       |  |  |      |  |  |  |       | 
|UK                                                            |  |          | 127.3 |       |  |       | 34.5 |       |  |  | 8.4  |  |  |  | 170.2 | 
|US                                                            |  |          | 29.4  |       |  |       | 16.4 |       |  |  | 0.7  |  |  |  | 46.5  | 
|Norway                                                        |  |          | 2.9   |       |  |       | 16.7 |       |  |  | 9.0  |  |  |  | 28.6  | 
|Other                                                         |  |          | 4.9   |       |  |       | 3.4  |       |  |  | 0.7  |  |  |  | 9.0   | 
|                                                              |  |          |       |       |  |       |      |       |  |  |      |  |  |  |       | 
|Total                                                         |  |          | 164.5 |       |  |       | 71.0 |       |  |  | 18.8 |  |  |  | 254.3 | 
|                                                              |  |          |       |       |  |       |      |       |  |  |      |  |  |  |       | 

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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

The market value of assets in the schemes at December 31, 2001 and the long term expected rates of return at that date were:

|                                                              |  |          |       |       |  |       |      |       |  |  |      |  |  |  |       | 
|------------------------------------------------------------- |  | -------- | ----- | ----- |  | ----- | ---- | ----- |  |  | ---- |  |  |  | ----- | 
|December 31, 2001                                             |  | Equities |       | Bonds |  | Other |      | Total
|                                                              |  |          |       |       |  |       |      |      
|Long term rate of return expected at December 31, 2001 (% pa) |  |          |       |       |  |       |      |       |  |  |      |  |  |  |       | 
|UK                                                            |  |          | 8.00  |       |  |       | 5.50 |       |  |  | 5.00 |  |  |  |      | 
|US                                                            |  |          | 8.75  |       |  |       | 7.00 |       |  |  | 4.50 |  |  |  |      | 
|Norway                                                        |  |          | 8.25  |       |  |       | 6.75 |       |  |  | 6.00 |  |  |  |      | 
|Other                                                         |  |          | 6.25  |       |  |       | 3.00 |       |  |  | 2.00 |  |  |  |      | 
|Value at December 31, 2001 (£m)                               |  |          |       |       |  |       |      |       |  |  |      |  |  |  |       | 
|UK                                                            |  |          | 136.5 |       |  |       | 26.7 |       |  |  | 27.4 |  |  |  | 190.6 | 
|US                                                            |  |          | 32.0  |       |  |       | 21.7 |       |  |  | 0.7  |  |  |  | 54.4  | 
|Norway                                                        |  |          | 4.8   |       |  |       | 15.2 |       |  |  | 2.7  |  |  |  | 22.7  | 
|Other                                                         |  |          | 4.4   |       |  |       | 3.2  |       |  |  | 0.7  |  |  |  | 8.3   | 
|                                                              |  |          |       |       |  |       |      |       |  |  |      |  |  |  |       | 
|Total                                                         |  |          | 177.7 |       |  |       | 66.8 |       |  |  | 31.5 |  |  |  | 276.0 | 
|                                                              |  |          |       |       |  |       |      |       |  |  |      |  |  |  |       | 

The following amounts at December 31, 2002 were measured in accordance with the requirements of FRS17:

|                                    |  |    |        |    |  |        |        |       |  |       |       |   |  |  |       |   |  |  |        |  
|----------------------------------- |  | -- | ------ | -- |  | ------ | ------ | ----- |  | ----- | ----- | - |  |  | ----- | - |  |  | ------ | -
|                                    |  | UK |        | US |  | Norway |        | Other |  | Total
|                                    |  | £m |        | £m |  | £m     |        | £m    |  | £m   
|                                    |  |    |        |    |  |        |        |       |  |      
|Total market value of assets        |  |    | 170.2  |    |  |        | 46.5   |       |  |       | 28.6  |   |  |  | 9.0   |   |  |  | 254.3  |  
|Present value of scheme liabilities |  |    | (268.3 | )  |  |        | (102.2 | )     |  |       | (33.8 | ) |  |  | (58.3 | ) |  |  | (462.6 | )
|Deficit in the scheme               |  |    | (98.1  | )  |  |        | (55.7  | )     |  |       | (5.2  | ) |  |  | (49.3 | ) |  |  | (208.3 | )
|Related deferred tax asset          |  |    | 7.5    |    |  |        | 22.3   |       |  |       | 1.4   |   |  |  | 15.4  |   |  |  | 46.6   |  
|                                    |  |    |        |    |  |        |        |       |  |       |       |   |  |  |       |   |  |  |        |  
|Net pension liabilities             |  |    | (90.6  | )  |  |        | (33.4  | )     |  |       | (3.8  | ) |  |  | (33.9 | ) |  |  | (161.7 | )
|                                    |  |    |        |    |  |        |        |       |  |       |       |   |  |  |       |   |  |  |        |  

The following amounts at December 31, 2001 were measured in accordance with the requirements of FRS17:

|                                    |  |    |        |    |  |        |       |       |  |       |       |   |  |  |       |   |  |  |        |  
|----------------------------------- |  | -- | ------ | -- |  | ------ | ----- | ----- |  | ----- | ----- | - |  |  | ----- | - |  |  | ------ | -
|                                    |  | UK |        | US |  | Norway |       | Other |  | Total
|                                    |  | £m |        | £m |  | £m     |       | £m    |  | £m   
|                                    |  |    |        |    |  |        |       |       |  |      
|Total market value of assets        |  |    | 190.6  |    |  |        | 54.4  |       |  |       | 22.7  |   |  |  | 8.3   |   |  |  | 276.0  |  
|Present value of scheme liabilities |  |    | (212.4 | )  |  |        | (92.2 | )     |  |       | (26.3 | ) |  |  | (48.7 | ) |  |  | (379.6 | )
|Deficit in the scheme               |  |    | (21.8  | )  |  |        | (37.8 | )     |  |       | (3.6  | ) |  |  | (40.4 | ) |  |  | (103.6 | )
|Related deferred tax asset          |  |    |       |    |  |        | 15.1  |       |  |       | 1.0   |   |  |  | 12.5  |   |  |  | 28.6   |  
|                                    |  |    |        |    |  |        |       |       |  |       |       |   |  |  |       |   |  |  |        |  
|Net pension liabilities             |  |    | (21.8  | )  |  |        | (22.7 | )     |  |       | (2.6  | ) |  |  | (27.9 | ) |  |  | (75.0  | )
|                                    |  |    |        |    |  |        |       |       |  |       |       |   |  |  |       |   |  |  |        |  

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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

If the above amounts had been recognized in the financial statements, the Groups net assets and reserves at December 31, 2002 would be as follows:

|                                                       |  |              |         |              |  |  |        |  
|------------------------------------------------------ |  | ------------ | ------- | ------------ |  |  | ------ | -
|                                                       |  | Dec 31, 2002 |         | Dec 31, 2001
|                                                       |  |              |         | Restated    
|                                                       |  | £m           |         | £m          
|                                                       |  |              |         |             
|Net assets                                             |  |              |         |              |  |  |        |  
|Net assets                                             |  |              | 1,176.9 |              |  |  | 658.9  |  
|Add back SSAP 24 net pension liability and prepayments |  |              | 80.8    |              |  |  | 79.5   |  
|Less effect of NMP joint venture scheme                |  |              | (0.2    | )            |  |  | (0.1   | )
|Less FRS 17 net pension liability, including NMP       |  |              | (208.3  | )            |  |  | (103.6 | )
|Net effect on related deferred tax asset               |  |              | 19.6    |              |  |  | 2.2    |  
|Impact on minority interest                            |  |              |        |              |  |  | (0.2   | )
|                                                       |  |              |         |              |  |  |        |  
|Net assets including FRS 17 pension liability          |  |              | 1,068.8 |              |  |  | 636.7  |  
|                                                       |  |              |         |              |  |  |        |  
|Reserves                                               |  |              |         |              |  |  |        |  
|Reserves                                               |  |              | 1,136.9 |              |  |  | 564.2  |  
|Add back SSAP 24 net pension liability and prepayments |  |              | 80.8    |              |  |  | 79.5   |  
|Less effect of NMP joint venture scheme                |  |              | (0.2    | )            |  |  | (0.1   | )
|Less FRS 17 net pension liability, including NMP       |  |              | (208.3  | )            |  |  | (103.6 | )
|Net effect on related deferred tax asset               |  |              | 19.6    |              |  |  | 2.2    |  
|Impact on minority interest                            |  |              |        |              |  |  | (0.2   | )
|                                                       |  |              |         |              |  |  |        |  
|Reserves including FRS 17 pension liability            |  |              | 1,028.8 |              |  |  | 542.0  |  
|                                                       |  |              |         |              |  |  |        |  

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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

The amounts charged to operating profit under FRS17 would have been:

|                       |  |    |      |    |  |        |     |       |  |       |     |  |  |  |     |  |  |  |      | 
|---------------------- |  | -- | ---- | -- |  | ------ | --- | ----- |  | ----- | --- |  |  |  | --- |  |  |  | ---- | 
|                       |  | UK |      | US |  | Norway |     | Other |  | Total
|                       |  |    |      |    |  |        |     |       |  |      
|                       |  | £m |      | £m |  | £m     |     | £m    |  | £m   
|Current service cost   |  |    | 10.7 |    |  |        | 4.8 |       |  |       | 1.6 |  |  |  | 2.9 |  |  |  | 20.0 | 
|Past service cost      |  |    |     |    |  |        | 0.3 |       |  |       |    |  |  |  |    |  |  |  | 0.3  | 
|                       |  |    |      |    |  |        |     |       |  |       |     |  |  |  |     |  |  |  |      | 
|Total operating charge |  |    | 10.7 |    |  |        | 5.1 |       |  |       | 1.6 |  |  |  | 2.9 |  |  |  | 20.3 | 
|                       |  |    |      |    |  |        |     |       |  |       |     |  |  |  |     |  |  |  |      | 

The amounts charged to financing under FRS17 would have been:

|                                         |  |    |       |    |  |        |      |       |  |       |      |   |  |  |      |   |  |  |       |  
|---------------------------------------- |  | -- | ----- | -- |  | ------ | ---- | ----- |  | ----- | ---- | - |  |  | ---- | - |  |  | ----- | -
|                                         |  | UK |       | US |  | Norway |      | Other |  | Total
|                                         |  |    |       |    |  |        |      |       |  |      
|                                         |  | £m |       | £m |  | £m     |      | £m    |  | £m   
|Expected return on pension scheme assets |  |    | (14.1 | )  |  |        | (4.3 | )     |  |       | (1.8 | ) |  |  | (0.4 | ) |  |  | (20.6 | )
|Interest on pension scheme liabilities   |  |    | 12.1  |    |  |        | 6.3  |       |  |       | 2.0  |   |  |  | 2.8  |   |  |  | 23.2  |  
|                                         |  |    |       |    |  |        |      |       |  |       |      |   |  |  |      |   |  |  |       |  
|Total financing charge/(income)          |  |    | (2.0  | )  |  |        | 2.0  |       |  |       | 0.2  |   |  |  | 2.4  |   |  |  | 2.6   |  
|                                         |  |    |       |    |  |        |      |       |  |       |      |   |  |  |      |   |  |  |       |  

The total pension charge for the Group, including NMP, is £23.8m. Excluding items outside the scope of SSAP 24 of £0.6m, the charge for the year is £23.1m. The effect on the
charge of adopting FRS 17 would therefore be a decrease of £0.2m.

Analysis of the amount that would have been included within the Statement of Total Recognized Gains and Losses under FRS17:

|                                                                                  |  |    |       |    |  |        |       |       |  |       |      |   |  |  |      |   |  |  |        |  
|--------------------------------------------------------------------------------- |  | -- | ----- | -- |  | ------ | ----- | ----- |  | ----- | ---- | - |  |  | ---- | - |  |  | ------ | -
|                                                                                  |  | UK |       | US |  | Norway |       | Other |  | Total
|                                                                                  |  |    |       |    |  |        |       |       |  |      
|                                                                                  |  | £m |       | £m |  | £m     |       | £m    |  | £m   
|Actual return less expected return on pension
scheme assets                       |  |    | (44.8 | )  |  |        | (10.1 | )     |  |       | (1.4 | ) |  |  | (1.4 | ) |  |  | (57.7  | )
|Experience gains/(losses) arising on the
scheme liabilities                       |  |    | 4.2   |    |  |        | (2.7  | )     |  |       | 2.3  |   |  |  | 1.3  |   |  |  | 5.1    |  
|Changes in assumptions underlying the present
value of scheme liabilities1        |  |    | (37.7 | )  |  |        | (8.8  | )     |  |       | (2.9 | ) |  |  | (3.1 | ) |  |  | (52.5  | )
|                                                                                  |  |    |       |    |  |        |       |       |  |       |      |   |  |  |      |   |  |  |        |  
|Actuarial loss recognized in group statement
of total recognized gains and losses |  |    | (78.3 | )  |  |        | (21.6 | )     |  |       | (2.0 | ) |  |  | (3.2 | ) |  |  | (105.1 | )
|                                                                                  |  |    |       |    |  |        |       |       |  |       |      |   |  |  |      |   |  |  |        |  



---

1 Includes the impact of adopting Urgent Issues Task Force (UITF) No 35 Death-in-service and incapacity benefits.

The analysis of experience gains and losses, recognized in the statement of total recognized gains and losses, is as follows:

|                                                                                       |  |    |       |    |  |        |       |       |  |       |      |   |  |  |      |   |  |  |        |  
|-------------------------------------------------------------------------------------- |  | -- | ----- | -- |  | ------ | ----- | ----- |  | ----- | ---- | - |  |  | ---- | - |  |  | ------ | -
|                                                                                       |  | UK |       | US |  | Norway |       | Other |  | Total
|                                                                                       |  |    |       |    |  |        |       |       |  |      
|Actual return less expected return on pension
scheme assets (£m)                       |  |    | (44.8 | )  |  |        | (10.1 | )     |  |       | (1.4 | ) |  |  | (1.4 | ) |  |  | (57.7  | )
|Percentage of scheme assets at end of year                                             |  |    | 26    | %  |  |        | 22    | %     |  |       | 5    | % |  |  | 16   | % |  |  | 23     | %
|Experience gains/(losses) arising on the
scheme liabilities (£m)                       |  |    | 4.2   |    |  |        | (2.7  | )     |  |       | 2.3  |   |  |  | 1.3  |   |  |  | 5.1    |  
|Percentage of scheme liabilities at end of year                                        |  |    | 2     | %  |  |        | (3    | %)    |  |       | 7    | % |  |  | 2    | % |  |  | 1      | %
|Total actuarial loss recognized in statement
of total recognized gains and losses (£m) |  |    | (78.3 | )  |  |        | (21.6 | )     |  |       | (2.0 | ) |  |  | (3.2 | ) |  |  | (105.1 | )
|                                                                                       |  |    |       |    |  |        |       |       |  |       |      |   |  |  |      |   |  |  |        |  
|Percentage of scheme liabilities at end of year                                        |  |    | 29    | %  |  |        | 21    | %     |  |       | 6    | % |  |  | 5    | % |  |  | 23     | %
|                                                                                       |  |    |       |    |  |        |       |       |  |       |      |   |  |  |      |   |  |  |        |  

F-50



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

The movement in the deficit during the year under FRS 17 would have been:

|                                                   |  |    |       |    |  |        |       |       |  |       |      |   |  |  |       |   |  |  |        |  
|-------------------------------------------------- |  | -- | ----- | -- |  | ------ | ----- | ----- |  | ----- | ---- | - |  |  | ----- | - |  |  | ------ | -
|                                                   |  | UK |       | US |  | Norway |       | Other |  | Total
|                                                   |  |    |       |    |  |        |       |       |  |      
|                                                   |  | £m |       | £m |  | £m     |       | £m    |  | £m   
|Deficit in the scheme at the beginning of the year |  |    | (21.8 | )  |  |        | (37.8 | )     |  |       | (3.6 | ) |  |  | (40.4 | ) |  |  | (103.6 | )
|Movement in the year:                              |  |    |       |    |  |        |       |       |  |       |      |   |  |  |       |   |  |  |        |  
|Foreign currency translation                       |  |    |      |    |  |        | 5.2   |       |  |       | (0.8 | ) |  |  | (2.9  | ) |  |  | 1.5    |  
|Current service cost                               |  |    | (10.7 | )  |  |        | (4.8  | )     |  |       | (1.6 | ) |  |  | (2.9  | ) |  |  | (20.0  | )
|Past service costs                                 |  |    |      |    |  |        | (0.3  | )     |  |       |     |   |  |  |      |   |  |  | (0.3   | )
|Contributions                                      |  |    | 10.7  |    |  |        | 5.6   |       |  |       | 3.0  |   |  |  | 2.5   |   |  |  | 21.8   |  
|Other finance income/(charge)                      |  |    | 2.0   |    |  |        | (2.0  | )     |  |       | (0.2 | ) |  |  | (2.4  | ) |  |  | (2.6   | )
|Actuarial loss                                     |  |    | (78.3 | )  |  |        | (21.6 | )     |  |       | (2.0 | ) |  |  | (3.2  | ) |  |  | (105.1 | )
|                                                   |  |    |       |    |  |        |       |       |  |       |      |   |  |  |       |   |  |  |        |  
|Deficit in the scheme at the end of the year       |  |    | (98.1 | )  |  |        | (55.7 | )     |  |       | (5.2 | ) |  |  | (49.3 | ) |  |  | (208.3 | )
|                                                   |  |    |       |    |  |        |       |       |  |       |      |   |  |  |       |   |  |  |        |  
|Opening related deferred tax asset                 |  |    |      |    |  |        | 15.1  |       |  |       | 1.0  |   |  |  | 12.5  |   |  |  | 28.6   |  
|Movement in the year                               |  |    | 7.5   |    |  |        | 7.2   |       |  |       | 0.4  |   |  |  | 2.9   |   |  |  | 18.0   |  
|                                                   |  |    |       |    |  |        |       |       |  |       |      |   |  |  |       |   |  |  |        |  
|Closing related deferred tax asset                 |  |    | 7.5   |    |  |        | 22.3  |       |  |       | 1.4  |   |  |  | 15.4  |   |  |  | 46.6   |  
|                                                   |  |    |       |    |  |        |       |       |  |       |      |   |  |  |       |   |  |  |        |  

31  SHARES IN GROUP UNDERTAKINGS

Information relating to subsidiary, joint venture and associated undertakings
is given on those that, in the opinion of the Directors, principally affected
the profits or assets of the Group.

The primary activity of the majority of the undertakings shown below is the
development and manufacture and/or sale of specialized products for
research-based biotechnology supply and the diagnosis and treatment of disease.
Subsidiary, joint venture, and associated undertakings are listed under the
relevant business operation. Where the relevant company serves more than one
business it is listed under the dominant business operation.

With the exception of Amersham Buchler GmbH & Co. KG and Amersham Biosciences
Limited, the companys holdings in the following undertakings are represented
by ordinary shares. Amersham Buchler GmbH & Co. KG is a partnership in which
the Groups interest is in limited liability form. The Company holds ordinary
and non-voting preference shares in Amersham Biosciences Limited in the
proportion stated below.

All of the companies listed below operate principally in their country of
incorporation or registration and have coterminous year ends.

|                           |  |                  |  |         |     |                             |  |   |     |  |  | 
|-------------------------- |  | ---------------- |  | ------- | --- | --------------------------- |  | - | --- |  |  | 
|                           |  |                  |  |         |     | Proportion of nominal value
|                           |  |                  |  |         |     | of issued shares held      
|                           |  | Country of       |  |        
|                           |  | incorporation or |  | By the  |     | By subsidiary              
|                           |  | registration     |  | Company |     | undertakings               
|                           |  |                  |  |         |     |                            
|                           |  |                  |  |         |     | %                           |  | %
|Holding companies          |  |                  |  |         |     |                             |  |   |     |  |  | 
|Amersham Health Norge AS   |  | Norway           |  |         |    |                             |  |   | 100 | 
|Acam Overseas Holdings Ltd |  | UK               |  |         |    |                             |  |   | 100 | 
|Acam Holdings (UK) Ltd     |  | UK               |  |         | 100 |                             |  |   |    | 
|Amersham Benelux BV        |  | Netherlands      |  |         |    |                             |  |   | 100 | 
|Amersham Biosystems AB     |  | Sweden           |  |         |    |                             |  |   | 100 | 

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AMERSHAM PLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

|                                 |  |           |  |  |     |  |  |  |     |  |  | 
|-------------------------------- |  | --------- |  |  | --- |  |  |  | --- |  |  | 
|Amersham Biosciences             |  |           |  |  |     |  |  |  |     |  |  | 
|Amersham Biosciences Ltd         |  | UK        |  |  | 61  |  |  |  | 39  | 
|Amersham Biosciences Corp        |  | USA       |  |  |    |  |  |  | 100 | 
|Amersham Biosciences UK Ltd      |  | UK        |  |  |    |  |  |  | 100 | 
|Amersham Biosciences Europe GmbH |  | Germany   |  |  |    |  |  |  | 100 | 
|Amersham Biosciences AB          |  | Sweden    |  |  |    |  |  |  | 100 | 
|Amersham Biosciences (SV) Corp   |  | USA       |  |  |    |  |  |  | 100 | 
|Amersham Biosciences KK          |  | Japan     |  |  |    |  |  |  | 100 | 
|Amersham Biosciences Ltd         |  | Hong Kong |  |  |    |  |  |  | 100 | 
|AG Technology Corp               |  | USA       |  |  |    |  |  |  | 100 | 
|InnovaSep Technology Corporation |  | USA       |  |  |    |  |  |  | 100 | 
|Amersham Health                  |  |           |  |  |     |  |  |  |     |  |  | 
|Amersham Buchler GmbH & Co. KG   |  | Germany   |  |  |    |  |  |  | 60  | 
|Amersham Health AS               |  | Norway    |  |  |    |  |  |  | 100 | 
|Amersham Health                  |  | Ireland   |  |  |    |  |  |  | 100 | 
|Amersham Health Inc              |  | USA       |  |  |    |  |  |  | 100 | 
|Amersham Health Pte Ltd          |  | Singapore |  |  |    |  |  |  | 100 | 
|Nycomed Amersham Sorin Srl       |  | Italy     |  |  | 100 |  |  |  |    | 
|Amersham Health Ltd              |  | China     |  |  |    |  |  |  | 80  | 
|Amersham Health Holdings Inc     |  | USA       |  |  |    |  |  |  | 100 | 
|Joint venture                    |  |           |  |  |     |  |  |  |     |  |  | 
|Amersham Health                  |  |           |  |  |     |  |  |  |     |  |  | 
|Nihon Medi-Physics Company Ltd   |  | Japan     |  |  | 29  |  |  |  | 21  | 

The investment in Nihon Medi-Physics Company Ltd relates to ordinary shares.
The shares carry standard pre-emption rights.

A full list of all Group undertakings will be appended to the annual return.

32  NET CASH INFLOW FROM OPERATING ACTIVITIES

|                                                                   |  |              |       |              |  |              |       |   |  |  |       |  
|------------------------------------------------------------------ |  | ------------ | ----- | ------------ |  | ------------ | ----- | - |  |  | ----- | -
|                                                                   |  | 12 months to |       | 12 months to |  | 12 months to
|                                                                   |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|                                                                   |  |              |       |              |  |             
|                                                                   |  | £m           |       | £m           |  | £m          
|Total operating profit before exceptional items                    |  |              | 230.5 |              |  |              | 280.8 |   |  |  | 273.2 |  
|Share of operating profit of joint venture and associates          |  |              | (29.8 | )            |  |              | (26.1 | ) |  |  | (23.2 | )
|Depreciation and amortization                                      |  |              | 71.9  |              |  |              | 80.0  |   |  |  | 116.4 |  
|Loss on sale of tangible fixed assets                              |  |              | 1.1   |              |  |              | 0.3   |   |  |  | 1.5   |  
|Increase/(decrease) in provisions                                  |  |              | (7.7  | )            |  |              | 1.3   |   |  |  | (6.8  | )
|Increase in stocks                                                 |  |              | (26.8 | )            |  |              | (12.1 | ) |  |  | (19.9 | )
|(Increase)/ decrease in debtors                                    |  |              | 11.6  |              |  |              | (16.8 | ) |  |  | 5.3   |  
|Increase/(decrease) in creditors                                   |  |              | 4.5   |              |  |              | 34.9  |   |  |  | (1.0  | )
|                                                                   |  |              |       |              |  |              |       |   |  |  |       |  
|Net cash inflow from operating activities before exceptional
items |  |              | 255.3 |              |  |              | 342.3 |   |  |  | 345.5 |  
|Integration costs paid                                             |  |              | (15.8 | )            |  |              |      |   |  |  |      |  
|Other exceptional items                                            |  |              | (14.8 | )            |  |              | 12.0  |   |  |  |      |  
|                                                                   |  |              |       |              |  |              |       |   |  |  |       |  
|Net cash inflow from operating activities                          |  |              | 224.7 |              |  |              | 354.3 |   |  |  | 345.5 |  
|                                                                   |  |              |       |              |  |              |       |   |  |  |       |  

F-52



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

33  ANALYSIS OF NET DEBT

|                                   |  |             |        |           |  |           |        |              |  |       |      |   |  |  |        |  
|---------------------------------- |  | ----------- | ------ | --------- |  | --------- | ------ | ------------ |  | ----- | ---- | - |  |  | ------ | -
|                                   |  | As at       |        |           |  |           |        | Exchange     |  | As at
|                                   |  | Jan 1, 2002 |        | Cash flow |  | movements |        | Dec 31, 2002
|                                   |  | £m          |        | £m        |  | £m        |        | £m          
|                                   |  |             |        |           |  |           |        |             
|Cash at bank and in hand           |  |             | 56.9   |           |  |           | (30.3  | )            |  |       | 6.1  |   |  |  | 32.7   |  
|Overdrafts                         |  |             | (11.1  | )         |  |           | 4.0    |              |  |       | (0.1 | ) |  |  | (7.2   | )
|                                   |  |             |        |           |  |           |        |              |  |       |      |   |  |  |        |  
|                                   |  |             | 45.8   |           |  |           | (26.3  | )            |  |       | 6.0  |   |  |  | 25.5   |  
|Liquid resources                   |  |             | 96.5   |           |  |           | (74.5  | )            |  |       | 0.1  |   |  |  | 22.1   |  
|Loans due within one year          |  |             | (19.7  | )         |  |           | (14.7  | )            |  |       | (3.0 | ) |  |  | (37.4  | )
|Loans due after more than one year |  |             | (148.0 | )         |  |           | (133.6 | )            |  |       | 89.1 |   |  |  | (192.5 | )
|                                   |  |             |        |           |  |           |        |              |  |       |      |   |  |  |        |  
|Net debt                           |  |             | (25.4  | )         |  |           | (249.1 | )            |  |       | 92.2 |   |  |  | (182.3 | )
|                                   |  |             |        |           |  |           |        |              |  |       |      |   |  |  |        |  

|                                                     |  |             |        |           |  |           |       |              |  |       |      |   |  |  |        |  
|---------------------------------------------------- |  | ----------- | ------ | --------- |  | --------- | ----- | ------------ |  | ----- | ---- | - |  |  | ------ | -
|                                                     |  | As at       |        |           |  |           |       | Exchange     |  | As at
|                                                     |  | Jan 1, 2001 |        | Cash flow |  | movements |       | Dec 31, 2001
|                                                     |  | £m          |        | £m        |  | £m        |       | £m          
|                                                     |  |             |        |           |  |           |       |             
|Cash at bank and in hand                             |  |             | 50.1   |           |  |           | 7.8   |              |  |       | (1.0 | ) |  |  | 56.9   |  
|Overdrafts                                           |  |             | (10.9  | )         |  |           |      |              |  |       | (0.2 | ) |  |  | (11.1  | )
|                                                     |  |             |        |           |  |           |       |              |  |       |      |   |  |  |        |  
|                                                     |  |             | 39.2   |           |  |           | 7.8   |              |  |       | (1.2 | ) |  |  | 45.8   |  
|Short term deposits and interest bearing investments |  |             | 4.7    |           |  |           | 91.4  |              |  |       | 0.4  |   |  |  | 96.5   |  
|Loans due within one year                            |  |             | (2.0   | )         |  |           | (17.9 | )            |  |       | 0.2  |   |  |  | (19.7  | )
|Loans due after more than one year                   |  |             | (365.4 | )         |  |           | 223.2 |              |  |       | (5.8 | ) |  |  | (148.0 | )
|                                                     |  |             |        |           |  |           |       |              |  |       |      |   |  |  |        |  
|Net debt                                             |  |             | (323.5 | )         |  |           | 304.5 |              |  |       | (6.4 | ) |  |  | (25.4  | )
|                                                     |  |             |        |           |  |           |       |              |  |       |      |   |  |  |        |  

34  RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

|                                                                         |  |            |        |            |  |            |        |   |  |  |        |  
|------------------------------------------------------------------------ |  | ---------- | ------ | ---------- |  | ---------- | ------ | - |  |  | ------ | -
|                                                                         |  | Dec 31, 00 |        | Dec 31, 01 |  | Dec 31, 02
|                                                                         |  | £m         |        | £m         |  | £m        
|                                                                         |  |            |        |            |  |            |        |  
|Increase/(decrease) in cash in period                                    |  |            | 0.8    |            |  |            | 7.8    |   |  |  | (26.3  | )
|Cash (inflow)/outflow from liquid resources                              |  |            | (64.1  | )          |  |            | 91.4   |   |  |  | (74.5  | )
|Cash (inflow)/outflow from reduction/increase in
loans and lease finance |  |            | 70.3   |            |  |            | 205.3  |   |  |  | (148.3 | )
|                                                                         |  |            |        |            |  |            |        |   |  |  |        |  
|Change in net debt resulting from cash flows                             |  |            | 7.0    |            |  |            | 304.5  |   |  |  | (249.1 | )
|Exchange movements                                                       |  |            | (31.6  | )          |  |            | (6.4   | ) |  |  | 92.2   |  
|                                                                         |  |            |        |            |  |            |        |   |  |  |        |  
|Movement in net debt in the period                                       |  |            | (24.6  | )          |  |            | 298.1  |   |  |  | (156.9 | )
|Net debt at January 1                                                    |  |            | (298.9 | )          |  |            | (323.5 | ) |  |  | (25.4  | )
|                                                                         |  |            |        |            |  |            |        |   |  |  |        |  
|Net debt at December 31                                                  |  |            | (323.5 | )          |  |            | (25.4  | ) |  |  | (182.3 | )
|                                                                         |  |            |        |            |  |            |        |   |  |  |        |  

35  RELATED PARTY DISCLOSURES

Apart from the transactions noted below there were no other material items
requiring disclosure.

Transactions with Nihon Medi-Physics Company Limited (NMP)

During 2002 the Group made sales to NMP of £7.6m (2001  £6.6m, 2000  £7.5m)
and purchases of £0.1m, (2001  £0.1m, 2000  £0.1m). At the year end the
Group was owed £1.0m (2001  £1.3m, 2000  £2.1m) in respect of trading
balances.

Transactions with Reviss Services Limited (RSL)

During 1996 the Group disposed of its Puridec business to RSL, then an
associated undertaking, for a consideration of £5.9m payable within a seven
year period. At December 31, 2002 the group held a 10% trade investment in
RSL. During 2002 the Group recharged RSL in relation to the provision of
payroll and other services £0.8m (2001  £1.1m, 2000  £1.5m) and made purchases of £2.9m
(2001  £4.7m, 2000 

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AMERSHAM PLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

£4.5m) in respect of normal trading activities. At
December 31, 2002 the Group owed RSL £0.2m (2001  £0.1m, 2000  £0.2m) and
was owed £0.6m, (2001  £1.3m, 2000  £2.2m) comprising £0.6m (2001  £0.6m,
2000  £0.5m) in respect of other services and £nil,
(2001  £0.7m, 2000  £1.7m) in relation to the sale of Puridec business.

Transactions with Gyros AB

During 2002 the Group made milestone payments of £nil (2001  £1.0m, 2000 -
£2.8m) to Gyros AB. The Group holds a 9.7% interest in Gyros AB. At December
31, 2002 the Group owed Gyros AB £nil (2001  £nil, 2000  £1.1m).

Transactions with Cimarron Software Inc

From January 1, 2002 to May 10, 2002 the Group held a trade investment in
Cimarron Software Inc representing 19% of that companys equity. During the
period to May 10, 2002 the Group paid £0.5m (2001  £1.1m, 2000  £0.8m) to
Cimarron Software Inc in respect of normal trading activities. From May 10,
2002 onwards, Cimarron Software Inc has been consolidated as a subsidiary
undertaking.

Transactions with Molecular Staging Inc.

The Group holds a trade investment in Molecular Staging Inc. During 2002, the
Group made sales of £nil (2001  £0.2m, 2000  £nil) to Molecular Staging
Inc, and made purchases of £0.8m (2001  £0.4m, 2000  £0.8m), in respect of
normal trading activities.

Transactions with Nycomed Pharma

During 2001 the Group made sales to Nycomed Pharma of £2.8m (2000  £7.0m) and
purchased £4.0m (2000  £2.7m) in respect of normal trading activities to the
date of disposal.

Loan to Dr A Carr

The Group has agreed to provide an interest free, secured loan to Dr A Carr,
the Chief Executive of Amersham Biosciences, of up to $300,000 to assist in
the purchase of a house following his relocation to the US. The loan will be
repayable over five years in equal bi-weekly installments or on his ceasing to
be employed by the Group, if earlier. The balance due on the loan at December
31, 2002 was $231,000 (2001  $291,000, 2000  $162,000). The loan has been
repaid since the year end.

Transactions with MU Biotech AB

During the year, the Group made royalty payments to MU Biotech AB, a company
of which Professor Uhlen is the sole director and shareholder, of SEK 800,000,
with an additional SEK 400,000 accrued payments at December 31, 2002. These
payments were made in respect of royalty agreements entered into prior to the
appointment of Professor Uhlen as a non-executive director.

36  CONTINGENT LIABILITIES

The Group is involved in various negotiations or disputes of a nature
considered typical for its businesses, including those relating to product
liability and infringements and claims of intellectual property rights,
validity of patents and taxation. Although there can be no assurance regarding
the outcome of any of these negotiations or disputes, the Group believes that
on the basis of current available information they will not have a material
adverse impact on the Groups financial position.

37  RESTATEMENT OF PRIOR PERIODS

Following the introduction of Financial Reporting Standard 19, Deferred
Taxation in 2002, the Group has changed its accounting policy with respect to
deferred taxation. Under the previous policy, provision was made for deferred
taxation, using the liability method, on all material timing differences to the
extent that it was probable that an asset or liability would crystallise. Under
the revised accounting policy, liabilities will be recognized for most types of timing differences regardless of whether they are
anticipated to reverse in the foreseeable future. Deferred taxation assets will
be recognized to the extent that it is more likely than not that they will
reverse.

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AMERSHAM PLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

The adjustments required to shareholders funds are set out below:

|                                                |  |            |      |            |  |  |      |  
|----------------------------------------------- |  | ---------- | ---- | ---------- |  |  | ---- | -
|                                                |  | 12 months  |      | 12 months 
|                                                |  | to Dec 31, |      | to Dec 31,
|                                                |  | 2001       |      | 2000      
|                                                |  | £m         |      | £m        
|                                                |  |            |      |           
|Adjustment to opening shareholders funds       |  |            | 8.5  |            |  |  |     |  
|Effect of adoption of FRS 19 at January 1, 2001 |  |            |     |            |  |  | 12.3 |  
|Reverse deferred tax provision under SSAP 15    |  |            | 4.5  |            |  |  |     |  
|Deferred tax provision under FRS 19             |  |            | (9.0 | )          |  |  |     |  
|Attributable to minority interest  FRS 19      |  |            | 0.4  |            |  |  | (3.8 | )
|                                                |  |            |      |            |  |  |      |  
|Adjustment to closing shareholders funds       |  |            | 4.4  |            |  |  | 8.5  |  
|                                                |  |            |      |            |  |  |      |  

In the year ended December 31, 2001, deferred tax charged under FRS 19 amounted
to £9.0m; this would have been £4.5m under SSAP 15. For the year ended
December 31, 2002, deferred tax charged under FRS 19 amounted to £23.1m; this
would have been £18.9m under SSAP 15.

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)



|38. |  | SUMMARY OF DIFFERENCES BETWEEN UK AND US GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES (GAAP)
|--- |  | -------------------------------------------------------------------------------------------

The accompanying financial statements have been prepared in accordance with UK
GAAP, which differs in certain material respects from US GAAP. Such
differences involve methods for measuring the amounts shown in the financial
statements, as well as additional disclosures required by US GAAP.

The effect on the Groups net income and shareholders equity of applying the
significant differences between UK GAAP and US GAAP is summarized in the
tabular reconciliation statement set out below:

Reconciliation of consolidated profit and loss accounts

|                                                                                     |                                       |                       |      |    |       |      |        |              |       |              |        |              |      |      |        |       |   | 
|------------------------------------------------------------------------------------ | ------------------------------------- | --------------------- | ---- | -- | ----- | ---- | ------ | ------------ | ----- | ------------ | ------ | ------------ | ---- | ---- | ------ | ----- | - | 
|                                                                                     |                                       |                       |      |    |       |      |        | 12 months to |       | 12 months to |        |              |      |     
|                                                                                     |                                       |                       |      |    |       |      |        | Dec 31, 00   |       | Dec 31, 01   |        | 12 months to
|                                                                                     |                                       |                       |      |    |       |      |        | (restated)   |       | (restated)   |        | Dec 31, 02  
|                                                                                     |                                       |                       |      |    |       |      |        | £m           |       | £m           |        | £m          
|                                                                                     |                                       |                       |      |    |       |      |        |              |       |              |        |             
|Profit attributable to shareholders reported under
UK GAAP                           |                                       |                       |      |    |       |      | 107.0  |              |       |              | 210.7  |              |      |      | 178.7  |      
|US GAAP adjustments:                                                                 |                                       |                       |      |    |       |      |        |              |       |              |        |              |      |      |        |      
|Business combinations:                                                               |                                       |                       |      |    |       |      | (118.0 | )            |       |              | (107.7 | )            |      |      | (5.6   | )    
|                                                                                     | Effect of SFAS 142                    |                       |      | (i | )     |      |        |             |       |              |        |             |      |      |        | 36.6  |  
|                                                                                     | Goodwill amortization                 |                       |      | (i | )     |      |        | (74.9        | )     |              |        | (65.1        | )    |      |        |      |  
|                                                                                     | Amortization of intangible assets     |                       |      | (i | )     |      |        | (41.1        | )     |              |        | (41.8        | )    |      |        | (42.2 | )
|                                                                                     | Write-off of purchased in-process R&D |                       |      | (i | )     |      |        | (2.0         | )     |              |        |             |      |      |        |      |  
|                                                                                     | Revaluation of inventory              |                       |      | (i | )     |      |        |             |       |              |        | (0.8         | )    |      |        |      |  
|Accounting for purchase of minority interest in
Amersham Biosciences:                |                                       |                       |      |    |       |      |       |              |       |              |       |              |      |      | (108.2 | )    
|                                                                                     | Amortization of intangible assets     |                       |      | (i | )     |      |        |             |       |              |        |             |      |      |        | (41.4 | )
|                                                                                     | Write-off of purchased in-process R&D |                       |      | (i | )     |      |        |             |       |              |        |             |      |      |        | (47.7 | )
|                                                                                     | Revaluation of inventory              |                       |      | (i | )     |      |        |             |       |              |        |             |      |      |        | (19.1 | )
|Investment in Nycomed Pharma                                                         |                                       |                       | (i   | )  |       |      | (2.1   | )            |       |              | (0.3   | )            |      |      |       |      
|Disposal of Nycomed Pharma                                                           |                                       | (iii)                 |      |    |      |      |        |              | (10.4 | )            |        |              | (1.2 | )   
|Revenue recognition                                                                  |                                       | (ii)                  |      |    | 7.6   |      |        |              | (2.9  | )            |        |              | (1.2 | )   
|Long term incentive plans                                                            |                                       | (iv)                  |      |    | 0.6   |      |        |              | 0.8   |              |        |              | 0.4  |     
|Financial instruments hedging                                                        |                                       | (vi)                  |      |    | 17.6  |      |        |              | 5.6   |              |        |              | 66.4 |     
|Stock-based compensation                                                             |                                       | (vii)                 |      |    | (14.1 | )    |        |              | (7.9  | )            |        |              | 2.9  |     
|Pensions                                                                             |                                       | (viii)                |      |    | (1.8  | )    |        |              | 0.9   |              |        |              | (4.4 | )   
|Transfer of assets from former pension plans                                         |                                       | (ix)                  |      |    |      |      |        |              | 6.0   |              |        |              | (1.0 | )   
|Accounting for investment in NMP:                                                    |                                       |                       |      |    |       |      |        |              |       |              |        |              |      |      |        |      
|                                                                                     |                                       | Goodwill amortization |      |    | (i    | )    |        |              | (3.6  | )            |        |              | (3.6 | )    |        |       |  | 
|Investments in equity securities                                                     |                                       |                       | (v   | )  |       |      |       |              |       |              | (1.6   | )            |      |      | (1.2   | )    
|Other                                                                                |                                       |                       |      |    |       |      | (1.2   | )            |       |              | (1.3   | )            |      |      | (1.8   | )    
|Deferred taxation:                                                                   |                                       |                       |      |    |       |      |        |              |       |              |        |              |      |      |        |      
|                                                                                     | Application of full liability method  |                       | (xi) |    |       | 35.8 |        |              |       | 5.6          |        |              |      | 5.9  |       
|                                                                                     | Tax effect of US GAAP adjustments     |                       | (xi) |    |       | 30.0 |        |              |       | 20.5         |        |              |      | 29.7 |       
|Cumulative effect of changes in revenue
recognition as at January 1, 2000 net of tax |                                       | (ii)                  |      |    | (10.8 | )    |        |              |      |              |        |              |     |     
|Minority interest                                                                    |                                       | (xii)                 |      |    | 17.6  |      |        |              | 10.0  |              |        |              | 1.1  |     
|                                                                                     |                                       |                       |      |    |       |      |        |              |       |              |        |              |      |      |        |      
|Total US GAAP adjustments                                                            |                                       |                       |      |    |       |      | (42.4  | )            |       |              | (86.3  | )            |      |      | (18.2  | )    
|                                                                                     |                                       |                       |      |    |       |      |        |              |       |              |        |              |      |      |        |      
|Net income in accordance with US GAAP                                                |                                       |                       |      |    |       |      | 64.6   |              |       |              | 124.4  |              |      |      | 160.5  |      
|                                                                                     |                                       |                       |      |    |       |      |        |              |       |              |        |              |      |      |        |      
|Basic earnings per share in accordance with US GAAP                                  |                                       |                       |      |    |       |      | 10.2p  |              |       |              | 19.6p  |              |      |      | 23.4p  |      
|Diluted earnings per share in accordance with US
GAAP*                               |                                       |                       |      |    |       |      | 10.1p  |              |       |              | 19.5p  |              |      |      | 23.3p  |      

*Options exercisable under the Groups share option schemes (see note 25)
could dilute basic earnings per share in the future.

F-56



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Reconciliation of shareholders equity

|                                                                      |                                              |        |      |    |       |       |              |         |              |       |              |         |       |        |         |         |  
|--------------------------------------------------------------------- | -------------------------------------------- | ------ | ---- | -- | ----- | ----- | ------------ | ------- | ------------ | ----- | ------------ | ------- | ----- | ------ | ------- | ------- | -
|                                                                      |                                              |        |      |    |       |       | 12 months to |         | 12 months to |       |              |         |      
|                                                                      |                                              |        |      |    |       |       | Dec 31, 00   |         | Dec 31, 01   |       | 12 months to
|                                                                      |                                              |        |      |    |       |       | (restated)   |         | (restated)   |       | Dec 31, 02  
|                                                                      |                                              |        |      |    |       |       | £m           |         | £m           |       | £m          
|                                                                      |                                              |        |      |    |       |       |              |         |              |       |             
|Equity shareholders funds reported under UK GAAP                     |                                              |        |      |    |       |       | 416.9        |         |              |       | 596.3        |         |       |        | 1,172.0 |        
|US GAAP adjustments:                                                  |                                              |        |      |    |       |       |              |         |              |       |              |         |       |        |         |        
|Business combinations:                                                |                                              |        |      |    |       |       | 1,757.6      |         |              |       | 1,761.6      |         |       |        | 1,829.3 |        
|                                                                      | Effect of SFAS 142                           |        |      |    |       |       |              |        |              |       |              |        |       |        |         | 36.6    |  
|                                                                      | Goodwill                                     |        |      | (i | )     |       |              | 1,240.4 |              |       |              | 1,237.7 |       |        |         | 1,242.5 |  
|                                                                      | Intangible assets                            |        |      | (i | )     |       |              | 364.3   |              |       |              | 371.8   |       |        |         | 398.1   |  
|                                                                      | Purchased in-process R&D                     |        |      | (i | )     |       |              | 152.9   |              |       |              | 152.9   |       |        |         | 152.9   |  
|                                                                      | Revaluation of inventory                     |        |      | (i | )     |       |              |        |              |       |              | (0.8    | )     |        |         | (0.8    | )
|Accumulated amortization:                                             |                                              |        |      |    |       |       | (558.6       | )       |              |       | (667.9       | )       |       |        | (753.2  | )      
|                                                                      | Goodwill                                     |        |      | (i | )     |       |              | (240.1  | )            |       |              | (304.8  | )     |        |         | (308.9  | )
|                                                                      | Intangible assets                            |        |      | (i | )     |       |              | (161.6  | )            |       |              | (206.2  | )     |        |         | (287.4  | )
|                                                                      | Purchased in-process R&D written off         |        |      | (i | )     |       |              | (156.9  | )            |       |              | (156.9  | )     |        |         | (156.9  | )
|Accounting for purchase of minority interest in Amersham
Biosciences: |                                              |        |      |    |       |       |             |         |              |       |             |         |       |        | (8.6    | )      
|                                                                      | Goodwill                                     |        |      | (i | )     |       |              |        |              |       |              |        |       |        |         | (391.2  | )
|                                                                      | Intangible assets                            |        |      | (i | )     |       |              |        |              |       |              |        |       |        |         | 422.9   |  
|                                                                      | Intangible assets  accumulated amortization |        |      | (i | )     |       |              |        |              |       |              |        |       |        |         | (40.3   | )
|                                                                      | Purchased in-process R&D                     |        |      | (i | )     |       |              |        |              |       |              |        |       |        |         | 47.7    |  
|                                                                      | Purchased in-process R&D written off         |        |      | (i | )     |       |              |        |              |       |              |        |       |        |         | (47.7   | )
|Investment in Nycomed Pharma                                          |                                              |        | (i   | )  |       |       | 11.0         |         |              |       | 1.5          |         |       |        |        |        
|Long term incentive plan                                              |                                              | (iv)   |      |    | (1.1  | )     |              |         | (0.3         | )     |              |         | 0.1   |       
|Stock-based compensation                                              |                                              | (vii)  |      |    |      |       |              |         | 0.6          |       |              |         | 0.2   |       
|Share ownership trust (QUEST)                                         |                                              | (iv)   |      |    | (16.4 | )     |              |         | (19.5        | )     |              |         | (16.4 | )     
|Investments in equity securities                                      |                                              |        | (v   | )  |       |       |             |         |              |       | (1.4         | )       |       |        | (2.4    | )      
|Financial instruments hedging                                         |                                              | (vi)   |      |    | 13.3  |       |              |         | 12.8         |       |              |         | 32.9  |       
|Pensions                                                              |                                              | (viii) |      |    | (5.8  | )     |              |         | (26.1        | )     |              |         | (73.5 | )     
|Transfer of assets from former pension plans                          |                                              | (ix)   |      |    |      |       |              |         | 6.0          |       |              |         | 5.0   |       
|Accounting for investment in NMP:                                     |                                              |        |      |    |       |       | 45.3         |         |              |       | 41.7         |         |       |        | 41.7    |        
|                                                                      | Step-by-step acquisition/foreign exchange    |        |      | (x | )     |       |              | 0.1     |              |       |              | 0.1     |       |        |         | 0.1     |  
|                                                                      | Goodwill                                     |        |      | (i | )     |       |              | 76.9    |              |       |              | 76.9    |       |        |         | 76.9    |  
|                                                                      | Accumulated amortization of goodwill         |        |      | (i | )     |       |              | (19.9   | )            |       |              | (23.5   | )     |        |         | (23.5   | )
|                                                                      | Purchased in-process R&D written off         |        |      | (i | )     |       |              | (11.8   | )            |       |              | (11.8   | )     |        |         | (11.8   | )
|Revenue recognition                                                   |                                              | (ii)   |      |    |      |       |              |         | (2.9         | )     |              |         | (3.9  | )     
|Deferred taxation:                                                    |                                              |        |      |    |       |       |              |         |              |       |              |         |       |        |         |        
|                                                                      | Application of full liability method         |        | (xi) |    |       | 22.7  |              |         |              | 28.7  |              |         |       | 27.6   |        
|                                                                      | Tax effect of US GAAP adjustments            |        | (xi) |    |       | (75.9 | )            |         |              | (55.7 | )            |         |       | (142.8 | )      
|Other                                                                 |                                              |        |      |    |       |       | (1.0         | )       |              |       | (3.1         | )       |       |        | (3.8    | )      
|Minority interest                                                     |                                              | (xii)  |      |    | (85.2 | )     |              |         | (75.6        | )     |              |         |      |       
|Ordinary dividends                                                    |                                              | (xiii) |      |    | 26.9  |       |              |         | 30.3         |       |              |         | 36.0  |       
|                                                                      |                                              |        |      |    |       |       |              |         |              |       |              |         |       |        |         |        
|Total US GAAP adjustments                                             |                                              |        |      |    |       |       | 1,132.8      |         |              |       | 1,030.7      |         |       |        | 968.2   |        
|                                                                      |                                              |        |      |    |       |       |              |         |              |       |              |         |       |        |         |        
|Shareholders equity in accordance with US GAAP                       |                                              |        |      |    |       |       | 1,549.7      |         |              |       | 1,627.0      |         |       |        | 2,140.2 |        
|                                                                      |                                              |        |      |    |       |       |              |         |              |       |              |         |       |        |         |        

Figures for the 12 months ended December 31, 2000 and 2001 have been restated
following the introduction of FRS 19 as explained in Note 37.

F-57



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Net income for the 12 months to December 31, 2000 and 2001, and shareholders
equity at December 31, 2000 and 2001 in accordance with US GAAP have been
restated as outlined in notes (iv), (vi), (ix) and (xi) below.

The effect of these restatements on the 12 months to December 31, 2000 reduces
net income by £8.2m from £72.8m to £64.6m, with a corresponding 1.3p reduction
in basic net income per share for the 12 months to December 31, 2000. The
restatements have reduced shareholders equity at December 31, 2000 by £8.2m,
from £1,557.9m to £1,549.7m.

The effect of these restatements on the 12 months to December 31, 2001
increases net income by £16.1m, from £108.3m to £124.4m, with a corresponding
2.5p increase in basic net income per share for the 12 months to December 31,
2001. The restatements have reduced shareholders equity by £1.6m, from
£1,628.6m to £1,627.0m at December 31, 2001.



|(i) |  | Business combinations
|--- |  | ---------------------

Under both UK GAAP and US GAAP acquisitions are accounted for as purchase
business combinations. However, certain differences between UK GAAP and US
GAAP in the application of the purchase method of accounting for business
combinations are set out below.

Goodwill, intangible and other assets

Both UK GAAP and US GAAP require purchase consideration to be allocated to the
net assets acquired at their fair value on the date of acquisition, with the
difference between the consideration and the fair value of the identifiable
net assets recorded as goodwill. Under the requirements of FRS10 Goodwill
and Intangible Assets, goodwill arising on acquisitions of subsidiaries,
joint ventures, and associates during accounting periods ending on or after
December 23, 1998 should be capitalized and amortized over its useful economic
life. This treatment of goodwill is similar to its treatment under US GAAP,
prior to the introduction of Statement of Financial Accounting Standards
(SFAS) 142 Goodwill and other intangible assets. The impact of the
introduction of SFAS 142 is discussed below. However, because FRS 10 need not
be applied retrospectively to goodwill written off against shareholders funds
in earlier years, there will continue to be differences between the goodwill
calculated under UK GAAP and US GAAP. For the purposes of US GAAP, goodwill
written off against shareholders funds under UK GAAP has been reinstated.

UK GAAP requires an allocation of purchase consideration to intangible assets
which are separable from the business. For UK GAAP purposes, intangible
assets, other than goodwill, acquired in a business combination, which are not
separable and measurable, are not capitalized. US GAAP requires an allocation
of consideration to identifiable intangible assets if they arise from
contractual or other legal rights. If intangible assets do not arise from
contractual or legal rights, the asset is recognized apart from goodwill only
if it is separable. The intangible assets are being amortized on a
straight-line basis over periods up to 10 years.

Effect of SFAS 142
Goodwill and other intangible assets

Under US GAAP, following the introduction of SFAS 142, goodwill and intangible
assets with indefinite useful lives are not amortized, but reviewed annually
for impairment. The 2002 amortization charge on such goodwill recognized for
UK GAAP has been reversed for US GAAP purposes. The impact of the
introduction of SFAS 142 on net income per share is analyzed below:

F-58



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

|                                                                               |  |              |       |              |  |              |       |  |  |  |       | 
|------------------------------------------------------------------------------ |  | ------------ | ----- | ------------ |  | ------------ | ----- |  |  |  | ----- | 
|                                                                               |  | 12 months to |       | 12 months to |  |              |       | 
|                                                                               |  | Dec 31, 00   |       | Dec 31, 01   |  | 12 months to
|                                                                               |  | (restated)   |       | (restated)   |  | Dec 31, 02  
|                                                                               |  | £m           |       | £m           |  | £m          
|                                                                               |  |              |       |              |  |             
|Net Income                                                                     |  |              |       |              |  |              |       |  |  |  |       | 
|Net income as reported under US GAAP                                           |  |              | 64.6  |              |  |              | 124.4 |  |  |  | 160.5 | 
|Add back: goodwill amortization                                                |  |              | 89.2  |              |  |              | 80.4  |  |  |  |      | 
|                                                                               |  |              |       |              |  |              |       |  |  |  |       | 
|Net income under US GAAP adjusted for SFAS 142                                 |  |              | 153.8 |              |  |              | 204.8 |  |  |  | 160.5 | 
|                                                                               |  |              |       |              |  |              |       |  |  |  |       | 
|Net income per share  basic                                                   |  |              | p     |              |  |              | p     |  |  |  | p     | 
|Net income per share as reported under US GAAP                                 |  |              | 10.2  |              |  |              | 19.6  |  |  |  | 23.4  | 
|Add back: goodwill amortization                                                |  |              | 14.1  |              |  |              | 12.7  |  |  |  |      | 
|                                                                               |  |              |       |              |  |              |       |  |  |  |       | 
|Net income per share (basic) as reported
under US GAAP adjusted for SFAS 142   |  |              | 24.3  |              |  |              | 32.3  |  |  |  | 23.4  | 
|                                                                               |  |              |       |              |  |              |       |  |  |  |       | 
|Net income per share  diluted                                                 |  |              | p     |              |  |              | p     |  |  |  | p     | 
|Net income per share (diluted) as reported
under US GAAP                       |  |              | 10.1  |              |  |              | 19.5  |  |  |  | 23.3  | 
|Add back: goodwill amortization                                                |  |              | 14.0  |              |  |              | 12.6  |  |  |  |      | 
|                                                                               |  |              |       |              |  |              |       |  |  |  |       | 
|Net income per share (diluted) as reported
under US GAAP adjusted for SFAS 142 |  |              | 24.1  |              |  |              | 32.1  |  |  |  | 23.3  | 
|                                                                               |  |              |       |              |  |              |       |  |  |  |       | 

Amortization of Intangible assets

The estimated aggregate amortization expense under US GAAP for each of the
five succeeding years, is as follows:

|                  |  |    |       | 
|----------------- |  | -- | ----- | 
|                  |  | £m
|                  |  |   
|12 months to:     |  |    |       | 
|December 31, 2003 |  |    | 100.9 | 
|December 31, 2004 |  |    | 94.5  | 
|December 31, 2005 |  |    | 67.4  | 
|December 31, 2006 |  |    | 65.4  | 
|December 31, 2007 |  |    | 61.4  | 

Purchased research and development

Acquired in-process research and development expenditure recognized under US
GAAP purchase accounting requirements is written off directly to net income in
the year of acquisition: the technological feasibility of such in-process
technology not having been established and not having an alternative future
use. Acquired research and development is not recognized as a separate asset
under UK GAAP.

Purchase of 45% minority interest in Amersham Biosciences

Under UK GAAP, fair value adjustments have been recognized for tangible fixed
assets, listed investments and the funded status of pensions. Under US GAAP,
additional fair value adjustments have been recognized for separable
intangible assets, in-process research and development and the revaluation of
inventory.

The book and fair values of the 45% net assets purchased, under US GAAP, are
set out below:

F-59



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

|                                                        |  |              |       |  
|------------------------------------------------------- |  | ------------ | ----- | -
|                                                        |  | March 21, 02
|                                                        |  | £m          
|                                                        |  |             
|Book value of net assets purchased                      |  |              | 143.4 |  
|Net book value of US GAAP goodwill subsumed on purchase |  |              | (96.5 | )
|Fair value adjustment:                                  |  |              |       |  
|- tangible assets                                       |  |              | 13.4  |  
|- intangible fixed assets                               |  |              | 446.2 |  
|- in-process research and development                   |  |              | 47.7  |  
|- revaluation of inventory                              |  |              | 19.1  |  
|- pensions                                              |  |              | 0.3   |  
|                                                        |  |              |       |  
|Fair value of net assets published                      |  |              | 573.6 |  
|Cost of purchase                                        |  |              | 708.6 |  
|                                                        |  |              |       |  
|Goodwill arising on purchase (US GAAP)                  |  |              | 135.0 |  
|                                                        |  |              |       |  

The intangible assets recognized are being written-off on a straight-line
basis over periods up to 10 years. The in-process research and development
asset has been written-off to income in the year. Following the introduction
of SFAS 142, goodwill amortization recorded under UK GAAP has been reversed
for US GAAP purposes.

Investment in Nycomed Pharma

The remaining 29% investment in Nycomed Pharma was being recorded under the
cost method of accounting under UK GAAP prior to its disposal as the Company
did not exert significant influence over the entity. Under US GAAP, the
investment was accounted for using the equity method.

Revaluation of inventory

Under UK GAAP inventory is recognized at replacement cost. Under US GAAP
inventory acquired in a business combination is recognized at selling price
less a margin for selling.



|(ii) |  | Revenue Recognition
|---- |  | -------------------

The introduction by the US Securities and Exchange Commission of its Staff
Accounting Bulletin 101 required certain amendments under US GAAP to the
revenue recognition policies of the Group. At January 1, 2000 the cumulative
effect of these changes in revenue recognition was a charge of £16.5m,
together with a corresponding tax credit of £5.7m.

Under UK GAAP, contract revenue is recognized when it is earned and
non-refundable and when there are no future obligations under the contract
terms. Under US GAAP, more prescriptive criteria are applied to assess
whether the culmination of the earnings process has occurred and the Group has
a continuing obligation throughout the contract terms. As a result, in the
years ending December 31, 2001 and 2002, certain non-refundable fees have been
deferred over the term of the contract under US GAAP.



|(iii) |  | Disposal of Nycomed Pharma
|----- |  | --------------------------

In 2001, the Group sold its trade investment in Nycomed Pharma. Under US
GAAP, the investment was treated as an associate company resulting in a lower
profit on disposal under the equity method of accounting. Certain costs
associated with the sale have been recognized in the year ended December 31,
2002.



|(iv) |  | Long term incentive plan/share ownership trust
|---- |  | ----------------------------------------------

Under UK GAAP, repurchases of share capital are recorded as fixed asset
investments at cost and amortized over the life of the Companys long-term
incentive plan. Under US GAAP, repurchases of share capital are recorded at
cost as treasury stock within shareholders equity.

F-60



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

During the year ended December 31, 2002, the Group determined that the
adjustment to shareholders equity at December 31, 2001 relating to ESOP
transactions had been incorrectly calculated. Correspondingly, the adjustment
to shareholders equity at December 31, 2001 has been restated with a
reduction of £3.1m to £19.5m.



|(v) |  | Investments in equity securities
|--- |  | --------------------------------

Under UK GAAP, equity securities held for the long-term are recorded in the
balance sheet at cost, less any provision for impairment. Under US GAAP,
available-for-sale securities are carried at fair (i.e. market) value with
unrealized holding gains and losses included as a separate component of
equity, net of tax effects. If a decline in an available for sale security is
considered other than temporary the loss is regarded as realized and taken to
current earnings.



|(vi) |  | Financial instruments hedging
|---- |  | -----------------------------

Under US GAAP, the Group does not qualify for hedge accounting, therefore
gains and losses arising on derivative instruments have been booked directly
to income.

During the year ended December 31, 2002, the Group determined that the
adjustment relating to gains and losses arising on financial instruments for
the years ending December 31, 2000 and December 31, 2001 had been incorrectly
accounted for. Accordingly, the Group has restated the years to December 31,
2000 and December 31, 2001. The adjustment to net income in the year ending
December 31, 2000 has reduced by £11.7m, and the adjustment to shareholders
equity has reduced by £11.7m to £13.3m at December 31, 2000. The adjustment
to net income in the year ending December 31, 2001 has correspondingly
increased by £21.0m to £5.6m at December 31, 2001, with a cumulative increase
to shareholders equity of £3.2m to £12.8m.



|(vii) |  | Stock-based compensation
|----- |  | ------------------------

Under UK GAAP, the Company does not recognize a compensation expense under its
share option plans. Under US GAAP, the compensation expense associated with
shares issued through the share option plans, in consideration for services
received, is recognized as the difference between the quoted market price of
the stock, at the measurement date, and the exercise price of the option.
Compensation costs, as determined above, are expensed over the period in which
the related service is provided. The Group chose to continue applying the
recognition provisions of APB 25 under US GAAP. The pro forma disclosures
required under SFAS 123 are presented in Note 39(e). Under UK GAAP, National
Insurance contributions payable by the Company at the exercise of the options
should be accrued over the relevant vesting period. Under US GAAP, such costs
must be recognized at the exercise date of the option.



|(viii) |  | Pensions
|------ |  | --------

Under UK GAAP, the cost of providing defined benefit pension arrangements is
expensed over the average expected service lives of eligible employees on the
basis of a constant percentage of current and estimated future earnings.
Under US GAAP, SFAS 87 Employers Accounting for Pensions, requires that the
cost is determined based on a comparison of the projected benefit obligation
with the market value of the underlying plan assets and other unrecognized
gains and losses assessed on an actuarial basis. Principally as a result of
this difference in methodology, the Groups US GAAP pension cost can be
significantly different from that determined under UK GAAP and tends to be
more sensitive to changing economic conditions. In line with SFAS 87 an
additional minimum liability of £65.9m at December 31, 2002, and £21.3m at
December 31, 2001, has been recorded, of which £65.0m at December 31, 2002 and
£20.1m at December 31, 2001 has been charged to shareholders equity.



|(ix) |  | Transfer of assets from pension plans
|---- |  | -------------------------------------

A transfer of assets was received from former pension plans in 2001. Under US
GAAP, the proportion of the transfer relating to current employees of the
Group is being spread over the remaining service lives of the employees under
SSAP 24. Under US GAAP, this was taken to income in 2001.

During the year ended December 31, 2002, the Group determined that income
recognized in the year ending December 31, 2001 relating to the transfer of
assets from further pension plans had been incorrectly accounted for under US
GAAP. Net income in the year ending December 31, 2001 has been restated and

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

income recognized on the transfer reduced by £1.0m to £6.0m. The adjustments
to shareholders equity at December 31, 2001 has also been restated, with a
corresponding reduction of £1.0m to £6.0m.



|(x) |  | Accounting for investment in NMP
|--- |  | --------------------------------

Under UK GAAP, the change from the cost method to the equity method in the
year ended March 31, 1997, due to the acquisition of an additional interest in
NMP, did not require retroactive adjustment to the financial statements.
Under US GAAP the investment, results of operations, and shareholders equity
of the Group have been adjusted retroactively in a manner consistent with the
accounting for a step-by-step acquisition of a subsidiary.



|(xi) |  | Deferred taxation
|---- |  | -----------------

Under UK GAAP, provision for deferred taxation is recorded under FRS 19.
Except for certain timing differences relating to revaluations, rolled over
taxable gains and unremitted income, provision is made for all timing
differences that would give rise to a deferred tax liability. Deferred tax
assets are recognized to the extent that it is more likely than not they will
be recoverable. Under US GAAP, deferred taxation is provided for on a full
liability basis. A valuation allowance is established when it is more likely
than not that some portion of all of the deferred tax asset will not be
realized.

Following the adjustments to net income in the years ending December 31, 2000
and December 31, 2001, as outlined in notes (vi) and (ix), the tax effects of
the US GAAP adjustments have been increased by £3.5m to £30.0m in the year
ending December 31, 2000, with a corresponding reduction in shareholders
equity by £3.5m to £75.9m. In the year ending December 31, 2001, the tax
effect of the US GAAP adjustments have been reduced by £3.9m to £20.5m, and
the adjustment to shareholders equity of December 31, 2001 correspondingly
reduced by £0.7m to £55.7m.



|(xii) |  | Minority Interest
|----- |  | -----------------

This amount represents the components of the US GAAP adjustment attributable
to Pharmacia Corporations 45% interest in Amersham Biosciences. The minority
interest was extinguished during the year ended December 31, 2002 on the
purchase of the 45% minority interest in Amersham Biosciences that the Group
did not already own.



|(xiii) |  | Ordinary dividends
|------ |  | ------------------

Under UK GAAP, dividends proposed are provided for on the basis of
recommendation by the Board of Directors for approval by the shareholders.
Under US GAAP, dividends are recorded as a reduction to retained earnings when
they have been formally declared and notice given to shareholders.



|(xiv) |  | Cash flow information
|----- |  | ---------------------

Under UK GAAP, the Consolidated Cash Flow Statements are presented in
accordance with FRS 1. The Statements prepared under FRS 1 present
substantially the same information as that required under US GAAP as
interpreted by SFAS 95.

Under UK GAAP, cash comprises cash in hand and at bank (including overnight
deposits), net of bank overdrafts. Under US GAAP, cash and cash equivalents
include cash and short-term investments with original maturities of three
months or less.

Under UK GAAP, cash flows are presented for operating activities; returns on
investments and servicing of finance; taxation; capital expenditure and
financial investment; acquisitions and disposals; equity dividends paid;
management of liquid resources and financing. US GAAP requires the
classification of cash flows as resulting from operating, investing and
financing activities.

Cash flows under US GAAP in respect of interest received, interest paid,
investment income and taxation would be included within operating activities.
Capital expenditure and financial investment and cash flows from acquisitions
and disposals would be included within investing activities under US GAAP.
Dividends paid by subsidiary undertakings to minority interests, equity
dividends paid and management of liquid resources would be included within
financing activities under US GAAP.

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AMERSHAM PLC AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Management of liquid resources under UK GAAP represents current asset
investments that are held as readily disposable stores of value. Under UK
GAAP, short term deposits, interest bearing and other investments are
classified within management of liquid resources; under US GAAP short term
deposits have been classified as cash and cash equivalents.

A summary of the Groups operating, investing and financing activities,
classified in accordance with US GAAP, is presented below. For purposes of
this summary, cash and cash equivalents consist of cash at bank and in hand,
and short term deposits.

|                                                                                      |  |              |        |              |  |              |        |   |  |  |        |  
|------------------------------------------------------------------------------------- |  | ------------ | ------ | ------------ |  | ------------ | ------ | - |  |  | ------ | -
|                                                                                      |  | 12 months to |        | 12 months to |  | 12 months to
|                                                                                      |  | Dec 31, 00   |        | Dec 31, 01   |  | Dec 31, 02  
|                                                                                      |  | £m           |        | £m           |  | £m          
|                                                                                      |  |              |        |              |  |             
|Cash provided by operating activities                                                 |  |              | 195.8  |              |  |              | 302.1  |   |  |  | 289.4  |  
|Cash provided by/(used in) investing activities                                       |  |              | (155.4 | )            |  |              | 29.6   |   |  |  | (901.6 | )
|Cash used in financing activities                                                     |  |              | (60.4  | )            |  |              | (230.3 | ) |  |  | 507.4  |  
|                                                                                      |  |              |        |              |  |              |        |   |  |  |        |  
|Net (decrease) / increase in cash and cash equivalents under US
GAAP                  |  |              | (20.0  | )            |  |              | 101.4  |   |  |  | (104.8 | )
|Effect of exchange rate changes on cash and cash equivalents                          |  |              | (9.1   | )            |  |              | (0.6   | ) |  |  | 6.2    |  
|Cash and cash equivalents under US GAAP at the beginning of the
year                  |  |              | 81.7   |              |  |              | 52.6   |   |  |  | 153.4  |  
|                                                                                      |  |              |        |              |  |              |        |   |  |  |        |  
|Cash and cash equivalents under US GAAP at the end of the year                        |  |              | 52.6   |              |  |              | 153.4  |   |  |  | 54.8   |  
|Less: Investments within three months of maturity when acquired
(short term deposits) |  |              | (2.5   | )            |  |              | (96.5  | ) |  |  | (22.1  | )
|Add: Overdrafts                                                                       |  |              | (10.9  | )            |  |              | (11.1  | ) |  |  | (7.2   | )
|                                                                                      |  |              |        |              |  |              |        |   |  |  |        |  
|Cash under UK GAAP at the end of the period                                           |  |              | 39.2   |              |  |              | 45.8   |   |  |  | 25.5   |  
|                                                                                      |  |              |        |              |  |              |        |   |  |  |        |  

Consistent with UK GAAP, the cash flows of the overseas subsidiary and
associated undertakings are translated at the average exchange rate of the
period during which they arise.



|(xv) |  | Comprehensive income
|---- |  | --------------------

For the Amersham Group the statement of total recognized gains and losses is
largely the same as if a statement of comprehensive income had been presented
in accordance with SFAS 130, Reporting Comprehensive Income. Under US GAAP,
the unrealized holding gains and losses on equity securities and the
additional minimum pension liability as presented in items (v) and (viii) of
the US GAAP reconciliation, would be recognized in the statement of
comprehensive income.

Additional Information

Presentation of income from interests in associated undertakings

In accordance with US GAAP, the income from interests in associated
undertakings would be presented in the profit and loss account net of tax as
follows:

|                                                 |  |              |       |              |  |              |       |   |  |  |       |  
|------------------------------------------------ |  | ------------ | ----- | ------------ |  | ------------ | ----- | - |  |  | ----- | -
|                                                 |  | 12 months to |       | 12 months to |  | 12 months to
|                                                 |  | Dec 31, 00   |       | Dec 31, 01   |  | Dec 31, 02  
|                                                 |  | £m           |       | £m           |  | £m          
|                                                 |  |              |       |              |  |             
|Income from interests in associated undertakings |  |              | 29.8  |              |  |              | 26.1  |   |  |  | 23.2  |  
|Net interest                                     |  |              | (0.6  | )            |  |              | (0.6  | ) |  |  | (0.6  | )
|Tax                                              |  |              | (13.3 | )            |  |              | (11.7 | ) |  |  | (10.1 | )
|                                                 |  |              |       |              |  |              |       |   |  |  |       |  
|                                                 |  |              | 15.9  |              |  |              | 13.8  |   |  |  | 12.5  |  
|                                                 |  |              |       |              |  |              |       |   |  |  |       |  



|39 |  | ADDITIONAL US GAAP DISCLOSURE REQUIREMENTS
|-- |  | ------------------------------------------



|(a) |  | 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 accounting period.
Accounting estimates have been employed in these financial statements to
determine reported amounts, including realizability, useful lives of assets
and corporate taxes. Actual results could differ from those estimates.

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AMERSHAM PLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)



|(b) |  | Earnings/(loss) per share
|--- |  | -------------------------

Basic and diluted earnings per share in accordance with US GAAP is calculated
as follows:

|                                                          |  |        |       |        |  |           |       |              |  |  |       | 
|--------------------------------------------------------- |  | ------ | ----- | ------ |  | --------- | ----- | ------------ |  |  | ----- | 
|                                                          |  | Net    |       |        |  |           |       | Net earnings
|                                                          |  | income |       | Shares |  | per share
|                                                          |  |        |       |        |  |          
|                                                          |  | £m     |       | m      |  | p        
|Year ended December 31, 2002                              |  |        |       |        |  |           |       |              |  |  |       | 
|Basic earnings per share                                  |  |        | 160.5 |        |  |           | 684.7 |              |  |  | 23.4p | 
|Effect
of potentially dilutive securities  share options |  |        |       |        |  |           | 4.0   |              |  |  |       | 
|                                                          |  |        |       |        |  |           |       |              |  |  |       | 
|Diluted earnings per share                                |  |        |       |        |  |           | 688.7 |              |  |  | 23.3p | 
|                                                          |  |        |       |        |  |           |       |              |  |  |       | 
|Year ended December 31, 2001                              |  |        |       |        |  |           |       |              |  |  |       | 
|Basic earnings per share                                  |  |        | 124.4 |        |  |           | 634.4 |              |  |  | 19.6p | 
|Effect
of potentially dilutive securities  share options |  |        |       |        |  |           | 4.3   |              |  |  |       | 
|                                                          |  |        |       |        |  |           |       |              |  |  |       | 
|Diluted earnings per share                                |  |        |       |        |  |           | 638.7 |              |  |  | 19.5p | 
|                                                          |  |        |       |        |  |           |       |              |  |  |       | 
|Year ended December 31, 2000                              |  |        |       |        |  |           |       |              |  |  |       | 
|Basic earnings per share                                  |  |        | 64.6  |        |  |           | 630.9 |              |  |  | 10.2p | 
|Effect
of potentially dilutive securities  share options |  |        |       |        |  |           | 7.4   |              |  |  |       | 
|                                                          |  |        |       |        |  |           |       |              |  |  |       | 
|Diluted earnings per share                                |  |        |       |        |  |           | 638.3 |              |  |  | 10.1p | 
|                                                          |  |        |       |        |  |           |       |              |  |  |       | 

F-64



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)



|(c) |  | Retirement benefits
|--- |  | -------------------

The net pension cost in accordance with SFAS 87 for the defined benefit plans
in the UK, US, Norway and Sweden were as follows:

|                                                 |  |                  |       |              |  |              |       |       |  |    |       |       |  |  |       |   |  |  |       |   |  |  |       |  
|------------------------------------------------ |  | ---------------- | ----- | ------------ |  | ------------ | ----- | ----- |  | -- | ----- | ----- |  |  | ----- | - |  |  | ----- | - |  |  | ----- | -
|                                                 |  | Pension Benefits
|                                                 |  |                 
|                                                 |  | 12 months to     |       | 12 months to |  | 12 months to
|                                                 |  | Dec 31, 00       |       | Dec 31, 01   |  | Dec 31, 02  
|                                                 |  |                  |       |              |  |             
|                                                 |  | UK               |       | Other        |  | UK           |       | Other |  | UK |       | Other
|                                                 |  |                  |       |              |  |              |       |       |  |    |       |      
|                                                 |  | £m               |       | £m           |  | £m           |       | £m    |  | £m |       | £m   
|Change in benefit obligation:                    |  |                  |       |              |  |              |       |       |  |    |       |       |  |  |       |   |  |  |       |   |  |  |       |  
|Benefit obligation at beginning of period        |  |                  | 162.4 |              |  |              | 101.6 |       |  |    | 219.5 |       |  |  | 117.7 |   |  |  | 240.3 |   |  |  | 130.3 |  
|Service cost                                     |  |                  | 4.0   |              |  |              | 5.5   |       |  |    | 5.5   |       |  |  | 6.3   |   |  |  | 10.7  |   |  |  | 6.7   |  
|Interest cost                                    |  |                  | 10.7  |              |  |              | 7.1   |       |  |    | 13.0  |       |  |  | 8.0   |   |  |  | 13.8  |   |  |  | 8.7   |  
|Changes in assumptions                           |  |                  |      |              |  |              |      |       |  |    | (0.1  | )     |  |  | (3.9  | ) |  |  | 11.6  |   |  |  | 11.4  |  
|Actuarial loss/(gain)                            |  |                  | 42.4  |              |  |              | 3.8   |       |  |    | 5.3   |       |  |  | 3.2   |   |  |  | (4.5  | ) |  |  | (1.1  | )
|Settlements                                      |  |                  |      |              |  |              |      |       |  |    |      |       |  |  |      |   |  |  |      |   |  |  |      |  
|Benefits paid                                    |  |                  |      |              |  |              | (0.7  | )     |  |    | (2.9  | )     |  |  | (3.1  | ) |  |  | (3.6  | ) |  |  | (3.9  | )
|Foreign currency translation                     |  |                  |      |              |  |              | 0.4   |       |  |    |      |       |  |  | 2.1   |   |  |  |      |   |  |  | (3.8  | )
|                                                 |  |                  |       |              |  |              |       |       |  |    |       |       |  |  |       |   |  |  |       |   |  |  |       |  
|Benefit obligation at end of period              |  |                  | 219.5 |              |  |              | 117.7 |       |  |    | 240.3 |       |  |  | 130.3 |   |  |  | 268.3 |   |  |  | 148.3 |  
|                                                 |  |                  |       |              |  |              |       |       |  |    |       |       |  |  |       |   |  |  |       |   |  |  |       |  
|Change in plan assets:                           |  |                  |       |              |  |              |       |       |  |    |       |       |  |  |       |   |  |  |       |   |  |  |       |  
|Fair value of plan assets at beginning of period |  |                  | 175.6 |              |  |              | 68.6  |       |  |    | 192.8 |       |  |  | 74.4  |   |  |  | 190.6 |   |  |  | 77.1  |  
|Actual return on plan assets                     |  |                  | 10.3  |              |  |              | 1.0   |       |  |    | (6.3  | )     |  |  | (2.4  | ) |  |  | (27.5 | ) |  |  | (5.5  | )
|Employer contributions                           |  |                  | 6.9   |              |  |              | 3.3   |       |  |    | 7.0   |       |  |  | 6.0   |   |  |  | 10.7  |   |  |  | 7.7   |  
|Transfers                                        |  |                  |      |              |  |              |      |       |  |    |      |       |  |  |      |   |  |  |      |   |  |  |      |  
|Settlements                                      |  |                  |      |              |  |              |      |       |  |    |      |       |  |  |      |   |  |  |      |   |  |  |      |  
|Benefits paid                                    |  |                  |      |              |  |              | (2.4  | )     |  |    | (2.9  | )     |  |  | (2.6  | ) |  |  | (3.6  | ) |  |  | (2.8  | )
|Foreign currency translation                     |  |                  |      |              |  |              | 3.9   |       |  |    |      |       |  |  | 1.7   |   |  |  |      |   |  |  | (1.3  | )
|                                                 |  |                  |       |              |  |              |       |       |  |    |       |       |  |  |       |   |  |  |       |   |  |  |       |  
|Fair value of plan assets at end of period       |  |                  | 192.8 |              |  |              | 74.4  |       |  |    | 190.6 |       |  |  | 77.1  |   |  |  | 170.2 |   |  |  | 75.2  |  
|                                                 |  |                  |       |              |  |              |       |       |  |    |       |       |  |  |       |   |  |  |       |   |  |  |       |  
|Funded status                                    |  |                  | (26.7 | )            |  |              | (43.3 | )     |  |    | (49.7 | )     |  |  | (53.3 | ) |  |  | (98.1 | ) |  |  | (73.2 | )
|Unrecognized net actuarial (gain)/loss           |  |                  | 29.8  |              |  |              | (7.6  | )     |  |    | 55.4  |       |  |  | (0.4  | ) |  |  | 98.2  |   |  |  | 19.5  |  
|Unrecognized prior service cost                  |  |                  |      |              |  |              |      |       |  |    |      |       |  |  | (0.3  | ) |  |  |      |   |  |  | (0.5  | )
|Unrecognized transitional asset                  |  |                  | 1.5   |              |  |              | (0.4  | )     |  |    | 1.2   |       |  |  |      |   |  |  | 0.9   |   |  |  |      |  
|                                                 |  |                  |       |              |  |              |       |       |  |    |       |       |  |  |       |   |  |  |       |   |  |  |       |  
|Prepaid/(accrued) benefit cost                   |  |                  | 4.6   |              |  |              | (51.3 | )     |  |    | 6.9   |       |  |  | (54.0 | ) |  |  | 1.0   |   |  |  | (54.2 | )
|                                                 |  |                  |       |              |  |              |       |       |  |    |       |       |  |  |       |   |  |  |       |   |  |  |       |  
|Weighted-average assumptions:                    |  |                  |       |              |  |              |       |       |  |    |       |       |  |  |       |   |  |  |       |   |  |  |       |  
|Discount rate                                    |  |                  | 6.00  | %            |  |              | 6.83  | %     |  |    | 5.75  | %     |  |  | 6.99  | % |  |  | 5.50  | % |  |  | 6.49  | %
|Rates of return on plan assets                   |  |                  | 7.50  | %            |  |              | 7.71  | %     |  |    | 7.25  | %     |  |  | 7.71  | % |  |  | 7.25  | % |  |  | 7.51  | %
|Salary growth                                    |  |                  | 4.50  | %            |  |              | 4.17  | %     |  |    | 4.25  | %     |  |  | 4.05  | % |  |  | 4.25  | % |  |  | 4.03  | %
|Pension increases                                |  |                  | 2.50  | %            |  |              | 2.25  | %     |  |    | 2.25  | %     |  |  | 2.26  | % |  |  | 2.25  | % |  |  | 2.24  | %
|Components of net periodic benefit cost:         |  |                  |       |              |  |              |       |       |  |    |       |       |  |  |       |   |  |  |       |   |  |  |       |  
|Service cost                                     |  |                  | 3.9   |              |  |              | 5.5   |       |  |    | 5.5   |       |  |  | 6.3   |   |  |  | 10.7  |   |  |  | 6.7   |  
|Interest cost                                    |  |                  | 10.7  |              |  |              | 7.1   |       |  |    | 13.0  |       |  |  | 8.0   |   |  |  | 13.8  |   |  |  | 8.7   |  
|Expected return on plan assets                   |  |                  | (13.9 | )            |  |              | (5.9  | )     |  |    | (14.7 | )     |  |  | (5.9  | ) |  |  | (13.8 | ) |  |  | (5.9  | )
|Amortization of prior service cost               |  |                  |      |              |  |              | 0.1   |       |  |    |      |       |  |  | 0.1   |   |  |  |      |   |  |  |      |  
|Amortization of transitional asset               |  |                  | 0.3   |              |  |              |      |       |  |    | 0.3   |       |  |  |      |   |  |  | 0.3   |   |  |  |      |  
|Recognized net actuarial (gain)/loss             |  |                  |      |              |  |              | (0.8  | )     |  |    | 0.5   |       |  |  |      |   |  |  | 2.0   |   |  |  | (0.1  | )
|                                                 |  |                  |       |              |  |              |       |       |  |    |       |       |  |  |       |   |  |  |       |   |  |  |       |  
|Net periodic benefit cost                        |  |                  | 1.0   |              |  |              | 6.0   |       |  |    | 4.6   |       |  |  | 8.5   |   |  |  | 13.0  |   |  |  | 9.4   |  
|                                                 |  |                  |       |              |  |              |       |       |  |    |       |       |  |  |       |   |  |  |       |   |  |  |       |  

F-65



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

The pension increase assumption for the plans in Norway reflects past practice
and is not based on current contractual arrangements.

The assets of each funded plan are invested in domestic and overseas equities,
in domestic fixed interest and indexed securities and in property. The asset
allocation reflects the maturity profile of each plan. None of the plans
assets comprise shares in the Company or are leased to the Company.

Amounts recognized in the statement of financial position for the defined
benefit schemes in the UK, US, Norway and Sweden include:

|                                       |  |               |       |               |  |    |       |       |  |  |       |   |  |  |       |  
|-------------------------------------- |  | ------------- | ----- | ------------- |  | -- | ----- | ----- |  |  | ----- | - |  |  | ----- | -
|                                       |  | at Dec 31, 01 |       | at Dec 31, 02
|                                       |  |               |       |              
|                                       |  | UK            |       | Other         |  | UK |       | Other
|                                       |  |               |       |               |  |    |       |      
|                                       |  | £m            |       | £m            |  | £m |       | £m   
|Balance sheet (accrued) benefit cost   |  |               | (14.4 | )             |  |    | (54.0 | )     |  |  | (58.7 | ) |  |  | (61.5 | )
|Balance sheet prepaid benefit cost     |  |               |      |               |  |    |      |       |  |  |      |   |  |  | 1.1   |  
|Accumulated other comprehensive income |  |               | 20.1  |               |  |    |      |       |  |  | 58.8  |   |  |  | 6.2   |  
|Intangible asset                       |  |               | 1.2   |               |  |    |      |       |  |  | 0.9   |   |  |  |      |  
|                                       |  |               |       |               |  |    |       |       |  |  |       |   |  |  |       |  
|Net amount recognized                  |  |               | 6.9   |               |  |    | (54.0 | )     |  |  | 1.0   |   |  |  | (54.2 | )
|                                       |  |               |       |               |  |    |       |       |  |  |       |   |  |  |       |  

In respect of the above plans where the accumulated benefit obligation
exceeded the total plan assets, the total projected benefit obligation was
£388.1m (2001  £350.0m), the total accumulated benefit obligation was £327.8m
(2001  £295.8m), and the fair value of plan assets was £216.6m, (2001 -
£245.0m).



|(d) |  | Financial instruments and related disclosures
|--- |  | ---------------------------------------------

Concentration of credit risk

The Group enters into a variety of financial instruments to reduce its risk
associated with fluctuations in interest rates and foreign currencies. The
Group does not hold or issue financial instruments for trading purposes. The
Group controls credit risk by entering into transactions involving financial
instruments only with authorized counter-parties of strong credit quality
consisting of a large number of major international financial institutions.
Counter-party positions are regularly monitored.

At December 31, 2002, the Group did not consider there to be any significant
concentration of credit risk.

Potential concentrations of credit risk to the Group comprise principally cash
and short term deposits.

The Groups minimum acceptable credit rating for counterparties, for the
purpose of the investment of surplus cash, is A- from Standard & Poors.

Interest rate risk management

The Group uses interest rate swaps to manage its interest rate exposures on
debt and cash positions.

At December 31, 2002, the Group had outstanding interest rate swap agreements
to convert fixed rate obligations to floating rates on notional amounts of
£31.1m, (2001  £52m, 2000  £50m). In addition, the Group had outstanding
interest rate swap agreements to convert floating rate obligations to fixed
rate on notional amounts of £nil, (2001  £35m, 2000  £34m). The table
below summarizes, by notional currency, the weighted average interest rates of
the Groups outstanding interest rate swaps.

|                           |  |              |      |              |  |  |      | 
|-------------------------- |  | ------------ | ---- | ------------ |  |  | ---- | 
|                           |  | 12 months to |      | 12 months to
|                           |  |              |      |             
|                           |  | Dec 31, 01   |      | Dec 31, 02  
|                           |  |              |      |             
|                           |  | US$          |      | US$         
|                           |  | %            |      | %           
|Average incoming swap rate |  |              | 5.01 |              |  |  | 7.09 | 
|Average outgoing swap rate |  |              | 4.22 |              |  |  | 1.60 | 

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AMERSHAM PLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Swap contracts have a remaining life of up to two years, (2001  three
years).

Foreign exchange risk management

The Group borrows in foreign currencies and enters into foreign exchange
contracts to reduce its current balance sheet exposure to foreign exchange
rate fluctuations. The Group maintains foreign currency liabilities to hedge
some of its foreign currency equity investments and Group net assets. The
Group also enters into foreign exchange contracts to reduce the foreign
exchange risk on uncommitted anticipated transactions.

The contractual amounts of the Groups forward foreign exchange contracts were
as follows:

|                 |  |            |       |            |  |     |       |      |  |  |       |  |  |  |       | 
|---------------- |  | ---------- | ----- | ---------- |  | --- | ----- | ---- |  |  | ----- |  |  |  | ----- | 
|                 |  | Dec 31, 01 |       | Dec 31, 02
|                 |  | Forwards   |       | Forwards  
|                 |  |            |       |           
|                 |  | Buy        |       | Sell       |  | Buy |       | Sell
|                 |  |            |       |            |  |     |       |     
|                 |  | £m         |       | £m         |  | £m  |       | £m  
|U.S. dollars     |  |            | 66.3  |            |  |     | 423.0 |      |  |  | 60.4  |  |  |  | 416.1 | 
|Euro             |  |            | 111.0 |            |  |     | 106.0 |      |  |  | 41.6  |  |  |  | 105.1 | 
|Japanese yen     |  |            | 5.2   |            |  |     | 191.2 |      |  |  | 2.9   |  |  |  | 137.9 | 
|Sterling         |  |            | 332.3 |            |  |     | 96.8  |      |  |  | 265.5 |  |  |  | 159.6 | 
|Danish krona     |  |            | 0.0   |            |  |     | 2.5   |      |  |  | 2.2   |  |  |  | 3.1   | 
|Norwegian kroner |  |            | 229.6 |            |  |     | 17.1  |      |  |  | 454.8 |  |  |  | 11.9  | 
|Swedish krona    |  |            | 152.7 |            |  |     | 0.0   |      |  |  | 92.2  |  |  |  | 17.8  | 
|Other            |  |            | 3.5   |            |  |     | 36.5  |      |  |  | 3.8   |  |  |  | 39.1  | 
|                 |  |            |       |            |  |     |       |      |  |  |       |  |  |  |       | 
|Total            |  |            | 900.6 |            |  |     | 873.1 |      |  |  | 923.4 |  |  |  | 890.6 | 
|                 |  |            |       |            |  |     |       |      |  |  |       |  |  |  |       | 

The Company does not obtain collateral or other security to support financial
instruments subject to credit risk but monitors the credit standing of the
counterparties.

Anticipated transactions are hedged up to three years in advance. Only
forward foreign exchange contracts and currency options are used to hedge
anticipated transactions.

Gains explicitly deferred at the end of the last three financial periods are:

|                  |  |    |      | 
|----------------- |  | -- | ---- | 
|                  |  | £m
|                  |  |   
|December 31, 2002 |  |    | 19.6 | 
|December 31, 2001 |  |    | 11.1 | 
|December 31, 2000 |  |    | 0.1  | 

Gains or losses on anticipated transactions are only recognized in the year to
which the cover relates. The aggregate transaction gain/(loss) included in
net income is as follows:

|                             |  |    |      |  
|---------------------------- |  | -- | ---- | -
|                             |  | £m
|                             |  |   
|Year ended December 31, 2002 |  |    | 10.4 |  
|Year ended December 31, 2001 |  |    | 14.8 |  
|Year ended December 31, 2000 |  |    | (5.7 | )

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AMERSHAM PLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)



|(e) |  | Group share option schemes
|--- |  | --------------------------

The rules of the share option schemes and share purchase plan were approved by
shareholders at Annual General Meetings held in 1998 (Sharesave and Executive
Share Option Scheme 1993), 2000 (Employee Stock Purchase Plan), 2001 (Executive
Share Option Scheme 2001) and 2002 (Sharesave). The schemes are subject to
limits on share issuance including the requirement to make available not more
than 10% of issued share capital over any ten year period.

Certain employees of the Company participate in Amersham sponsored stock option
plans. Grants pursuant to the plans are at the market price of Amersham
shares at the date of grant and, prior to October 2000, included restrictions
on vesting until certain performance targets were met. Unearned compensation
expense, which is shown as a separate component of stockholders equity, has
been recorded pursuant to the intrinsic value approach under APB 25 based on
the market value of Amersham stock at the end of each period and is being
amortized over the vesting period based upon expectations of meeting these
performance targets. In October 2000, the Amersham Board of Directors elected
to remove the performance conditions of the options. Thus, the unearned
compensation expense became fixed based on the market value of Amersham stock
on the date the performance condition was removed, and is being amortized over
the remaining vesting period of the options.

Save as you earn scheme (Sharesave)

Under Sharesave, eligible employees (i.e. all UK employees, including Executive
Directors) may elect to save specified amounts each month for a period of
three, five or seven years. The scheme is subject to a cumulative maximum
investment of £250 per month for each individual. Within six months from the
end of this period the employee can elect to buy shares at a price
approximately 20% below the market price of Amersham shares at the date the
employee originally elects to participate in the Scheme or the employee may
elect to receive a refund of contributions with interest.


Stock options under Sharesave are as follows:

|                                                     |  |                     |            |                  |  |                   |       | 
|---------------------------------------------------- |  | ------------------- | ---------- | ---------------- |  | ----------------- | ----- | 
|                                                     |  |                     |            |                  |  | Weighted exercise
|                                                     |  | Shares under option |            | price per option
|                                                     |  |                     |            |                 
|Balance at December 31, 2000 (1,279,992 exercisable) |  |                     | 6,363,224  |                  |  |                   | £2.86 | 
|Granted                                              |  |                     | 810,516    |                  |  |                   | £4.80 | 
|Exercised                                            |  |                     | (911,382   | )                |  |                   | £1.60 | 
|Lapsed                                               |  |                     | (253,107   | )                |  |                   | £3.21 | 
|                                                     |  |                     |            |                  |  |                   |       | 
|Balance at December 31, 2001 (1,370,781 exercisable) |  |                     | 6,009,251  |                  |  |                   | £3.30 | 
|                                                     |  |                     |            |                  |  |                   |       | 
|Granted                                              |  |                     | 1,084,797  |                  |  |                   | £4.49 | 
|Exercised                                            |  |                     | (1,397,806 | )                |  |                   | £2.17 | 
|Lapsed                                               |  |                     | (214,744   | )                |  |                   | £3.83 | 
|                                                     |  |                     |            |                  |  |                   |       | 
|Balance at December 31, 2002 (1,464,396 exercisable) |  |                     | 5,481,498  |                  |  |                   | £3.80 | 
|                                                     |  |                     |            |                  |  |                   |       | 

The weighted-average exercise price of options exercisable as at December 31,
2002 and December 31, 2001 are £2.77 and £2.15 respectively.

Executive Share Option Scheme 1993 (ESOS 1993)

Under the ESOS eligible employees may be granted options that shall only be
exercisable if certain conditions of performance are satisfied. The Scheme
permits the Group to make grants with an exercise price up to 15% below the
market value at the date of grant, however, all grants
have been made at market value. Options to acquire shares in the Company are
awarded on a discretionary basis and the options are normally exercisable
between three and ten years from the date of grant. The exercise of the
options granted since October 1993 are subject to the attainment of growth in
the Groups earnings per share of at least 6% more than the increase in the
Retail Price Index in any three consecutive years prior to the exercise of the
option. Under the earlier plan, options were exercisable after three years
with no performance condition.


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AMERSHAM PLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

|                                                     |  |                     |            |                  |  |                   |       | 
|---------------------------------------------------- |  | ------------------- | ---------- | ---------------- |  | ----------------- | ----- | 
|                                                     |  |                     |            |                  |  | Weighted exercise
|                                                     |  | Shares under option |            | price per option
|                                                     |  |                     |            |                 
|Balance at December 31, 2000 (5,330,136 exercisable) |  |                     | 11,544,473 |                  |  |                   | £4.08 | 
|Granted                                              |  |                     |           |                  |  |                   |      | 
|Exercised                                            |  |                     | (3,262,198 | )                |  |                   | £3.40 | 
|Lapsed                                               |  |                     | (475,423   | )                |  |                   | £4.38 | 
|                                                     |  |                     |            |                  |  |                   |       | 
|Balance at December 31, 2001 (5,165,340 exercisable) |  |                     | 7,806,852  |                  |  |                   | £4.35 | 
|                                                     |  |                     |            |                  |  |                   |       | 
|Granted                                              |  |                     |           |                  |  |                   |      | 
|Exercised                                            |  |                     | (1,529,306 | )                |  |                   | £3.74 | 
|Lapsed                                               |  |                     | (140,605   | )                |  |                   | £4.72 | 
|                                                     |  |                     |            |                  |  |                   |       | 
|Balance at December 31, 2002 (6,136,941 exercisable) |  |                     | 6,136,941  |                  |  |                   | £4.49 | 
|                                                     |  |                     |            |                  |  |                   |       | 

The weighted-average exercise price of options exercisable as at December 31,
2002 and December 31, 2001 are £4.49 and £3.79 respectively.

Nycomed Share Option Plan (NSOP)

The Nycomed Share Option Plan was a stock option plan formerly operated by the
Nycomed Group for its employees in the USA under which options were granted
over Nycomed B ADSs. Under the rules of the Plan all outstanding options
became fully exercisable upon the approval of the Offer (made by Amersham
International to acquire all of the issued and outstanding Nycomed Securities)
by the Nycomed Board on July 1, 1997.


Under the terms of the merger outstanding options over Nycomed B ADSs were
converted into options over Amersham B ADSs in accordance with a formula based
on the terms of the merger. Each outstanding option over a Nycomed B ADS was
converted into an option to purchase 0.6506 Amersham B ADSs. The exercise
price of the options was adjusted on conversion by the inverse factor of 0.6506
to preserve the intrinsic value of the option. The conversion formula also
reflected the value of the special dividend which Nycomed paid to its
shareholders on completion of the merger. All converted options remain
exercisable for their full term.

|                                                   |  |                     |          |                  |  |                   |      | 
|-------------------------------------------------- |  | ------------------- | -------- | ---------------- |  | ----------------- | ---- | 
|                                                   |  |                     |          |                  |  | Weighted exercise
|                                                   |  | Shares under option |          | price per option
|                                                   |  |                     |          |                 
|Balance at December 31, 2000 (212,305 exercisable) |  |                     | 212,305  |                  |  | $                 | 3.89 | 
|Granted                                            |  |                     |         |                  |  |                   |     | 
|Exercised                                          |  |                     | (128,395 | )                |  | $                 | 3.81 | 
|Lapsed                                             |  |                     |         |                  |  |                   |     | 
|                                                   |  |                     |          |                  |  |                   |      | 
|Balance at December 31, 2001 (83,910 exercisable)  |  |                     | 83,910   |                  |  | $                 | 4.02 | 
|                                                   |  |                     |          |                  |  |                   |      | 
|Granted                                            |  |                     |         |                  |  |                   |     | 
|Exercised                                          |  |                     | (83,910  | )                |  | $                 | 4.02 | 
|Lapsed                                             |  |                     |         |                  |  |                   |     | 
|                                                   |  |                     |          |                  |  |                   |      | 
|Balance at December 31, 2002 (nil exercisable)     |  |                     |         |                  |  |                   |     | 
|                                                   |  |                     |          |                  |  |                   |      | 

The weighted-average exercise price of options exercisable as at December 31,
2002 and December 31, 2001 are $nil and $4.02 respectively.

Amersham US Stock Option Plan (USOP)

During 2000 a new Executive scheme was introduced in North America consistent
with US Market practice (the US Stock Option Plan). Under this plan options
become exercisable in four equal tranches on the first, second, third and
fourth anniversaries of the date of grant. The shares utilized by the plan
have been purchased in the market and will not lead to a dilution in share
capital. None of the executive directors received option grants under this
plan.

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AMERSHAM PLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

|                                                   |  |                     |           |                  |  |                   |       | 
|-------------------------------------------------- |  | ------------------- | --------- | ---------------- |  | ----------------- | ----- | 
|                                                   |  |                     |           |                  |  | Weighted exercise
|                                                   |  | Shares under option |           | price per option
|                                                   |  |                     |           |                 
|Balance at December 31, 2000 (651,672 exercisable) |  |                     | 2,606,686 |                  |  |                   | £6.19 | 
|Granted                                            |  |                     |          |                  |  |                   |      | 
|Exercised                                          |  |                     | (3,489    | )                |  |                   | £6.23 | 
|Lapsed                                             |  |                     | (198,309  | )                |  |                   | £6.17 | 
|                                                   |  |                     |           |                  |  |                   |       | 
|Balance at December 31, 2001 (601,222 exercisable) |  |                     | 2,404,888 |                  |  |                   | £6.19 | 
|                                                   |  |                     |           |                  |  |                   |       | 
|Granted                                            |  |                     |          |                  |  |                   |      | 
|Exercised                                          |  |                     | (101,925  | )                |  |                   | £6.19 | 
|Lapsed                                             |  |                     | (331,856  | )                |  |                   | £6.18 | 
|                                                   |  |                     |           |                  |  |                   |       | 
|Balance at December 31, 2002 (492,777 exercisable) |  |                     | 1,971,107 |                  |  |                   | £6.19 | 
|                                                   |  |                     |           |                  |  |                   |       | 

The weighted-average exercise price of options exercisable as at December 31,
2002 and December 31, 2001 are £6.19 at both period ends.

Executive share option scheme 2001 (ESOS 2001)

During 2001 and 2002, shares under ESOS 2001 were awarded to Executive
Directors and Senior Managers. Options granted to Senior Managers are
exercisable in four equal tranches in the First, Second, Third and Fourth
anniversaries of the grant. Options granted to Executive Directors are not
normally exercisable until the Third anniversary of the date of grant and to
the extent performance conditions have been satisfied. Options granted to
Senior Managers worldwide are not subject to performance conditions.

|                                                     |  |                     |            |                  |  |                   |       | 
|---------------------------------------------------- |  | ------------------- | ---------- | ---------------- |  | ----------------- | ----- | 
|                                                     |  |                     |            |                  |  | Weighted exercise
|                                                     |  | Shares under option |            | price per option
|                                                     |  |                     |            |                 
|Balance at December 31, 2000 (nil exercisable)       |  |                     |           |                  |  |                   |      | 
|Granted                                              |  |                     | 6,843,888  |                  |  |                   | £5.62 | 
|Exercised                                            |  |                     |           |                  |  |                   |      | 
|Lapsed                                               |  |                     | (89,696    | )                |  |                   | £5.60 | 
|                                                     |  |                     |            |                  |  |                   |       | 
|Balance at December 31, 2001 (1,564,621 exercisable) |  |                     | 6,754,192  |                  |  |                   | £5.62 | 
|                                                     |  |                     |            |                  |  |                   |       | 
|Granted                                              |  |                     | 8,678,506  |                  |  |                   | £6.94 | 
|Exercised                                            |  |                     | (7,165     | )                |  |                   | £5.60 | 
|Lapsed                                               |  |                     | (617,668   | )                |  |                   | £6.22 | 
|                                                     |  |                     |            |                  |  |                   |       | 
|Balance at December 31, 2002 (3,322,163 exercisable) |  |                     | 14,807,865 |                  |  |                   | £6.37 | 
|                                                     |  |                     |            |                  |  |                   |       | 

The weighted-average exercise price of options exercisable as at December 31,
2002 and at December 31 2001 are £6.37 and £5.62 respectively.

Options for All

During the year, options over 1,000 shares each were granted to all employees
in the Group, except for the then four Executive Directors, under the Companys
Options for All programme, to mark the new corporate identity of the Group
and to reinforce the one company strategy. These options were granted under
the rules of the Executive Share Option Scheme approved by shareholders at the
Annual General Meeting in 2001. The options are not subject to performance
conditions and are normally exercisable after three but not more than six years
from the date of grant. Options were granted on a tax approval basis as far as
possible in those countries where local legislation permitted  UK, US,
Ireland, France and Italy. In addition, in those countries where it was not
tax efficient to grant options over shares or there were legal constraints,
equivalent cash options were granted instead of conventional share options.

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AMERSHAM PLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

|                                               |  |                     |           |                  |  |                   |       | 
|---------------------------------------------- |  | ------------------- | --------- | ---------------- |  | ----------------- | ----- | 
|                                               |  |                     |           |                  |  | Weighted exercise
|                                               |  | Shares under option |           | price per option
|                                               |  |                     |           |                 
|Balance at December 31, 2000 (nil exercisable) |  |                     |          |                  |  |                   |      | 
|Granted                                        |  |                     | 9,298,000 |                  |  |                   | £6.35 | 
|Exercised                                      |  |                     |          |                  |  |                   |      | 
|Lapsed                                         |  |                     | (148,000  | )                |  |                   | £6.35 | 
|                                               |  |                     |           |                  |  |                   |       | 
|Balance at December 31, 2001 (nil exercisable) |  |                     | 9,150,000 |                  |  |                   | £6.35 | 
|                                               |  |                     |           |                  |  |                   |       | 
|Granted                                        |  |                     |          |                  |  |                   |      | 
|Exercised                                      |  |                     |          |                  |  |                   |      | 
|Lapsed                                         |  |                     | (568,648  | )                |  |                   | £6.35 | 
|                                               |  |                     |           |                  |  |                   |       | 
|Balance at December 31, 2002 (nil exercisable) |  |                     | 8,581,352 |                  |  |                   | £6.35 | 
|                                               |  |                     |           |                  |  |                   |       | 

Had compensation expense for the Companys SAYE, its ESOS and its NSOP been
determined based upon the fair value at the grant date for awards under these
plans consistent with the methodology prescribed under SFAS No. 123, Accounting
for Stock-Based Compensation, the Groups US GAAP net income and earnings per
share would have been reduced to the following pro forma amounts:

|                           |  |                                |       |              |  |              |       |  |  |  |       | 
|-------------------------- |  | ------------------------------ | ----- | ------------ |  | ------------ | ----- |  |  |  | ----- | 
|                           |  | 12 months to                   |       | 12 months to |  | 12 months to
|                           |  | Dec 31, 00                     |       | Dec 31, 01   |  | Dec 31, 02  
|                           |  |                                |       |              |  |             
|                           |  | (In £m, except per share data)
|US GAAP Net Income         |  |                                |       |              |  |              |       |  |  |  |       | 
|As reported                |  |                                | 64.6  |              |  |              | 124.4 |  |  |  | 160.5 | 
|Pro forma                  |  |                                | 73.4  |              |  |              | 124.1 |  |  |  | 139.6 | 
|Basic
earnings per share   |  |                                |       |              |  |              |       |  |  |  |       | 
|As reported                |  |                                | 10.2p |              |  |              | 19.6p |  |  |  | 23.4p | 
|Pro forma                  |  |                                | 11.6p |              |  |              | 19.5p |  |  |  | 20.4p | 
|                           |  |                                |       |              |  |              |       |  |  |  |       | 
|Diluted earnings per share |  |                                |       |              |  |              |       |  |  |  |       | 
|As reported                |  |                                | 10.1p |              |  |              | 19.5p |  |  |  | 23.3p | 
|Pro forma                  |  |                                | 11.5p |              |  |              | 19.4p |  |  |  | 20.3p | 

The fair value of the options granted are estimated using the Black-Scholes
option pricing model with the following assumptions:

|                          |  |              |     |              |  |              |      |   |  |  |     |  
|------------------------- |  | ------------ | --- | ------------ |  | ------------ | ---- | - |  |  | --- | -
|                          |  | 12 months to |     | 12 months to |  | 12 months to
|                          |  | Dec 31, 00   |     | Dec 31, 01   |  | Dec 31, 02  
|                          |  |              |     |              |  |             
|Risk free rate            |  |              | 6.1 | %            |  |              | 5.0  | % |  |  | 5.0 | %
|Expected life             |  | 4.2 years    |     | 4.4 years    |  | 4.7 years   
|Expected volatility       |  |              | 35  | %            |  |              | 46   | % |  |  | 46  | %
|Underlying dividend yield |  |              | 1.8 | %            |  |              | 1.25 | % |  |  | 1.3 | %

The weighted average fair value of options granted at market price was £3.05
(2001  £2.31, 2000  £1.97) and granted at a discount to market price was
£2.62 (2001  £2.98, 2000  £2.66). The weighted average fair value of grants,
issued at 85% of the lesser of market price on grant date and vesting date,
based on one ADR, was £8.69, (2001  £7.66, 2000  £nil).

No options were issued under the US Stock Option Plan in 2002. The weighted
average fair value for options issued under the stock purchase plan in 2001 was
£nil, (2000  £7.82).

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AMERSHAM PLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)



|(f) |  | Deferred taxation
|--- |  | -----------------

Deferred taxation (assets)/liabilities on the full provision basis under US
GAAP.

|                               |  |               |       |               |  |           |      |           |  |            |       |           |  |  |       |   |  |  |      |  |  |  |       |  
|------------------------------ |  | ------------- | ----- | ------------- |  | --------- | ---- | --------- |  | ---------- | ----- | --------- |  |  | ----- | - |  |  | ---- |  |  |  | ----- | -
|                               |  | At Dec 31, 01 |       |               |  |           |      |           |  |            |       |           |  | 
|                               |  | (restated)    |       | At Dec 31, 02
|                               |  |               |       |              
|                               |  | Full          |       | Valuation     |  | Net       |      | Full      |  | Valuation  |       | Net      
|                               |  | provision     |       | allowances    |  | provision |      | provision |  | allowances |       | provision
|                               |  |               |       |               |  |           |      |           |  |            |       |          
|                               |  | £m            |       | £m            |  | £m        |      | £m        |  | £m         |       | £m       
|                               |  |               |       |               |  | *         |      |           |  |            |       |           |  |  |       | * |  |  |      | 
|Accelerated capital
allowances |  |               | 13.6  |               |  |           |     |           |  |            | 13.6  |           |  |  | 27.0  |   |  |  |     |  |  |  | 27.0  |  
|Capital gains rolled over      |  |               | 6.5   |               |  |           |     |           |  |            | 6.5   |           |  |  | 6.6   |   |  |  |     |  |  |  | 6.6   |  
|Other timing differences       |  |               | (68.2 | )             |  |           | 31.3 |           |  |            | (36.9 | )         |  |  | (66.8 | ) |  |  | 34.2 |  |  |  | (32.6 | )
|                               |  |               |       |               |  |           |      |           |  |            |       |           |  |  |       |   |  |  |      |  |  |  |       |  
|                               |  |               | (48.1 | )             |  |           | 31.3 |           |  |            | (16.8 | )         |  |  | (33.2 | ) |  |  | 34.2 |  |  |  | 1.0   |  
|                               |  |               |       |               |  |           |      |           |  |            |       |           |  |  |       |   |  |  |      |  |  |  |       |  



---

|* |  | The valuation allowances relate principally to tax losses and tax
allowable goodwill primarily in respect of acquired businesses.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------

A valuation allowance is provided to reduce the deferred tax asset to a level
which more likely than not will be realized, based on available evidence
including historical and projected operating results, estimated reversals of
temporary differences and tax planning strategies.



|(g) |  | Foreign currencies
|--- |  | ------------------

The principal exchange rates used to translate overseas group companies
financial information were:

|                    |  |              |        |               |  |        |          |        |  |        |          |        |  |  |        |  |  |  |          |  |  |  |          | 
|------------------- |  | ------------ | ------ | ------------- |  | ------ | -------- | ------ |  | ------ | -------- | ------ |  |  | ------ |  |  |  | -------- |  |  |  | -------- | 
|                    |  | Average rate |        | Year end rate
|                    |  |              |        |              
|                    |  | Dec 31       |        | Dec 31        |  | Dec 31 |          | Dec 31 |  | Dec 31 |          | Dec 31
|                    |  | 2002         |        | 2001          |  | 2000   |          | 2002   |  | 2001   |          | 2000  
|                    |  |              |        |               |  |        |          |        |  |        |          |       
|US dollar           |  |              | 1.51   |               |  |        | 1.44     |        |  |        | 1.51     |        |  |  | 1.61   |  |  |  | 1.45     |  |  |  | 1.49     | 
|Canadian dollar     |  |              | 2.37   |               |  |        | 2.24     |        |  |        | 2.25     |        |  |  | 2.54   |  |  |  | 2.31     |  |  |  | 2.23     | 
|German mark         |  |              |       |               |  |        | 3.16     |        |  |        | 3.22     |        |  |  |       |  |  |  | 3.20     |  |  |  | 3.13     | 
|French franc        |  |              |       |               |  |        | 10.59    |        |  |        | 10.81    |        |  |  |       |  |  |  | 10.75    |  |  |  | 10.50    | 
|Netherlands guilder |  |              |       |               |  |        | 3.56     |        |  |        | 3.63     |        |  |  |       |  |  |  | 3.61     |  |  |  | 3.53     | 
|Belgian franc       |  |              |       |               |  |        | 65.11    |        |  |        | 66.48    |        |  |  |       |  |  |  | 66.09    |  |  |  | 64.59    | 
|Danish krone        |  |              | 11.81  |               |  |        | 12.03    |        |  |        | 12.28    |        |  |  | 11.42  |  |  |  | 12.18    |  |  |  | 11.94    | 
|Norwegian kroner    |  |              | 11.90  |               |  |        | 12.97    |        |  |        | 13.36    |        |  |  | 11.18  |  |  |  | 13.06    |  |  |  | 13.20    | 
|Swedish krona       |  |              | 14.52  |               |  |        | 14.99    |        |  |        | 13.96    |        |  |  | 14.07  |  |  |  | 15.24    |  |  |  | 14.14    | 
|Italian lira        |  |              |       |               |  |        | 3,125.42 |        |  |        | 3,191.00 |        |  |  |       |  |  |  | 3,172.00 |  |  |  | 3,100.00 | 
|Spanish peseta      |  |              |       |               |  |        | 268.54   |        |  |        | 274.17   |        |  |  |       |  |  |  | 273.00   |  |  |  | 266.00   | 
|Australian dollar   |  |              | 2.77   |               |  |        | 2.81     |        |  |        | 2.63     |        |  |  | 2.85   |  |  |  | 2.84     |  |  |  | 2.68     | 
|Japanese yen        |  |              | 188.00 |               |  |        | 175.58   |        |  |        | 164.00   |        |  |  | 191.00 |  |  |  | 190.00   |  |  |  | 171.00   | 
|Swiss franc         |  |              | 2.33   |               |  |        | 2.44     |        |  |        | 2.57     |        |  |  | 2.23   |  |  |  | 2.42     |  |  |  | 2.44     | 
|Euro                |  |              | 1.59   |               |  |        | 1.61     |        |  |        | 1.65     |        |  |  | 1.54   |  |  |  | 1.64     |  |  |  | 1.60     | 



|(h) |  | Impact of recently issued accounting standards
|--- |  | ----------------------------------------------
|   

| | i) |  | UK GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    |  | Retirement Benefits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |  | In November 2000, the Accounting Standards Board, (ASB), issued FRS 17
Retirement Benefits. The standard will have a significant impact on the
way that companies account for pensions and other post retirement benefits
in the future. Although the standard does not become mandatory until
accounting periods beginning on or after January 1, 2005, it sets down
transitional arrangements which require footnote disclosures in the interim
period up to full adoption. Transitional disclosures required under the
standard are given in note 30 to the accounts.

F-72



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)



| | ii) |  | US GAAP
| | --- |  | -------



Asset Retirement Obligations


In June 2001, the FASB published SFAS 143, Accounting for Asset Retirement
Obligations. The standard codifies the accounting for any obligations arising
from asset retirements, requiring the fair value of a liability for obligations
to be recognized in the period it is incurred. Upon initial recognition of
such a liability, entities should capitalize the cost by recognizing an
increase in the carrying value of the related tangible fixed asset. The
statement is effective for financial years beginning after June 15, 2002.




Costs Associated with Exit or Disposal Activities


In June 2002, the FASB published SFAS 146, Accounting for Costs Associated with
Exit or Disposal Activitieswhich addresses financial accounting and reporting
for costs associated with exit or disposal activities and nullifies Emerging
Issues Task Force (EITF) Issue no 94-3, Liability Recognition for Certain
Employee Termination Benefits and other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring). The statement requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred and can be measured at fair value. The
provisions of this statement are effective prospectively for exit or disposal
activities initiated after December 31, 2002.




Disclosure Requirements for Guarantees


In November 2002, the FASB published Interpretation No 45, (FIN 45), Guarantors
Accounting and Disclosure Requirements for Guarantors, Including Indirect
Guarantees of the Indebtedness of Others. FIN 45 elaborates on the existing
disclosure requirements for most guarantees, including loan guarantees such as
standby letters of credit. FIN 45 will be effective on a prospective basis to
guarantees issued or modified after December 31, 2002.




Consolidation of Variable Interest Entities


In January 2003, the FASB published Interpretation No. 46, (FIN 46)
Consolidation of Variable Interest Entities.Under FIN 46, certain entities
known as Variable Interest Entities (VIE) must be consolidated by the
primary beneficiary of the entity. The primary beneficiary is generally
defined as having the majority of the risks and rewards arising from the VIE.
For VIEs in which a significant (but not majority) variable interest is held,
certain disclosures are required. The measurement principles of this
interpretation will be effective for the Groups December 31, 2003 financial
statements.




The Group is still evaluating the impact of SFAS 143, SFAS 146, FIN 45 and FIN
46.




|40. |  | POST BALANCE SHEET EVENTS
|--- |  | -------------------------

On February 26, 2003, the Group announced a restructuring of its discovery
systems business area. The restructuring programme, which is intended to
deliver a more efficient manufacturing cost base and focus R&D on fewer sites,
will result in the net loss of approximately 400 jobs. The Group will incur
one-off costs in the range of £45-50m, which are expected to result in savings
running at the rate of £30-£35m per annum by the end of 2004. The
restructuring plans are expected to bring benefits in 2003 moving the business
to profitability during 2004.

On April 22, 2003, we announced an intended merger of our brachytherapy
business with the urology business of Galil Medical to create a stand-alone
marketing company. The combined sales of both businesses would have been
approximately £57m, ($90m) in 2002. The new company, which is 75% owned by
Amersham, will be accounted for as a joint venture.

F-73



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##### Table of Contents



AMERSHAM PLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)



|41. |  | UK COMPANIES ACT
|--- |  | ----------------

The consolidated financial statements and notes thereto set out on pages F-1 to
F-74, of which this note forms part, do not comprise statutory accounts within
the meaning of Section 240 of the Companies Act 1985 (as amended) insofar as
such accounts have to comply with the disclosure and other provisions of that
Act. Certain reclassifications and changes in presentation and disclosure have
been made to the Groups statutory accounts in order to conform more closely
with the accounting presentation and disclosure requirements applicable in the
United States. Statutory accounts for the year ended December 31, 2002, year
ended December 31, 2001, and the year ended December 31, 2000, on which the
auditors expressed unqualified opinions, have been delivered to the Registrar
of Companies for England and Wales.

F-74