bringing innovation to the life...

Tecan Group Ltd., Seestrasse 103, CH-8708 Männedorf, Switzerland, T+411 922 88 88, F+411 922 88 89, [email protected]

Annual Report 2002Bringing innovation to the Life Sciences

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TECAN PROFILE

Tecan is a leading player in the Life Sciences supply industry. The companyspecializes in the development, production, and distribution of enablingsolutions for Genomics, Proteomics, Drug Discovery and Diagnostics.Founded in Switzerland in 1980, the company has manufacturing, researchand development sites in both North America and Europe and maintains asales and service network in 52 countries. Tecan clients are leading pharma-ceutical and biotechnology companies, university research departmentsand diagnostic laboratories.

The business strategy of Tecan is to focus on growth opportunities in its fourmarket segments of Genomics, Proteomics, Drug Discovery and Diagnostics.The company focuses on key bottlenecks in the Life Science industrythat benefit from its expertise in automation, liquid handling, robotics,detection, software and miniaturization.

Registered shares of Tecan Group are traded on the Swiss SWX stock exchange(TK: TECN / Reuters: TECZn.S / Valor : 1210019). In 2002, Tecan achieved salesof CHF 332.2 million (USD 213.0 million; EUR 226.0 million).

www.tecan.com

CreditsText: Rochat & Partners, Geneva, Switzerland

Design: Inox Graphic Design, Neuchâtel, Switzerland

Prepress/Printing: Neidhart + Schön AG, Zurich Switzerland

Project Management: Tecan Corporate Communications and Corporate Finance, Männedorf, Switzerland

© Copyright Tecan Group Ltd.

BOARD OF DIRECTORS AND MANAGEMENT

TECAN - EXECUTIVE LEADERSHIP COMMITTEE

1. Anton Schrofner President Tecan Instruments2. Franz Rutzer Chief Financial and Operating Officer of Tecan Europe3. Jan Timmers Head of Business Development and Biopharma4. Dr. Emile C. Sutcliffe Chief Executive Officer (CEO)5. Carl Severinghaus President Tecan US6. Steve Levers President Tecan Systems

TECAN - ENHANCED MANAGEMENT TEAM

Joerg Borer Head of Customer ServicesWolfgang Deuringer President Tecan Sales InternationalScott Eaton President Tecan JapanRudolf Eugster CFOSylvain Hunault President Tecan Southern EuropeSarah Kreienbühl Head of Human ResourcesMartin von Lueder President Tecan Central EuropePaul Mitchell President Tecan Northern EuropeBob Young President Tecan Boston

TECAN - BOARD OF DIRECTORS

Mike Baronian Chairman of the BoardProf. Dr. Armin Seiler Vice ChairmanDr. Emile C. Sutcliffe Chief Executive Officer (CEO)Timothy B. Anderson MemberHans-Jörg Kummer Member

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CONTENTS

FOREWORD

Profile 2

Message to Shareholders 4

Bringing Innovation to the Life Sciences 8

MARKETS

Genomics 14

Proteomics 18

Drug Discovery 22

Diagnostics 26

CORPORATE GOVERNANCE 30

FINANCIALS

Chief Financial Officer’s Statement 36

Five-year Consolidated Data 38

Financial Review 39

Consolidated Financial Statements 42

INFORMATION

Glossary 68

Tecan Locations 70

Tecan Board of Directors and Management Team 71

Unfavourable market conditions for the Life Sciences

In 2002, the slowdown in the global economy continued to have a negative impact on international markets. Risk

aversion and extreme caution have become the order of the day for many companies — the Life Science industry is

no exception. In many cases, market confidence has been impaired, investments have declined and many companies

have been left with no choice but to revise financial expectations. This has resulted in reduced expenditure by

biotechnology and pharmaceutical companies around the globe.

Tecan has felt the effects of these unfavourable market conditions. As much as possible, we have been proactive in

our response by putting in place the necessary mechanisms to control costs and manage the fundamentals of our

business. These mechanisms have been effective and will remain active until we see changes in the market.

Throughout the slowdown in the Life Science sector, we have maintained our market share. We have also continued

to strengthen our product portfolio, which should put us in a good position to take advantage of future business

opportunities and of any improvement in economic conditions.

Lower sales – strong financial position

Following strong increases in 2000 and 2001, sales in local currencies decreased by 3.3% in 2002 (-8.4% in CHF). This

was principally due to reduced R&D spending by the pharmaceutical and biotechnology industries, as well as

difficult local market conditions especially in Latin America. Tecan’s portfolio effect, which results from the

company’s strategic commitment to serve the four key markets in the Life Sciences, again produced

benefits in 2002. A presence in four key markets protected Tecan from specific growth variations

observed in each of its market segments of Genomics, Proteomics, Drug Discovery, and Diagnostics.

MESSAGE TO SHAREHOLDERS

Annual report 2002: Innovation for the Life Sciences

“In 2002, we focused on managing the fundamentals of our business due to challengingmarket conditions. At the same time, we successfully launched new products acrossall our business areas. This impetus in expanding our product portfolio should deliversignificant benefits to Tecan over the coming years.”

Dr. Emile C. Sutcliffe, Chief Executive Officer

By maintaining its gross profit

margin at a high level and imple-

menting its cost reduction program,

Tecan kept the level of its operating

margin at 13.5% of sales compared to

an average of 11.7% for the life

science supply industry. With an

EBITDA at 18.1% of sales, we also

demonstrated our ability to increase

cash flow from operations. In a

difficult environment, cash flow from

operating activities rose 31.6% to CHF

42.6 million. Tecan is thus in a good

cash position and benefits from a

strong balance sheet.

Net profit represented 9.9% of

sales (2001: 12.4 %). The decrease in

profit margins is due directly to the

very abrupt slowdown in top-line

growth, which fell from more than

20% in the last quarter of 2001 to no

growth at the beginning of 2002.

Consistent with our policy to deliver

value to our shareholders, we started

in 2002 a share buy-back program

of up to CHF 40 million. This

program began in 2002

and will last for up to

two years.

We have maintained our strategic

commitment to keep R&D expendi-

ture at 10-12% of sales. The number

of launches in 2002 and the current

product pipeline are the highest

and strongest, respectively, since

the foundation of the company

more than 20 years ago.

Increased organizational efficiencies.We continued to strengthen our

internal organization. The creation

of Tecan Europe is the latest step in

the further integration of our

European subsidiaries and will bring

additional improvements to the

quality of services we offer our

customers.

The acquisition of CST Logic GmbH,

a German company specializing in

the development of software for

laboratory automation and data

management, was also completed in

2002.

By significantly cutting operating

expenses through a cost and

headcount reduction program, we

further improved the efficiency of

operations.

The role of innovation atTecan

The theme for this year’s annual

report is innovation. Innovation is

at the center of our business

model and yields solutions for

our customers. It is not only the

foundation of our growth — the

success of the diagnostic, pharma-

ceutical and biotechnology indus-

tries depends on it.

In October, Forbes Magazine rated

us as one of the world’s 200 best

small (“under a billion dollars in

revenue”) companies which shows

that our efforts to be one of the

most innovative companies in the

Life Sciences are being noticed.

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Business Area Highlights

Our ability to deliver innovation to

our customers results from commit-

ment to our proven business model.

This business model focuses on

supplying the Life Sciences industry

with innovative solutions to elimi-

nate the key bottlenecks in the four

markets of Genomics, Proteomics,

Drug Discovery and Diagnostics.

Recognizing new opportunities.Both the public and private

sectors are striving to streamline

and accelerate drug discovery and

development, introduce cost and

resource savings, and implement

the latest advances in genomics.

Tecan entered the new market of

Genomics in 1999 and, by the

start of 2002, Genomics/Proteomics

already represented 20.5% of total

sales. Genomics has developed into

an important part of our business

and its contribution to Tecan sales

further increased in 2002 to 22.6%

total sales. Genomics/Proteomics

showed positive growth in local

currencies for 2002.

In 2002, Tecan completed its Gene

Expression Suite by launching

the HS 4800 Hybridization Station

for microarray processing. The

microarray market is one of the

fastest growing segments for bioin-

strumentation (Strategic Directions

International, September 2002).

Business model supports successfulentry into new markets. In Proteo-

mics, we launched the ProTeam™

FFE, the cornerstone of our modular

ProTeam™ Product Suite. At our

Innovation Day in Munich, Germany,

and at the first meeting of the

Human Proteome Organization

(HUPO) in Versailles, France, we

unveiled for the first time the

ProTeam™ suite of technologies. The

successful entry into the Proteomics

market has been achieved within

two years since the foundation of

our Center of Expertise in Proteo-

mics at Tecan Munich.

Our strategic commitment to Pro-

teomics is a further step in the

implementation of Tecan’s business

strategy and demonstrates the

effectiveness of our business model

to focus on new needs in new

markets.

Broadening of portfolio in DrugDiscovery. In Drug Discovery, we

have expanded our portfolio in de-

tection technologies and advanced

pipetting solutions that enable

high throughput drug discovery.

The launch of the LabCD™-ADMET

System in November was a major

milestone since it validated our

business strategy to develop new

core competencies at Tecan — in this

case a combination of microfluidics

and miniaturization to accelerate

drug discovery and development.

Further applications are in progress

for this breakthrough technology.

With 35.5% of total sales, Drug

Discovery remains our core business

in Biopharma. Tecan entered this

market in 1995 and innovation has

lead to substantial business. Despite

a global slowdown in this market

since 2001, we have continued to

strengthen our position in Drug

Discovery by investing in new

products.

Partnerships in Diagnostics. In 2002,

we had some good examples of how

our synergies between business

areas are giving us competitive

advantages in new and existing

markets. Our know-how in nucleic

acid testing in Genomics was

particularly useful in advancing

applications in Diagnostics. In

2002, we concluded two agree-

ments in molecular diagnostics with

Abbott Laboratories and Chiron

Corporation.

In 2002, sales in Diagnostics repre-

sented 41.9% of total sales. We

strongly believe that this market will

provide significant future growth

opportunities for the company re-

sulting from the new developments

already impacting molecular diag-

nostics. Tecan is in a good position to

take advantage of this revival.

MESSAGE TO SHAREHOLDERS

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Dr. Emile C. Sutcliffe

Chief Executive Officer

Mike Baronian

Chairman of the Board

Managing the essentials of our business

We focused in 2002 on managing the fundamentals of our business due

to the challenging market conditions. In part, this was achieved by

implementing cost and headcount reduction programs whose full-year

impact will be seen in 2003.

Managing our business according to the criteria that reflect the current,

uncertain, market conditions will remain our priority in 2003. We will remain

cautious in our outlook as long as we experience unpredictable spending

patterns by the pharmaceutical and biotechnological industries, a cyclical

period of lower investments and a weak economy.

Longer term, we remain convinced that the need for increased efficiencies is

paramount for the Drug Discovery industry. This should imply a gradual

acceleration in pharmaceutical spending over time.

The success of Tecan relies on the effectiveness of its proven business model

to eliminate key bottlenecks in Genomics, Proteomics, Drug Discovery, and

Diagnostics. Our goal is to deliver genuine technological breakthroughs to

our customers.

In 2002, we made good progress in strengthening the range of innovative

solutions we offer. In 2003, we should be able to see the impact of the

launches secured in the past twelve months.We are ready to seize any upturn

in demand as these launches have considerably strengthened our product

portfolio in all business areas.

We would like to thank everyone for the commitment they have shown in

making this possible.

Civilization grows through innovation

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We bring innovation to the Life Sciences"Technological progress is equally dependent on the skills of innovation and themanagement of invention. At Tecan, innovation is key to recognizing and enteringnew high growth markets, developing new core competencies, and benefiting fromsynergies across all of our business areas."

Dr Emile C. Sutcliffe, Chief Executive Officer

BRINGING INNOVATION

TO THE LIFE SCIENCES

Innovation at Tecan.

Innovation can be found at all levels of Tecan in each of its four business areas of Genomics, Proteomics, Drug

Discovery and Diagnostics. It starts by identifying a particular need for which there is no available or effective

technological solution and which represents a significant growth opportunity for the company. Innovation brings original

solutions, enables entry into new markets, provides novel core competencies and delivers benefits from synergies between

the different business areas directly to clients in the Life Sciences.

GENOMICS: Realizing the potential of genomic informationto improve medical interventions

Genomics originally referred just to the study of a genome - in particular the

exhaustive mapping, sequencing and analysis of all of its genes. Today, the

focus is not just on gene structure but function as well. Most recently, the

trend is not solely to generate information and knowledge but to take advan-

tage of that knowledge to realize the full promise of modern health care.

Advancing healthcare. Genomics holds tremendous potential for improving

health globally. The information it generates over time will provide major

benefits for the prevention, diagnosis and management of both commu-

nicable and genetic diseases as well as other common causes of illness

such as heart disease, cancer, diabetes, and mental illness.

Innovation in Genomics: Recognizing high growth markets

Beyond the genome. The first major advance in genomics was the technology to analyse genomes on a large scale.

The second phase of the revolution in Genomics is even more challenging. It requires not only analysis of the large

amounts of data being generated but establishing the function of the many genes that have been sequenced and

identified. This endeavour, which is often referred to as functional genomics, represents one of the newer frontiers for

biomedical research.

New market opportunities. The move towards functional genomics will benefit significantly from developments

in automation. Application know-how and core competencies in liquid handling, robotics, detection, software and

miniaturization has put Tecan in a good position to recognize and quickly develop original solutions for these high

growth market opportunities.

Understanding gene function

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Access to new drug targets

PROTEOMICS: Enabling more direct routes to disease targetsand new drugs

Why proteomics? Proteomics directly studies and measures the proteins that

carry out most of the biological events in a living cell. It is the next logical

step after genomics, in which the emphasis shifts more from what could be

happening in a cell to what is actually happening in a cell.

Diverse clinical applications. Since proteins are responsible for most biologi-

cal actions, they are excellent targets for developing specific drugs. These

versatile molecules may also be used to identify biological markers for diag-

nostic and pharmacological applications. Changing the levels of some

proteins is enough to treat certain diseases. Moreover, proteins make

excellent therapeutic agents and are one of the cornerstones of the

revolution in biotechnology and pharmaceutical development.

Innovation in Proteomics:Entry into new markets

The proteomics market is singularly

driven by advances in technology

and thus by innovation in automa-

ted solutions. Innovation in proteo-

mics has allowed Tecan to rapidly

enter new markets and open up

significant business opportunities

for the company.

Impetus driven by innovation.Within two years, Tecan has moved

from establishing a new center of

expertise in Proteomics to introduc-

ing a full range of innovative solu-

tions for the proteomics market. This

innovation depends on combining

world class experience in automa-

tion with the expertise of highly

skilled scientists working at its

Proteomics Center in Munich,

Germany.

Critically, this innovation specifically

targets the consistency of results,

the sensitivity or size of a response

for very small amounts of proteins,

the resolution or ability to clearly

distinguish one protein from

another, and the speed at which

results are generated. Through

groundbreaking technologies, Tecan

provides flexible modular suites of

solutions for all of the sample

preparation steps performed in

proteomics before analysis by

detection methods such as mass

spectrometry.

Enabling drug discovery

DRUG DISCOVERY: Developing new therapeutics againstdisease targets

Solutions for Drug Discovery. Developing new therapeutics against disease

targets requires tools to transform drug discovery. These tools are needed to

identify and validate or confirm the role of a new drug against a target

that is typically a protein. They are required not only to accelerate the drug

discovery process but to increase the success rate for novel drugs.

Meeting clinical needs. To treat and manage the many diseases that up to

now have proven impossible to control requires significant advances in

the drug discovery and development process. From infectious diseases

such as malaria, tuberculosis and AIDS to non-communicable diseases

such as heart disease, cancer, and diabetes - all are awaiting drastic

improvements in the standard of available therapeutic agents.

Improving efficiency. The challenges

facing drug development are

evident from its current deficiencies.

An insufficient number of disease

targets are being validated and

screened each year: many failures

occur in late-stage drug develop-

ment due to incomplete target

validation and unpredicted drug

effects; the drug discovery process is

in many cases too long and places

large demands on resources; the

number of new drugs reaching the

market is insufficient. This is where

innovative technologies in automa-

tion can play their role.

Core competencies. Tecan is devel-

oping new core competencies, such

as microfluidics and miniaturiza-

tion, that accelerate the identifica-

tion of new drugs and their targets,

that speed the drug discovery

process, save on critical resources,

and increase the likelihood of a new

drug being successful. Tecan is also

developing new detection devices,

which offer innovative features such

as fluorescence lifetime measure-

ments, bringing major benefits

to growth areas such as

assay development and

drug screening.

The LabCDTM. A good example is the

LabCDTM

-ADMET system launched

in 2002. This revolutionary micro-

fluidics platform on a disposable

disc enables pharmaceutical and

biotechnology companies to per-

form more tests earlier in the drug

discovery process at a fraction of

the cost of traditional assays. This is

of immense benefit to researchers

involved in R&D in their quest to

rapidly develop new therapeutic

agents against disease targets.

Innovation in Drug Discovery: New core competencies for the Life Sciences

BRINGING INNOVATION

TO THE LIFE SCIENCES

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Innovation in Diagnostics

DIAGNOSTICS: Empowering the revolution in personalizedmedicine

Diagnostics is undergoing a major transformation away from technologies

that detect just the symptoms of a disease towards molecular diagnostic

methods that detect the actual cause of or predisposition to a disease. The

sweeping changes in this area will have major implications for the practice of

modern health care.

Personalized medicine. In the coming years, doctors, other health care

professionals and even patients will be able to assess the likelihood of a

particular disease occurring, the responsiveness of a disease to certain

drugs, and the likelihood of drug side effects. This will result in

personalized medicine based on the genetic profile of a patient

becoming an essential part of health care practice.

Innovation in Diagnostics: Synergies across business areas

The move towards molecular diagnostics is being made possible by rapid advances in a wide range of disciplines in-

cluding genomics, proteomics and bioinformatics. The new clinical focus is personalized or individualized medicine,

managed care and evidence-based medicine.

A multidisciplinary approach. Tecan is able to bring innovation to diagnostics by exploiting synergies that exist or

arise in its different business areas. For example, Tecan is able to leverage its expertise in nucleic acid sample prepa-

ration and amplification, to develop cutting edge solutions in molecular diagnostics.

Advances in detection and microarray processing. Tecan's microarray processing technologies and the introduction of

detection solutions such as the LS Series of laser scanners also mean that the latest advances in diagnostics are within

reach of Tecan's customers. These new testing methods will be used to diagnose a wide range of infectious diseases

of viral or bacterial origin.

Innovation to support business partners. Tecan's strength in innovation is not only the foundation of its own product

portfolio but is also the cornerstone of technological solutions offered by other companies in the Life Sciences. Tecan

has been the Original Equipment Manufacturer (OEM) of choice for diagnostic and biotechnology instrument

manufacturers for more than 20 years. For this purpose, Tecan develops and manufactures solutions for a variety of

clients, from start-up companies to Fortune 500 enterprises.

This success testifies to the strength of Tecan's innovation and its reputation worldwide.

Information to build knowledge

GENOMICS

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Realizing the potential of genomicinformation to improve medicalinterventionsBy launching the HS 4800 Hybridization Station in 2002, Tecan completed its GeneExpression Suite offering. Through the automation of activities from microarray processing up to the validation of tissue gene expression, Tecan is further penetratingfast-growing market segments in Genomics.

Industry trends

The need and drivers. Biotechnology

and pharmaceutical companies are

using genomic and other information

in their search for new therapeutics.

For this purpose, they are investing

in the latest developments in

sequencing, genotyping and gene

expression analyses. Tecan is one of

the leading supplier of tools that

enable Life Science companies to

make full use of the advances taking

place in genomics.

The need for higher throughput,

sensitivity, and reproducibility is

pressing. The more processes can be

automated, the more researchers will

be able to deal with the large

amounts of data being generated.

In the genomic era following the

sequencing of the human genome,

some of the key activities in the geno-

mics industry are found in comparati-

ve nucleic acid sequencing, geno-

typing and gene expression studies.

Key facts: GenomicsApproximately 30 000 human genes

Microarray processing solutions, scanners and

hybridization station market estimated at USD

296 million in 2001 1

Microarray-related market expected to grow at

a CAGR2 of approximately 20% to reach 749 USD

million by 20061

1 Strategic Directions International 20012 Compound Annual Growth Rate

GENOMICS

Tecan's approach

Tecan is active in Front-end

Sequencing, Genotyping and Gene

Expression analysis segments of the

Genomics market.

Front-end Sequencing Solutions.Tecan provides automated solutions

for major tasks prior to sequencing

like Nucleic Acid Sample Preparation,

Normalisation, Sequencing reaction

set-up, thermocycling and dye

removal.

According to individual customer

needs, Tecan offers several automa-

tion and detection platforms ranging

from smaller scale solutions based

on the MiniPrep series of liquid

handling systems and larger-scale

Genesis workstations all the way

up to the very-large-scale fully auto-

mated TRAC (Tecan Robotic Assay

Composer) systems for ultra high-

throughput applications.

Genotyping Solutions. In Geno-

typing, which includes the identifica-

tion and scoring of single nucleotide

polymorphisms (SNPs), Tecan offers

detection devices such as the Ultra

family to complement the nucleic

acid sample preparation solutions

described above.

Solutions for Gene Expression Analyses. For Gene Expression, a high

growth market as the interest of researchers shifts to functional genomic

studies, Tecan provides different solutions that form the modular Gene

Expression Suite (see table). The Gene Expression Suite automates a range of

activities from microarray processing on slides or microplates up to in situ

hybridization.

Market opportunities in microarray processing. Tecan's microarray

processing solutions may be used to process and detect both nucleic acid and

protein-based arrays on slides and microplates, which provides much needed

flexibility for this rapidly growing market. For Gene Expression studies, Tecan

also provides the Tecan GenePaint system, an automated solution for in situ

hybridization.

Gene Expression Suite ApplicationNucleic Acid Sample Preparation and reaction Sequencing, Genotyping,

set-up platforms, plus associated consumables Gene Expression Analyses

HS 4800 Hybridization Station Microarray processing on slides

LS 200 series laser scanners Detection of microplates and slides

GenePaint System Gene expression analyses in tissue

Customized solutions, flexible options. Uniquely, Tecan systems for genomics

may automate applications using three different separation technologies:

vacuum filtration/solid phase extraction, magnetic bead separation, or

centrifugation. In addition to providing its own solutions for these applications,

Tecan actively validates a range of purification chemistries from third party

suppliers thus offering a host of automation solutions for all three types of

separation technologies.

Achievements 2002

Market segment Product launch ApplicationsGene Expression HS 4800 Hybridization Station Microarray processing on slides

Sequencing MiniPrep with MagPrep kits Nucleic Acid Sample

Preparation and Purification

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In 2002, Tecan launched the HS 4800 Hybridization Station. The promise of

miniaturization, automation and massive parallel analysis makes solutions

such as the Hybridization Station powerful tools with applications in both

industrial and academic settings.

The Hybridization Station enables

automated hybridization of microar-

rays on slides and is a key component

of Tecan's Gene Expression Suite. The

HS 4800 Hybridization Station has

been designed to offer researchers

improved reproducibility, superior

performance and the throughput

necessary to perform a wide range of

applications in Genomics and

Proteomics.

2002 also saw the introduction of further magnetic bead sample preparation

solutions (Te-MagS) for the MiniPrep platform. Tecan provides a range of

specific magnetic-bead-based kits that offer low-throughput solutions for

nucleic acid sample preparation.

Outlook

In 2003, Tecan will continue to strengthen its product pipeline in all market

segments of Genomics. Further validated nucleic acid extraction kits will

become available for the range of Tecan automated platforms. A new hybridi-

zation station, the HS 400, will be launched targeting researchers who require

a lower throughput solution for functional genomics applications.

With its portfolio of solutions for gene expression, nucleic acid sample

preparation and genotyping applications, Tecan is well positioned to meet the

different needs of its customers in Genomics.

Partnerships with leadingacademic research institu-tions.

"To establish the function of a gene

requires knowing when and where it

is expressed in a particular tissue. For

the approximately 30 000 genes in

the human body this is a significant

undertaking considering that one of

the best available techniques for this

purpose, in situ hybridization (ISH), is

extremely labor intensive and time

consuming. We recognized several

years ago that the solution was to

automate the process and we have

been working closely with Tecan to

develop a fully automated in-situ-

hybridization workstation – the

Tecan GenePaint system."

Professor Gregor Eichele, Director of theDepartment of Molecular Embryology at theMax-Planck-Institute in Hannover

www.genepaint.org

The Tecan GenePaint system was

recently used in a landmark study to

map human chromosome 21 gene

expression in the mouse. 1

Ref: 1 Reymond et al. (2002) Human chromoso-me 21 gene expression atlas in mouse. Nature420: 582-586.

Magnetic-bead-based sample preparation

Tools to transform discovery

PROTEOMICS

Enabling more direct routes todisease targets and new drugsThe unveiling of the ProTeam Product Suite was a major milestone for Tecan Proteomics.For the first time, researchers were able to see at first hand a modular automatedsystem that is able to perform almost every sample preparation task in the modernproteomics laboratory.

Industry trends

The need and industry drivers.Pharmaceutical and biotechnology

companies need to identify and

validate new drug targets, accelerate

their drug discovery processes, and

increase the success rate for new

drugs.

The proteomics industry is being

driven by developments in technolo-

gy that offer a more direct route to

disease targets and drugs.

Key facts: ProteomicsApproximately 30 000 human genes

More than 200 000 protein species

The available market for Tecan in integrated

proteomic systems was estimated at USD 183

million in 2001

Available market for integrated systems is

expected to grow by a CAGR1 of over 30% in the

next five years2

1 Compound annual growth rate2 Source: Frontline 2001

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PROTEOMICS

Tecan's approach

Tecan customers are free to decide

the technologies they need for their

particular proteomics requirements.

The company works with customers

to combine different options into a

solution that meets their individual

needs. For this purpose, Tecan

provides application development

programs whereby the company and

the client can work together to

develop a customized solution.

The study of proteins usually first

involves sample fractionation into

more manageable parts. These

fractions are separated, the resulting

proteins are quantified or measured,

and proteins of interest are isolated.

Finally, selected proteins are identi-

fied and characterized. Protein

identification is often carried out by

mass spectrometry, a technique that

accurately identifies protein species.

Tecan is active in three market

segments of Proteomics – Fraction-

ation and Protein Identification, which

together constitute all the sample

preparation steps performed before

mass spectrometric analysis,

and Protein Characterization.

Tecan’s technologies in Genomics, for

example the HS 4800 Hybridization

Station and LS series of laser

scanners, also have many applica-

tions in Proteomics. These include

the processing of protein microarrays

on slides and microplates and

quantitating experimental results.

The bottlenecks in Proteomics DeliverableReproducibility Consistent results

Sensitivity Detection of low amounts of proteins

Throughput Speed and high quality data

Access to low-abundance proteins New proteins for study

Informatics and data management Managing large data sets/data analysis

Standardization of methods and protocols Ease-of-use and consistency

to prepare samples that reproducibly represent

a proteome

Achievements 2002

Market segment Product ApplicationsFractionation ProTeam FFE Reducing the complexity of the proteome

Enriching low abundant proteins

Isolation of cell organelles, cell types,

and complex protein mixtures

Protein Identification ProTeam Advanced Digest In-gel and in-solution protein digestion

Sample preparation for MALDI-mass

spectrometry1

1 Matrix-assisted Laser Desorption/Ionization

Protein identification

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Rapidly entering new markets

Event WhenCenter of Expertise January 2001

in Proteomics founded

ProTeam FFE unveiled September 2001

at Innovation Day

First demonstration of September 2002

ProTeam Product Suite

at Innovation Day

BioPharma Day October 2002

Unveiling of ProTeam November 2002

Product Suite at Human

Proteome Organization

(HUPO) meeting

Meeting the challenges posed bymembrane proteins. Membrane

proteins play a fundamental role

in biology. However, they are also

amongst some of the most difficult

proteins to study and characterize.

Tecan is a partner in the program

“New efficient techniques for

functional proteome analysis”. This

project, which is sponsored by the

German Government (Bundes-

ministerium für Bildung und

Forschung or BMBF), is already

delivering results: cell organelles,

sub-structures in the cell carrying

out some of the most essential

processes in biology, have been

isolated with unmatched purity

using the Tecan ProTeam FFE;

the two-dimensional separation of

membrane proteins from a bacterial

membrane has also been achieved by

combining free flow electrophoresis

with gel electrophoresis (SDS-PAGE).

This is opening up new opportunities

for target identification and va-

lidation in the quest for new

therapeutic agents.

Highlights

2002: Innovation Day, Biopharma Day,and the HUPO meeting. In September,

2002, Tecan unveiled the revolutionary

ProTeam product suite at its Innovation

Day in Munich, Germany. The ProTeam

product suite is the first automated

platform capable of performing all the

sample preparation steps necessary

before analysis by mass spectrometry. One month later,Tecan opened its doors

at Munich to the biopharmaceutical industry to show the potential of its

technological solutions to transform their research and development

activities. In November, the ProTeam Product Suite was demonstrated to

a wide audience including representatives from the pharmaceutical,

biotechnological and academic sectors of the Life Sciences at the First World

Congress of the Human Proteome Organization (HUPO) in Versailles, France.

Powerful solutions for protein digestion. In 2002, Tecan completed the

development of the ProTeam Advanced Digest. Protein digestion, in which

large protein molecules are cleaved into smaller fragments or peptides, allows

the transfer of peptides to a wide range of target plates that facilitate mass

spectrometric analysis.

The ProTeam Advanced Digest is a next-generation solution for automated

protein processing in gels or in solution. It offers extended sensitivity to very

low quantities of proteins and high throughput (3000 samples

processed/day).

Outlook

Automated 2D electrophoresis. In 2003, Tecan will commence Early

Access Programs for the ProTeam 2D (automated 2D electrophoresis). 2D

electrophoresis is the method of choice in proteomics laboratories for the

separation of proteins. The company will continue to introduce and develop

further the ProTeam Product Suite.

Protein Crystallization. In Protein Crystallization, automation is key to

overcome bottlenecks in determining the structures of proteins, a critical step

in designing new drugs. In 2003, Tecan will pursue business opportunities for

its already popular ProTeam Crystallization solutions.

Recognizing that the emerging proteomics market is singularly driven by

advances in technology,Tecan has quickly positioned itself as a provider of inno-

vative technologies to serve this important sector of the Life Sciences industry.

Protein Characterization

Light to bring solutions

DRUG DISCOVERY

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Developing new therapeuticsagainst disease targetsWith the launch of Ultra Evolution, a new detection platform enabling FluorescenceLifetime measurements, Tecan is providing a solution to overcome some of the majorbottlenecks in drug screening.

Industry trends

The need. Rapidly rising drug

development costs, increasing

competition, and changing health-

care and regulatory environments

mean pharmaceutical and bio-

technology firms will continue to

strive for greater efficiencies.

Tecan’s approach. Tecan’s strategy is

to target the key bottlenecks in the

drug discovery process by developing

innovative automation, detection,

and modular integrated-system

solutions.

Industry drivers. One of the main

drivers in drug discovery and

development is the need for new

detection technologies. These

technologies, which are used to

monitor chemical and biological

processes, are of particular use in

identifying and screening new drug

targets. A key bottleneck is the speed

at which it is possible to perform

ADMET (Adsorption, Distribution,

Metabolism, Excretion and Toxicity)

assays. ADMET assays are essential

pharmacological screening assays

used to determine if a drug

candidate is suitable for further

development.

The total core drug discovery

laboratory automation market

available to Tecan is expected to

grow annually by 9% to USD 0.8

billion in 2006.

DRUG DISCOVERY

Achievements 2002

Significant expansion of product pipeline. In 2002, expansion of the Tecan

product pipeline was reflected in key launches for all of its targeted

market segments.

Market segment Product launch ApplicationsTarget Identification See also Proteomics Drug Development

and Validation and Genomics business areas

Compound Synthesis and Automated Weighing Station Automated weighing

Compound Logistics and dilution

Assay Development/ Ultra Evolution with fluorescence Assay Development,

Screening lifetime capabilities Screening, Compound

Characterization

Assay Development/ Connect - Automated Reader Range of biological assays

Screening Interface with Plate Stackers including Cellular and Sub-

Cellular Screening Assays

Screening & 384-tip head for multi-channel High Throughput Screening

Compound Logistics pipettors and Plate Replication

ADMET (Adsorption, Distribution, LabCD™ Cytochrome P450 Inhibition &

Metabolism, Excretion & Toxicity) Serum Protein Binding assays

Highlights.

Innovation in detection. Detection devices are used in many segments of

drug discovery. These include primary and secondary screening, in which assays

or tests are used to detect compounds that represent drug candidates, and assay

development, in which methods are developed to detect the activities of

potential therapeutic compounds. Tecan offers both Assay Development and

different Screening workstations based on a range of existing Tecan technologies.

These include both the Genesis and Genesis Freedom platforms. In 2002,

Tecan added the Ultra Evolution with Fluorescence Lifetime technology to

its existing detection portfolio (Safire, Ultra and the GENios line of detec-

tion devices; see Innovation in detection for drug discovery).

Synergies from Genomics andProteomics. Tecan’s Proteomics and

Genomics technologies have impor-

tant applications in Drug Discovery.

For example, the ProTeam FFE

enables access to many previously

unavailable low-abundance proteins

potential drug targets not accessible

by conventional technologies.

Milestone in microfluidics. In Novem-

ber, Tecan launched its revolutionary

microfluidics technology the LabCD™.

The LabCD™, which represents a major

step in the expansion of Tecan’s core

competencies, allows researchers to

perform key drug discovery assays in

a more standardized and efficient

way. ADMET assays are essential

screening tests designed to test the

suitability of compounds as new

drug candidates.

The LabCD™ complements Tecan’s

existing portfolio including its Cell

Permeability, Drug Metabolism and

Cell Maintenance workstations.

Further applications for the

LabCD™ technology are

planned for release in

2003.

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Outlook

Enhanced automation platforms.Tecan will continue to introduce new

automation, detection, and integra-

ted system solutions targeting its

key market segments in Drug

Discovery. A new platform will

further strengthen Tecan’s product

portfolio, while simultaneously

enabling new, key drug discovery

applications.

Portfolio of liquid handling solutions.For Screening, Tecan will launch

several new multi-channel pipetting

systems, including the stand-alone

Aquarius system. Multi-channel

pipettors are automated systems

designed to dispense many liquids

over a range of volumes to different

target vessels such as microplates.

With the pending introduction of its

exciting new proprietary Impulse

low-volume pipetting technology,

Tecan customers will be able to

choose from a complete portfolio of

multi-channel pipetting options.

Strength in detection. New detec-

tion devices such as GENios Pro will

strengthen Assay Development

and Drug Screening applications

by enabling several new types of

biological assays including cell-based

assays.

In addition, further market penetra-

tion is expected for a new version of

the Safire scanning monochromator

reader, a detection device suitable for

many applications in assay develop-

ment, compound characterization

and high throughput screening.

These solutions will strengthen

further Tecan’s portfolio in Drug

Discovery and, at the same time,

improve the effectiveness of Tecan’s

business partners in bringing new

therapeutics to the market.

Ultra Evolution

Innovation in detection for drug discovery.

Dr. Ulrich Hassiepen,

Novartis Pharma AG, Basel

“Pharmaceutical companies conti-

nually strive to introduce the latest

developments in detection plat-

forms into their drug screening

procedures. One of our main

concerns is to not spend time

pursuing compounds that do not

represent lead compounds.

Tecan’s ULTRA Evolution, a new

detection platform enabling Fluor-

escence Lifetime measurements

(FLT), overcomes some of the major

bottlenecks in drug screening.

For years, researchers have been

vexed with the problem of “false

positive” screening results. These

“false positive” results were often

generated by screening artefacts

such as compound autofluorescence.

With FLT technology, time and

resources wasted on “false posi-

tives” can be minimized by selecting

the best lead compound for further

development.”

Innovation to drive molecular diagnostics

DIAGNOSTICS

Empowering the revolution in personalized medicine

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Tecan further strengthened its portfolio of automated molecular diagnostic solutionsin 2002. This progress reflects not only Tecan’s considerable expertise in automateddiagnostic methods but also its ability to implement synergies from its Genomicsbusiness area.

Industry trends

The need. Diagnostics customers worldwide are looking for the best

options in laboratory automation. In addition to worldwide access

to service networks, they need flexible solutions that may be customized

to meet specific needs.

Industry drivers. Integrating the latest clinical diagnostic technologies with

innovative engineering solutions will deliver the best solutions for laboratory

automation. In a highly regulated marketplace, those companies that most

effectively implement the recommendations of the In Vitro Diagnostic (IVD)

Directive will benefit most in the coming years.

Diagnostics: Key factsThe available market for Tecan in Diagnostics was estimated at USD 300 million in 2002

The available market for Tecan in Diagnostics is expected to grow at a CAGR1 of 6% to reach

over USD 0.5 billion in 2006

The available market for Tecan for Nucleic Acid Testing (NAT) was estimated at USD 120 million

in 2002

The available market for Tecan for NAT is expected to show double digit growth to 2006

1 Compound Annual Growth Rate

Tecan’s approach

Tecan is active in four market

segments in Diagnostics – Blood

Grouping, Immunology, Laboratory

Logistics and Molecular Diagnostics.

For these markets, the company

provides a whole spectrum of inno-

vative solutions used in many

diagnostic laboratories and blood

banks.

Advances in moleculardiagnostics

Building on its reputation as a

leading automation provider, Tecan

is implementing the latest advances

in molecular diagnostics into its

portfolio of automated platforms.

DIAGNOSTICS

Roche Diagnostics collaboration. In collaboration with Roche Diagnostics in

the United States and Europe, local solutions were launched that automate

PCR sample preparation of the COBAS AMPLICOR™ and AMPLICOR™ assays

for chlamydial and gonorrhoeal infections.

Achievements 2002

Partnership ApplicationChiron Corporation Nucleic acid testing (NAT) for HIV-1 1 and HCV2

Abbott Laboratories NAT testing for HIV-1 and HCV

Gen-Probe NAT testing for sexually transmitted diseases

Roche Diagnostics PCR sample preparation

1 Human immunodeficiency virus 2 Hepatitis C virus

Advances in Immunology.

Immunological tests typically involve capturing and measuring a component

of the body’s immune system using an immunoassay (e.g. by an ELISA1

assay)

and are major diagnostic tools both in human and veterinary diagnosis.

In Immunology, Tecan provides automated systems that perform a host of

immunological diagnostic tests. These options range from different readers,

for example the popular Sunrise absorbance reader, up to fully automated

Genesis RMP systems capable of high throughput applications. Demand for

these systems is continuing on a global level – recently Tecan’s Genesis RMP

platform was selected as the automation platform of choice to meet the needs

of all blood banks in Taiwan. Further growth in this area is expected in 2003.

ProfiBlot, Tecan’s unique fully automated solution for Western blot analysis,

continues to establish outstanding market penetration. In addition to the

confirmatory testing of HIV and hepatitis C infections, the device automates

the testing for diseases such as cystic fibrosis. In all these areas, the need for

diagnostic tests continues to grow.

Diverse markets, flexible solutions. In veterinary diagnostics, Tecan is

expanding on its recent success of rapidly providing automated solutions for

BSE testing. The goals are to consolidate the position of Tecan as the leading

supplier in this area, to deliver further options for prion testing, as well as to

expand in the field of veterinary diagnostics.

Major partnerships inMolecular Diagnostics

Chiron collaboration. In 2002, Tecan

and Chiron Corporation entered into

an agreement to include Chiron’s

FDA-approved Procleix™ HIV-1/HCV

assay on the high-throughput

Genesis platform. The Procleix™

assay is a breakthrough develop-

ment in nucleic acid testing (NAT) —

tests or assays that enable genetic

material to be amplified and easily

measured. Procleix™ assays, which

are performed on the blood supply,

are particularly effective since they

allow very early detection of viruses

causing Acquired Immunodeficiency

Syndrome (AIDS) and hepatitis C.

Abbott partnership. In 2002, Tecan

also announced an agreement with

Abbott Laboratories. Both compa-

nies have agreed to develop and

commercialize automated sample

preparation systems for Abbott’s

molecular diagnostic assays for

HIV and hepatitis C. Automation is

allowing these methods to be

performed more efficiently, reducing

costs and enhancing productivity.

Blood typing

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Advances in Laboratory Logistics.

In Laboratory Logistics, Tecan supplies a range of automated platforms for

sample preparation and processing. Tecan recently introduced novel features

for the FE500 Workcell. Overall flexibility has been improved through a more

enhanced modular system design, a new tube inspection unit that reads

directly through sample tube labels and a novel archiving system that delivers

improved options for sample storage.

The Genesis FE500 workstation continues to be a popular option for pre-ana-

lytic processing, one of the most labor-intensive parts of clinical laboratory

testing. Building on this success, Tecan is actively expanding further its

corporate partnership options for FE500 distribution worldwide.

Synergies from Genomics andProteomics. Breakthrough solutions

in Genomics, such as the HS 4800

Hybridization station or GenePaint

on the Genesis platform, are today

well established solutions for geno-

mics applications. Similarly forensic

applications in DNA matching based

on Genesis and MiniPrep platforms

are finding routine uses in genomic

applications and are the first solutions ready to enter the diagnostic

market. These are examples of how Tecan’s business model supports

the leverage of solutions in genomics to enhance the successful

development of applications in clinical diagnostics.

Outlook

In 2003, Tecan will introduce further

solutions in Nucleic Acid Testing

(NAT) catering for growth opportu-

nities in Molecular Diagnostics.

A new platform will also be

launched that is fully compliant

with forthcoming IVD medical

device regulations (see Tecan and

IVD compliance). The goal of these

efforts is not only to assure that

the efficacy and effectiveness of

Tecan’s diagnostic solutions comply

with the recommendations, but also

that Tecan’s staff are fully trained

to deliver the best possible services

to accompany these changes.

Tecan is well on track with its IVD

readiness program — the end result

will be improved customer service

at all levels of the organization.

1 Enzyme-Linked Immunosorbent Assay

Tecan and IVD compliance

Over the past years, Tecan has been preparing to meet the requirements

of the IVD (In vitro diagnostic) Directive, the new EU initiative to ensure safety,

quality and performance of diagnostic medical devices. Companies that

most effectively meet these regulations will benefit from significant new

business opportunities.

Tecan was one of the first companies to make readers and washers available

that comply with the IVD Directive. The company is in a strong position

to build on its position as a leading supplier of IVD-compliant solutions in

the diagnostics industry.

Dispensing to microplate

Automated nucleic acid preparation

for PCR Testing

CORPORATE GOVERNANCE

1. Group structure and shareholders

Group structure. Tecan Group Ltd. (the "Company"), Seestrasse 103, CH-8708

Männedorf, Zürich, Switzerland, is the parent company of the Tecan Group

The company is listed on SWX Swiss Exchange.Security number: 1 210 019

ISIN: CH0012100191

Telekurs, Dow Jones: TECN

Reuters: TECZn.S

The Company's shares are also traded in EUR in Frankfurt, Munich and

Stuttgart under the security number 922 557. At December 31, 2002, the

market capitalization of the company was CHF 593.4 million.

The list of consolidated subsidiaries, none of which is publicly listed, is present-

ed in the financial section on page 64 of this Annual Report. The operational

group structure is organized according to the geographical regions Europe,

America and Asia as well as to the business areas Genomics/Proteomics, Drug

Discovery and Clinical Diagnostics. The segment reporting according to this

structure is presented in the financial section on page 56 of this Annual Report.

Significant shareholders. As per December 31, 2002 the following sharehold-

ers held more than 5% of Tecan’s shares:

shares %Schweizerische Unfallversicherungsanstalt (SUVA), Lucerne, Switzerland 1,438,394 11.1%

UBS Fund Management, Zurich, Switzerland 748,400 5.7%

Tecan Group Ltd., Männedorf, Switzerland (treasury shares) 662,430 5.1%

The Company does not have any cross-shareholdings exceeding 5% of the

capital or voting rights on both sides.

2. Capital structureCapital structure of Tecan Group Ltd. at December 31

2002 2001 2000Registered shares of CHF 1 nominal value

Number 13,076,075 13,040,930

Nominal value CHF 13,076,075 13,040,930

Registered shares of CHF 10 nominal value

Number 1,302,007

Nominal value CHF 13,020,070

Share capital CHF 13,076,075 13,040,930 13,020,070

Legal reserves CHF 72,480,731 55,933,389 36,826,286

Retained earnings CHF 84,852,535 70,340,959 59,090,882

Shareholders’ equity CHF 170,409,341 139,315,278 108,937,238Conditional share capital CHF 1,223,925 1,259,070 1,279,930

In 1999, the shareholders of the

Company approved the introduction

of one single class of registered

shares. Each formerly existing bearer

share of CHF 100 nominal value was

converted into 10 new registered

shares of CHF 10 nominal value. The

previous registered shares of CHF 15

nominal value each were exchanged

in a two-level transaction into new

registered shares of CHF 10 nominal

value. In the annual shareholders’

meeting in 2001, the Company's

shareholders decided to split the

registered shares in a 1:10 ratio.

As of December 31, 2002, the

Company’s share capital was CHF

13,076,075, divided into 13,076,075

registered shares with a nominal

value of CHF 1 each. Each share is

entitled to any dividends approved

by the shareholders.

Conditional share capital – changesin capital. In 1997, the Company's

shareholders approved a conditional

share capital of CHF 1,300,000

(consisting of 1,300,000 registered

shares of CHF 1 nominal value each)

reserved for the purpose of

employee participation. Since 1999,

employee stock option plans have

been adopted based on this

conditional share capital. Details on

options granted under these plans

are given in the financial section on

page 52 of this Annual Report. At

December 31, 2002, 1,141,754 shares

of the conditional share capital were

reserved for outstanding employee

stock options. Subsequent to the

exercise of 35,145 options during the

financial year 2002 (2001: 20,860

options; 2000: 20,070 options),

the Company's share capital was

increased in 2002 by 35,145 shares

(2001: 20,860 shares; 2000: 20,070

shares) and the Company received

(Information according to the Directive on Information Relating to

Corporate Governance of the SWX Swiss Exchange, DCG)

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CHF 1.7 million in cash (2001: CHF 1.1

million; 2000: CHF 1.3 million).

Limitations on transferability andnominee registration. Registration

with voting rights in the Company’s

share register is conditional on share-

holders declaring that they have

acquired the shares in their own

name and for their own account. No

shareholder is registered with voting

rights for more than 5% of the share

capital. The Board of Directors of the

Company may register nominees for

up to 2% of the share capital as

shareholders with voting rights in

the share register. Nominees are per-

sons who do not explicitly declare in

the application for registration to hold

the shares for their own account and

with whom the Company has en-

tered into an agreement accordingly.

Further, the Board of Directors may

for shares in excess of 2% of the

share capital register nominees with

voting rights in the share register if

such nominees disclose the names,

addresses, nationalities and share-

holdings of the persons in whose

interest they hold 2 or more per cent

of the share capital.

Entities which are bound by voting

power, common management or

otherwise or which act in a coordi-

nated manner to circumvent the 5%-

rule are considered as one sharehold-

er. The Board of Directors is entitled

to grant exceptions from the regis-

tration restrictions in special cases.

No such exceptions were granted

in the year under review.

The procedures and condi-

tions for canceling these

limitations on trans-

ferability are de-

scribed under

item 6.

3. Board of Directors

The Board of Directors is responsible for the ultimate supervision and

management of the Company, including the establishment of general

strategies and guidelines, as well as for other matters which by law are under

its nontransferable responsibility. To the extent permitted by law and except

as otherwise provided in some cases in the Company's Articles of

Incorporation and Organizational Regulations, the management of the

Company's affairs is delegated to the Management Board pursuant to

Organizational Regulations adopted by the Board of Directors.

Members (see also page 71):

Mike Baronian (Chairman)1947, Canadian-Swiss citizen, Degree in Finance (Concordia, Montreal Canada)

Since 2000, elected until 2003

Professional background: AZAD Pharma (CH), CEO

Prof. Dr. Armin Seiler (Vice Chairman)1939, Swiss citizen, MS in mechanical engineering (Swiss Federal Institute of

Technology), MS and Ph.D. in business administration (University of Zurich).


Professional background: Professor at the Swiss Federal Institute of

Technology in Zurich for Marketing and Strategic Management

Other activities: Industrieholding Cham (CH), Board member

Tuxedo Invest (CH), Board member

Dr. Emile C. Sutcliffe (Delegate of the Board, CEO)1957, Swiss citizen, Dr. Technological Sciences (Swiss Federal Institute of

Technology ETHZ, Zurich) and MBA (City University, Zurich)


Functions: CEO since 1998

Professional background: Oscilloquartz, (CH), CEO until 1998

Timothy B. Anderson1946, US-American citizen, Degree in Business Studies (Northwestern

University) and MBA (Stanford University)


Professional background: Baxter International, (US), executive management

Other activities: Lake Forest Hospital, (US), Board member

Hans-Jörg Kummer1941, Swiss citizen, Degree in Economics (University of Zurich)


Professional background: Schering-Plough Corporation, (US), Chairman

Europe / Canada / Middle East / Africa

Other activities: Project Hope (CH), Board member

Meetings. The Board of Directors

meets as often as business matters

require, normally at least four times

a year. The Committees of the Board

of Directors hold separate meetings

as often as the business requires.

On scientific issues, the Board is

provided support by a Scientific

Advisory Board of which all mem-

bers are external specialists.

Election and term of office. Members

of the Board of Directors are elected

by the Annual General Meeting for a

1-year term of office. Reelection is

possible. The Board of Directors

constitutes itself.

Independence. With the exception of

Dr. Sutcliffe (CEO), all the members

of the Board of Directors are non-

executive members. None of the

non-executive board members has

important business connections with

Tecan Group Ltd. or any other group

company. None of the non-executive

board members was formerly a

member of the management of Tecan

Group Ltd. or any group company

prior to the period under review.

There is no cross involvement of the

Company with the boards of

directors of other listed companies.

Committees. The Board of Directors

may appoint from amongst its mem-

bers committees for the preparation

and implementation of its resolutions

and for exercising its supervision

function. The following committees

have recently been established:

Audit CommitteeTimothy B. Anderson (Chairman)

Mike Baronian

Prof. Dr. Armin Seiler

The principal tasks and responsibili-

ties of the Audit Committee are, in

short, to form an impression of the

internal and external audit, to assess

the quality of internal control and

compliance, to review the financial

statements, and to report and make

recommendations on its activities to

the full Board of Directors.

Compensation CommitteeHans-Jörg Kummer (Chairman)

Mike Baronian

Prof. Dr. Armin Seiler

The principal tasks and responsibili-

ties of the Compensation Commit-

tee are, in short, to prepare and

submit to the full Board of Directors

proposals on the amount and form

of remuneration of the members

of the Board of Directors, the CEO,

and the other members of the

Management.

Information and Controlling Instru-ments. To monitor the group’s

financial situation and its evolution,

the Board of Directors continually

receives reports from the group’s

Management Information System.

To limit and control treasury risks,

regulations for treasury affairs

are in place.

4. Executive Leadership Committee (ManagementBoard)

The Executive Leadership Commit-

tee, under the presidency of the CEO,

is responsible for all areas of man-

agement of the Company which are

not reserved to the Board of

Directors by law or by the Articles of

Incorporation and the Organiza-

tional Regulations of the Company.

Members (see also page 71)

Dr. Emile C. Sutcliffe (CEO)See page 31

Franz Rutzer1960, Swiss citizen, Degree in

Economics (University of St. Gallen)

and Professional Controller’s Degree

(SIB)

Functions: CFO from 1998 to 2002;

CFO/COO Tecan Europe & President

of Tecan Trading since 2002

Professional background: Oerlikon-

Bührle Holding (head of group

controlling)

Anton Schrofner1963, Austrian citizen, Diploma in

Engineering (University of Salzburg)

and Degree in Economics (University

of Innsbruck)

Function: President of Tecan Austria

since 1994; President of Tecan

Schweiz since 2001; President of

Tecan Instruments since 2002

Professional background: SLT Lab-

instruments GmbH (operational

management)


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Jan Timmers1962, Dutch citizen, Diploma in

Biochemistry and Clinical Chemistry

Function: Marketing manager of

Tecan Schweiz and Tecan Austria

since 1992, Head of business

development and Biopharma since

1999 and 2002 respectively

Professional background: Proton

Wilten / Spectra and Ortho-Clinical

Diagnostics / Johnson & Johnson

(application and sales specialist and

product manager)

Steve Levers1954, US-American citizen, Degree in

Finance (San Jose State University)

and MBA (University of Santa Clara)

Functions: CFO of Tecan Systems

since 1997; President of Tecan

Systems since 2000

Professional background: Different

companies and industries in the

Silicon Valley (financial manage-

ment)

Carl Severinghaus1952, US-American citizen, Degree in

Finance (Drake University, Iowa)

Function: Sales manager of Tecan

US since 1996; President of Tecan US

since 1999

Professional background: Beckman

Coulter and American Monitor

(sales specialist)

Enhanced Management TeamJoerg Borer: Head of Customer Services

Wolfgang Deuringer: President Tecan Sales International

Scott Eaton: President Tecan Japan

Dr. Rudolf Eugster: CFO

Sylvain Hunault: President Tecan Southern Europe

Sarah Kreienbühl: Head of Human Resources

Martin von Lueder: President Tecan Central Europe

Paul Mitchell: President Tecan Northern Europe

Bob Young: President Tecan Boston

Management Contracts. No agreements for the delegation of management

tasks between the Company and third parties not being part of the Tecan

Group were entered into or existing in the year under review.

5. Compensations, shareholdings and loans

Decisions regarding the compensation of the members of the Board of Directors

and the Management Board as well as decisions regarding the grant of employee

stock options are taken by the Board of Directors (since 2003: upon proposal

by the Compensation Committee). In addition, the newly established Compen-

sation Committee supervises the salary structure within the Tecan Group.

Compensations paid in 2002 2001Member CHF 1,000 Member CHF 1,000

Non-executive members of 4 260 5 241

the Board of Directors in total

Executive members of the Board 7 2,231 10 3,573

of Directors and Executive Leadership

Committee in total

Options granted in 2002 2001(Plan 2003) Member Number Member Number

Non-executive members of 4 13,140 5 4,380

the Board of Directors in total

Executive members of the Board 7 90,810 10 39,330

of Directors and Executive Leadership

Committee in total

The details of the employee stock option plan 2003 are described in the consolidated financial

statements, note 9 ‘Employee benefits’.

6. Shareholders’participation rights

Each share entitles to one vote. No

shareholder, or groups of sharehold-

ers acting in concert, may represent

at a shareholders’ meeting more

than 5% of the aggregate voting

rights of the Company. An exception

exists for shareholders who were

registered as shareholders with

voting rights for more than 5% of

the Company’s share capital in the

course of the restructuring of the

share capital in 1999 (introduction of

one single class of shares). Further,

this voting restriction does not apply

to the independent voting represen-

tative and to a proxy holder appoint-

ed by the Company (“Organ-

vertreter”). The board of directors

may agree with banks on exceptions

of the voting restrictions to enable

the exercise of the voting rights for

deposited shares by proxy. No such

agreements were entered into or

existing in the year under review.

Shareholders may be represented

at the shareholder’s meeting by

their legal representative, another

shareholder with voting rights, the

independent voting representative,

the proxy appointed by the

Company or a proxy appointed by a

depository institution. A written

power of attorney is required

which is valid and issued for

only one specific share-

holder’s meeting.


In 2001 and 2002, neither special compensations upon resignation nor

compensations to former members of the Board of directors or the Executive

Leadership Committee were paid.

The member of the Board of Directors with the highest total compensation

received a compensation of kCHF 500 and 44,430 employee stock options in

2002 (compensation of 650 kCHF and 14,810 employee stock options in 2001).

No shares have been allocated to any member of the Board of Directors, any

member of the Executive Leadership Committee or any related parties

during 2001 and 2002.

Ownership of shares as per December 31, 2002Number

Non-executive members of the Board

of Directors including related parties in total 1,100

Executive members of the Board of Directors,

Executive Leadership Committee and related parties in total 0

Ownership of employee stock options as per December 31, 2002Plan Number

Non-executive members of the Board 1999 2,000

of Directors including related parties in total 2000 6,660

2001 4,380

2002 4,380

2003 13,140

Executive members of the Board of Directors, 1999 64,920

Executive Leadership Committee and related parties in total 2000 34,489

2001 25,910

2002 32,620

2003 90,810

The details of the employee stock option plans are described in the consolidated financial

statements, note 9 ‘Employee benefits’.

No additional fees and/or compensations have been paid during 2001 and

2002 to any member of the Board of Directors, any member of the Executive

Leadership Committee or any related parties. No loan is outstanding as per

December 31, 2002 to or by any of these persons.

35

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Art. 13 paragraph 2 of the Company's

Articles of Incorporation lists mat-

ters as to which, in addition to the

qualified majority requirements

prescribed by law, a shareholders

resolution taken by a qualified

majority of at least two thirds of

the votes represented is required.

These matters are the following:

- the conversion of registered

shares into bearer shares;

- the cancellation or modification

of transfer restrictions (Art. 5 of

the Articles of Incorporation);

- the cancellation or modification

of voting-right restrictions (Art.

12 paragraph 4 of the Articles of

Incorporation);

- the dissolution of the Company

with liquidation, and

- the cancellation of Art. 13

paragraph 2 of the Articles of

Incorporation itself and the

cancellation or modification of

the majority requirements in

this provision.

Shareholders representing shares in

the aggregated nominal value of at

least CHF 1 million may demand that

an item be included on the agenda

and shareholders representing 10%

of the share capital may demand

that a General Meeting of Share-

holder be convened.

Shareholders registered with voting

rights are convened to general meet-

ings by mail at least 20 days prior to

the day of the meeting. From the

day on which the invitations for the

general meeting are dispatched,

no further entries are made

in the share register until

the first day after the

general meeting.

7. Changes of control and defence measure

The Company's Articles of Incorporation do not contain an opting-out or

opting-up clause to remove or limit the duty to make a mandatory offer based

on the Stock Exchange Law.

There are no clauses on changes of control in agreements or plans benefiting

members of the Board of Directors and/or the Management of the Company

or the Tecan Group.

8. Auditors

Date of assumption of the existing auditing May 28,1997

mandate by KPMG Fides Peat (date of acceptance)

Date on which the head auditor in charge Fredy Luthiger in 1997

took up office

Total audit fees KPMG 2002 (CHF 1,000) 420

Total consulting fees KPMG 2002 (CHF 1,000) 341

The largest portion of the consulting fees is paid for tax consulting.

The auditors are elected by the Annual General Meeting for a one-year term

of office. Since 2003, the external audit is reviewed by the Audit Committee.

9. Information policy

It is Tecan's policy to keep shareholders and the financial community up-

dated regarding significant development in business operations. This policy

is primarily implemented through regular press releases, quarterly and

annual financial reports and information provided on the Company’s website:

www.tecan.com. Hardcopies of company publications are available on

request. They can also be downloaded from Tecan’s website. Important

website paths are:

http://www.tecan.com/index/com-ir/com-ir-fina_repo.htm

http://www.tecan.com/index/com-ir/com-ir-inve_cale.htm

http://www.tecan.com/index/com-ir/com-ir-corp_present-entry.htm

CFO STATEMENT

Strong financial position maintained indifficult environment.

In 2002, Tecan was exposed to two major factors that

negatively affected its performance. Firstly a decline of

the markets in which it is operating and secondly the fall

of the US-Dollar versus the Swiss Franc. Despite these

factors, Tecan’s balance sheet per December 31, 2002,

remained strong. Shareholder’s equity represented a high

71.4% (2001: 68.7%) of total assets of CHF 240.9 million

(2001: CHF 262.4 million). Due notably to the substantial

buy-back of treasury shares, the execution of a put

option and exchange rate effects, cash and cash

equivalents declined to CHF 58.9 million (2001: CHF 64.4

million). Tecan has no net debt but a net liquidity of

CHF 48.4 million (2001: CHF 55.2 million).

Lower sales impact profit.

In 2002, Tecan experienced a decrease of sales in local

currencies of 3.3%. (2001: +34.8%). Due to the lower

exchange rates, consolidated sales declined to CHF 332.2

million (-8.4%). Tecan, being a company with high profit

and contribution margins, posted a net profit decrease of

26.9% (2001: +14.3%) to CHF 33.0 million (2001: CHF 45.1

million). In 2002 Tecan reported the income from engi-

neering services as sales instead of as other operating

income. The change is due to the increasing importance

of Tecan being a solution provider. The incremental sales

from engineering services in 2002 compared to 2001

were CHF 2.3 million or +0.6% of total sales. The net

profit is not affected by these changes.

Increase of cash flow from operatingactivities.

In 2002, Tecan strengthened its focus on operations. Cash

flow from operating activities rose by 31.6 % (2001: 6.6 %)

to a robust CHF 42.6 million (2001: CHF 32.3 million) and

demonstrates Tecan’s ability to generate cash in a difficult

market environment.

Personnel reduction implemented to reduceimpact of lower sales on EBIT.

To increase efficiency, Tecan implemented several cost

reduction projects. As a consequence of this, the number

of employees decreased to 872 (2001: 915) at the end of

the year. Tecan will benefit in 2003 from the full-year

effect of these savings.

Investment in R&D kept at long-term level.

The company’s objective is to spend 10-12% of sales

annually on R&D. This objective was met in 2002 with

R&D expenses amounting to 11.9% of sales (2001: 12.1%).

New tax strategy lowers overall tax rate.

Tecan is in the process of successfully implementing a new

tax strategy. Major benefits were achieved in 2002, and

resulted in a decrease of the tax rate to 24.1% (2001: 29.4%).

Share buy-back program launched.

In the summer of 2002, Tecan announced a share buy-

back program. By the end of 2002, the number of shares

bought-back amounted to 348,943 and the total number

of treasury shares amounted to 622,430. Tecan will

continue its buy-back program in 2003 according to the

announcement made in the summer of 2002.

Dr. Rudolf Eugster,

Chief Financial Officer

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Net Liquidity

in CHF 1,000 2000 2001 2002

+ cash and cash equivalent 49,071 64,386 58,901

./. current bank liablities -2,126 -7.982 -9,368

./. bank loans -640 -1,166 -1,141

= net liquidity 46,305 55,238 48,392

Cashflow from operating activities

in CHF million

2000 30.3

2001 32.3

2002 42.6

0 10 20 30 40 50

Research and development

in CHF million

2000 29.0

10.6 %

2001 43.7

12.1 %

2002 39.5

11.9 %

0 10 20 30 40 50

Research and Development gross

Research and Development (gross) in % of sales

Operating and net profit

in CHF million

2000 57.9

39.5

2001 62.4

45.1

2002 44.7

33.0

0 20 40 60 80 50

Operating profit

Net profit

Diluted earings per share

in CHF/share

2000 3.00

2001 3.48

2002 2.57

0 10 20 30 40 50

Manpower by activity (eop)

Manufacturing & Logisitics 172 19.7 %

Selling & Marketing 324 37.1 %

Customer Service 106 12.2 %

Research & Development 174 20.0 %

General & Administration 96 11.0 %

Total 872

Sales broken down by region

in CHF million

2000 273.7

2001 362.7

2002 332.2

0 100 200 300 400 500

North America Asia

Europe Others

Sales by markets

in CHF million

Genomics/Proteomics 75.0 22.6 %

Drug Discovery 118.1 35.5 %

Diagnostics 139.1 41.9 %

Total 332.2

FIVE-YEAR CONSOLIDATED DATA

Five-year consolidated data

in CHF 1,000

Income statement

Sales

Operating profit

Financial result

Income taxes

Net profit

Research and development, gross

Personnel expenses

Depreciation of property, plant and equipment

Amortization of intangible assets

Balance sheet

Current assets

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

Minority interests

Shareholders' equity

Cash flow statement

Cash inflows from operating activities

Capital expenditure in property, plant and equipment and intangible assets

Dividends paid

Other data

Number of employees (end of period)

Number of employees (average)

Research and development in % of sales

Sales per employee

Data per share (CHF)*

Net profit

Shareholders' equity

Dividends paid (CHF/share) **

* data per share are based on 12,761,653 registered shares of par value CHF 1 each outstanding for all periods presented

** proposal to the Annual General Meeting

2002

332,180

44,701

-1,466

10,427

32,972

39,492

102,819

9,170

6,237

183,859

57,057

240,916

61,548

7,338

68,886

0

172,030

42,581

20,296

5,807

872

904

11.9%

367

2.58

13.48

0.45

2001

362,675

62,378

1,500

18,789

45,093

43,729

101,396

7,512

4,575

206,071

56,363

262,434

74,565

7,645

82,210

0

180,224

32,345

24,873

4,534

915

855

12.1%

424

3.53

14.12

0.45

2000

273,701

57,915

-3,488

14,882

39,450

28,935

73,437

5,631

2,928

151,594

42,825

194,419

48,136

7,261

55,397

25

138,997

30,334

25,850

3,358

690

629

10.6%

435

3.09

10.89

0.35

1999

193,478

41,015

989

13,896

28,050

25,720

56,342

4,592

0

131,346

23,226

154,572

32,460

4,172

36,632

80

117,860

27,656

9,623

2,683

556

542

13.3%

357

2.20

9.24

0.25

1998

164,279

31,545

168

6,766

22,876

18,650

46,806

6,025

22

103,016

16,991

120,007

26,229

4,976

31,205

219

88,583

26,097

4,832

1,944

507

489

11.4%

336

1.79

6.94

0.20

39

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Sales

Tecan Group consolidated sales in 2002 fell by 8.4% to

CHF 332.2 million (2001: CHF 362.7 million). The fall of the

CHF against the USD to CHF 1.39 (2001 CHF 1.67), had an

adverse effect on the overall sales figures. Excluding

the effect of currency translation, sales were reduced

by 3.3%. Sales within the market segments showed

differing performance levels. Genomics/Proteomics sales

were more or less flat compared to 2001, rising by 0.3% to

CHF 75.0 million, which amounted to 22.6% of total sales.

In local currency terms however, sales pushed ahead by a

healthy 6.8% compared to 2001. Drug Discovery sales

totaled CHF 118.1 million, which amounted to 35.5% of

total sales. This represented a fall of 9.4%, and in local

currency terms a decrease of 3.2%. Diagnostics sales

were reduced to CHF 139.1 million or 41.9% of total sales,

which represents a decrease of 11.8% in 2002, and in local

currency terms a fall of 8.0%.

Additionally, at the end of 2002 income from engineer-

ing contracts previously recognized as other operating

income has been reclassified directly to sales. Related

costs are disclosed as cost of sales instead of research

and development expenses. Prior year figures have been

reclassified accordingly. In 2002 the income from

engineering contracts increased by 290% to CHF 3.2

million. (2001 CHF 0.8 million). This reclassification has

had no impact on operating profit.

In terms of location of customers, whereas in 2001 the

America geographical segment showed the largest

growth in sales, in 2002 the European market showed

stronger growth. In local currency terms this amounted

to 7.0%. These increased sales were largely attributed to

a more locally focused distribution network. In line with

the general turndown in the business environment

in that area, the America market segment showed

negative growth in local currency terms of 3.9%.

Changes in Group companies

In January 2002 Tecan acquired the remaining 49% of Dr.

Weber GmbH. On the same date Tecan purchased 100%

of CST Logic Softwareentwicklungs GmbH in Mainz-

Kastel, Germany. In addition as of December 19, 2002

Tecan has acquired the remaining 30% of Tecan Software

GmbH. Tecan also established new distribution channels

to cater for the requirements of certain local markets.

On January 1, 2002 Tecan Sales Switzerland AG, Tecan

Sales Austria GmbH, and Tecan Sales International GmbH

were formed and on December 31, 2002 Tecan Iberica

Instrumentacion S.L. came into existence.

FINANCIAL REVIEW

FINANCIAL REVIEW

Profitability

Gross profit. A gross profit of 54.4% was achieved in

2002. This figure was down on 2001 (56.7%) and more

than 1% of the fall could be associated with the

exchange rate impact.

Personnel. With the changing market conditions a

number of programmes to increase efficiency were

introduced within the Tecan Group. This led to a

reduction in the number of employees at year end 2002

to 872 (2001: 915). However, the area of Research and

Development was not affected. Due to the lower sales

reached in 2002, sales per employee fell to CHF 367,000

(2001: CHF 424,000). Despite the difficult market

conditions investment into development of staff and

further education of employees was not affected,

ensuring that Tecan would continue to develop highly

qualified staff for the future. Tecan employees once

again as in previous years had the possibility to partici-

pate in a stock option plan. In the year some 510,007

stock options were granted to employees. (2001: 184,752)

Research & Development. Tecan consistently maintains

a target of spending 10-12% of sales on R&D. In 2002,

Tecan invested CHF 39.5 million in R&D compared to CHF

43.7 million in 2001. This represents 11.9% of sales, a slight

decrease on the previous years figure. (12.1% in 2001). In

comparison to the previous year R&D expenditure in

2002 concentrated on internal development which led to

a 30% fall in external R&D expenditures.

Tecan launched a significant amount of new products in

2002, especially in the second half of the year. Main

product releases include the HS 4800 Hybridization

Station in Genomics, the ProTeam FFE in Proteomics,

several new detection devices, LabCD-ADMET based

ADME solutions and parallel pipetting devices in Drug

Discovery. In Diagnostics Tecan launched a solution for

nucleic acid testing and extended the FE500 Workcell

functionality.

Other operating expenses. Throughout 2002 Tecan

entered into a number of efficiency and improvement

programs during the year. These programs ensured that

the Tecan Group cost base could be reduced. However,

Tecan continued to invest in system and infrastructure

expenses to ensure continued efficiency of processes.

Operating profit fell by 28.3% to CHF 44.7 million, or

13.5% of sales (2001: 17.2%). The fall in the operating

margin reflects the overall fall in sales but is bolstered by

the cost and efficiency improvement programmes on

the cost base. The figure also includes amortization

intangibles of CHF 6.2 million (2001: CHF 4.6 million).

Financial result. The decline of the US Dollar to CHF 1.39

at the end of the year (2001: CHF 1.67), caused Tecan to

suffer on a operational level but also caused a larger than

expected currency loss. The size of the loss was offset

largely by Tecan policy of hedging. The exchange losses

for the year were CHF 2.2 million.

Taxes. Tecan in 2002 continued to benefit from a higher

allocation of its profits to countries with lower tax rates.

The Group is continuing with improvements in its tax

strategy, in which many of the benefits can be seen in

2002. The Group target of maintaining tax rates at

sustainable levels was achieved with the underlying tax

rate for 2002 of 24.1% (2001: 29.4%)

41

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41

Tecan's operating performance in 2002 resulted in a

net profit of CHF 33.0 million, or 9.9% of sales. This

represents a decrease in net income of 26.9% compared

with 2001. The diluted earnings per share fell from CHF

3.48 in 2001 to CHF 2.57 for the year 2002.

Balance sheet

Despite the difficult market conditions, Tecan has conti-

nued to show a very strong balance sheet structure.

Although shareholders' equity showed a net decrease of

CHF 8.2 million it still represents a high 71.4% of total

assets as at December 31, 2002, (2001: 68.7%). Tecan has

a policy of continuing to buy treasury shares during the

financial year. Due to the dealings in treasury shares

shareholders equity was charged with a net amount of

CHF 21.0 million (2001: 3.1 million).

Cash flow statement

Despite the slow down in market conditions, Tecan conti-

nued to focus its attention on operations. Cash flow from

operations increased by CHF 10.2 million compared with

the 2001, reaching CHF 42.6 million in 2002. Cash flow

from investing activities remained flat compared to 2001

at CHF 20.1 million. The cash outflows from financing

activities of CHF 30.5 million are largely attributable to

the purchase of treasury shares and put options on the

treasury shares. As a result, cash and cash equivalents

decreased by CHF 5.5 million as of the end of 2002. Cash

and cash equivalents amounted to CHF 58.9 million

which represents 24.4% of the total balance sheet.

Treasury shares

During the year 2002, some 517,931 shares were pur-

chased and some 28,650 shares were sold. Tecan held

662,430 treasury shares as of year-end. In 2002 Tecan

announced a share buy back program of up to 10% of its

shares issued. The program will be terminated at the

latest in August 2004.

Dividends

At the annual shareholders' meeting on April 16, 2003,

the Board of Directors will recommend the payment of

dividends of CHF 0.45 per share (2001: CHF 0.45).

Stock market performance

The registered shares of Tecan Group Ltd., the Group's

ultimate holding company, are traded on the Swiss

stock exchange. In former years, the share price clearly

outperformed the Swiss Performance Index (SPI).

At the end of 2002 Tecan shares traded at CHF 45.50

which was 59% lower than at the start of the year.

The performance of the SPI during the same period was

-26%. The stock's high was 115 and the low 29.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated balance sheet at December 31

Assets

in CHF 1,000 Notes 2002 2001

Cash and cash equivalents 58,901 64,386

Trade accounts receivable 3 76,858 98,595

Other accounts receivable 8,489 7,131

Inventories 4 29,481 31,072

Prepaid expenses and other current assets 10,130 4,887

Current assets 183,859 206,071

Financial assets 73 296

Property, plant and equipment 5 25,712 28,461

Intangible assets 6 19,293 14,246

Deferred tax assets 20 10,742 12,264

Other non-current assets 1,237 1,096

Non-current assets 57,057 56,363

Assets 240,916 262,434

Liabilities and equity

Current bank liabilities 7 9,368 7,982

Trade accounts payable 10,907 21,204

Other accounts payable 3,606 2,898

Advance payments 0 497

Current provisions 8 6,291 5,033

Current tax liabilities 8,807 11,995

Accrued and other current liabilities 22,569 24,956

Current liabilities 61,548 74,565

Bank loans 7 1,141 1,166

Non-current provisions 8 1,841 1,811

Deferred tax liabilities 20 3,867 4,207

Other non-current liabilities 489 461

Non-current liabilities 7,338 7,645

Minority interests 0 0

Share capital 13,076 13,041

Capital reserve 15,845 21,223

Treasury shares (48,537) (27,213)

Retained earnings 202,014 174,849

Translation differences (10,368) (1,676)

Shareholders’ equity 10 172,030 180,224

Liabilities and equity 240,916 262,434

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Consolidated income statement

in CHF 1,000 Notes 2002 2001

Sales 14, 15 332,180 362,675

Cost of sales (151,434) (156,866)

Gross profit 180,746 205,809

Selling and marketing (59,814) (62,738)

Research and development 18 (39,492) (43,729)

General and administration (30,868) (34,023)

Amortization of intangible assets 6 (6,237) (4,575)

Other operating income 19 366 1,634

Operating profit 44,701 62,378

Interest expense (383) (184)

Interest income 1,126 1,318

Foreign exchange gains (losses) (2,209) 366

Financial result (1,466) 1,500

Profit before taxes 43,235 63,878

Income taxes 20 (10,427) (18,789)

Profit before minority interests 32,808 45,089

Minority interests in profit 164 4

Net profit 32,972 45,093

Earnings per share (CHF/share) * 24 2.58 3.50

Diluted earnings per share (CHF/share)* 24 2.57 3.48

* per registered share with a nominal value of CHF 1

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated statement of changes in shareholders’ equity

in CHF 1,000

Shareholders’ equity at 1/1/2001

Net profit

Dividends paid

Movement in treasury shares

Share capital increase from exercise

of employee stock options

Put option on treasury shares

Translation differences



Net profit

Dividends paid

Movement in treasury shares

Share capital increase from exercise

of employee stock options

Put options on treasury shares (net)



See also note 10.

Share

capital

13,020

-

-

-

21

-

-

13,041

13,041

-

-

-

35

-

-

13,076

Capital

reserve

15,017

-

-

1,070

1,103

4,033

-

21,223

21,223

-

-

314

1,712

(7,404)

-

15,845

Treasury

shares

(23,073)

-

-

(4,140)

-

-

-

(27,213)

(27,213)

-

-

(21,324)

-

-

-

(48,537)

Retained

earnings

134,261

45,093

(4,505)

-

-

-

-

174,849

174,849

32,972

(5,807)

-

-

-

-

202,014

Translation

differences

318

-

-

-

-

-

(1,994)

(1,676)

(1,676)

-

-

-

-

-

(8,692)

(10,368)

Total share-

holders’equity

139,543

45,093

(4,505)

(3,070)

1,124

4,033

(1,994)

180,224

180,224

32,972

(5,807)

(21,010)

1,747

(7,404)

(8,692)

172,030

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Consolidated cash flow statement

in CHF 1,000 Notes 2002 2001

Profit before minority interests 32,808 45,089

Adjustments to reconcile profit to cash flow from operating activities:

Depreciation of property, plant and equipment 5 9,170 7,512

Amortization of intangible assets 6 6,237 4,575

Change in provisions 8 1,778 1,138

Change in net deferred taxes 20 737 (6,161)

(Gain) loss on sales of property, plant and equipment 1,173 (967)

(Increase) decrease in current assets:

Trade accounts receivable 3 14,037 (31,136)

Inventories 4 (3,020) (4,915)

Other (7,446) (3,513)

Increase (decrease) in current liabilities:

Trade accounts payable (9,182) 1,152

Other (3,711) 19,571

Cash inflows from operating activities 42,581 32,345

Purchase of property, plant and equipment 5 (11,854) (22,878)

Proceeds from sales of property, plant and equipment 0 5,653

Acquisitions, net of cash 1 (4,191) (2,692)

Purchase of intangible assets 6 (4,073) 0

(Increase) decrease in financial assets 220 (503)

(Increase) decrease in other non-current assets (243) 0

Cash outflows from investing activities (20,141) (20,420)

Dividends paid (5,807) (4,534)

Share capital increase from exercise of employee stock options 1,747 1,124

Purchase of treasury shares (net) (21,010) (3,148)

Put options on treasury shares (net) 10 (7,404) 4,020

Increase in current bank liabilities 1,957 6,498

Increase in bank loans 7 0 660

Cash in(out)flows from financing activities (30,517) 4,620

Translation differences 2,592 (1,230)

Increase (decrease) in cash and cash equivalents (5,485) 15,315

Cash and cash equivalents at beginning of year 64,386 49,071

Cash and cash equivalents at year-end 58,901 64,386

Interest received 791 1,215

Interest paid 173 140

Income taxes paid 16,211 13,154

SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

Basis for the consolidated financial statements

The consolidated financial statements are based on the

individual subsidiaries’annual accounts as of December 31,

which were prepared according to uniform Group

accounting principles. These consolidated financial state-

ments are designed to give a true and fair view of the

results of operations, financial position and cash flows of

the Tecan Group, and are prepared in accordance with

International Financial Reporting Standards (IFRS).

These consolidated financial statements were approved by

the Board of Directors on February 14,2003. Final approval is

subject to acceptance by the Annual General Meeting of

shareholders on April 16, 2003.

ReclassificationsIncome from engineering contracts previously recog-

nized as other operating income has been reclassified to

sales. The related costs associated with this business

are disclosed as cost of sales instead of research and

development expenses. Prior year figures have been

reclassified accordingly (see note 14).

Scope of consolidation

The consolidated financial statements include Tecan

Group Ltd. and all subsidiaries, which are directly or

indirectly under its control (specifically those for which

over 50% of the voting rights are owned). Minority

interests in shareholders’ equity and in the net profit of

consolidated subsidiaries are shown separately. Group

companies acquired during the year are included in the

consolidated financial statements as of the date of

purchase. The companies, which are included in the

consolidated financial statements, are listed in the notes

to the statutory financial statements of Tecan Group Ltd.

Currently all investments owned by Tecan are fully

consolidated.

Capital consolidation

The capital consolidation is performed according to the

purchase method. Companies included for the first

time in the consolidation are valued according to

uniform accounting principles. Any resulting goodwill is

capitalized and amortized over its estimated useful life.

Translation of foreign currencies

The financial statements of foreign subsidiaries

denominated in foreign currencies are translated into

Swiss francs as follows:

Assets and liabilities current rates at year-end

Income and expenses average rates for the year

Cash flows average rates for the year

The resulting translation differences are directly charged

against or credited to shareholders’ equity.

Foreign currency transactions are translated using

rates applicable as of the transaction date. Resulting

exchange gains and losses are included in net profit.

Monetary assets and liabilities denominated in foreign

currencies, which were held at December 31 are

translated at year-end rates. The resulting translation

gains and losses are a component of net profit.

Intercompany sales and profits

Intercompany sales and profits, as well as accounts

receivable and payable between Group companies, are

eliminated.

Marketable securities

Marketable securities consist of easily realizable invest-

ments in debt and equity securities for which a liquid

market exists. The Group does not hold investments for

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trading purposes. All securities held by the Group are

classified as being available-for-sale. They are stated

at fair value, with any resultant gain or loss being

recognized in the income statement. There were no mar-

ketable securities as per balance sheet date.

Receivables

Trade accounts receivable and other receivables are

shown at their nominal values, less economically

necessary allowance for doubtful accounts.

Inventories

Inventories are valued at the lower of purchase/produc-

tion costs or market values, using the first-in-first-out or

average method. Production costs include costs of

material and labor, as well as a reasonable allocation

of overhead. Provisions have been made against any

slow-moving and obsolete inventory items.

Property, plant and equipment

Property, plant and equipment are stated at cost less

accumulated depreciation and impairment losses where

economically necessary. Depreciation is calculated under

the straight-line method based on the estimated useful

lives of the underlying assets:

Furniture and fixtures 4 - 8 years

Machines and motor vehicles 3 - 7 years

EDP equipment 3 - 5 years

Leasehold improvements term of the lease,

not exceeding

10 years

Assets acquired under leasing agreements, which

provide the Group with substantially all benefits and

risks of ownership are classified as finance leases and

capitalized at amounts equivalent to the estimated

present value of the underlying lease payments. The

corresponding rental obligations, net of finance charges,

are included in liabilities. Leased assets are depreciated

over their estimated useful lives.

Intangible assets

GoodwillGoodwill resulting from acquisitions represents the

difference between the purchase price and the fair

value of net assets acquired. Goodwill is stated at cost

less amortization and impairment losses. Amortization

is recorded on a straight-line basis over the estimated

economically useful life, limited to a maximum of 20 years.

Development costsIn compliance with IAS 38, development costs are

capitalized if technical and economical feasibility is

assured, if evidence of future use exists, and if

development costs can be separately determined and

measured. Development costs capitalized which include

material costs and external project costs, are amortized

over the useful life associated with the project, but not

to exceed 5 years.

SoftwareThe third party expenditure (license and external

consulting fees) related to the implementation of

integrated software in the individual subsidiaries are

capitalized and written off over five years.

Provisions

Provisions are recognized when an obligation has

resulted from past events, which will probably require an

outflow of resources and the amount of which can

reliably be estimated.

SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

Employee profit sharing

In 1997 shareholders approved a conditional share

capital, reserved for the employee profit sharing

program. Since 1999, based on this conditional share

capital, employee stock option plans have been

introduced. As such options are exercised, new shares

will be issued from the conditional share capital, which

will result in a share capital and capital reserve equal to

the strike prices received.

Provision for employee benefits

Within the Group, various retirement benefit plans for

employees exist. As a rule, the obligations are covered by

independent pension funds, which are maintained as

defined contribution plans.

Equity instruments

When own shares are purchased, the amount of the

consideration paid, including directly attributable costs

and taxes, is recognized as a change in equity.

Repurchased shares are classified as treasury shares

and presented as a deduction from total equity. The

consideration received when treasury shares are sold is

recognized as a change in equity.

The Group enters into certain option contracts on own shares,

which are classified as equity instruments with option

premiums recognized directly in equity (capital reserve).

Financial instruments

The Group uses derivative financial instruments to

economically hedge certain exposures to foreign

exchange rate risks. Hedge accounting is not applied.

Derivative financial instruments are recognized initially

at cost. Subsequent to initial recognition, derivative

financial instruments are stated at fair value.

Recognition of any resultant gain or loss is recognized in

the income statement.

Government research subsidies

The Group receives unconditional Government grants

for research activities. They are recognized as income

when received.

Taxes

The Group provides for all taxes estimated to be payable

on Group companies’ net taxable income for the year.

Deferred taxes arising due to temporary differences in

the recognition of certain income and expenses for

financial and tax reporting purposes are provided. The

deferred tax calculation is based on the balance sheet

liability method using local tax rates currently

applicable or expected. Deferred tax assets resulting

from timing differences and tax loss carry-forwards are

recorded to the extent that their future realization is

probable.

Differences relating to investments in subsidiaries are

not provided for to the extent that they will probably

not reverse in the foreseeable future.

Related parties

Transactions with related parties are conducted under

arms’ length market conditions.

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2001

63

1,044

51

(379)

(19)

760

1,995

2,755

(63)

2,692

2002

509

454

69

(525)

(176)

331

4,369

4,700

(509)

4,191

Changes in Group companies (acquisitions)The following amounts were included in the consolidation for assets and liabilities acquired:

in CHF 1,000

Cash and cash equivalents

Other current assets


Liabilities

Minority interests

Net identifiable assets and liabilities

Goodwill

Purchase price

Cash acquired

Net cash outflow

Foreign exchange ratesThe Tecan Group has used the following foreign exchange rates in the preparation of the financial statements:

in CHF

USD

EUR

GBP

SEK

JPY

SGD

Acquisitions in 2001:As of January 1, 2001, Tecan acquired an interest of 51% (majority) in Dr. Weber GmbH (Germany). After having

founded Tecan Nordic AB as of November 1, 2001, Tecan took over assets from its former distributor in Sweden

(Lambda Instruments) and Denmark (Laboratory, Automation & Technology).

Acquisitions in 2002:Tecan purchased the remaining 49% of Dr. Weber GmbH as of January 1, 2002. At the same time Tecan acquired a

100% of CST Logic Softwareentwicklungs GmbH (Germany). Finally Tecan took over the remaining 30% of Tecan

Software GmbH as of December 19, 2002.

Income statement

2001

1.69

1.51

2.43

15.71

1.39

0.95

2002

1.56

1.47

2.34

16.00

1.24

0.87

Balance sheet

2001

1.67

1.48

2.42

15.98

1.27

0.91

2002

1.39

1.45

2.23

15.82

1.17

0.80

1

1

1

100

100

1

Trade accounts receivable

in CHF 1,000

Receivables

Allowance for doubtful accounts

Total

Change compared with previous year

Thereof translation differences

2001

100,568

(1,973)

98,595

30,406

(344)

2002

78,765

(1,907)

76,858

(21,737)

(9,102)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.

2.

3.


in CHF 1,000

At cost

Balance at January 1


Additions

Disposals

Transfer


Balance at December 31

Accumulated depreciation



Annual depreciation

Disposals

Transfer



Net book value

Furniture and

fixtures

8,903

69

1,573

(404)

395

(625)

9,911

3,804

51

1,456

(243)

211

(333)

4,946

4,965

Machines and

motor vehicles

14,317

41

6,166

(1,542)

(395)

(843)

17,744

7,384

16

2,993

(534)

(210)

(450)

9,199

8,545

EDP

equipment

19,925

229

3,589

(457)

(2,896)

(1,193)

19,197

10,743

203

3,850

(381)

(1)

(886)

13,528

5,669

Leasehold

improvements

8,067

-

526

106

-

(563)

8,136

820

-

871

34

-

(122)

1,603

6,533

Total 2002

51,212

339

11,854

(2,297)

(2,896)

(3,224)

54,988

22,751

270

9,170

(1,124)

-

(1,791)

29,276

25,712

Total 2001

51,062

88

22,878

(22,535)

-

(281)

51,212

33,194

37

7,512

(17,849)

-

(143)

22,751

28,461

Inventories

in CHF 1,000

Raw material and work in process

Semi-finished and finished goods

Allowance for slow-moving and obsolete inventories

Total



2001

13,606

19,642

(2,176)

31,072

5,611

14

2002

13,072

20,173

(3,764)

29,481

(1,591)

(4,035)

Property, plant and equipment are insured in the event of fire for the total value of CHF 51.2 million (2001: CHF 51.0

million). As of year-end, purchase commitments for capital expenditure for property, plant and equipment amounted

to CHF 0.2 million (2001: CHF 3.9 million).

In 2002 capitalized software licenses totaling CHF 2.9 million have been transferred from property, plant and

equipment to intangible assets.


4.

5.

Intangible assets

in CHF 1,000

At cost



Additions

Disposals

Transfer from property, plant and equipment



Accumulated amortization



Annual amortization

Disposals

Transfer



Net book value

Goodwill

18,889

4,369

-

-

-

(85)

23,173

5,843

-

4,458

-

-

(31)

10,270

12,903

Development

costs for products

3,600

-

-

-

-

-

3,600

2,400

-

1,200

-

-

-

3,600

-

Software

-

-

4,073

-

2,896

-

6,969

-

-

579

-

-

-

579

6,390

Total 2002

22,489

4,369

4,073

-

2,896

(85)

33,742

8,243

-

6,237

-

-

(31)

14,449

19,293

Total 2001

20,531

1,995

-

-

-

(37)

22,489

3,677

-

4,575

-

-

(9)

8,243

14,246

Interest-bearing loans and borrowings

in CHF 1,000

Analysis by currency:

Denominated in EUR

Denominated in JPY

Denominated in USD

Total



Analysis by interest rates:

Variable (LIBOR)

0% - 2%

2% - 4%

4% - 6%

6% - 8%

Total

2002

5,700

4,680

129

10,509

1,361

(224)

9,239

129

1,141

-

-

10,509

1 year

4,559

4,680

129

9,368

Due within

2 – 3 years

1,141

-

-

1,141

Over 3 years

-

-

-

-

2001

1,270

7,638

240

9,148

6,382

(233)

-

7,638

645

625

240

9,148

Unused lines of credit amounting to CHF 42.7 million are available to the Group at December 31,2002 (2001:CHF 44.4 million).

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6.

7.

Provisions

in CHF 1,000



Provisions made

Provisions used

Provisions reversed



Thereof current

Thereof non-current

Warranty

provision

3,925

63

6,289

(4,498)

(1,221)

(343)

4,215

4,129

86

Provisions for

legal obligations

331

-

163

-

(129)

(11)

354

64

290

Employee

benefits

1,125

-

966

(637)

-

(152)

1,302

678

624

Other

1,463

-

1,399

(330)

(224)

(47)

2,261

1,420

841

Total 2002

6,844

63

8,817

(5,465)

(1,574)

(553)

8,132

6,291

1,841

Total 2001

5,636

110

5,330

(4,192)

-

(40)

6,844

5,033

1,811

2001

82,403

10,114

2,455

6,424

101,396

2002

87,656

9,691

3,508

1,964

102,819

Personnel expenses include the following:

in CHF 1,000

Salaries and wages

Social security

Retirement benefits

Other personnel expenses

Total

Employee profit sharingIn December 1999 Tecan introduced the first employee stock option plan for Tecan shares. In addition to their salaries,

all employees of the Tecan Group outside of the USA receive options. Employees in the USA receive stock appreciation

rights with the same treatment and the same conditions as the employee stock options. The options issued grant

employees the right to purchase one Tecan share per option.

The employee stock option plans include progressive restricted periods, which allow the exercise of a maximum of

25% / 50% / 75% / 100% of options issued after one / two / three / four years (exception plan 1999: maximum of

50% / 100% of options issued after two / four years).

All outstanding options granted are covered by the conditional share capital.

Employee benefits

Change in the number of employee stock options outstanding:


Issued

Exercised

Cancelled and expired


2001

Number

606,390

184,752

(20,860)

(21,330)

748,952

2002

Number

748,952

510,007

(35,145)

(82,060)

1,141,754


8.

9.Personnel expenses

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Subsequent to the exercise of 35,145 options during the financial year 2002, the company received CHF 1.7 million in

cash and cash equivalents (2001: CHF 1.1 million). This resulted in an increase in share capital of CHF 35,145 and in

capital reserve of CHF 1,711,833.

Summary of employee stock options outstanding as of year-end:

Expiration date

December 15, 2004

April 10, 2005

November 30, 2005

November 30, 2012

November 30, 2013


Thereof vested

Strike price (CHF)

50.00

100.00

162.50

99.00

48.40

2002

Number

203,755

160,460

117,585

152,851

507,103

1,141,754

275,079

2001

Number

266,020

176,690

132,350

173,892

-

748,952

123,390

Provision for employee benefitsThe Tecan Group maintains various retirement benefit plans for its employees. Benefits are distributed for the most

part by separate pension funds. These represent financially independent retirement benefit funds administered

by insurance companies and banks, and are conceived solely as defined contribution plans. As a rule, financing is

achieved through both employee and employer contributions.

As of year-end, provisions for employee benefits relating to termination benefits and long-service leave amounted

to CHF 1.3 million in 2002 (2001: CHF 1.1 million).

Shareholders’ equityThe changes in shareholders’ equity are presented on page 44.

The position ‘treasury shares’ consists of 662,430 registered shares with a nominal value of CHF 1 each (2001: 173,149

registered shares with a nominal value of CHF 1 each). Through various purchase and sales transactions dealing

in treasury shares during the current financial year, shareholders’ equity was charged with a net amount of CHF

21.0 million (2001: CHF 3.1 million).

In 2002 the following amounts relating to sales of put options on own shares have been recognized directly in equity (capital reserve):

in CHF 1,000

Option premiums received

Realized losses

Total

2001

4,033

-

4,033

2002

6,246

(13,650)

(7,404)

10.

At the end of 2002 a put option on own shares, which gives the other party the right to deliver 100,000 Tecan shares

until April 11, 2005 at a strike price of CHF 100.0 payable by Tecan in cash, was outstanding (2001: 100,000 Tecan shares

until November 30, 2005, at a strike price of CHF 162.5). As this put option is classified as an equity instrument,

changes in its fair value are not recognized.

The composition of and the changes in share capital are disclosed in note 3 to Tecan Group Ltd.’s statutory financial

statements.

Financial instruments

Credit risksThe individual companies and the Group as a whole have no significant concentration of credit risks, as financial

instrument contracts are concluded exclusively with first-rate financial institutions. The credit risk associated with

trade accounts receivable is limited, as the Group has numerous clients located in various geographical regions. The

maximum exposure to credit risk is represented by the carrying amount of each financial asset, including derivative

financial instruments, in the balance sheet.

Interest rate risksThe Group places its cash and cash equivalents as well as bank loans, which are primarily short-term, with first-rate

bank institutions.

Foreign currency risksThe Group incurs foreign currency risks on sales, purchases, borrowings and investments denominated in a currency

other than the measurement currency of the respective subsidiaries. On a consolidated basis, the Group is also

exposed to currency fluctuations between the Swiss Franc and the local measurement currencies of its subsidiaries.

The two major currencies giving rise to currency risks are Euros and US Dollars.

Tecan centralizes its foreign currency exposure in a few locations only. The hedging policy of the Group is to cover the

foreign currency exposure to a certain percentage of the operating activities. The Group uses forward exchange

contracts, currency options and swaps to hedge its foreign currency risk on specific future foreign currency cash flows.

These contracts have maturities of up to 12 months. The Group does not hedge for its net investment in foreign

entities and the related foreign currency translation of local earnings. The derivative financial instruments used as

economic hedges of foreign currencies are summarized in the table below. They are recognized at fair value as other

current assets and liabilities respectively.

in CHF 1,000

Foreign currency forwards

Denominated in USD

Denominated in EUR

Foreign currency options

Denominated in USD

Denominated in GBP

Total 2002

Total 2001

Positive

988

-

-

-

988

278


11.

Contracted value

Due within

3 – 12 months

-

-

11,120

2,230

13,350

54,650

3 months

27,800

2,900

2,780

2,230

35,710

2,420

Total

27,800

2,900

13,900

4,460

49,060

57,070

Fair value

Negative

(606)

-

(23)

(4)

(633)

(815)

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55

Rental and lease commitmentsThe commitments arising from operating leases are largely rental payments for buildings.

No commitments exist under finance leases.

Contingent liabilities and encumbrance of assetsAs of December 31, 2002 and 2001, the Group had no contingent liabilities to third parties, and none of the Group’s

assets were pledged, assigned or subject to retention of title.

Based on the above adjustments the following notes have also been reclassified: Note 14, 15, 16 and 18.

In 2002 the income from engineering contracts increased by 290% to CHF 3.2 million.

Commitments under non-cancelable operating leases:

in CHF 1,000

Due date

2002

2003

2004

2005

2006

2007 and beyond

Total

2001

5,729

5,217

4,448

4,467

4,539

18,062

42,462

2002

-

7,429

6,560

5,645

5,313

24,128

49,075

Income from engineering contracts (reclassification)

in CHF 1,000

Sales

Cost of sales

Gross profit


Other cost items

Other operating income

Operating profit

2001

Reclassified

362,675

(156,866)

205,809

(43,729)

(101,336)

1,634

62,378

Adjustments

+809

-550

+259

+550

-809

0

2001

Annual report 2001

361,866

(156,316)

205,550

(44,279)

(101,336)

2,443

62,378

12.

13.

14.

Segment informationThe primary segmentation is indicated by geographical region. Intersegment transactions are conducted based on

prevailing market prices.

2002

154,044

10,994

165,038

21,553

76,648

2,289

(2,110)

63,896

America

2001

178,555

13,505

192,060

23,237

91,465

5,225

(1,933)

61,294

2002

161,817

67,936

229,753

26,072

282,218

9,523

(13,206)

54,086

Europe

2001

164,409

73,218

237,627

39,162

246,874

17,490

(10,035)

57,078

2002

16,319

-

16,319

1,077

7,274

42

(91)

7,080

Asia

2001

19,711

-

19,711

556

15,152

163

(119)

13,538

2002

-

(78,930)

(78,930)

(4,001)

(125,224)

-

-

(56,176)

Corporate /

consolidation

2001

-

(86,723)

(86,723)

(577)

(91,057)

-

-

(49,700)

2002

332,180

-

332,180

44,701

240,916

11,854

(15,407)

68,886

Group

2001

362,675

-

362,675

62,378

262,434

22,878

(12,087)

82,210

Sales by regions (by location of customers)

in CHF 1,000

Sales to third parties

Change in local

currency versus the

prior year in %

2002

153,982

(4)

America

2001

173,109

33

2002

145,850

7

Europe

2001

140,190

34

2002

27,890

2

Asia

2001

29,566

24

2002

4,458

(77)

Others

2001

19,810

95

2002

332,180

(3)

Total

2001

362,675

35

Sales by markets

in CHF 1,000


Change in local currency

versus the prior year in %

2002

75,022

7

Genomics /

Proteomics

2001

74,788

76

2002

118,047

(3)

Drug

Discovery

2001

130,226

3

2002

139,111

(8)

Diagnostics

2001

157,661

57

2002

332,180

(3)

Total

2001

362,675

35

No significant non-cash expenses other than depreciation of property, plant and equipment and amortization of

intangible assets were incurred.

Assets and capital expenditure in property, plant and equipment cannot be allocated meaningfully to the individual

markets. A mathematical allocation would not result in reliable or meaningful information.


15.

Segment information (by location of assets)

in CHF 1,000


Intersegment sales

Total sales

Operating profit

Total assets

Capital expenditure in

property,plant and

equipment

Depreciation and

amortization

Total liabilities

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in CHF 1,000

Material costs

Personnel expenses



Other operating income and expenses (net)

Total operating expenses

2001

112,831

101,396

7,512

4,575

73,983

300,297

2002

102,741

102,819

9,170

6,237

66,512

287,479

Other operating income

in CHF 1,000


Gain on sales of property, plant and equipment

Other operating income (miscellaneous)

Other operating expense (miscellaneous)

Total other operating income

2001

439

1,561

-

-366

1,634

2002

422

-

141

-197

366


in CHF 1,000

Total research and development (gross)

Amortization of

Development costs capitalized

Goodwill arising from R&D driven acquisitions


Total research and development (net)

Thereof external project costs

2001

43,729

1,200

3,098

-439

47,588

18,977

2002

39,492

1,200

3,880

-422

44,150

13,226

PersonnelTecan Group employed an average of 904 employees (2001: 855 employees) during 2002. At year-end, the Group

employed 872 people (2001: 915 people).

Costs for research and the development of new products amounted to 11.9% of sales (2001: 12.1%). Based on a sales

agreement with Abbott, costs relating to the completion of the Genesis FE amounting to CHF 3.6 million were

capitalized for the first time at December 31, 1999. The development costs capitalized are amortized over 3 years.

Goodwill arising from research and development driven acquisitions are amortized over 5 years. After offsetting the

government research subsidies, net research and development expense in 2002 was CHF 44.2 million (2001: CHF 47.6

million), which represents 13.3% (2001: 13.2%) of sales.

16.

17.

18.

19.

Deferred income taxes arising due to temporary differences in the valuation of assets and liabilities for financial

reporting and for tax purposes are determined according to the balance sheet liability method. The Group recognizes

both deferred tax assets and liabilities on temporary differences using local tax rates currently applicable or

expected. In addition, deferred taxes are provided on expected dividend distributions from subsidiary companies

(withholding taxes).

Income taxes:

in CHF 1,000

Current income taxes

Deferred taxes

Total

2001

24,994

(6,205)

18,789

2002

9,690

737

10,427

The income tax expense can be analyzed as follows:

in CHF 1,000

Profit before taxes

Tax expense based on the Group’s average rate of 25.8% (2001: 29.2%)

Non-deductible expenses

Tax-free income and tax reductions

Unrecognized tax loss carry-forwards used

Under (over) provided in prior years

Tax expense reported

2001

63,878

18,657

1,103

(2,674)

(205)

1,908

18,789

2002

43,235

11,176

637

(3,100)

-

1,714

10,427

Tax loss: carry-forwards available to Group companies:

in CHF 1,000

Expiring in

2002

2003

2004

2005 and beyond

Unlimited

Total potential tax benefits

Thereof not capitalized

2002

-

-

-

1,796

1,042

2,838

-

2001

-

-

47

3,011

595

3,653

2


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Deferred taxes apply to the following balance sheet line items:

in CHF 1,000

Inventories


Liabilities and accrued expenses

Provisions

Other

Total net deferred tax assets arising from temporary differences

Deferred taxes provided on

Expected dividend distributions

Potential tax benefits from tax loss carry-forward

Total net deferred tax assets


Impact on profit at average currency rates

2002

4,564

(844)

785

318

(620)

4,203

(166)

2,838

6,875

2001

4,992

(1,113)

875

67

684

5,505

(1,099)

3,651

8,057

Impact on profit

2002

(428)

269

(90)

251

(1,304)

(1,302)

933

(813)

(1,182)

445

(737)

Temporary differences on inventory primarily relate to income on intra-group sales eliminated for accounting purposes.

Deferred taxes are included in the balance sheet as follows:

in CHF 1,000

Deferred tax assets

Deferred tax liabilities

Total, net

2001

12,264

(4,207)

8,057

2002

10,742

(3,867)

6,875

Subsequent eventsNo events have occurred subsequent to the balance sheet date, which would impact the disclosures made in these

financial statements.

Future change in accounting principlesDue to the increasing importance of services in our products (i.e. installations) Tecan decided effective January 1, 2003

to recognize sales based on acceptance rather than on delivery. Such a change in revenue recognition is purely a deferral

in time of the recognition of sales and results in a decrease in equity in the balance sheet on January 1, 2003 of CHF 11.8

million.

21.

22.

in CHF

Share capital issued

Treasury shares

Share capital entitled to dividends

Average number of shares outstanding

Undiluted profit attributable to shareholders (CHF/share)

Average number of shares under option

Average exercise price

Number of shares which could be issued from the above proceeds if the company

had issued shares at the average trading price for the year of CHF 69.19

Average number of shares after dilution

Diluted earnings per share for shareholders (CHF/share)

2001

13,040,930

(173,149)

12,867,781

12,869,766

3.50

3.48

2002

13,076,075

(662,430)

12,413,645

12,761,653

2.58

277,146

49.76

(199,295)

12,839,504

2.57

Remuneration of directorsThe total remuneration expense for the Board of Directors of Tecan Group Ltd. was CHF 0.76 million in 2002 (2001: CHF

0.89 million). In addition, a total of 57,570 stock options (2001: 19,190 stock options) were issued to the Board members

in connection with employee stock option plans.

Earnings per shareThe earnings per share are determined based on the profit attributable to shareholders and the average number of

shares outstanding, excluding treasury shares.


23.

24.

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Report of the Group auditors to the general meeting of shareholders ofTecan Group Ltd., Männedorf

As auditors of the Group, we have audited the consolidated financial statements of Tecan Group Ltd.,

Männedorf, and subsidiaries, presented on pages 42 to 60 for the year ended December 31, 2002.

These consolidated financial statements are the responsibility of the Board of Directors. Our responsibility is to

express an opinion on these consolidated financial statements based on our audit.We confirm that we meet the legal

requirements concerning professional qualification and independence.

Our audit was conducted in accordance with auditing standards promulgated by the Swiss profession and with the

International Standards on Auditing issued by the International Federation of Accountants (IFAC), which require

that an audit be planned and performed to obtain reasonable assurance about whether the consolidated financial

statements are free from material misstatement. We have examined on a test basis evidence supporting the

amounts and disclosures in the consolidated financial statements. We have also assessed the accounting principles

used, significant estimates made and the overall consolidated financial statement presentation. We believe that our

audit provides a reasonable basis for our opinion.

In our opinion the consolidated financial statements give a true and fair view of the financial position, the results of

operations and the cash flows in accordance with the International Financial Reporting Standards (IFRS) and comply with

Swiss law.

We recommend that the consolidated financial statements submitted to you be approved.

KPMG Fides Peat

Fredy Luthiger Werner Pfäffli

Swiss Certified Accountant Swiss Certified Accountant

Auditor in Charge

Zurich, February 14, 2003

TECAN GROUP LTD.

2001

21,095,890

708,655

14,758,221

2,770,700

713,314

40,046,780

91,362,772

18,440,561

777,437

2,895,800

113,476,570

153,523,350

3,043,256

62,305

1,218,404

6,665,800

1,400,000

1,818,307

14,208,072

13,040,930

55,933,389

70,340,959

139,315,278

153,523,350

2002

19,456,857

775,838

16,200,782

44,404,333

2,109,912

82,947,722

64,797,797

30,140,606

972,685

3,030,166

98,941,254

181,888,976

390,254

75,636

1,791,451

6,994,306

1,400,000

827,988

11,479,635

13,076,075

72,480,731

84,852,535

170,409,341

181,888,976

Consolidated balance sheet at December 31

Assets

in CHF

Cash and cash equivalents

Other accounts receivable from third parties

Other accounts receivable from Group companies

Current loans to Group companies

Prepaid expenses

Current assets

Financial assets

Treasury shares


Intangible assets

Non-current assets

Assets

Liabilities and shareholders’ equity

Trade accounts payable to third parties

Other liabilities to third parties

Other liabilities to Group companies

Current provisions

Current tax liabilities

Accrued liabilities

Current liabilities

Share capital

Legal reserves

Retained earnings

Shareholders’ equity

Liabilities and equity

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Income statement

in CHF

Dividend income from Group companies

Interest and investment income from third parties

Interest income from Group companies

Management fees from Group companies

Gain on sales of property, plant and equipment

Income

Personnel expenses



Financial expense

Other expenses

Expenses

Profit before taxes

Income taxes

Net profit

2001

38,756,746

535,518

3,611,484

16,766,140

560,886

60,230,774

(5,938,909)

(305,967)

0

(9,652,345)

(12,998,773)

(28,895,994)

31,334,780

(559,834)

30,774,946

2002

42,371,823

391,278

5,440,438

23,046,108

0

71,249,647

(6,681,298)

(500,422)

(319,868)

(19,109,078)

(10,826,426)

(37,437,092)

33,812,555

(591,600)

33,220,955

NOTES TO THE FINANCIAL STATEMENTS

Financial assets

in CHF

Investments in subsidiaries

Non-current loans to Group companies

Total

2001

20,565,755

70,797,017

91,362,772

2002

21,161,675

43,636,122

64,797,797

Overview of investments in subsidiaries:

Company

Tecan Schweiz AG

Tecan Trading AG

Tecan Sales Switzerland AG

Tecan Austria GmbH

Tecan Sales Austria GmbH

Tecan Sales International GmbH

Tecan Landesholding GmbH

• Tecan Deutschland GmbH

• Tecan München GmbH

• CST Logic Softwareentwicklungs GmbH

Tecan Software GmbH

Tecan Belgium N.V.

Tecan France SA

Tecan Iberica Instrumentacion S.L.

Tecan Italia S.r.l.

Tecan UK Ltd.

Tecan Nordic AB

Tecan US Group, Inc.

• Tecan US, Inc.

• Tecan Systems, Inc.

• Tecan Boston, Inc.

Tecan Japan Co., Ltd.

Tecan Asia (Pte.) Ltd.

S = services, holding functions, R = research and development, P = production, D = distribution

All subsidiaries are 100% owned.

Activities

R/P

S

D

R/P

D

D

S

D

R

R

R

D

D

D

D

D

D

S

D

R/P/D

R

D

D

Share capital

5,000,000

300,000

250,000

1,460,000

35,000

35,000

25,000

51,129

25,000

25,000

76,694

62,000

450,000

34,850

77,469

500,000

100,000

1,500,000

400,000

26,000

0

50,000,000

800,000

Currency

CHF

CHF

CHF

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

GBP

SEK

USD

USD

USD

USD

JPY

SGD

Domicile

Männedorf (CH)

Männedorf (CH)

Männedorf (CH)

Grödig / Salzburg (Oe)



Crailsheim (D)

Crailsheim (D)

Kirchheim (D)

Mainz-Kastel (D)

Hannover (D)

Mechelen (B)

Trappes (F)

Barcelona (E)

Milano (I)

Reading (GB)

Mölndal (S)

Research Triangle Park, NC (US)

Research Triangle Park, NC (US)

San Jose, CA (US)

Medford, MA (US)

Tokyo (Jap)

Singapore (Sin)

Changes in 2002:- Purchase of the remaining 49% of Dr. Weber GmbH and absorption of the company by Tecan München GmbH as of

January 1, 2002.

- Formation of the distribution companies Tecan Sales Switzerland AG, Tecan Sales Austria GmbH and Tecan Sales

International GmbH in the context of business restructuring as of January 1, 2002. The distribution companies are

spin-offs from the production companies Tecan Schweiz AG and Tecan Austria GmbH.

- Acquisition of 100% of CST Logic Softwareentwicklungs GmbH as of January 1, 2002.

- Purchase of the remaining 30% of Tecan Software GmbH as of December 19, 2002.

- Formation of the distribution company Tecan Iberica Instrumentacion S.L. as of December 31, 2002.

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Treasury sharesThe balance in treasury shares is made up of 662,430 registered shares with a nominal value of CHF 1 each. The

average price of shares purchased (sold) in 2002 amounted to CHF 46.23 (CHF 102.35).

The increase in treasury stock holdings is mainly due to the company’s Share-Buy-Back-Program. The program was

announced on July 30, 2002. It intends to buy back treasury shares up to 10% of the outstanding share capital over a

period of two years.

The company’s share capital is CHF 13,076,075, consisting of 13,076,075 registered shares with a nominal value of CHF 1

each (2001: 13,040,930 registered shares with a nominal value of CHF 1 each). Each share has one voting right at the

Annual General Meeting. Shareholders are entered in the share register only up to 5% of the share capital, and

nominees only up to 2%.

In 1997 shareholders approved a conditional share capital of CHF 1,300,000, reserved for an employee profit sharing

program. The conditional share capital consists of 1,300,000 registered shares with a nominal value of CHF 1 each.

Since 1999, based on this conditional capital, employee stock option plans have been introduced. At December 31,

2002, 1,141,754 options not yet exercised were outstanding in connection with the employee stock option plans.

At the end of 2002 a put option on own shares, which gives the other party the right to deliver 100’000 Tecan shares

until April 11, 2005 at a strike price of CHF 100.0 payable by Tecan in cash, was outstanding (2001: 100,000 Tecan shares

until November 30, 2005, at a strike price of CHF 162.5). The fair value of the put option has been provided for. The

reserve for treasury shares includes the purchase of treasury shares resulting from the potential exercise of this put

option (after deducting the premium received).


Additions

Disposals


Number of shares

173,149

517,931

(28,650)

662,430

Changes in shareholders’ equity

in CHF


Dividends paid

Capital increase

Net profit

Changes in reserves for treasury shares


Share capital

13,040,930

-

35,145

-

-

13,076,075

General reserve

16,490,828

-

3,453,297

-

-

19,944,125

Legal reserves

Reserve for treasury shares

(Note 2)

39,442,561

-

-

-

13,094,045

52,536,606

Retained

earnings

70,340,959

-5,807,191

191,857

33,220,955

-13,094,045

84,852,535

Total share-

holders’ equity

139,315,278

-5,807,191

3,680,299

33,220,955

-

170,409,341

2.

3.

The Company has knowledge of the following significant shareholders as of December 31, 2002:

Schweizerische Unfallversicherungsanstalt (SUVA), Lucerne, CH, 1,438,394 shares (11.0%)

UBS Fund Management, Zürich, CH, 748,400 (5.7%)

Tecan Group Ltd, Männedorf, CH, 662,430 (5.1 %)

Contingent liabilitiesThe total amount of guarantees in favor of subsidiaries was CHF 42.8 million at December 31, 2002 (2001: CHF 37.2

million).

Encumbrance of assetsAt December 31, 2002 and 2001, none of the Company’s assets were pledged, assigned, or subject to retention of title.

Unrecorded leasing liabilitiesThe total amount of unrecorded liabilities under lease commitments was CHF 0.3 million at December 31, 2002 (2001:

CHF 0.2 million).

Fire insurance value of property, plant and equipmentThe insured value of property, plant and equipment in the event of fire was CHF 1.0 million (2001: CHF 0.9 million).

Liabilities to pension fundsAt December 31, 2002, as in the prior year, no liabilities to pension funds existed.

No other items existed which would require disclosure under the provisions of Art. 663b of the Swiss Code of

Obligations.

Proposal of the Board of Directors for the appropriation of retained earnings

The Board of Directors of Tecan Group Ltd. proposes that the retained earnings of CHF 84,852,535 be appropriated as

follows:

in CHF

45% dividends on the company’s share capital of CHF 13,076,075 at December 31, 2002 * (CHF 0.45 per share as in the previous year)

45% dividends on employee stock options which may be exercised before the date of dividend payment, totaling 275,079*

Balance to be carried forward

Total

* Dividends on treasury shares and employee stock options which have not been exercised on the date of the dividend payment will be added to

retained earnings.

5,884,234

123,785

78,844,516

84,852,535

NOTES TO THE FINANCIAL STATEMENTS

4.

5.

6.

7.

8.

Report of the statutory auditors to the general meeting of shareholders ofTecan Group Ltd., Männedorf

As statutory auditors, we have audited the accounting records and the financial statements of Tecan Group

Ltd., Männedorf, presented on pages 62 to 66 for the year ended December 31, 2002.

These financial statements are the responsibility of the Board of Directors. Our responsibility is to express an

opinion on these financial statements based on our audit. We confirm that we meet the legal requirements

concerning professional qualification and independence.

Our audit was conducted in accordance with auditing standards promulgated by the Swiss profession, which

require that an audit be planned and performed to obtain reasonable assurance about whether the financial

statements are free from material misstatement. We have examined on a test basis evidence supporting the

amounts and disclosures in the financial statements. We have also assessed the accounting principles used,

significant estimates made and the overall financial statement presentation. We believe that our audit provides a

reasonable basis for our opinion.

In our opinion, the accounting records, the financial statements and the proposed appropriation of available earnings

comply with Swiss law and the company’s articles of incorporation.

We recommend that the financial statements submitted to you be approved.

KPMG Fides Peat

Fredy Luthiger Werner Pfäffli

Swiss Certified Accountant Swiss Certified Accountant

Auditor in Charge

Zurich, February 14, 2003

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GLOSSARY

GenotypingThe determination of nucleotide base sequences in

genetic material (chromosomes)

High-throughput screeningAutomated processes for the rapid assessment of the

activity of large numbers of samples

In situ hybridization A method of localizing either messenger RNA within the

cytoplasm or DNA within the chromosomes of the

nucleus by hybridizing the sequence of interest to a

complimentary strand of a nucleotide probe

IVD DirectiveIn Vitro Diagnostic Directive – new European directive to

ensure safety, quality and performance of diagnostic

medical devices

Liquid handling Automated handling of very small volumes of liquids to

enable high-throughput processes

Matrix-Assisted Laser Desorption/Ionization massspectrometry (MALDI-MS)A spectrometric technique that is used to determine the

mass of large biomolecules

Absorption, distribution, metabolism, excretion, toxicity(ADMET) assaysScreening tests designed to determine the toxicity of new

drug candidates

AIDSAcquired Immunodeficiency Syndrome

Detection devicesInstruments used to monitor chemical and biological

processes

FractionationThe physical separation of molecules of different properties

Free-flow electrophoresisAutomated tool for the fractionation of proteins. Allows

for elimination of abundant molecules that may interfere

with detection of key target molecules

Functional genomicsThe process of assigning functions to genes and other

parts of the genome of organisms

GenomicsThe study of the structure and function of large numbers

of genes simultaneously

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Microarray Glass or silicon surface used to support rows of biological

material, for example known sequences of DNA.

Microarrays are an integral part of high-throughput

processes

MicrofluidicsThe miniaturization of fluid-based biological processes

to very small volumes that enables high throughput

analysis

MicroplateA standardized plastic tray typically with 96 wells or

depressions for holding small quantities of material. The

96 wells are uniformly located in 8 rows of 12 wells each

Miniaturization The reduction of systems to a small scale. A key

requirement of some high-throughput processes

ProteomeThe continually changing protein complement expressed

by a genome or tissue

ProteomicsThe study of the full expression of proteins by cells in their

lifetime

ScreeningThe use of assays or tests to detect compounds that

change the activity of a target

Secondary screeningRefined testing procedures with which already identified

substances can be more precisely characterised, opti-

mised, and investigated for their behavior

Single nucleotide polymorphisms (SNPs)Small differences in genetic makeup that may be used to

predict drug response and potentially improve disease

treatment results. Offers the possibility of personalized

medicine

TargetA molecule (usually a protein but sometimes a DNA

sequence) that may interact with a drug or drug

candidate

Target validationThe process of determining if a target is critically involved

in a disease process

Two-dimensional electrophoresisAnalytical method in which sample is subjected to two

consecutive separation processes in different directions

Tecan Asia (Pte) Ltd.80, Marine Parade / #13-04Singapore 449269 / SingaporeT +65 644 41 886 / F +65 644 41 836

Tecan Japan Co. LtdMeiji Seimei Fuchu Building 10F / 1-40 MiyamachiFuchu City, Tokyo, JapanT +81 42 334 88 55 / F +81 42 334 04 01

LOCATIONS

TECAN SALES OFFICES

Tecan Sales Austria GmbHUntersbergstrasse 1aA-5082 Grödig / Salzburg, AustriaT +43 62 46 89 33 / F +43 62 46 72 770

Tecan Sales International GmbHUntersbergstrasse 1aA-5082 Grödig / Salzburg, AustriaT +43 62 46 89 33 / F +43 62 46 72 770

Tecan Benelux B.V.B.A.Vaartdijk 55 / B-2800 Mechelen, BelgiumT +32 15 42 13 19 / F +32 15 42 16 12

Tecan Benelux B.V.B.A.Industrieweg 30 / NL-4283 Giessen, Netherlands T +31 18 34 48 17 4 / F +31 18 34 48 06 7

Tecan Deutschland GmbHTheodor-Strom-Straße 17 / D-74564 Crailsheim,GermanyT +49 79 51 94 170 / F +49 79 51 50 38

Tecan France S.A.Parc d'Activités de Pissaloup / Bâtiment Hermes IIRue Edouard Branly / F-78190 Trappes, FranceT +33 1 30 68 81 50 / F +33 1 30 68 98 13

Tecan Italia S.r.l.Via F.lli Cerci, Palazzo BerniniCentro Direzionale Milano 2I-20090 Segrate (Mi), ItalyT +39 02 215 21 28 / F +39 02 215 97 441

Tecan Nordic ABBox 208 / SE-43123 Mölndal, SwedenT +46 31 75 44 000 / F +46 31 75 44 010

Tecan Nordic ABVallenbaekvejn 22 B / DK-2605 Bröndby, DenmarkT +45 70 234 450 / F +45 70 234 450

Tecan Sales Switzerland AGSeestrasse 103 / CH-8708 Männedorf,SwitzerlandT +41 1 922 89 22 / F +41 1 922 89 23

Tecan SpainSabino de Arana, 32 / E-08028 Barcelona, SpainT +34 93 490 01 74 / F +34 94 411 24 07

Tecan UK Ltd.Theale Court, 11-13 High Street, ThealeUK-Reading RG7 5AH, United KingdomT +44 11 89 300 300 / F +44 11 89 305 671

TECAN MANUFACTURING

AND R&D SITES

Tecan Austria GmbHUntersbergstrasse 1aA-5082 Grödig / Salzburg, AustriaT +43 62 46 89 33 / F +43 62 46 72 770

Tecan Munich GmbHFeldkirchner-Straße 12aD-85551 Kirchheim, Germany T +49 89 98 106 111 / F +49 89 98 106 180

Tecan Schweiz AGSeestrasse 103 / CH-8708 Männedorf, SwitzerlandT + 41 1 922 81 11 / F +41 1 922 81 12

Tecan Software GmbHGrosser Kolonnenweg 23 / D-30179 Hannover,GermanyT + 49 511 334 280 / F + 49 511 334 28 28

CST Logic Softwareentwicklungs GmbHSchmalweg 5 / D-55252 Mainz-Kastel, GermanyT +49 6134 18 14 21 / F +49 6134 18 14 30

Tecan Systems, Inc2450 Zanker Road / San Jose, CA 95131, USAT +1 408 953 3100 / F +1 408 953 3107

Tecan US, Inc.P.O. Box 13953 / Research Triangle ParcNC 27709, USAT +1 919 361 5200 / F +1 919 361 5201

Tecan Boston, Inc.200 Boston Avenue, Suite 3000 / Medford, MA02155, USAT +1 781 306 08 27 / F +1 781 306 08 37

Tecan Systems, Inc2450 Zanker Road / San Jose, CA 95131, USAT +1 408 953 3100 / F +1 408 953 3107

EUROPE

ASIA

USA

TECAN PROFILE

Tecan is a leading player in the Life Sciences supply industry. The companyspecializes in the development, production, and distribution of enablingsolutions for Genomics, Proteomics, Drug Discovery and Diagnostics.Founded in Switzerland in 1980, the company has manufacturing, researchand development sites in both North America and Europe and maintains asales and service network in 52 countries. Tecan clients are leading pharma-ceutical and biotechnology companies, university research departmentsand diagnostic laboratories.

The business strategy of Tecan is to focus on growth opportunities in its fourmarket segments of Genomics, Proteomics, Drug Discovery and Diagnostics.The company focuses on key bottlenecks in the Life Science industrythat benefit from its expertise in automation, liquid handling, robotics,detection, software and miniaturization.

Registered shares of Tecan Group are traded on the Swiss SWX stock exchange(TK: TECN / Reuters: TECZn.S / Valor : 1210019). In 2002, Tecan achieved salesof CHF 332.2 million (USD 213.0 million; EUR 226.0 million).

www.tecan.com

CreditsText: Rochat & Partners, Geneva, Switzerland

Design: Inox Graphic Design, Neuchâtel, Switzerland

Prepress/Printing: Neidhart + Schön AG, Zurich Switzerland

Project Management: Tecan Corporate Communications and Corporate Finance, Männedorf, Switzerland

© Copyright Tecan Group Ltd.

BOARD OF DIRECTORS AND MANAGEMENT

TECAN - EXECUTIVE LEADERSHIP COMMITTEE

1. Anton Schrofner President Tecan Instruments2. Franz Rutzer Chief Financial and Operating Officer of Tecan Europe3. Jan Timmers Head of Business Development and Biopharma4. Dr. Emile C. Sutcliffe Chief Executive Officer (CEO)5. Carl Severinghaus President Tecan US6. Steve Levers President Tecan Systems

TECAN - ENHANCED MANAGEMENT TEAM

Joerg Borer Head of Customer ServicesWolfgang Deuringer President Tecan Sales InternationalScott Eaton President Tecan JapanRudolf Eugster CFOSylvain Hunault President Tecan Southern EuropeSarah Kreienbühl Head of Human ResourcesMartin von Lueder President Tecan Central EuropePaul Mitchell President Tecan Northern EuropeBob Young President Tecan Boston

TECAN - BOARD OF DIRECTORS

Mike Baronian Chairman of the BoardProf. Dr. Armin Seiler Vice ChairmanDr. Emile C. Sutcliffe Chief Executive Officer (CEO)Timothy B. Anderson MemberHans-Jörg Kummer Member

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Tecan Group Ltd., Seestrasse 103, CH-8708 Männedorf, Switzerland, T+411 922 88 88, F+411 922 88 89, [email protected]

Annual Report 2002Bringing innovation to the Life Sciences

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