Chairman's Statement

Surgical Innovations Group PLC
25 April 2000


CHAIRMAN'S REMARKS AT ANNUAL GENERAL MEETING
25 APRIL 2000


Since  my  Chairman's Statement with the  Annual  Report,
issued  just one month ago, there have been a  number  of
significant changes at your Company.

Firstly, my predecessor, Brian Long, who remained a  non-
executive  director when he relinquished the chairmanship
last December, has now resigned from the Board.

Also,  as  part of the strategic review of the  Company's
activities  that I announced in my Chairman's  Statement,
there  have been further changes to the Board. Ian Lomas,
by  amicable  agreement,  has stepped  down  as  Managing
Director and, on behalf of the Board, I wish to thank Ian
for  his  valuable  contribution to the  Company  in  its
formative  years  and  wish him  every  success  for  the
future.

The  strategic  review has indicated  that,  despite  the
continuing  interest  in and increasing  demand  for  our
blood products, there is likely to be a requirement for a
further   considerable  investment   of   the   Company's
resources in the short term, before this division returns
to  profitability. Therefore, the Board has decided  that
the  preferable route is to look for a strategic  partner
who  can provide the necessary investment to develop  its
market area more speedily than we can.

Also, as part of the strategic review, the Board believes
that  resources  should be concentrated  on  Ion  Product
Solutions,   the   Division  which  offers   design   and
manufacturing solutions to other healthcare companies, as
well   as   dealing  with  the  Company's   own   product
developments.

Therefore, Stuart Moran has been appointed to  the  Board
as Technical Director. Given the innovative nature of the
business  it  has  become  necessary  to  have  technical
representation on the main Board. Stuart  has  been  with
Surgical  Innovations  Limited,  the  operating  Company,
virtually since its inception and the Board believes  his
experience  and knowledge will be of significant  benefit
as the Company moves forward.

It  is  pleasing  to  report that we have  an  increasing
royalty  income stream from Genzyme, the US  licensee  of
our  Endoflex  technology. Against this background we are
waiting  to  examine  other  measures  with  a  view   to
providing  the Company with a stable and profitable  base
from which to expand.

We  are  also  looking  to develop  our  UK  distribution
division  that  markets our own and third party  products
aimed primarily at the operating theatre. Sales have been
slower  than  anticipated but we are confident  that  our
efforts in this area will bear fruit in the near future.

Our main area for encouragement is Ion Product Solutions.
In  this regard, we are delighted to announce the  recent
signing  of  a  design  and manufacturing  contract  with
Genzyme   France,  in  respect  of  a  device   for   the
laparoscopic   deployment   of  Genzyme's   anti-adhesion
barrier, SEPRAFILM. Francois Cornu, President of  Genzyme
France, commented, 'We know we can rely on Ion to deliver
innovative  and  quality solutions'.  Current  contracted
business  with  Genzyme now stands at  over  0.5  million
pounds.

Until  a  new Managing Director can be appointed,  Graham
Bowland,  our  Finance  Director,  together  with  Stuart
Moran, will be sharing the responsibilities of the day-to-
day  running of the Company. In addition, Colin Glass,  a
non-executive  Director,  and  myself  will  be  devoting
additional  time to the Company. We both  have  extensive
business  experience,  including  within  the  healthcare
industry,  and have been involved with the  Company  from
its  early  days. Also we have the continuing support  of
Getz Bros, an international medical distribution Company,
through Ray Simkins, our other non-executive Director.

In  recognition of this additional involvement and as  an
incentive to the Directors, the Board has agreed to issue
each Director with 1 million share options at a price of 5p.

Your  Board is confident that there is an exciting future
for the Company following the current reorganisation.

Finally, I would like to offer my grateful thanks  to  my
colleagues, both past and present, and to all  the  staff
who have put in so much hard work.


DOUG LIVERSIDGE
25 APRIL 2000