Pilkington’s Tiles Group plc 
Annual Report and Accounts 2002 Front cover: the six base tiles of the new Directions ceramic wall tile collection, each with its own natural surface texture.
Back cover: the texture of slip-resistant Terrazzo tiles. Pilkington’s is a design-led manufacturing
and service Group offering high quality 
wall and floor solutions for the home, office, 
commercial and industrial environments.
Slip resistant Terrazzo: floor tiles in an infinite variety
of shades, tested to high standards for specific 
areas of usage.
Directions: six base wall tiles, each surface subtly 
different, in soft, warm, natural colours. Sensual and 
distinctive to the touch.
Group Profile 
Our portfolio is being honed to closely
reflect the aesthetic and functional
needs of the market and to offer real
value for money.
New aesthetic and functional textures which define 
our environment in brand new ways... Contents
03 Financial and Operational Highlights
04 Brand Profiles
06 Chairman’s Statement
08 Chief Executive’s Review
14 Financial Review
17 Directors and Advisers
18 Directors’ Report
21 Corporate Governance
23 Report on Directors’ Remuneration
26 Statement of the Directors’ Responsibilities 
in Respect of the Accounts
27 Independent Auditors Report to the 
Members of Pilkington’s Tiles Group plc
28 Consolidated Profit and Loss Account
29 Other Primary Statements
30 Balance Sheets
31 Consolidated Cash Flow Statement
32 Notes to the Accounts
48 Five Year Financial History
49 Notice of Annual General Meeting Financial Highlights for the year ended 31 March 2002
2002 2001 2000
£’m £’m £’m
Turnover 33.5 34.2 43.5
Profit before taxation and exceptional costs 1.0 0.7 3.7
Exceptional costs (0.2) (2.0) (0.4)
Profit/(loss) before taxation 0.8 (1.3) 3.3
pp p
Earnings per share (before exceptional costs)* 0.42 0.47 1.64
Earnings/(loss) per share (after exceptional costs)* 0.35 (0.37) 1.47
Dividends per share - 0.2 0.6
Times Times Times
Interest cover (before exceptional costs) 3.6 3.0 9.4
Dividend cover (before exceptional costs)* - 2.4 2.9
£’m £’m £’m
Net debt 3.1 5.2 3.5
%% %
Gearing* 21.9 40.2 27.2
*Prior year comparatives have been restated for FRS 19.
Financial and Operational Highlights
The improvement in Group profitability is pleasing, especially in a year which
has proved to be testing for British manufacturing. In particular, both our
Terrazzo and Access Flooring businesses performed strongly, whilst the
Ceramics business, which continues to operate in a highly competitive market,
made satisfactory progress following the losses made in the previous year.
Group returns to
profit...
Profit before tax 
£0.8 million compared 
to loss of £1.3 million in 
previous year.
Gearing reduced...
Gearing down to 21.9%
from 40.2% in previous
year.
Turnover
£’000
2000 2001 2002
43,485
34,225 33,479
0
Earnings per Share
pence
2000 2001 2002
(0.37)
0.35
0
1.47
Gearing
%
2000 2001 2002
27.2
40.2
21.9
0
Profit before Tax
£’000
2000 2001 2002
3,303
840
(1,275)
0 Pilkington’s is a leading manufacturer
and design innovator in ceramic floor
and wall tiles, with a broad portfolio of
products in many sectors including 
domestic, architectural and 
housebuilding. Production is carried
out at a 20 acre site in Manchester and
an 8 acre site in Poole. This is 
supplemented by supplier partnerships
with other leading European 
companies.
Woolliscroft Tiles has been 
manufacturing for over 150 years in the
UK. Clays are supplied from the
Group’s own quarry in Dorset.
Unglazed floor tiles for commercial and
industrial environments include the
market leading and unique Versatile
brand and also the renowned Atlaz
industrial floor tiles. 
Quiligotti introduced Terrazzo 
manufacture to the UK and remains 
the clear market leader today. A new 
factory produces the product long
famed for its durability in
Supermarkets, Shopping Malls,
Airports, Railway Stations and other
heavy foot traffic public spaces.
Investment in design, development and 
marketing is driving Quiligotti Terrazzo
into new areas of use, capturing the
imagination of a new generation 
of designers and specifiers.
Quiligotti Access Flooring creates
raised floor systems that incorporate
access to building services concealed
below the floor surface. Systems range
from the cost effective Microfloor brand
through to high specification steel
encapsulated panels with factory
bonded finishes in ceramics, 
hardwood and natural stone.
Specialists in the installation of hard
flooring, the company is particularly
involved in projects that are most
demanding by way of their large scale
or difficult site conditions and
timescale.
Brand Profiles 
The ceramic business returns to profit
following remedial actions referred to 
in last year’s annual report, but a 
considerable amount remains to be
accomplished.
Both the Terrazzo and Access Flooring
businesses performed strongly, 
returning record profits.
Directions Essential: a soft satin glaze, and each motif
a delicate imprint of life captured forever within stone.  6  Pilkington’s Tiles Group plc Annual Report and Accounts 2002
Chairman’s Statement
The coming financial year should see further
improvement as we reduce the breadth of our
activities, build on areas of strength and focus
on improving both the pace of change and
operational effectiveness.
The improvement in Group profitability is pleasing, especially in a year which has
proved to be testing for British manufacturing. In particular, both our Terrazzo and
Access Flooring businesses performed strongly, whilst the Ceramics business,
which continues to operate in a highly competitive market, made satisfactory
progress following the losses made in the previous year.
Results
Profit before tax and exceptional items was £1.0 million compared to £0.7 million
in the previous financial year. Profit before tax after exceptionals has increased to
£0.8 million compared to a loss of £1.3 million in the year to 31 March 2001.
Exceptional costs and write-offs totalling £2.0 million, which severely affected last
year’s results, have been reduced to £164,000, which includes redundancy costs
of £110,000 following the introduction of the new kiln technology.
Group turnover of £33.5 million has fallen from the previous period of £34.2 
million. The background to the trading performance of our individual activities is
detailed in the Chief Executive’s Review.
The Group’s balance sheet remains satisfactory. Total borrowings were £3.1 
million (reduced from £5.2 million in 2001) and gearing has fallen to 21.9% 
(2001: 40.2%). This lower level of gearing reflects a strongly positive cash flow 
performance but is in part due to the final payments, amounting to £1.3 million 
for the small tile kiln, having not yet been made.
H A (Tony) Palmer, Chairman Pilkington’s Tiles Group plc Annual Report and Accounts 2002  7
all our shareholders are kept
informed. We reiterate that no firm
offers have been received in respect
of this land and that we continue to
operate our floor tile manufacturing
facility there as usual. 
We also announced our intention to
apply to transfer the listing of the
Company’s issued share capital to
the Alternative Investment Market
(AIM). This process was completed
on 25 April 2002. We believe that 
an AIM listing offers significant 
advantages to both the Company
and its shareholders, including 
potential cost savings and flexibility.
Dividend
As indicated at the half year, the
repayment of debt is a high priority
and we have not declared a 
dividend. We are currently part way
through a corporate restructuring
programme designed to simplify our
corporate structure and this is
explained in more detail in the
Finance Director’s Review. It is 
anticipated that this process will 
be finalised before publication of 
our interim results for the six months
ending 30 September 2002. Subject
to the capital reduction programme
described in the Directors’ Report
taking effect, the Board intends to
resume payment of dividends when
satisfied that the business recovery is
sufficient and consolidated.
Management and Employees
We have previously notified 
shareholders of the appointment of
Mark Hesketh to the Board as Group
Finance Director and Company
Secretary last September and 
welcomed David Booth’s 
continuation on the Board as a 
non-executive Director.
This year has not been an easy one
following the unsettling elements of
the previous financial year. Our
employees have shown considerable
forbearance for which we would
thank them, as well as for their hard
work and commitment.
Statement of Prospects
We continue to work towards 
securing real trading improvements,
following a year in which some
progress was made. The coming
financial year should see further
improvement as we reduce the
breadth of our activities, build on
areas of strength and focus on
improving both the pace of change
and operational effectiveness.
Strategy
As noted in last year’s annual report,
management is focused on resolving
the issues which have affected the
business in recent years. We 
continue to review our manufacturing
operations in order to ensure that we
are able to realise the benefits from
recent investment, particularly that
made in our ceramic manufacturing 
technology.
Although the Group has returned to
profitability, the supply and fix 
business again made a loss and it
has been decided that we should
withdraw from this activity due to the
difficulties encountered in recent
periods and to reduce the Group’s
exposure to the risks associated with
this business. This action will also
allow increased focus on our core
businesses. Consequently, no further
long term work is being sought by
Quiligotti Contracts Limited and it is
planned that we will complete those
contracts to which we are currently
committed within the next twelve
months.
Shareholders will have noted the
announcements made during the
year with regard to our freehold site
in Poole. In particular, on 25 March,
we released the results of the 
professional valuations of that site 
to ensure that, following my 
comments in last year’s annual
report and recent press speculation,
Terrazzo floors are practical, hardwearing and very
easy to clean. Renowned for their durability, with proper
care, Terrazzo floors will outwear many other flooring
materials.
Dorset Tessella, a range of mosaic borders, panels
and patterns complementing standard Dorset floor tiles,
offers a convenient and simple way of achieving
authentic Victorian floor designs.
Porcelain Floor Tiles: unglazed mingles, granites and
solid colours are exceptionally durable and frost proof. 8  Pilkington’s Tiles Group plc Annual Report and Accounts 2002
Chief Executive’s Review Overview
Quiligotti Terrazzo and Quiligotti Access
Flooring reported record profits. Pilkington’s
Tiles went through a year of considerable
change and achieved a modest improvement
in profitability.
Introduction
Operational performance across the Group presented a mixed picture in 2001-
2002. Quiligotti Terrazzo and Quiligotti Access Flooring reported record profits.
Pilkington’s Tiles went through a year of considerable change and achieved a 
modest improvement in profitability. Quiligotti Contracts, the supply and fix 
business, reached its targeted level of sales but continued to be hampered by
claims relating to past work, and despite a far more professional approach, 
again returned a loss. A year ago we said that the contribution and benefit to be
derived from each constituent part of the Group would be considered with care:
in light of this it has been decided to close Quiligotti Contracts Limited during the
next twelve months. 
Group operating profits before exceptional items have risen by 27% (£296,000)
due to improvements in all three continuing businesses, despite turnover having
fallen by 2% (£746,000). This fall was primarily the result of action taken in
Pilkington’s Tiles to eliminate marginal business.
Mary-Lorraine Hughes, Group Chief Executive Pilkington’s Tiles Group plc Annual Report and Accounts 2002  9
Chief Executive’s Review Terrazzo
To be able to report a record profit
year is gratifying. The operational
actions taken, as anticipated in last
year’s report, the appointment of a
new Sales Director last September,
strong production performance 
levels, and by no means least the
continuing support of our key 
customers, have all contributed to
this achievement. 
The new slip resistant terrazzo 
system of riven textured tile and 
penetrating seal was launched at last
October’s Built Environment
Exhibition in London, and has 
generated very significant interest.
This has not diminished the profile 
of our traditional terrazzo product
which won the 2001 ‘Contract
Floors’ Supplier Award in the marble
and terrazzo category.
A considerable amount of work is
being devoted to rejuvenating 
interest in terrazzo for use in 
non-retail environments and 
achieving novel installations will be 
a particularly important priority for
the coming year. This initiative is
being assisted by the new ‘Terrazzo
Naturals’ collection, which exploits
the contemporary demand for 
materials such as limestone and
soapstone, by suspending small 
marble and granite aggregates in
natural coloured grounds.
A record profit year. The operational actions
taken, strong production performance and
the continuing support of our key customers
have all contributed to this achievement.
Bespoke Service An almost infinite 
variety of designs and special effects
can be created with our bespoke 
sampling service. This allows the client
to mix and match their own colours 
for a totally individual look.
Terrazzo Tiles pressing operation.
Terrazzo
2002 2001
£’000 £’000
Sales 4,768 4,184
Operating profit before 1,146 986
exceptional items
Exceptional items - (218)
Operating profit 1,146 768 10  Pilkington’s Tiles Group plc Annual Report and Accounts 2002
Chief Executive’s Review Access Flooring
A record profit year for the Access
Flooring business was achieved by
the professional management of this
particular market sector against a
background of increasing pressure
on margins.
This has resulted from Access
Flooring’s ability to satisfy the various
requirements of our clients, by 
offering Quilfloor 600, a traditional
steel encapsulated product,
Microfloor 600, an extremely 
competitive alternative and the Intec
range which allows hard finishes
such as marble, ceramic and 
hardwood to be factory applied to
the panels. In addition, diversification
into the hardwood flooring sector
has proved to be successful and is
targeted as a growth area.
The consistently strong performance
of this business encourages further
investment in its careful expansion
whilst maintaining strict operational
and cost control: this encapsulates
the plan for the coming year.
A record profit year was achieved by the 
professional management of this market 
sector. The consistently strong performance
of this business encourages further 
investment in its’ careful expansion.
Intec panels: factory-bonded with 
polished porcelain ceramic tiles 
providing a clean, modern, 
flexible working environment.
Microfloor 600 benefits from the small 
number of components employed in 
its construction, there are no metallic 
parts contained in the basic system 
eliminating the possibility of corrosion 
or delamination,
Access Flooring
2002 2001
£’000 £’000
Sales 3,106 3,470
Operating profit before 464 378
exceptional items
Exceptional items - -
Operating profit 464 378 Pilkington’s Tiles Group plc Annual Report and Accounts 2002  11
The 6% decline in ceramic tile sales
reflects not only a tough marketplace,
exacerbated by the continuing
strength of sterling but also the 
deliberate decision not to pursue less
profitable business. This, together
with the planned remedial actions
referred to in last year’s report, has
had a positive impact and turned last
year’s pre-tax loss into a profit. 
The new wall tile kiln at the
Manchester factory, the full 
commissioning of which was delayed
by structural faults is now performing
at close to targeted levels and is
expected to contribute positively to
our ability to flex and respond to 
customer requirements. 
We now have a far more effective and
responsive warehouse and 
distribution organisation, which has
been acknowledged by a number of
our customers. They have also seen
greater analysis of sales data and
market feedback which allows for
more targeted initiatives. 
However, a considerable amount
remains to be accomplished, such
as:
u even tighter cost control to offer 
more competitive pricing: This 
means a more rigorous approach 
within all operational areas 
including production and 
purchasing. 
u the development of more 
targeted product ranges offering 
real value for money, consisting of 
fewer line items and with range 
specific marketing: The new 
‘Directions’ wall tile collection, 
illustrated within this report, 
reflects this requirement perfectly 
and is already selling well. 
u ongoing product range 
rationalisation: In the past year 
about a third of the items in the 
portfolio have already been 
discontinued or earmarked for 
retirement.
u a more comprehensive portfolio:
Products which cannot be 
manufactured are being sourced. This 
area of activity is already showing 
positive signs for development.
u adjusting sales team responsibilities: 
‘Sector champions’ will be
concentrating on each route to market 
including distribution, multiple
retail, housebuilding, industrial and 
commercial specification. A new Sales 
Director is currently being sought, for 
the Ceramic business, to pursue this 
focused approach further.
Our clear intent is not only to grow the tile
business, but to further improve its 
profitability. Some areas of business where
margins have become increasingly slim
have been deliberately reduced or 
eliminated. This contributed to 
disappointing third quarter sales levels, 
but in the fourth quarter of the year
turnover was far more positive. 
The planned remedial actions and the 
decision not to pursue less profitable 
business have had a positive impact and
turned last year’s pre-tax loss into a profit.
‘Versatile’: extremely durable frost and
slip resistant unglazed floor tiles for 
both interior and exterior use.
Chief Executive’s Review Ceramics
Ceramics
2002 2001
£’000 £’000
Sales 21,715 23,058
Operating profit before 566 447
exceptional items
Exceptional items (110) (1,216)
Operating profit/(loss) 456 (769) 12  Pilkington’s Tiles Group plc Annual Report and Accounts 2002
Chief Executive’s Review Supply and Fix
We have continued to experience problems
and, after careful consideration, it has been
decided to withdraw from this activity.
Quiligotti Terrazzo tiles floor 
Liverpool Street Station
Supply and Fix
2002 2001
£’000 £’000
Sales 4,239 3,863
Operating loss before (156) (92)
exceptional items
Exceptional items (54) (353)
Operating loss (210) (445)
The supply and fix business has
again returned a loss as we 
continued to experience problems
achieving acceptable margins 
commensurate with the significant
risks and levels of investment 
associated with this activity.
After careful consideration it has
been decided that we will largely
withdraw from this activity during the
next financial year. This will allow us
to increase our focus on and support
for our other businesses, notably
Quiligotti Access Flooring which 
continues to develop.
This decision will unfortunately 
mean the potential loss of about 
20 jobs over the next year, but it is
hoped that a number of people 
can be employed in other areas of
the Group.
At present Quiligotti Contracts
Limited fixes less than 10% of the
Terrazzo tiles manufactured by
Quiligotti Terrazzo, which of course
will no longer be possible. However,
management will work closely with
key tile installers to ensure that 
future sales of Terrazzo tiles are 
fully supported. Pilkington’s Tiles Group plc Annual Report and Accounts 2002  13
Chief Executive’s Review Conclusion
Conclusion
Our product and service portfolio is
being honed to closely reflect the
aesthetic and functional needs of the
market and to offer real value.
Not only will we continue to benefit
from the specialist skills within the
Group, but will also further exploit
the potential synergies between
Group products in specific areas of
the continuing businesses. This
approach will be underlined by the
opening of our new showroom this 
summer. The new location at the
Building Centre in London, will 
showcase all Group products and
services, will provide a suitable 
environment for meeting existing
customers, and is ideally situated to
interest new clients.
Our priorities for all the businesses
will be to:
u reduce the cost base of all our 
activities more aggressively and 
thereby: 
u offer increasing value for money 
enabling us to:
u respond very specifically to 
customer requirements.
Dorset Tetra: attractive slip resistant floor tiles,
ideal for wet zones, changing areas, food 
processing areas and light industrial 
applications.
Main picture
Directions Rustic Collection: the honest
charm of stone lifted by a hint of mineralised
sparkle, enhanced by harmonious mosaics. 14  Pilkington’s Tiles Group plc Annual Report and Accounts 2002
Financial Review
We stated in last year’s annual report that we
would be working to achieve a lower level of
gearing during the period. Gearing has 
fallen to 21.9% from 40.2% at the previous
year end.
Profit before Exceptional Costs and Tax
Profit before exceptional costs, interest and tax of £1.4 million has improved from
£1.1 million in the previous period. This is largely due to excellent trading 
performances in our Terrazzo and Access Flooring activities. The ceramics 
business also saw an improvement in profitability despite a decrease in turnover,
as payroll and other operating costs were also reduced in response to the lower
activity. The supply and fix business performed poorly although activity increased
and, as noted in the Chairman’s Statement, it has been decided to withdraw from
this activity during the next financial year. 
Interest costs of £0.4 million (2001: £0.5 million) benefited from a reduction in
interest rates and the lower level of borrowings in the latter part of the year. It
should be noted that £0.1 million of interest was capitalised as part of the small 
tile kiln project during the year ended 31 March 2001.
Exceptional costs
Exceptional costs, which were all incurred in the first half of the year, include:- 
u £54,000 for provisions against old tile fixing contract debts.
u £110,000 for redundancy costs following the investment in new manufacturing 
technology.
Tax
The tax charge of £0.18 million is reduced by the release of provisions in 
subsidiary companies following the agreement of prior year liabilities.
Mark Hesketh, Group Finance Director and Company Secretary Pilkington’s Tiles Group plc Annual Report and Accounts 2002  15
Following the implementation of FRS 19 ‘Accounting for deferred tax’, the prior year comparatives have been restated. 
The effect has been to reduce opening net assets at 31 March 2000 by £779,000. Earnings per share have also been
restated. In addition, the loss after tax for the year ended 31 March 2001 has been reduced by £70,000. The current year
tax charge has been increased by £114,000 as a result of the adoption of FRS 19.
Land and Buildings
During the year, as noted in recent announcements and in the Chairman’s Statement, we have valued our land and 
buildings both at Poole and Clifton. This has resulted in an increase in the existing use value of £471,000 and this has
been incorporated in our financial statements.
Capital Structure
The Group’s capital structure as at 31 March is as follows:
2002 2001
£’000 £’000
Net debt
Finance leases and hire purchase contracts 598 965
Cash at bank (500) (2)
Bank overdrafts - 4,282
Bank Loans 3,000 -
3,098 5,245
Shareholders’ funds
Equity 14,163 13,036
17,261 18,281
Our closing level of debt is £3.1 million. Of this total, £0.6 million is in respect of finance leases, the majority of which
relates to a seven year lease for plant, on which the primary payments complete in September 2003. The interest rate on
this is fixed but the interest payment reduces annually as repayments are made. On 1 October the company entered into a
five year term loan agreement to finance the recent investment in the small tile kiln. As at 31 March 2002 £3.5 million of
this £4.75 million facility had been drawn down and the balance remaining at that date was £3.0 million. The Group also
has a working capital facility of £3.2 million which was not being utilised at the year end as we were holding cash 
balances of £0.5 million. Both the term loan and working capital facilities carry an interest cost related to base rates.  
We stated in our Interim Announcement that no dividend would be paid as the Board were focused on the repayment of
debt. This policy continues but in addition, due to the existence of a deficit on the Company’s profit and loss account, we
are unable to pay a dividend at the year end. This will be addressed by the reorganisation of the Company’s capital and
reserves, discussed below.
Investment and Use of Funds
Following last year’s large investment in the new small tile kiln, levels of capital expenditure have reduced significantly as
planned and the total invested in fixed assets during the year was £0.8 million (2001: £4.7 million). The majority of this was
related to the completion of the small tile kiln project. The remainder of our capital investment was limited to spend on 
periodic replacement of equipment and total spend was well below depreciation.
We stated in last year’s Annual Report that we would be working to achieve a lower level of gearing during the period.
Gearing has fallen to 21.9% from 40.2% at the previous year end. As noted earlier, however, we have yet to complete final 
payments with regard to the new kiln and if these are taken into account our gearing would rise to 31%. We are committed
to reducing gearing further over the next financial year.
Reorganisation
We are currently part way through a capital restructuring programme. This has seen the divisionalisation of the business
and net assets of Quiligotti Terrazzo Limited and Woolliscroft Tiles Limited into our main trading subsidiary, Pilkington’s
Tiles Limited and the transfer of that company to the direct ownership of Pilkington’s Tiles Group plc, it being previously a 
subsidiary of Dayamber Limited, a dormant subsidiary holding company. Dayamber Limited has now been put into 
liquidation. This has resulted in a write down in the Company’s investment in Dayamber Limited and a substantial deficit in
the reserves in Pilkington’s Tiles Group plc. It is also proposed that, if approved by shareholders and, subsequently, by 
the High Court, the deficit that has arisen on the profit and loss account of the Company as a result of this corporate 
restructuring programme should be eliminated and, further, that distributable reserves be created, by transferring to the
profit and loss account of the Company the sums currently standing to the credit of the Company’s capital redemption  16  Pilkington’s Tiles Group plc Annual Report and Accounts 2002
reserve and share premium account. A detailed explanation of the special resolutions to be put to shareholders at the 
forthcoming Annual General Meeting concerning this proposal, and other matters to which it is subject, appear on pages
19 and 20 of the Directors’ Report. The changes to the balance sheet that are proposed are designed to facilitate the
Company paying dividends in due course if, subject to future trading performance, that is the course that the Directors
wish to recommend. An illustrative proforma balance sheet appears below. This reorganisation is designed to simplify our 
corporate and capital structure. 
The proforma Group consolidated balance sheet assuming the completion of the restructuring is set out below.
Adjusted
balance
31 March sheet following
2002 Adjustments Re-organisation
£’000 £’000 £’000
Capital and Reserves
Share Capital 9,247 - 9,247
Share Premium Account 25,429 (25,429) -
Capital Redemption Reserve 645 (645) -
Merger Reserve (1,001) 1,001 -
Revaluation Reserve 1,581 - 1,581    
Profit and Loss Account (21,738) 25,073 3,335
Equity Shareholders’ funds 14,163 - 14,163
Derivatives and other Financial Instruments
The Group’s principal financial instruments, other than derivatives, comprise finance leases, hire purchase contracts, cash
and bank loans and overdrafts. The main purpose of these financial instruments is to raise finance for the Group’s 
operations. The Group has various other financial instruments such as trade debtors and trade creditors, that arise directly
from its operations.
The Group also enters into derivative transactions (principally rate cap transactions and a limited number of forward 
currency contracts). The purpose is to manage the interest rate and currency risks arising from the Group’s operations and
its sources of finance.
There were no rate cap transactions outstanding at the year end.
It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments shall be
undertaken.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk and a limited amount of 
foreign currency risk. The Board periodically reviews and agrees policies for managing each of these risks and they are
summarised below. These policies have remained unchanged since 1 April 2001.
Interest Rate Risk
The Group borrows in Sterling at floating rates of interest and then considers the use of interest rate caps to manage the
Group’s exposure to interest rate fluctuations.  
Liquidity Risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of overdrafts,
bank loans, finance leases and hire purchase contracts. Short term flexibility for working capital requirements is met by
bank overdraft facilities.
Foreign Currency Risk
The Group has transactional currency exposures. Such exposures arise from sales or purchases by an operating unit in
currencies other than Sterling. The Group does not consider its normal exposure to currency fluctuation to be sufficient to
justify the cost of forward cover but would use forward currency contracts to eliminate currency exposure on any 
significant individual purchases. The final stage payments for the recent capital investment programme for wall tiles are
due to be made in Euro and this has been forward covered. Less than 5% of the Group’s sales are denominated in 
currencies other than in Sterling and the Group does not consider the exposure resulting to be sufficient to justify forward
cover on sales not made in Sterling.
Financial Review Pilkington’s Tiles Group plc Annual Report and Accounts 2002  17
Tony Palmer, 
Non-Executive Chairman
Appointed Chairman of Pilkington’s Tiles Group plc in
August 1998 and is the Chairman of the Remuneration and
Audit Committees. Non-executive Director of a number of
public and private companies including Berkeley Group plc, 
High-Point Rendel Group plc and the Building Research
Establishment. Age 65.
Mary-Lorraine Hughes,
Group Chief Executive
Appointed Group Chief Executive on 1 January 2000.  
She was previously Chief Executive of Portmeirion Potteries
and prior to that held a number of senior executive 
positions within Courtaulds Textiles plc. Currently 
non-executive Director of Staffordshire Building Society 
and in 1996 was a Veuve Cliquot Businesswoman of the
Year finalist. Age 50.
Mark Hesketh,
Group Finance Director and Company Secretary
Appointed Group Finance Director in September 2001.
Mark qualified as a Chartered Accountant in 1984 whilst
working for Touche Ross in Manchester, and then joined
Cabot Corporation, Boston, Massachusetts. After a further
period with Touche Ross, he joined Greenway Holdings plc
in 1990 as Finance Director, latterly assuming the role of
Group Deputy Chief Executive and Finance Director. 
Age 43.
David Booth,
Non-Executive Director
Appointed Non-executive Director in September 2001, on
his retirement as Group Finance Director for the company, 
a position he had held since July 1997. He had previously
held senior financial positions with a number of other 
companies within the BTR Group, including Pilkington’s
Tiles Ltd as Finance Director. Age 54.
Secretary
Mark Hesketh
Registered and Head Office
PO Box 4, Rake Lane, 
Clifton Junction,
Manchester M27 8LP
Registered Number
2282021
Bankers:
Bank of Scotland, 
19/21 Spring Gardens,
Manchester M2 1FB
Solicitors
DLA, 
101 Barbirolli Square,
Manchester M2 3DL
Auditors
Ernst & Young LLP, 
100 Barbirolli Square,
Manchester M2 3EY
Stockbroker and Financial Adviser
Old Mutual Securities, 
2 Lambeth Hill,
London EC4V 4GG
Registrars
Computershare Services plc, 
PO Box 82, The Pavilions, 
Bridgwater Road,
Bristol BS99 7NH
Directors and Advisers
Left to right: 
Tony Palmer, Non-Executive Chairman
Mary-Lorraine Hughes, Group Chief Executive
Mark Hesketh, Group Finance Director and Company Secretary
David Booth, Non-Executive Director The Directors present their report and accounts for the year ended 31 March 2002.
Accounts and dividends
The Directors submit the audited accounts of the Group for the year ended 31 March 2002. The profit for the year
amounts to £656,000 (2001 – loss of £677,000).
The Directors do not recommend a final ordinary dividend. No interim dividend was paid (2001: 0.2p). The total dividend
on ordinary shares amounts to £nil (2001: £369,898).
Principal activities and review of business developments
The principal activities of the Group are the manufacture and sale of quality ceramic wall and floor tiles, the manufacture,
marketing and installation of terrazzo floor tiles, and the installation of raised access flooring.
A review of the business and an overview of future developments have been included in the Chief Executive’s Review on
pages 8 to 13.
Research and development
The Group is committed to appropriate expenditure on research and development activities, as well as design, so as to
maintain its position as a market leader in the manufacture and marketing of ceramic and terrazzo tiles and the installation
of raised access floors.
Directors and their interests
The beneficial interests of the Directors of the Company and their families at 31 March 2002 in ordinary shares of the
Company, according to the register required to be kept by Section 325 of the Companies Act 1985, were as follows:
31 March 2002 1 April 2001
or subsequent date
of appointment
Beneficial Beneficial
H A (Tony) Palmer 112,346 112,346 
D J Booth 3,440,508 3,440,508
M-L Hughes 366,000 116,000
M J Hesketh 196,560 – 
The Director retiring by rotation is D J Booth who, being eligible, offers himself for re-election.
M J Hesketh having been appointed during the year offers himself for election to the Board.
Details of Directors’ interest in share options under the Executive Share Option Scheme and Save As You Earn Share
Option Scheme are provided in the Report on Directors’ Remuneration on pages 23 to 25.
There have been no changes to the Directors’ interests between 31 March 2002 and 17 May 2002.
Substantial shareholdings
As at 17 May 2002 the Directors were aware of the following holdings of ordinary shares, which represent 3% or more of
the issued ordinary share capital of the Company:
Shareholder Number %
J J Gallagher Limited 13,470,000 7.28
Stable Management Limited 10,200,000 5.52
Fidelity Investment Management 7,350,000 3.97 
Supplier payment policy
The Group does not impose standard payment terms on its suppliers but agrees specific terms with each. It is the Group’s
policy to pay its suppliers in accordance with the terms which have been agreed. The Company is a holding company and
therefore has no trade creditors.
Charitable and political donations
The Company and its subsidiaries made no political or charitable contributions during the year.
Directors’ Report
18 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 Disabled employees
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the
applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their
employment with the Group continues and that appropriate training is arranged. It is the policy of the Group that the
training, career development and promotion of disabled persons should, as far as possible, be identical with that of other
employees.
Employee involvement
The Board places considerable value on the involvement of its employees and has improved its practice of keeping them
informed on matters affecting them as employees and on various matters affecting the performance of the Group via a
regular system of team briefing. Health and Safety Committees are in place at the Group’s factories. Employees participate
directly in the success of the business through the Group’s Save As You Earn share scheme.
Annual general meeting
Resolution 5 to be proposed at the Annual General Meeting authorises the Directors to allot relevant securities pursuant to
Section 80 of the Companies Act 1985 (the “Act”) up to an aggregate nominal amount of £3,615,413 which represents
approximately 38% of the nominal amount of issued ordinary share capital of the Company as at 17 May 2002. This
authority will expire on the earlier of the conclusion of the next following Annual General Meeting of the Company and the
date 15 months after the passing of the resolution. Except pursuant to the exercise of options the Directors have no
current intention of issuing any shares. Resolution 5 will be proposed as an ordinary resolution.
Resolution 6 to be proposed at the Annual General Meeting empowers the Directors pursuant to Section 95 of the Act to
allot equity securities for cash without first offering those shares to existing Shareholders on a pre-emptive basis as
required by Section 89(1) of the Act. This authority is limited to £462,372, which represents approximately 5% of the
nominal amount of issued ordinary share capital of the Company as at 17 May 2002. This authority will expire on the
earlier of the conclusion of the next following Annual General Meeting of the Company and the date 15 months after the
passing of the resolution. Resolution 6 will be proposed as a special resolution.
Resolution 7 to be proposed at the Annual General Meeting seeks the approval of Shareholders pursuant to Section 166
of the Act to a general authority for the Company to purchase its own shares. If approved, the Company will be authorised
to affect market purchases of up to 18,400,000 ordinary shares, (which represent just under 10% of the issued ordinary
share capital of the Company as at 17 May 2002), at a price which shall not exceed 105% of the average middle market
quotations for ordinary shares of the Company as shown in the London Stock Exchange Daily Official List over the five
business days immediately preceding the day of purchase. This authority will expire on the earlier of the conclusion of the
next following Annual General Meeting of the Company and the date 15 months after the passing of the resolution. The
Directors believe that it would be advantageous for the proposed general authority to be available to provide additional
flexibility in the management of the Company’s capital resources, however they have no present intention of using it. The
Directors would only use such authority if satisfied that to do so would be in the best interests of Shareholders and would
result in an increase in earnings per share. Any shares purchased under this authority will be cancelled and the number of
ordinary shares in issue will be reduced accordingly. Resolution 7 will be proposed as a special resolution.
Resolutions 8 and 9 are each to be proposed at the Annual General Meeting (“AGM”) as special resolutions, and are the
capital reduction programme referred to in the Chairman’s statement. Resolution 8 seeks the approval of shareholders to
the cancellation of the share premium account of the Company, which currently stands in the books of account of the
Company in the sum of £25,429,000; and resolution 9 seeks the approval of shareholders to the cancellation of the
capital redemption reserve of the Company, which currently stands in the books of account of the Company in the sum of
£645,000. In this section, these proposals are collectively and individually referred to as the “cancellations”.
Share premium arises on the issue by the Company of shares at a premium to their nominal value, and the premium is
credited to the share premium account. The capital redemption reserve arises on the redemption or purchase by a
company of its own shares from distributable reserves, and is the amount by which the issued share capital of the
company has been reduced as a result of the redemption or purchase.
Both the share premium account and capital redemption reserve are treated by statute as undistributable capital reserves
unless and until their reduction is, first, approved by the shareholders by special resolution and, second, confirmed by
order of the High Court on application to it by the Company following the approval by shareholders. The cancellation of
the share premium account and the capital redemption reserve takes effect upon the court’s order being registered by the
Registrar of Companies.
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  19 Accordingly, if either or both of special resolutions 8 and 9 are duly passed at the AGM, the Company proposes thereafter
to apply to court for its confirmation. In order to obtain the confirmation of the High Court, the Company will need to
demonstrate to the satisfaction of the High Court that no creditor of the Company who has not consented to the
cancellations will be prejudiced by them. At present, it is anticipated that the creditor protection will take the form of an
undertaking by the Company to the Court not to treat as distributable any sum realised following the cancellations
becoming effective which represent the realisation of hidden value in the balance sheet as at the date upon which the
cancellations take effect together with an amount equal to the amount by which the cancellations exceed the amount of
the deficit on the profit and loss account of the Company. However, the precise nature of any undertaking required of the
Company, its terms and duration, will be subject in due course to consideration by the Court and discussion with the
Company’s advisers. The Board reserves the right to abandon or discontinue any application to the High Court if the
Board believes that the terms required in order to obtain the confirmation of the High Court are unsatisfactory to the
Company.
The proposed cancellations do not affect the voting or dividend rights or rights on a return of capital of shareholders.
Auditors
A resolution to re-appoint Ernst & Young LLP as the Company’s auditor will be put to the forthcoming Annual General
Meeting.
By order of the Board
M J Hesketh
Company Secretary
17 May 2002
Directors’ Report
20 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 The Company is committed to high standards of corporate governance. The Board is accountable to the Company’s
Shareholders for good corporate governance. This statement describes how the principles of corporate governance are
applied to the Company.
The workings of the board and its committees
The Board
The Board currently comprises two non-executives, including the independent non-executive Chairman, and two executive
Directors. The biographies of the Directors appear on page 17. These demonstrate a range of experience and sufficient
calibre to bring independent judgement on issues of strategy, performance, resources and standards of conduct, which is
vital to the success of the Group. The Board is responsible to Shareholders for the proper management of the Group. A
statement of the Directors’ responsibilities in respect of the accounts and a statement on going concern are given on 
page 26.
The Board meets every month, reviewing trading performance, ensuring adequate funding, setting and monitoring
strategy, examining major acquisition possibilities and reporting to Shareholders as required. The non-executive Directors
have a particular responsibility to ensure that the strategies proposed by the executive Directors are fully considered. To
enable the Board to discharge its duties, all Directors receive appropriate and timely information. Briefing papers are
distributed by the Company Secretary to all Directors in advance of Board meetings. The Chairman ensures that the
Directors take independent advice as required.
The following Committees deal with the specific aspects of the Group’s affairs.
Nomination Committee
The Board have given due consideration to the establishment of a Nomination Committee. The Committee would
comprise the existing Board and the Chairman of the Board would act as Chairman of the Nomination Committee. In
appropriate cases, recruitment consultants would be used to assist the process. All Directors are subject to re-election at
least every three years.
Remuneration Committee
The Group’s Remuneration Committee is chaired by H A (Tony) Palmer and its other member is the other non-executive
Director, D J Booth. It is responsible for making recommendations to the Board, within agreed terms of reference, on the
Company’s framework of executive remuneration and its cost. The Committee determines the contract terms,
remuneration and other benefits for each of the executive Directors, including performance related bonus schemes,
pension rights and compensation payments. The Board itself determines the remuneration of the non-executive Directors.
Further details of the Company’s policies on remuneration, service contracts and compensation payments are given in the
Report on Directors’ Remuneration on pages 23 to 25.
Audit Committee
The Audit Committee, which is chaired by H A (Tony) Palmer, comprises the non-executive Directors and M-L Hughes. The
Committee provides a forum for reporting by the Group’s external auditors. Meetings are also attended, by invitation, by the
Finance Director.
The Audit Committee is responsible for reviewing a wide range of matters including the half-year and annual accounts, and
monitoring the controls that are in force to ensure the integrity of the information reported to the Shareholders. The Audit
Committee advises the Board on the appointment of external auditors and on the remuneration both for audit and non-
audit work, and discusses the nature, scope and results of the audit with the external auditors. The Audit Committee keeps
under review the cost effectiveness and the independence and objectivity of the external auditors.
Internal control
The Board is responsible for establishing and maintaining the Group’s system of internal control. Internal control systems
are designed to meet the particular needs of the Group and the risks to which it is exposed, and by their nature can
provide reasonable but not absolute assurance against material misstatement or loss. The key procedures which the
Directors have established with a view to providing effective internal controls are as follows:
Corporate Governance
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  21 Management Structure
The Board has overall responsibility for the Group and there is a formal schedule of matters specifically reserved for
decision by the Board. Each executive Director has been given responsibility for specific aspects of the Group’s affairs.
The executive Directors take part with key senior executives in monthly review meetings for all operating companies that
review day to day matters and progress of the businesses.
Corporate accounting, procedures and integrity of personnel
Responsibility levels are communicated throughout the Group as part of corporate accounting procedures. The general
ethos of the Group is to seek delegation of authority and authorisation levels, segregation of duties and the establishment
of suitable control procedures.
The integrity and competence of personnel is ensured through high recruitment standards and subsequent training
courses. High quality personnel are seen as an essential part of the control environment and high ethical standards are
expected.
The Board is responsible for identifying the major business risks faced by the Group and for determining the appropriate
course of action to manage those risks.
The Board has considered the need for an internal audit function but has decided that the size of the Group does not
justify it at present. The Board will review this decision again in the current year.
Budgetary process
Each year the Board approves an annual financial and management plan. Key risk areas are identified. Performance is
monitored and relevant action taken throughout the year through the monthly reporting to subsidiary Boards and the
Group Board of variances from the plan. Updated forecasts for the next quarter and full year are prepared together with
information on key risk areas.
Investment appraisal
Capital expenditure is regulated by a budgetary process and authorisation levels. For significant expenditure above
specified levels, detailed written proposals have to be submitted to the Board. Due diligence work is carried out if a
business is to be acquired.
Audit Committee
The Audit Committee considers and determines relevant action in respect of any control issues raised by the external
auditors and the Group’s own financial personnel. The Audit Committee reviews the effectiveness of the system of internal
control and reports its conclusions to the Board.
Communications with investors
The Directors make one to one presentations after issue of full year and interim results to Institutional investors, not
exclusively existing Shareholders. Visits to our sites are also encouraged and some fund managers avail themselves of this
opportunity. The Company chooses to hold its Annual General Meeting on site at its larger factory location to provide
individual Shareholders with the chance to see facilities, ask questions and to understand better the Group’s operations. 
The Directors, in meetings with fund managers, seek to understand the criteria they expect from their investments and
look for constructive feedback on their views of the Group.
Key performance indicators used by the Directors to measure progress include growth in sales, operating profit as a
percentage of sales and operating cashflow. Reductions in borrowings through trading are pursued to fund investment. 
The criteria used for investment, both capital expenditure and acquisitions, is payback in cashflow.
Key non-financial indicators used to assess progress are customer satisfaction and the perception of operating companies
compared to competitors in the marketplace.
Corporate Governance
22 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 Remuneration policy
The Company’s policy on executive Director remuneration is to provide the packages necessary to attract, retain and
motivate Directors of the quality required whilst remaining aware of the policies of comparable companies. 
The main elements of executive remuneration are:
Basic salary and taxable benefits
Basic salaries for executive Directors are reviewed with effect from 1 June annually. Taxable benefits generally include
provision of a car and health care.
Bonuses
Service contracts make provision for an annual bonus of up to 30% of salary dependent upon the actual performance of
the Group compared to targets set out at the beginning of the financial year by the Remuneration Committee. 
Service Contracts
The executive Directors have service agreements which can be terminated on 12 months notice being given in writing by
either party. The non-executive Directors do not have service contracts.
Share Option Schemes
The Company believes that share ownership by executive Directors strengthens the link between their personal interests
and those of the Shareholders. Grants of share options to executive Directors are at the discretion of the Remuneration
Committee.
The Company operates an Executive Share Option Scheme that was adopted by the Company on 29 June 1992 and
amended on 8 November 1993, 8 July 1994 and 15 July 1997. The Scheme was set up for a period of ten years.
Pension Entitlements
Certain executive Directors participate in defined benefit pension arrangements sponsored by the Company. This scheme
provides benefits based on earnings at or near retirement and is externally funded.
Pension benefit earned by the directors (note [1]):
Directors’ Increase in
Age at contribution accrued pension Accumulated total
31 March in the year during the year accrued pension at
Name of Director 2002 (note [2]) (note [3]) 31 March 2002
£’000 £’000 £’000 £’000
D J Booth 54 2.2 1.7 54.7
M-L Hughes 50 6.9 2.9 7.0
The following is additional information relating to Directors’ pensions:
a) Normal retirement age: 60.
b) Spouse’s and dependants’ pensions: 2/3rds of members pension on death both before and after retirement.
c) Early retirement rights: Members can retire if aged over 50 with Company and Trustee consent. Pensions are reduced
for early payment.
Report on Directors’ Remuneration
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  23 Pension Entitlements (continued)
d) Pension increases: A guaranteed increase on the pension in excess of the Guaranteed Minimum Pension of the
increase in the Retail Prices Index subject to a maximum of 5% p.a. and a minimum of 3% p.a.
e) Other discretionary benefits: None.
Notes
[1] The pension entitlement shown is that which would be paid annually on retirement based on service to the end of the
year.
[2] These relate to the contributions paid or payable in the year by the Directors under the terms of the scheme.
[3] The increase in accrued pension during the year excludes any increase for inflation.
Members of the scheme have the option to pay Additional Voluntary Contributions; neither the contributions nor resulting
benefits are included in the above tables.
An additional contribution equivalent to 4% of annual salary including contracted bonus is paid into a personal pension
arrangement for M-L Hughes.
A contribution equivalent to 5% of annual salary including contracted bonus is paid into a personal pension arrangement
for M J Hesketh.
H A (Tony) Palmer, non-executive Director, does not participate in any of the Group pension schemes and does not receive
any contribution to personal pension arrangements.
Directors’ remuneration
Salary/ Total Total Pension payments
fees Benefits Bonuses 2002 2001 2002 2001
£ £ £ £ £ £ £
Executive
M-L Hughes 130,002 12,817 – 142,819 147,226 5,200 5,017
M J Hesketh 49,584 6,391 – 55,975 – 1,417 –
(appointed 03.09.2001)
I Crowther – – – – 138,059 – –
(resigned 03.11.2000)
Non-executive
H A (Tony) Palmer 30,000 – – 30,000 40,000 – –
D J Booth 53,334 28,879 – 82,213 115,460 – –
P R McEnhill – – – – 17,500 – –
(resigned 23.03.2001) 
262,920 48,087 – 311,007 458,245 6,617 5,017 
Of the above amount paid to D J Booth in the year £70,547 relates to his service as an executive Director until 3
September 2001.
24 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 Interests in options
Executive Share Option Scheme
Options over ordinary shares of 5p each fully paid
Date of Number Exercise period Exercise price 
grant of options from to per share
M-L Hughes 22 Nov. 99 225,055 22 Nov. 02 21 Nov. 09 13.33p
22 Nov. 99 1,181,544 22 Nov. 02 21 Oct. 06 13.33p
D J Booth 22 July 97 750,000 22 July 00 21 June 04 24.00p
6 July 99 203,389 6 July 02 5 July 09 14.75p
6 July 99 338,982 6 July 02 5 June 06 14.75p
M J Hesketh 23 Nov. 01 750,000 23 Nov. 04 22 Nov. 11 5.00p
23 Nov. 01 500,000 23 Nov. 04 22 Oct. 08 5.00p
Options totalling 781,778 shares awarded to a previous Director, I Crowther, lapsed during the year.
There is a performance requirement before options become exercisable that over three consecutive financial years, the
earliest of which shall be no earlier than the financial year in which the option is granted, the earnings per share of the
Company must increase by more than the retail price index plus 2
1
/2% per annum.
The market value of the Company’s ordinary shares during the year was in the range from 3.75p to 6.25p, and was 5.25p
at 31 March 2002. No options were exercised during the year.
Report on Directors Remunerations
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  25 Directors’ responsibilities
Company law requires the Directors to prepare accounts for each financial year which give a true and fair view of the state
of affairs of the Company and Group and of the profit or loss of the Group for that period. In preparing those accounts, the
Directors are required to:
l select suitable accounting policies and then apply them consistently;
l make judgements and estimates that are reasonable and prudent; and
l state whether applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the accounts. 
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time
the financial position of the Company and Group and to enable them to ensure that the accounts comply with the
Companies Act 1985. They are also responsible for safeguarding the assets of the Company and Group and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
Going concern
After making enquiries, the Directors confirm that they have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going
concern basis in preparing the accounts.
Statement of Directors’ Responsibilities in Respect of the Accounts
26 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 We have audited the group’s financial statements for the year ended 31 March 2002 which comprise Consolidated Profit
and Loss Account, Consolidated Statement of Total Recognised Gains and Losses, Reconciliation of Consolidated
Shareholders’ Funds, Note of Historical Cost Profits and Losses, Group Balance Sheet, Company Balance Sheet,
Consolidated Cash Flow Statement, and the related notes 1 to 24. These financial statements have been prepared on the
basis of the accounting policies set out therein.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with applicable
United Kingdom law and accounting standards are set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and
United Kingdom Auditing Standards.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in
accordance with the Companies Act 1985. We also report to you if, in our opinion, the Directors’ Report is not consistent
with the financial statements, if the company has not kept proper accounting records, if we have not received all the
information and explanations we require for our audit, or if information specified by law or the Listing Rules regarding
directors’ remuneration and transactions with the group is not disclosed.
We read other information contained in the Annual Report and consider whether it is consistent with the audited financial
statements. This other information comprises the Chairman’s Statement, Chief Executive’s Review, Financial Review,
Directors’ Report, Corporate Governance Statement and Report on Directors’ Remuneration. We consider the implications
for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements.
Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board.
An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and judgements made by the directors in the
preparation of the financial statements, and of whether the accounting policies are appropriate to the group’s
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary
in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the financial statements.
Opinion
In our opinion the financial statements give a true and fair view of the state of affairs of the company and of the group as at
31 March 2002 and of the profit of the group for the year then ended and have been properly prepared in accordance
with the Companies Act 1985.
Ernst & Young LLP
Registered Auditor
Manchester
17 May 2002
Independent Auditors Report to the Members of Pilkington’s Tiles Group plc
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  27 2002 2002 2001 2001
Before Exceptional Before Exceptional
exceptional costs 2002 exceptional costs 2001
costs (Note 4) Total costs (Note 4) Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Turnover:
Continuing operations 2 33,479 – 33,479 34,225 – 34,225
Changes in stocks of finished goods and 
work in progress 244 – 244 1,274 1,027 2,301
Raw materials and consumables 9,624 – 9,624 8,451 – 8,451
Other external charges 8,897 54 8,951 9,730 846 10,576
Staff costs 5 11,153 110 11,263 11,768 129 11,897
Depreciation of tangible fixed assets 2,123 – 2,123 1,854 – 1,854
Amortisation of goodwill 47 – 47 53 – 53 
32,088 16432,252 33,130 2,002 35,132 
Operating profit/(loss):
Continuing operations 1,391 (164) 1,227 1,095 (2,002) (907)
Interest payable and similar charges 6 (387) – (387) (368) – (368)
Profit/(loss) on ordinary activities 
before taxation 2&3 1,004 (164) 840 727 (2,002) (1,275)
Taxation 7 (233) 49 (184) 143 455 598 
Profit/(loss) for the financial year 771 (115) 656 870 (1,547) (677)
Dividends
– ordinary dividend paid 9 ––– (370) – (370)
– ordinary dividend proposed 9 – – – –––
Profit/(loss) transferred to reserves 22 771 (115) 656 500 (1,547) (1,047) 
Earnings/(loss) per ordinary share
– basic 10 0.42p 0.35p 0.47p (0.37p)
– diluted 100.42p 0.35p0.47p (0.37p)
A statement of movements on reserves is set out in note 22.
Prior year comparatives have been restated as a consequence of adopting Financial Reporting Standard 19 ‘Accounting for
deferred tax’. See note 1b on page 33.
Consolidated Profit and Loss Account
for the year ended 31 March 2002
28 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 Consolidated Statement of Total Recognised Gains and Losses 
2002 2001
£’000 £’000
Profit/(loss) for the financial year 656 (677)
Revaluation of freehold land and buildings 471 1,110
Total recognised gains and losses relating to the year 1,127 433
Prior year adjustment (779)
Total gains and losses recognised since last Annual Report 348
Reconciliation of Consolidated Shareholders’ Funds
2002 2001
£’000 £’000
Total recognised gains and losses 1,127 433
Dividends – (370)
Total movements during the year 1,127 63
Shareholders’ funds at 1 April 13,036 12,973
Shareholders’ funds at 31 March 14,163 13,036
Shareholders’ funds at 1 April 2001 were previously £13,815,000 before the prior year adjustment of £779,000.
Note of Historical Cost Profits and Losses
2002 2001
£’000 £’000
Reported profit/(loss) on ordinary activities before taxation 840 (1,275)
Historical cost profit/(loss) on ordinary activities before taxation 840 (1,275)
Historical cost profit/(loss) for the year retained after taxation and dividends 656 (1,047)
Prior year comparatives have been restated as a consequence of adopting Financial Reporting Standard 19 ‘Accounting for
deferred tax’. See note 1b on page 33.
Other Primary Statements
for the year ended 31 March 2002
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  29 Group Company
2002 2001 2002 2001
Notes £’000 £’000 £’000 £’000
Fixed assets:
Intangible assets 11 836 883 – – 
Tangible assets 12 16,390 17,243 – – 
Investments 13 – – 10,490 26,974
17,226 18,126 10,490 26,974
Current assets:
Stocks 14 5,044 5,276 – – 
Debtors 15 4,785 6,124 11,785 11,971
Cash at bank and in hand 500 2 – –
10,329 11,402 11,785 11,971
Creditors:
Amounts falling due within one year 16 (10,121) (14,909) – – 
Net current assets/(liabilities) 208 (3,507) 11,785 11,971
Total assets less current liabilities 17,434 14,619 22,275 38,945
Creditors:
Amounts falling due after more than one year 17 (2,178) (604) – –
Provisions for liabilities and charges 18 (1,093) (979) – – 
Net assets 14,163 13,036 22,275 38,945
Capital and reserves:
Called up share capital 21 9,247 9,247 9,247 9,247
Share premium account 22 25,429 25,429 25,429 25,429
Capital redemption reserve 22 645 645 645 645
Other reserve 22 – – – 3,337
Merger reserve 22 (1,001) (1,001) – – 
Revaluation reserve 22 1,581 1,110 – – 
Profit and loss account 22 (21,738) (22,394) (13,046) 287
Equity Shareholders’ funds 14,163 13,036 22,275 38,945
Prior year comparatives have been restated as a consequence of adopting Financial Reporting Standard 19 ‘Accounting for
deferred tax’ and to correct an error in the allocation between reserves. See note 1b on page 33. 
These financial statements were approved by the Board on 17 May 2002.
Signed on behalf of the Board
M J Hesketh
Director
Balance Sheets
as at 31 March 2002
30 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 2002 2001
Notes £’000 £’000 £’000 £’000
Cash inflow from operating activities 23 2,927 4,741
Returns on investment and servicing of finance:
Interest paid (352) (275)
Interest element of finance lease rental payments (63) (93)
Net cash outflow from returns
on investments and servicing of finance (415) (368) 
Taxation:
UK corporation tax paid (69) (519)
UK corporation tax refunded 536 257 
Net tax refunded/(paid) 467 (262)
Capital expenditure:
Payments to acquire tangible fixed assets (841) (4,774) 
Receipts from sales of tangible fixed assets 9 10 
Net cash outflow from investing activities (832) (4,764)
2,147 (653) 
Equity dividends paid – (1,110)
Cash inflow/(outflow) before financing 2,147 (1,763)
Financing:
Capital element of finance lease rental payments (367) (340)
New bank loans 3,000 –
Net cash inflow/(outflow) from financing 2,633 (340)
Increase/(Decrease) in cash 23 4,780 (2,103)
Consolidated Cash Flow Statement
for the year ended 31 March 2002
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  31 1a Accounting policies
The principal accounting policies that have been adopted in the preparation of the consolidated accounts of
Pilkington’s Tiles Group plc are given below.
Basis of accounting
The accounts have been prepared under the historical cost convention modified to include the revaluation of land and
buildings and in accordance with applicable Accounting Standards in the United Kingdom, including Financial Reporting
Standard 19 which applies for the first time this year. An explanation of the effect of FRS19 is set out in note 1b.
Goodwill
Goodwill arising on acquisitions of subsidiary undertakings and businesses prior to 1 April 1998 has been eliminated
against reserves, and has not been restated on implementation of FRS10. For acquisitions made subsequent to 1 April
1998 goodwill is capitalised and amortised over its estimated economic life to a maximum of 20 years. It is reviewed
for impairment at the end of the first full year following the acquisition and in other periods if events or changes in
circumstances indicate that the carrying value may not be recoverable.
If a subsidiary or business is subsequently sold or closed, any goodwill arising on acquisition that was written off
directly to reserves or that has not been amortised through the profit and loss account is taken into account in
determining the profit or loss on sale or closure.
Basis of consolidation
The consolidated financial information includes the Company and all its subsidiary undertakings. The results of
subsidiary undertakings acquired or disposed of are included in the consolidated profit and loss account from the
date of their acquisition or up to the date of their disposal. The purchase consideration of subsidiary undertakings has
been allocated to each class of asset on the basis of fair value at the date of acquisition with goodwill being the
difference between the purchase consideration and the fair value of the net separable assets.
No profit and loss account is presented for the Company as provided by Section 230 of the Companies Act 1985.
Investments
Fixed asset investments are shown at cost less amounts written off. Provisions are made for impairment if events or
changes in circumstances indicate that the carrying value may not be recoverable.
Tangible fixed assets
Provision for depreciation is made so as to write off the cost or valuation of tangible fixed assets, on a straight-line
basis, over the expected useful economic lives of the assets concerned. The principal annual rates used for this
purpose are:
Freehold buildings 2%
Freehold land used as a quarry 4%
Plant and machinery 7.5%
Motor vehicles 20%
Computer equipment and software 20%-30%
Furniture, fittings, office equipment 20%
No depreciation is provided on land other than land used as a quarry.
The carrying values of tangible fixed assets are reviewed for impairment in periods if events or changes in
circumstances indicate that the carrying value may not be recoverable.
Interest on borrowings to finance major capital projects is capitalised up to the date of completion.
Stocks
Stocks and work in progress are stated at the lower of cost and net realisable value. Cost is determined on a first-in
first-out basis and includes transport and handling costs; in the case of manufactured products cost includes all direct
expenditure and production overheads based on the normal level of activity. Net realisable value is the price at which
stocks can be sold in the normal course of business after allowing for the cost of realisation and, where appropriate,
the cost of converting from their existing state to a finished condition. Provision is made for obsolete, slow moving and
defective stocks. Contract costs are recognised in the profit and loss account as incurred.
Notes to the Accounts
for the year ended 31 March 2002
32 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 Foreign currency
Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction or, if hedged, at
the forward contract rate. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date
are reported at the rates of exchange prevailing at that date or, if appropriate, at the forward contract rate. Any gain or
loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange
gain or loss in the profit and loss account.
Turnover
Turnover represents the invoiced value of goods and services supplied and work completed on contracts after trade
discounts. A prudent assessment of claims and variations considered recoverable is recognised in the accounts. Any
differences between the final settlements on contracts and the turnover previously recognised is included in
subsequent accounts. Turnover excludes VAT and sales between Group undertakings.
Deferred taxation
Deferred taxation is provided on all timing differences that have originated but not reversed by the balance sheet date,
calculated at the rate at which it is anticipated the timing differences will reverse. This is subject to deferred taxation
assets only being recognised if it is considered more likely than not that there will be suitable profits from which the
future reversal of the underlying timing differences can be deducted. Deferred taxation is not provided on timing
differences arising from the revaluation of fixed assets where there is no commitment to sell the asset. Deferred tax
assets and liabilities are not discounted.
Development expenditure
Expenditure on research and development is charged in the profit and loss account as it is incurred.
Finance and operating leases
Assets held under finance leases are initially reported at the fair value of the asset with an equivalent liability
categorised as appropriate under creditors due within or after one year. The asset is depreciated over its useful
economic life, and its repayments are apportioned between finance charges and reduction of the liability. Finance
charges are allocated to accounting periods over the period of the lease to produce a constant rate of charge on the
outstanding balance.
Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not
made on such a basis.
Pension costs
Principally the Group operates a defined benefit pension scheme. The funds are valued every three years by a
professionally qualified independent actuary, the rates of contribution payable being determined by the actuary. In the
intervening years the actuary reviews the continuing appropriateness of the rates. Pension costs are accounted for in
accordance with SSAP 24 on the basis of charging the expected cost of providing pensions over the period during
which the Group benefits from the employees’ services. The effects of variations from regular cost are spread over the
expected average remaining service lives of members of the scheme. The first year disclosures required under FRS17
or included in note 20
1b Prior year adjustments
The prior year comparatives have been restated to comply with FRS19 ‘Deferred Taxation’. The effect is to reduce
2001 losses after tax by £70,000 to a loss of £677,000 and to reduce opening net assets at 31 March 2000 by
£849,000 from £13,822,000 to £12,973,000. Earnings per share have also been restated. The current year tax charge
has been increased by £114,000 as a result of the adoption of FRS19.
In addition, a prior year adjustment has been made to the Group and Company reserves to correct an understatement
of the Share Premium Account which arose due to an error in accounting for the premium arising on a share issue in
1997. This adjustment increases the balance on the Company’s Share Premium Account at both 1 April 2001 and 31
March 2002 by £14,601,000 and reduces the balance on the Other Reserve by the same amount. The impact on the
Group reserves is to increase the Share Premium Account at both 1 April 2001 and 31 March 2002 by £14,601,000
and to reduce the balance on the Profit & Loss Account reserve by the same amount.
This adjustment has no impact on the reported result or shareholders’ funds of the Group and the Company for either
the current or previous financial years.
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  33 2 Segment information
The analyses of sales by business group and geographical area and of profit or loss before taxation and net assets by
business group are set out below:
2002 2001
£’000 £’000
(a) Analysis of sales by business group
Terrazzo 4,768 4,184
Supply & fix 4,239 3,863
Raised access flooring 3,106 3,470
Ceramics 21,715 23,058
Inter Company sales (349) (350)
Total Sales 33,479 34,225
2002 2001
£’000 £’000
(b) Analysis of sales by destination
UK & Republic of Ireland 32,118 32,871
Other Europe 762 247
Rest of the world 599 1,107
Total Sales 33,479 34,225
All sales originate from the United Kingdom.
2002 2001
£’000 £’000
(c) Profit/(loss) before tax by business group
Terrazzo 1,146 986
Supply & fix (156) (92)
Raised access flooring 464 378
Ceramics 566 447
Central costs (629) (624)
1,391 1,095
Exceptional costs (164) (2,002)
1,227 (907)
Finance costs (387) (368)
Profit/(loss) before taxation 840 (1,275)
Of the exceptional costs of £164,000 in 2002, £110,000 relates to Ceramics, and £54,000 to Supply and Fix. (2001:
£1,216,000 relates to Ceramics, £218,000 to Terrazzo, £353,000 to Supply and Fix, and £215,000 to central costs).
All profits/(losses) before tax are generated in the United Kingdom.
Notes to the Accounts
for the year ended 31 March 2002
34 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 2 Segment information (continued)
2002 2001
£’000 £’000
(d) Net assets by business group
Terrazzo 3,245 3,137
Supply & fix 444 1,059
Raised access flooring 171 157
Ceramics 14,844 14,520
Net operating assets 18,704 18,873
Tax, dividends and other corporate items (1,443) (592)
Net debt (3,098) (5,245)
Net assets 14,163 13,036
All net assets are located in the United Kingdom.
3 Profit/(loss) on ordinary activities before taxation
This is stated after charging:
2002 2001
£’000 £’000
Depreciation and amounts written off tangible fixed assets:
– owned 1,950 1,681
– held under finance leases and hire purchase contracts 173 173
Hire of plant and machinery under operating leases 273 303
Auditors’ remuneration 40 46
Auditors’ non audit fees 32 41
4 Exceptional costs
2002 2001
£’000 £’000
Exceptional costs comprise:
Provision against contract debts 54 353
Stock provisions – 1,027
Settlement of legal disputes – 80
Professional fees – 135
Write-off fixed assets
and related equipment – 278
Redundancy costs 110 129
164 2,002
Provision against contract debts in 2002 related to additionally identified items following the fundamental review of the
ongoing business of the Group carried out last year.
In the year to 31 March 2002 redundancy costs relate to the review of production facilities following the installation of
the new kiln technology.
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  35 5 Staff costs
Particulars of employees (including executive Directors) are as follows:
2002 2001
£’000 £’000
Wages and salaries 9,871 10,309
Redundancy costs 110 129
Social security costs 714 801
Other pension costs 568 658
11,263 11,897
The average monthly number of persons employed by the Group during the year was as follows:
2002 2001
No. No.
Production and distribution 312 363
Contract work 38 61
Sales and administration 97 103
447 527
Details of Directors’ remuneration including pension entitlements and share options are included in the Report on
Directors Remuneration on pages 23 to 25.
6 Finance costs
2002 2001
£’000 £’000
On bank loans and overdrafts 324 275
Finance leases 63 93
387 368
7 Tax on profit/(loss) on ordinary activities
(a) Analysis of charge/(credit) in the year
2002 2001
£’000 £’000
Current tax:
UK corporation tax on profits/(losses) of the year 254 (500)
Adjustments in respect of previous years (184) (28)
Total current tax (note 7(b)) 70 (528)
Deferred tax:
Origination and reversal of timing difference (note 18) 114 (70)
Tax on profit/(loss) on ordinary activities 184 (598)
Notes to the Accounts
for the year ended 31 March 2002
36 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 7 Tax on profit/(loss) on ordinary activities (continued)
(b) Factors affecting the tax charge for the year
The tax assessed for the period is lower than the standard rate of corporation tax in the UK (30%). The differences are
explained below:
2002 2001
£’000 £’000
Profit/(loss) on ordinary activities before tax 840 (1,275)
Profit/(loss) multiplied by the standard rate of corporation tax in the UK of 30% 252 (383)
Effects of:
Expenses not deductible for tax purposes 111 76
Capital allowances for the year in excess of depreciation (104) –
Depreciation for the year in excess of capital allowances – 134
Adjustments to tax charge in respect of previous years (184) (28)
Utilisation of tax losses – (141)
Other short term timing differences (10) (64)
Other differences 5 (122)
Current tax charge/(credit) for the year 70 (528)
(c) Factors that may affect future tax charges
Based on current capital investment plans, the Group expects to continue to be able to claim capital allowances in
excess of depreciation in future years.
Tax losses carried forward within the Group, relating to contracting operations, are £668,000 (2001: £668,000). Based
on the plans to close these operations, the Group does not expect to be able to utilise these losses in the future and
has therefore not recognised a deferred tax asset in respect of these losses.
No provision has been made for deferred tax on revaluation gains on land and buildings due to the existence of capital
losses which are available for offset against such gains.
8 Loss attributable to members of the parent company
As permitted by Section 230 of the Companies Act 1985, the Company’s profit and loss account has not been
included in the accounts.
The loss dealt with in the accounts of the parent Company was £16,670,000 (2001: loss of £512,000) before
deducting dividends.
9 Dividends
2002 2001
£’000 £’000
Equity dividends on ordinary shares:
– interim paid Nil (2001: 0.2p) – 370
– final proposed Nil (2001: Nil) – –
– 370
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  37 10 Earnings/(loss) per ordinary share
2002 2001
Pence Pence
Earnings/(loss) per share:
Earnings per share before exceptional costs 0.42 0.47
Attributable to exceptional costs (0.07) (0.84)
Earnings/(loss) per share 0.35 (0.37)
Diluted earnings/(loss) per share:
Earnings per share before exceptional costs 0.42 0.47
Attributable to exceptional costs (0.07) (0.84)
Earnings/(loss) per share 0.35 (0.37)
£’000 £’000
The calculation of earnings/(loss) per share is based on:
Profit on ordinary activities after taxation before exceptional costs 771 870
Exceptional costs (115) (1,547)
Profit/(loss) on ordinary activities after taxation 656 (677)
Weighted average number of shares used in basic earnings per share:
Thousands Thousands
Weighted average for the year 184,949.0 184,949.0
Earnings per share is based on the weighted number of ordinary shares in issue during the year. Earnings per share
are shown before exceptional costs to illustrate the effect of these items on earnings per share.
The diluted earnings per share is based on the result for the year as shown above and on the number of ordinary
shares, calculated as follows:
Thousands Thousands
Basic weighted average number of shares 184,949.0 184,949.0
Dilutive potential ordinary shares:
– employee share options – –
184,949.0 184,949.0
11 Intangible fixed assets
£’000
Goodwill
Cost
Beginning and end of year 990
Amortisation
Beginning of year 107
Provided during the year 47
End of year 154
Net book value:
Beginning of year 883
End of year 836
Goodwill arose on the acquisition of the business of Woolliscroft Tiles and is being amortised evenly over the Directors’
estimate of its useful economic life of 20 years.
Notes to the Accounts
for the year ended 31 March 2002
38 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 12 Tangible fixed assets
Group
Freehold
land and Plant and Motor
buildings machinery vehicles Total
£’000 £’000 £’000 £’000
Cost or valuation:
Beginning of year 3,810 20,647 216 24,673
Additions 40 666 135 841
Revaluation 471 – – 471
Disposals (50) – (71) (121)
End of year 4,271 21,313 280 25,864
Depreciation:
Beginning of year 206 7,150 74 7,430
Charge for year 69 1,985 69 2,123
Disposals (38) – (41) (79)
End of year 237 9,135 102 9,474
Net book value:
Beginning of year 3,604 13,497 142 17,243
End of year 4,034 12,178 178 16,390
Net book value of leased assets included in the above:
Beginning of year – 1,553 – 1,553
End of year – 1,380 – 1,380
The net book value of land, which is not depreciated, is £2,728,000 (2001: £2,257,000).
Included within the cost of plant and machinery is capitalised interest of £245,867 (2001: £245,867).
All freehold land and buildings are stated at valuation.
The freehold land and buildings were valued by Edward Symmons & Partners as at 19 March 2002, on the basis of
existing use value in accordance with the Appraisal and Valuation Manual of The Royal Institution of Chartered
Surveyors. The historical cost of freehold land and buildings at 31 March 2002 is £2,690,000 (2001: £2,700,000),
and the net book value on the historical cost basis at 31 March 2002 is £2,453,000 (2001: £2,494,000).
The open market value of freehold land and buildings at 19 March 2002 was £4,950,000.
The Company
The Company has no tangible fixed assets.
13 Fixed asset investments
Company
£’000
Investments in subsidiary undertakings (at cost)
Beginning of the year 26,974
Written off on liquidation of Dayamber Limited (25,603)
Investment in Pilkington’s Tiles Limited 9,100
Investment in Royal Lancastrian Pottery Limited 19
End of year 10,490
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  39 13 Fixed asset investments (continued)
As part of a programme designed to simplify the corporate structure the trade and net assets of Woolliscroft Tiles
Limited and Quiligotti Terrazzo Limited have been transferred during the period to Pilkington’s Tiles Limited. This
company, together with Royal Lancastrian Pottery Limited, has been transferred from the ownership of Dayamber
Limited to be direct subsidiaries of Pilkington’s Tiles Group plc. Dayamber Limited, which has been dormant for some
time, has now been put into liquidation. The liquidator has made a final distribution of £9,343,000, resulting in a loss of
£16,260,000. The loss represents a fall in the value of the investment in the shares of Pilkington Tiles Limited following
difficult trading conditions in recent years.
Subsidiary companies:
The principal operating subsidiaries at 31 March 2002, all of which are wholly owned and registered in England and
Wales, are:
Company Business
Pilkington’s Tiles Limited Manufacture of ceramic and terrazzo tiles
Quiligotti Access Flooring Limited Installation of access floors
Quiligotti Contracts Limited Installation of terrazzo tiles
Quiligotti Terrazzo Limited Non-trading (previously manufacture of terrazzo tiles)
Woolliscroft Tiles Limited Non-trading (previously manufacture of ceramic tiles)
14 Stocks
Group
2002 2001
£’000 £’000
Raw materials and consumables 427 461
Work in progress 519 620
Finished goods and goods for resale 4,098 4,195
5,044 5,276
The Company held no stocks as at 31 March 2002 and 31 March 2001.
15 Debtors
Group Company
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Amounts falling due within one year:
Trade debtors 4,325 5,157 – –
Amounts owed by Group undertakings – – 11,785 11,971
Taxation repayable – 536 – –
Other debtors 7 – – –
Prepayments and accrued income 453 431 – –
4,785 6,124 11,785 11,971
The Group and Company have no debtors falling due after more than one year.
Notes to the Accounts
for the year ended 31 March 2002
40 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 16 Creditors: Amounts falling due within one year.
Group Company
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Bank loans and overdrafts (note 23c) 1,000 4,282 – –
Obligations under finance leases
and hire purchase contracts (note 19) 420 361 – –
Trade creditors 5,214 6,237 – –
Corporation tax 350 349 – –
Other taxes and social security costs 1,252 1,534 – –
Other creditors 1,885 2,146 – –
10,121 14,909 – –
The Group has granted a fixed and floating charge on all assets to secure bank loans and overdrafts.
17 Creditors: Amounts falling due after more than one year.
Group
2002 2001
£’000 £’000
Bank loan 2,000 –
Obligations under finance leases and hire purchase contracts 178 604
2,178 604
Obligations under finance leases and hire purchase contracts are repayable as follows:
Group
2002 2001
£’000 £’000
Within one year 447 422
Between one and two years 181 422
Between two and five years – 211
628 1,055
Less: finance charges allocated to future periods (30) (90)
598 965
Finance leases and hire purchase contracts are analysed as follows:
Due within one year 420 361
Due after one year 178 604
598 965
The bank loan is payable as follows:
Within one year 1,000 –
Between one and two years 1,000 –
Between two and five years 1,000 –
3,000 –
Less included within amounts due within one year (1,000) –
2,000 –
The bank loan is secured by a Fixed and Floating charge over the assets of all group companies.
The Company had no creditors falling due after more than one year at 31 March 2002 and 31 March 2001.
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  41 18 Provisions for liabilities and charges
Provisions for liabilities and charges comprise:
Group
2002 2001
£’000 £’000
Deferred taxation 1,093 979
Deferred taxation has been provided as follows:
Group
2002 2001
£’000 £’000
Excess of tax allowances over book depreciation of fixed assets 1,126 1,012
Other timing differences (33) (33)
1,093 979
The movement on deferred taxation comprises:
Group
2002
£’000
Beginning of year (as previously stated) 200
Prior year adjustment 779
Beginning of year (as restated) 979
Charged to profit and loss account for the year (note 7) 114
End of year 1,093
The prior year comparatives have been restated as a consequence of adopting Financial Reporting Standard 19
‘Accounting for deferred tax’. See note 1b on page 33.
19 Derivatives and other financial instruments
An explanation of the Group’s objectives, policies and strategies for the role of derivatives and other financial
instruments in creating and changing the risks of the Group in its activities can be found on page 16. The disclosures
below exclude short term debtors and creditors other than within the currency exposures.
Interest rate risk profile of financial liabilities
The interest rate profile of the financial liabilities of the Group as at 31 March was as follows:
Financial Floating Fixed
liabilities rate rate
£’000 £’000 £’000
2002
Total (all sterling) 3,598 3,000 598
2001
Total (all sterling) 5,247 4,282 965
The floating rate financial liabilities comprise sterling loans and overdrafts that bear interest at rates based on LIBOR.
Fixed rate liabilities comprise finance leases and hire purchase contracts. The weighted average period of these is 1.5
years at a weighted average interest rate of 7.8%.
Notes to the Accounts
for the year ended 31 March 2002
42 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 19 Derivatives and other financial instruments (continued)
Currency exposures
The table below shows the Group’s currency exposures; in other words, those transactional (or non-structural)
exposures that give rise to the net currency gains and losses recognised in the profit and loss account. Such
exposures comprise the monetary assets and monetary liabilities of the Group that are not denominated in sterling.
As at 31 March, these currency exposures were as follows (£ sterling is the functional currency):
Net foreign currency
monetary assets/(liabilities)
2002 2001
£’000 £’000
French Francs – (2)
Italian Lire – (16)
Spanish Peseta – (109)
German Deutschmark – (193)
Euro (539) (179)
Australian Dollars 24 13
US Dollars (77) –
Total (592) (486)
Maturity of financial liabilities
The maturity profile of the Group’s financial liabilities at 31 March was as follows:
2002 2001
£’000 £’000
In one year or less, or on demand 1,420 4,643
In more than one year, but not more than two 1,178 395
In more than two years, but not more than five 1,000 209
3,598 5,247
Borrowing facilities
The Group has various borrowing facilities available to it. The undrawn committed facilities available at 31 March in
respect of which all conditions precedent had been met at that date are as follows:
2002 2001
£’000 £’000
Expiring in one year or less 3,200 3,738
Expiring between two and five years 1,250 –
4,450 3,738
Fair values of financial assets and financial liabilities
In the opinion of the Directors the fair value, at 31 March 2002 and 31 March 2001, of all primary financial instruments,
being short and long term borrowings and cash, and derivative financial instruments, being interest rate caps and
forward currency contracts, approximates to the carrying amount. The book value of derivative financial instruments is
nil.
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  43 20 Pensions
The Group operates the Pilkington’s Tiles Pension Scheme arrangement for Group employees. The assets of the
scheme are held separately from those of the Group in an independently administered fund. Contributions to the
defined benefit sections of the scheme are charged to the profit and loss account so as to spread the cost of pensions
over employees’ working lives.
(a) A formal valuation was completed as at 1 January 2000. The key assumptions used were that the rate of return on
investments exceeded the rate of salary growth by 2% and the rate of pension increases by 3.25%. The actuarial value
of the assets (including those assets transferred from the A Quiligotti & Co. Retirement Benefits Scheme but excluding
those assets in respect of the money purchase section – see below) of the scheme was £19,038,000 and represented
118.5% of the value of the benefits that had accrued to members after allowing for expected future increases in
earnings. Contributions to the defined benefit scheme are determined by independently qualified actuaries on the
basis of valuations using the projected unit method.
The assets and liabilities of the A Quiligotti & Co. Retirement Benefits Scheme were transferred to the Pilkington’s Tiles
Pension Scheme with effect from 31 March 2000. The Quiligotti scheme will be wound up in due course.
The pension cost charged to profit and loss for the year amounted to £489,341 (2001: £580,453).
The FRS17 calculations for disclosure purposes have been based on the 1 January 2000 valuation results updated to
31 March 2002 by a qualified independent actuary. The major assumptions used by the actuary were:
At March 2002
Discount rate : 6.1%
Rate of increase in salaries : 4.5%
Rate of increase in pensions in payment : 3.3%
Inflation assumption : 3.0%
The assets in the Scheme and the expected rate of return were:
Long term rate of return Value at 31 March 2002
expected at 31 March 2002 (per annum) £’000
Equities 8.3% 15,840
Property 8.3% 452
Gilts 5.3% 2,294
Cash 0.0% 447
19,033
The following amounts at 31 March 2002 were measured in accordance with the requirements of FRS17:
£’000
Total market value of Scheme assets 19,033
Present value of Scheme liabilities (21,360)
Deficit in the Scheme (2,327)
Related deferred tax asset 698
Net pension liability (1,629)
Had the above amounts been recognised in the financial statements, the Group’s net assets and profit and loss
reserves at 31 March 2002 would be as follows:
£’000
Net assets excluding pension liability 14,163
Pension liability (1,629)
Net assets including pension liability 12,534
Profit and loss reserve excluding pension liability (21,738)
Pension liability (1,629)
Profit and loss reserve including pension liability (23,367)
Notes to the Accounts
for the year ended 31 March 2002
44 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 20 Pensions (continued)
The notional deficit under FRS17 reflects the different bases for valuing assets and liabilities compared to SSAP24,
including the immediate impact of the fair value of assets at 31 March 2002, which have been affected by the poor
performance of stock markets in recent times.
Whatever notional numbers are reported under FRS17 we remain committed to funding decisions based on our
actuarial valuation, undertaken every three years and to balance the financial security of employees with the needs of
the Group and its shareholders.
(b) The Pilkington’s Tiles Pension Scheme also includes a section for a defined contribution pension scheme. The
assets of the scheme are held separately from those of the Group in independently administered funds. Contributions
to the defined contribution section are charged to the profit and loss account as they fall due. The pension cost
charge represents amounts payable by the Group to the scheme during the year and amounted to £79,416 (2001:
£76,791).
21 Called-up share capital
2002 2001 2002 2001
Number Number £’000 £’000
Authorised:
Ordinary shares of 5p each 264,800,000 264,800,000 13,240 13,240
Allotted, called-up and fully paid:
Ordinary shares of 5p each 184,948,954 184,948,954 9,247 9,247
Share Options
Changes during the year in the number of outstanding options are shown below:
Executive Share 1998 Savings-Related
Option Scheme Share Option Scheme
Beginning of year 6,583,728 2,771,058
Granted 1,250,000 –
Lapsed (1,485,167) (1,576,837)
End of year 6,348,561 1,194,221
At 31 March 2002 options to purchase ordinary shares are outstanding as follows:
Date of Number of Date of
grant shares Price exercise
Executive Share 23.09.92 9,000 100.00p 23.09.95 to 23.09.02
Option Scheme 20.07.94 20,000 18.50p 20.07.97 to 20.07.04
22.07.97 242,424 24.75p 22.07.00 to 24.07.07
22.07.97 1,707,576 24.00p 22.07.00 to 21.06.04
06.07.99 881,351 14.75p 06.07.02 to 05.07.09
06.07.99 644,065 14.75p 06.07.02 to 05.06.06
22.11.99 225,055 13.33p 22.11.02 to 21.11.09
22.11.99 1,369,090 13.33p 22.11.02 to 21.10.06
23.11.01 750,000 5.00p 23.11.04 to 22.11.11
23.11.01 500,000 5.00p 23.11.04 to 22.10.08
Save As You Earn
Share Option Scheme 01.11.98 1,194,221 10.4p 01.11.03
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  45 22 Reserves
The movement on reserves in the year is as follows:
Capital Profit &
Share redemption Merger Revaluation Loss
Group premium reserve reserve Reserve account
£’000 £’000 £’000 £’000 £’000
At beginning of year (as previously stated) 10,828 645 (1,001) 1,110 (7,014) 
Prior year adjustments:
Correction of error in allocation to Share Premium account 14,601 – – – (14,601)
FRS19 Deferred tax adjustment – – – – (779)
At beginning of year (as restated) 25,429 645 (1,001) 1,110 (22,394)
Profit for the financial year – – – – 656
Revaluation of land & buildings – – – 471 –
At end of year 25,429 645 (1,001) 1,581 (21,738)
The cumulative amount of goodwill written off at 31 March 2002 is £25,227,000 (2001: £25,227,000).
Capital
Share redemption Other Profit & Loss
Company premium reserve reserve account
£’000 £’000 £’000 £’000
At beginning of year (as previously stated) 10,828 645 17,938 287
Correction of error in allocation to Share Premium Account 14,601 – (14,601) –
At beginning of year (as restated) 25,429 645 3,337 287
Loss for the financial year – – (16,670)
Transfer of realised loss
on liquidation of Dayamber Limited – – (3,337) 3,337
At end of year 25,429 645 – (13,046)
23 Cash flow information
(a) Reconciliation of operating profit to net cash inflow from operating activities:
2002 2001
£’000 £’000
Operating profit/(loss) 1,227 (907)
Depreciation charges 2,123 1,854
Loss on sale of fixed assets 33 171
Amortisation of goodwill 47 53
Decrease in stocks 232 2,028
Decrease in debtors 803 1,174
(Decrease)/increase in creditors (1,538) 368
Net cash inflow from operating activities 2,927 4,741
(b) Reconciliation of net cash flow to movement in net debt:
2002 2001
£’000 £’000
Increase/(decrease) in cash in the period 4,780 (2,103)
Cash outflow from decrease in lease financing 367 340
Cash inflow from new bank loans (3,000) –
Movement in net debt in the period 2,147 (1,763)
Net debt at 1 April (5,245) (3,482)
Net debt at 31 March (3,098) (5,245)
Notes to the Accounts
for the year ended 31 March 2002
46 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 23 Cash flow information (continued)
(c) Analysis of net debt:
Opening Cash Flow Closing
£’000 £’000 £’000
Cash at bank and in hand 2 498 500
Overdraft (4,282) 4,282 –
(4,280) 4,780 500
Term Loan – (3,000) (3,000)
Finance lease obligations (965) 367 (598)
Total (5,245) 2,147 (3,098)
(d) Cash flows relating to operating activities include the following outflows which relate to exceptional operating
items:
2002 2001
£’000 £’000
Settlement of legal disputes and legal costs – (80)
Redundancy costs (110) (129)
Professional fees – (100)
(110) (309)
24 Guarantees and other financial commitments
(a) Capital Commitments:
2002 2001
£’000 £’000
Contracted by Group 118 197
(b) Contingent Liabilities:
Group Company
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Guarantees in respect of bank borrowings of subsidiary undertakings – – 2,500 4,282
Guarantees in respect of hire purchase and finance lease obligations of
subsidiary undertakings – – 598 965
– – 3,098 5,247
(c) Obligations Under Operating Leases:
Annual commitments under non–cancellable leases are as follows:
2002 2001
Land & Land &
buildings Other buildings Other
£’000 £’000 £’000 £’000
Operating leases which expire:
– within one year – 235 – 56
– in two to five years – 368 – 192
– 603 – 248
The Company has no operating lease obligations (2001: £Nil)
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  47 1998 1999 2000 2001 2002
£’000 £’000 £’000 £’000 £’000
Turnover 29,667 39,973 43,485 34,225 33,479
Profit before interest and tax, and exceptional costs 1,931 3,569 4,186 1,095 1,391
Exceptional costs (1,286) (727) (436) (2,002) (164)
Net interest payable (541) (454) (447) (368) (387)
Taxation – (754) (405) 598 (184)
Dividends – (989) (1,135) (370) –
Retained profit/(loss) for the year 104 645 1,763 (1,047) 656
Dividends per share – 0.5p 0.6p 0.2p –
Net debt (5,687) (4,962) (3,482) (5,245) (3,098)
Shareholders’ Funds 11,693 12,220 12,793 13,036 14,163
Gearing 48.6% 40.6% 27.2% 40.2% 21.9%
Prior year comparatives have been stated as a consequence of adopting FRS 19.
48 Pilkington’s Tiles Group plc Annual Report and Accounts 2002
Five Year Financial History
year ended 31 March Notice is hereby given that the fournteenth Annual General Meeting of Pilkington’s Tiles Group plc (“the Company”)
will be held at the Conference Centre, Pilkington’s Tiles Group plc, Rake Lane, Clifton Junction, Manchester M27 8LP
on Thursday, 25 July 2002, at 11.00 a.m., for the following purposes:
1 To approve and adopt the audited accounts for the year ended 31 March 2002, together with the Directors’ and
Auditors’ reports.
2 To appoint Mr M J Hesketh as a Director.
3 To re-appoint Mr D J Booth as a Director, who retires by rotation.
4 To re-appoint Ernst & Young LLP as Auditors to hold office until the conclusion of the next general meeting of the
Company at which accounts are laid for the Company and to authorise the Directors to determine their
remuneration.
To consider and, if thought fit, pass the following resolutions which will be proposed as to resolution 5 as an ordinary
resolution and as to resolutions 6, 7, 8 and 9 as special resolutions of the Company:
5 That
(a) the Directors be and are hereby generally and unconditionally authorised pursuant to Section 80 of the
Companies Act 1985 in substitution for all existing authorities under that Section to exercise all the powers of the
Company to allot, grant options over, offer or otherwise deal with or dispose of any relevant securities (as defined
for the purposes of that Section) up to an aggregate nominal amount of £3,459,622;
(b) this authority shall expire (unless previously renewed, varied or revoked by the Company in general meeting) at the
conclusion of the next Annual General Meeting after the passing of this resolution or 15 months from the passing
of this resolution whichever is earlier; and
(c) the Company may, before this authority expires, make an offer or agreement which would or might require relevant
securities to be allotted under this authority after it expires and the Directors may allot relevant securities in
pursuance of that offer or agreement as if such authority had not expired.
6 That
(a) subject to the passing of resolution 5 set out in this notice of Annual General Meeting, the Directors be and are
hereby given power pursuant to Section 95 of the Companies Act 1985 (“Act”) to allot for cash equity securities (as
defined in Section 94 of the Act), pursuant to any general authority conferred on them pursuant to Section 80 of
the Act, as if Section 89(1) of the Act did not apply to the allotment, but this power shall be limited to:
(i) the allotment of equity securities in connection with an offer or issue to or in favour of holders of ordinary shares
in the capital of the Company on the Register on a date fixed by the Directors where the equity securities
respectively attributable to the interests of the holders of ordinary shares are proportionate (as nearly as
practicable) to the respective amounts of ordinary shares held by them on that date, but the Directors may
make such exclusions or other arrangements as they consider expedient in relation to fractional entitlements,
legal or practical problems under the laws in any territory or the requirements of any relevant regulatory body or
stock exchange; and
(ii) the allotment (other than under sub-paragraph (i) of this resolution) for cash of equity securities having, in the
case of relevant shares (as defined for the purposes of Section 89), a nominal amount or, in the case of other
equity securities, giving the right to subscribe for, or convert into, relevant shares having a nominal amount not
exceeding in aggregate £462,372;
(b) this power shall expire (unless previously renewed, varied or revoked by the Company in general meeting) at the
conclusion of the next Annual General Meeting of the Company after the passing of this resolution or 15 months
from the passing of this resolution whichever is earlier; and
(c) the Company may, before this power expires, make an offer or agreement which would or might require equity
securities to be allotted after it expires and the Directors may allot equity securities in pursuance of that offer or
agreement as if such authority had not expired.
Pilkington’s Tiles Group plc Annual Report and Accounts 2002  49
Notice of Annual General Meeting 7 That pursuant to Article 11 of its Articles of Association and part V of the Companies Act 1985 (“Act”) the Company
be and is hereby generally and unconditionally authorised for the purpose of Section 166 of the Act to make one or
more market purchases (within the meaning of Section 163 of the Act) of ordinary shares of 5p each in the capital
of the Company (“Ordinary Shares”) on such terms and in such manner as the Directors may from time to time
determine provided that:
(a) the maximum aggregate number of Ordinary Shares authorised to be purchased is 18,400,000;
(b) the minimum price which may be paid for an Ordinary Share is 5p (exclusive of expenses);
(c) the maximum price (exclusive of expenses) which may be paid for an Ordinary Share is an amount equal to 105
per cent. of the average of the middle market quotations for an Ordinary Share as derived from the London Stock
Exchange Daily Official List for the five business days immediately preceding the date on which the Ordinary Share
is purchased;
(d) this authority shall expire (unless previously renewed, varied or revoked by the Company in general meeting) on
the conclusion of the next Annual General Meeting of the Company after the passing of this resolution or 15
months from the passing of this resolution whichever is earlier; and
(e) the Company may, before this authority expires, make a contract or contracts to purchase Ordinary Shares under
this authority which contract would or might be executed wholly or partly after the expiry of this authority, and the
Directors may make a purchase of Ordinary Shares in pursuance of any such contract or contracts as if such
authority had not expired.
8 THAT the share premium account standing in the books of account of the Company at the date hereof be and the
same is hereby cancelled.
9 THAT the capital redemption reserve standing in the books of account of the Company at the date hereof be and
the same is hereby cancelled.
By order of the Board,
M J Hesketh
Company Secretary
Registered Office:
PO Box 4
Rake Lane
Clifton Junction
Manchester
M27 8LP
17 May 2002
Notes:
1 A Shareholder entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and, on a poll, to vote instead of him. A
proxy need not also be a Shareholder. Appointment of a proxy will not preclude a Shareholder from attending and/or voting at the Annual General
Meeting.
2 Forms of proxy should be completed in accordance with the notes on the enclosed form and should be received by the Company’s Registrars,
License No. SWB 1002, Computershare Services plc, PO Box 1075, Bristol BS99 3FA, not later than 48 hours before the time appointed for the
Annual General Meeting. In the case of a form of proxy signed by an agent of a Shareholder who is not a corporation, the authority under which the
proxy form is signed, or an office copy or a copy of it certified in accordance with Section 3 of the Powers of Attorney Act 1971, should also be
received by the Registrars not later than 48 hours before the time appointed for the meeting.
3 The Company, pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, specifies that only those Shareholders registered in the
Register as at 11.00 am on 23 July 2002 shall be entitled to attend or vote at the Annual General Meeting in respect of the number of shares
registered in their name at that time. Changes to entries in the Register after 11.00 am on 23 July 2002 shall be disregarded in determining the rights
of any person to attend or vote at the Annual General Meeting.
4 Copies of the service contracts of the Directors of the Company and a register of their interests are available for inspection at the registered office of
the Company during normal business hours and will be available for inspection at the place of the Annual General Meeting from 10.45 am until its
conclusion.
50 Pilkington’s Tiles Group plc Annual Report and Accounts 2002 Pilkington’s Tiles Group plc PO Box 4, Clifton Junction, Manchester M27 8LP   Telephone: +44 (0) 161 727 1000  Fax: +44 (0) 161 727 1063
www.pilkingtons.com