Pilkington’s
Tiles Group plc
Annual Report & Accounts 2003 Cover photograph showing external use of
Pilkington’s ceramics, (c) BBC Worldwide Ltd. 
as featured in Home Front Inside Out by Laurence
Llewellyn-Bowen and Diarmuid Gavin, published by
BBC Worldwide Ltd.
Quilfloor 600
A traditional, fully
flexible raised access
flooring system, using
steel pedestals.
Contents
01 Financial Highlights
02 Brand Profiles
04 Chairman’s Statement
06 Chief Executive’s Review 
12 Financial Review
15 Directors and Advisers
16 Directors’ Report
18 Corporate Governance
20 Report on Directors’ Remuneration
22 Statement of the Directors’ Responsibilities
23 Independent Auditors’ Report 
24 Consolidated Profit and Loss Account
25 Consolidated Statement of Total Recognised 
Gains and Losses
25 Reconciliation of Shareholders Funds
26 Balance Sheets
27 Consolidated Cash Flow Statement
28 Notes to the Accounts
44 Five year Financial History
45 Notice of AGM Pilkington’s Tiles Group plc Annual Report & Accounts 2003 01
Financial Highlights for the year ended 31 March 2003
2003 2002 2001 
£’m £’m £’m 
Turnover 27.4 33.5 34.2 
Loss/(profit) before taxation and exceptional costs (2.3) 1.0 0.7 
Exceptional costs (0.4) (0.2) (2.0) 
(Loss)/profit before taxation (2.7) 0.8 (1.3)
(Loss)/earnings per share (before exceptional costs) (0.88)p 0.42p 0.47p 
(Loss)/earnings per share (after exceptional costs) (1.04)p 0.35p (0.37)p 
Dividends per share _ – 0.2p  
Net debt 5.2 3.1 5.2 
Gearing 42.6% 21.9% 40.2%
2001 2002 2003 2001 2002 2003 2001 2002 2003 2001 2002 2003
0
34.2
33.5
27.4
(1.3)
(0.37)
0.35
40.2
21.9
42.6
(1.04)
(2.7)
0.8
Turnover
£’m
0 00
(Loss)/Profit before Tax
£’m
Earnings per Share
pence
Gearing
%
Financial Highlights
From left to right:
 Geo strip from the ‘Atelier’ collection.
 Hardwood installed in an apartment by
Quiligotti Access Flooring. 
 Matt and polished porcelain floor tiles.  Pilkington’s Tiles is a
leading manufacturer and
design innovator of 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. Wall tile is
manufactured at Manchester and floor tile at
Poole. This product portfolio is supplemented
through supplier partnerships with leading
manufacturers abroad.
Quiligotti Terrazzo
introduced terrazzo tile
manufacture to the UK
and remains the clear market leader today. 
The Manchester 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.
02  Pilkington’s Tiles Group plc Annual Report & Accounts 2003
Pilkington’s
Tiles Group plc
Brand Profiles
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. Both
commercial and domestic installation is 
in demand.
A design-led manufacturing and service group offering 
high quality wall and floor solutions for the home, office,
commercial and industrial environments.
Woolliscroft Multiversatile floor tiles.
Quiligotti terrazzo floor at Westminster
underground station.
Directions wall tile range with mosaic trim.
Intec special finish access flooring, featuring
porcelain tiles. Pilkington’s Tiles Group plc Annual Report & Accounts 2003 03
Main picture:
 The ‘Pearlstone’ wall tile collection, launched
Sept ‘02: platinum ‘Minerals’ decoration with
white field tile.
From left to right:
 Intec special finish access flooring, featuring
wood and glass panels.
 New colours (blue shown here) introduced into
the Dorset fully vitrified floor tile range in 
May 2003. “The year ended 31 March 2003 has been a very
difficult one for the Group...The next financial year will
see further work on the initiatives identified which are
crucial to our commitment to improve the fortunes of
the Group”.
04  Pilkington’s Tiles Group plc Annual Report & Accounts 2003
Chairman’s Statement
The year ended 31 March 2003 has been a
very difficult one for the Group. The
Ceramic business, which continues to
operate in a highly competitive market, has
experienced an overall reduction in sales
compared with the previous year. It has also
seen a change in product mix toward
outsourced products, particularly into the
multiple retail sector. This shift away from
manufactured products had a significant
impact on factory overhead recovery and
led to the manpower and cost reductions,
which were noted in our Interim Statement,
and have now taken place.
The Terrazzo operation, after achieving record
results last year, has suffered from a reduction in
activity levels in its major markets, partly as a
result of the unusually high level of activity in the
last quarter of 2001/2. This has of course
impacted on profitability. Access Flooring
performed creditably despite a significant drop in
turnover as we temporarily reduced activity in
certain markets in which margins had become
unacceptably low.
The Supply and Fix business, from which we
announced last year that we would withdraw by
From left to right:
 Large Scroll strip with light and mid soft
cream plain tiles from the ‘Naturals’
collection.
 Microfloor 600 access flooring being installed:
the cost effective solution. 
 Porcelain floor tiles in travertine marble.
Quiligotti Terrazzo 
in the halls of Leeds Magistrates Courts.
H A (Tony) Palmer
Chairman Pilkington’s Tiles Group plc Annual Report & Accounts 2003 05
March 2003, has now largely finished its
outstanding contracts and is effectively closed.
The closure programme has been completed in
line with expectations and in the coming year
activity will be confined largely to the collection 
of outstanding debts.
Results
Group turnover of £27.4m (2002: £33.5m)
reflects the issues noted above and in particular
the loss of £2.6m of Supply and Fix turnover.
The Group made an operating loss before
interest, tax and exceptional items of £1.9m
compared to a profit of £1.4m in the previous
financial year. Exceptional items, which related to
the closure of the Supply and Fix business and
the cost reduction programme in Ceramics,
amounted to £0.4m compared to £0.2m in the
previous year. The loss before tax after
exceptionals of £2.7m compares to a profit of
£0.8m in 2002.
The performance of the individual trading
divisions is discussed in the Chief
Executive’s Review.
Group gearing has increased at 31 March 2003
to 42.6% from 21.9% at last year-end. This is
due to the poor trading noted above, and the
final payment of £1.3m on the small tile kiln,
which was noted in last year’s Annual Report.
Total borrowings, including finance leases, were
£5.2m compared to £3.1m at last year-end.
Strategy
In the Interim Statement it was noted that we
had, together with independent advisors,
undertaken a strategic and operational review of
Group corporate issues as well as of each of the
operating companies.
The operational review identified a number of
initiatives to increase sales into certain chosen
market sectors and to reduce the cost base of
the businesses, designed to change substantially
the fortunes of those operations. These initiatives
are underway and on schedule, and it is
expected that the benefit will begin to be seen 
in the current financial year.
The Board’s position with regard to the land at
Poole remains largely unchanged in that
ultimately the potential development value of that
land may be such that it will be in excess of its
value as an operational site. That point has not
yet been reached. However, the Board remains
committed to maximising the value of the site,
and also wishes to maintain the supply of
products currently manufactured there, which
make a valuable contribution to the Group.
Consequently, the Group is likely to continue
to maintain a presence on that site in the
medium term.
Dividend
As a result of the current trading position the
Directors do not recommend the payment of a
dividend (2002: Nil). The Board is focussed on
the restoration of the trading fortunes of the
Group and dividends are unlikely to be resumed
until that process is well advanced.
Pensions
The Group’s pension scheme consists of two
sections: the defined benefit (or final salary)
section and the defined contribution section.
It was announced earlier in the year that we
believed the final salary section to be in deficit
and were undertaking a detailed review of its
future funding: this review is now complete.
The analysis of the final salary section of the
pension scheme revealed a substantial deficit of
some £4.2m on an actuarial basis as at 30
November 2002. On an FRS17 basis as at 31
March 2003 the deficit is £7.2m after tax. The
Board has been advised that as a result of the
deficit, the costs of funding the final salary
section of the pension scheme could increase
very significantly in the future. Consequently the
Board is proposing certain changes to the final
salary section designed to both maintain its
commitment to fund the existing accrued
benefits of the members and also to control the
future cost of the pension scheme. The proposal
is to close the final salary section to further
accrual and enable affected members to join the
defined contribution section of the pension
scheme to accumulate future pension benefits.
The Group will be entering into consultation,
regarding the proposed changes, with the
members of the final salary section. 
The proposed course of action may still result in
a substantial increase in the Group’s
contributions to the pension scheme which would
underline its continuing commitment to the
pension scheme. The Board believes that the
proposed changes to the pension scheme
represent a fair balance between maintenance of
the pension scheme and benefits to its
members, and the ability of the Group to fund
these benefits and the risk of future increases.
Management and Employees
The Group is committed to a programme of
operational improvement which inevitably involves
considerable change. This, combined with the
redundancies which have recently taken place,
the difficult trading conditions and the rapidly
changing dynamics in the ceramic industry in
particular, has meant that it has been a tough
year for all our employees and we thank them 
all for their efforts. The pace of change is
unlikely to slacken and we will be faced with
continuing challenges, but I believe that we now
have a team capable of facing the future with
skill and determination.
Prospects
The result for the year to 31 March 2003 was
extremely disappointing and fell well below our
expectations. The next financial year will see
further work on the initiatives identified which are
crucial to our commitment to improve the
fortunes of the Group. We anticipate that those
initiatives, combined with the cost reductions
already in place, will produce substantial
improvement in the next financial year.
H A (Tony) Palmer,
Chairman 06  Pilkington’s Tiles Group plc Annual Report & Accounts 2003
Chief Executive’s Review
Introduction
The results for the year ended March 2003
were extremely poor. Sales at £27.4m were
18% down on the previous year (£33.5m).
The Group made an operating loss before
exceptional costs of £1.9m, £224,000 of
which was associated with the Supply & Fix
business which was closed during the year
as planned.
It was noted in the Interim Report issued in
November 2002 that the already difficult
trading conditions faced by all the operating
businesses had deteriorated further. Despite
this, and the traditionally weaker second half
trading, the group sales level in the second half
year did remain similar to that of the first half.
The loss of the Supply and Fix sales had of
course been anticipated when the closure of
that business was announced in May 2002, but
beyond this, all three continuing businesses
contributed to the decline in sales. The
depressed manufacturing activity in the
Manchester ceramic and terrazzo factories,
consequent upon the lower sales, contributed
significantly to the operating losses.
“The most pressing issue in all the ongoing
operating businesses is to increase sales 
and it is to this end that resources are 
being concentrated, with the main driver 
being innovation”.
From left to right:
 ‘Domino’ mosaic
wall tiles.
 Hardwood
installation for
today’s lifestyle.
 Quiligotti Terrazzo
is ideal for
supermarket floors.
The ‘Pearlstone’ collection, launched Sept ‘02:
‘Jewels’ decoration contrasts with
stone/rose/cream/white checkerboard effect.
Mary-Lorraine Hughes
Group Chief Executive Pilkington’s Tiles Group plc Annual Report & Accounts 2003 07
Chief Executive’s Review Ceramics
From left to right:
 ‘Cairo’ feature 
strip for the 
Atalier range.
 Mosaic wall tiles 
in porcelain
stoneware.
 ‘Directions’ wall 
tiles collection.
In the second half of the year ceramic
sales maintained parity with the same
period in the previous year, compared to a
12% fall in the first half. This reflects some
of the planned remedial actions beginning
to take effect, albeit to date largely in
relation to sourced products, with which
the business has recently achieved notable
pockets of success. The focus now is
actively to grow sales of our own
manufactured products and so avoid the
under-recovery of overhead which
contributed to the operating loss of £1.6m
in this year.
The ceramic action plan, referred to in the
Interim Report last November, is being pursued
vigorously. Of the sales related initiatives, work
to develop activity with multiple retailers is most
advanced: declining accounts are being
reversed and new accounts opened. A pilot
project is currently underway, as a precursor to
a national programme, to raise the Pilkington’s
brand profile in the independent retail sector:
early feedback is encouraging. A new team is
dedicated to pursuing ‘new build’ opportunities.
Both new products and new people have been
introduced to support and drive these activities
during the second half of the year, including a
new sales director who joined the business in
April 2003. The rebuilding of sales is the
highest priority, despite the increasing
complexity of the routes to market and the
unrelenting downward pressure on prices.
A diverse range of new product collections has
been introduced over the past twelve months:
smaller wall tile for the kitchen and larger
format for bathrooms, with co-ordinating floor
tiles. New items within established ranges were
also launched at the Kitchen and Bathroom
Exhibition in London in May 2003, which was
acknowledged to be a first class showcase of
all Pilkington’s branded products. Further new
introductions are scheduled for the current year.
The need to improve manufacturing efficiency
and flexibility and to reduce inventory and
obsolescence is being driven by the transition
to ‘Lean’ principles. Considerable effort has
been concentrated on the various elements of
this programme at the Manchester factory, with
sustainable improvements finally becoming
apparent towards the year end. It was
regrettable that in order to align the cost base
with demand, a cost reduction programme 
last December meant the loss of over 40 
jobs at Manchester, which account for the
exceptional costs. The floor tile factory at Poole
continued to contribute positively to 
the ceramic division’s performance.
Proactive management of both the lifecycle of
products and the increasingly complex supply
chain are two important initiatives that support
the targeted improvements in manufacturing
and in sales.
‘The Limestone Collection’, launched Feb ‘03,
Mahogany strip with ivory and beige plains.
Ceramics
2003 2002
£’000 £’000
Sales 20,382 21,715
Operating (loss)/profit (1,377) 566
before exceptionals
Exceptional Items (206) (110)
Operating (loss)/profit (1,583) 456 08  Pilkington’s Tiles Group plc Annual Report & Accounts 2003
From left to right:
 Terrazzo floor at
Douglas Court
Shopping Centre, Cork.
 Use of Terrazzo at a
shopping centre.
 Water jet cutting of
Terrazzo can create
the most intricate
designs.
In the year sales of terrazzo fell by 33%,
leading to very depressed profitability. 
The second half of the year was particularly
disappointing, and entirely due to the poor
sales performance. None of the major
contractors, who the business supplies,
enjoyed an increase in their terrazzo
activity during the period of our financial
year. As reported at the interim stage, 
the reduced factory order book was in 
part due to exceptionally heavy demand 
in the fourth quarter of the previous
financial year.
An independent piece of market research has
been commissioned to establish customer
perception of the terrazzo product and its
market, and to identify potential future trends
and avenues for development. An additional
sales person has been recruited to enable our
approach to market to capitalise on the
research findings.
Innovative new products are finding receptive
audiences. Micro Terrazzo, which emulates
natural stone, is being well received, and new
slip resistant products for both internal and
external installation, are generating interest at
the market testing stage.
Complete customer satisfaction will be key to
maintaining market share when demand returns
and so work is also being done on both
process and plant to ensure the consistent
output of high quality product for which the
factory is known.
Chief Executive’s Review Terrazzo
Terrazzo
2003 2002
£’000 £’000
Sales 3,196 4,768
Operating profit 101 1,146
before exceptionals
Exceptional Items – –
Operating profit 101 1,146
Quiligotti terrazzo 
at Manchester Airport, Terminal 2. Chief Executive’s Review Access Flooring
From left to right:
 Quilfloor 600 access
flooring system:
during installation.
 Grintec: an exclusive
access flooring
system for external
applications.
 Sports hall hardwood
floor installed by
Access Flooring.
The decline in sales, and particularly 
the halving in profit, was due to the
increasingly keen competition in the sector
because of fewer contracts being available,
particularly larger sized projects. The
traditional steel-encapsulated product
came under particular pressure, especially
in the second half of the year, whereas
hardwood flooring installation, in contrast,
is a growing area of activity. An
installation service for other related
products is under consideration.
Sales, purchasing and operational aspects of
the business have all been subjected to close
scrutiny in an effort to maintain share and
brand equity. As in so many other industries,
the order book is becoming shorter which can
lead to the temptation to reduce its calibre.
However although margins have reduced 
during the past year, the business remains
sound and efficient.
Access Flooring
2003 2002
£’000 £’000
Sales 2,303 3,106
Operating profit 212 464
before exceptionals
Exceptional Items – –
Operating profit 212 464
Residential hardwood installation is increasingly in
demand from Quiligotti Access Flooring.
Pilkington’s Tiles Group plc Annual Report & Accounts 2003 09 10  Pilkington’s Tiles Group plc Annual Report & Accounts 2003
Chief Executive’s Review Supply & Fix
As expected, sales fell dramatically once
the announcement to withdraw from the
Supply & Fix business had been made last
May. There was an operating loss of
£224,000 in the year and linked to the
closure of the business were non-
operating exceptional costs of £188,000.
The well-managed closure programme has
proceeded to plan throughout the year and 
the last two major contracts are on schedule
and effectively complete. The collection 
of outstanding cash will be the only residual
activity during the current year as payments
become due.
The professionalism shown by everyone in this
business during the closure process is worthy
of special note and thanks.
Supply & Fix
2003 2002
£’000 £’000
Sales 1,603 4,239
Operating loss (224) (156)
before exceptionals
Exceptional Items – (54)
Operating loss (224) (210)
Quiligotti terrazzo at the Braehead Shopping &
Leisure Centre, Glasgow. 
From left to right:
 Dove Grey terrazzo at London 
Stanstead Airport. 
 Marbles black and white floor tiles from 
the ‘Porcelains’ range.
 Quiligotti terrazzo provides a seamless,
durable floor. Pilkington’s Tiles Group plc Annual Report & Accounts 2003 11
Chief Executive’s Review Conclusion
From left to right:
 Punctuation frieze with ivory and beige from
‘The Limestone Collection’, launched Feb ‘03.
 Intec special finish raised access flooring.
 Terrazzo floor at North Greenwich
Interchange, London.
The most pressing issue in all the ongoing
operating businesses is to increase sales
and it is to this end that resources are being
concentrated. The main driver is innovation:
new introductions, fuelled by both technical
and aesthetic developments, in the product
supply businesses and new services in the
installation business. To support this,
marketing efforts are being heightened with
new communication tools being developed
for every sector. 
Despite the successful introduction of a
sourced ceramic offer in the past year, the
performance of our own UK manufacturing
resources is extremely important: this still
represents nearly 70% of our sales as a Group.
The various initiatives on which we have
embarked are scheduled to bear fruit at various
stages of the coming year. Within each business
there is a set of clearly established plans and a
tangible determination to achieve them.
Mary-Lorraine Hughes
Group Chief Executive
New Matrix mingle in blue (launched May 2003),
with Royal Blue and Diamond White plain colours. 12  Pilkington’s Tiles Group plc Annual Report & Accounts 2003
Financial Review 
Loss before Exceptional Costs and Tax
The Group made a loss before exceptional
costs, interest and tax of £1.9m compared to
a profit of £1.4m in the previous period. This
was largely due to reductions in margins in
Ceramics because of changes in sales mix and
a loss of overhead recovery associated with
lower factory throughputs. Terrazzo and
Access Flooring also suffered reductions in
activity, with a consequential detrimental
impact on profitability. 
Interest costs of £0.4m (2002: £0.4m) benefited
from a reduction in interest rates during the
year, offset by increases in debt levels.
Exceptional Costs
Exceptional costs include:- 
• £206,000 of redundancy costs resulting from
the cost reduction exercise in Ceramics,
which was noted in our interim statement, and
• £188,000 related to the closure of the
Supply and Fix business.
Pension Fund
One of the most significant issues facing the
Group, in common with many other businesses,
is the deficit in the pension fund. 
The size of the deficit and the inherent
uncertainties associated with this type of
pension arrangement have led the Board to
decide that in the interests of the Company and
the interests of the members of the scheme, it
was prudent to balance those risks and
uncertainties and to propose the changes
highlighted in the Chairman’s Statement. Further
information can be found in note 20 on pages
39 to 41.
From left to right:
 Mosaic strip with pearl and pebble plain tiles
from the ‘Naturals’ collection, launched 
July ‘02.
 Another Intec special finish access floor. 
 Pilkingtons Dorset floor tile with universal
metricore fittings.
Mark Hesketh 
Group Finance Director and
Company Secretary
Turnover by division
“One of the most significant issues facing the
Group, in common with many other
businesses, is the deficit in the pension fund”.
Ceramics £20.4m
Terrazzo £3.2m
Access Flooring £2.3m
Supply & Fix £1.6m Pilkington’s Tiles Group plc Annual Report & Accounts 2003 13
Tax
The tax credit of £0.77m at 28.6% of the loss before tax is marginally lower than the standard rate of 30% due to a number of factors which are fully
explained in note 7 on page 32.
Capital Structure
The Group’s capital structure as at 31 March is as follows:
2003 2002
£’000 £’000
Net debt
Finance leases and hire purchase contracts 304 598
Cash at bank (1) (500)
Bank overdrafts 1,660 –
Bank loans 3,250 3,000
5,213 3,098
Shareholders’ funds
Equity 12,238 14,163
17,451 17,261
The closing level of debt is £5.2 million. Of this £3.25 million is in respect of a five year term loan to finance the investment in the small tile kiln. A
draw-down of £1.25 million, as flagged in last year’s Annual Report, was made to fund the final payments on the kiln, and repayments of £1.0 million
have been made against that loan in the period. The Group also has a working capital facility of £3.2 million. Both the term loan and working capital
facilities carry an interest cost related to base rates. At 31 March 2003 £0.3 million of debt related to 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 deal is fixed but the interest
payment reduces annually as payments are made.
Due to the current trading position the Directors do not recommend the payment of a dividend.
Investment and Use of Funds
Following the completion of the small tile kiln last year and excluding the final payment of £1.3 million on this project, capital expenditure reduced
again to £0.5 million (2002 : £0.8 million). This was spread over a number of projects, the largest of which related to cost savings in manufacturing
and additional warehouse space, following withdrawal from rented storage adjacent to our site.
Gearing has increased to 42.6% from 21.9% due principally to the payment of the final monies due on the small tile kiln and the disappointing trading
result. It is anticipated that capital expenditure will remain well below depreciation for the foreseeable future and we expect gearing to reduce in the
period to 31 March 2004.
Reorganisation
The capital restructuring which was part complete at last year end has now been completed following the AGM and approval by the courts. The impact
of this can be seen in note 22 to the accounts on page 42. 14  Pilkington’s Tiles Group plc Annual Report & Accounts 2003
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 a limited number of forward currency contracts. The purpose is to manage the currency
risks arising from the Group’s operations.
There were no rate cap transactions or forward currency contracts outstanding at the year end, as the Group did not consider it appropriate given the
Group’s current level of exposure.
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 fluctuations. 
Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of overdrafts, 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. 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.
Mark Hesketh 
Group Finance Director and Company Secretary Pilkington’s Tiles Group plc Annual Report & Accounts 2003 15
Directors and Advisers
Tony Palmer
Non-Executive Director
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 66.
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 55.
Mary-Lorraine Hughes
Executive Director
Appointed Group Chief Executive on 1 January 2000, Mary-Lorraine was
previously Chief Executive of Portmeirion Potteries PLC and prior to that held
a number of divisional Chief Executive positions within Courtaulds Textiles
plc. She began her career managing her own retail business. Currently, Mary-
Lorraine is also a non-executive director of Staffordshire Building Society. 
Age 51.
Mark Hesketh
Executive Director
Appointed Group Finance Director in September 2001, Mark qualified 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 44.
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
Arbuthnot Securities
2 Lambeth Hill,
London EC4V 4GG
Registrar
Computershare Services plc,
PO Box 82, The Pavilions,
Bridgwater Road,
Bristol BS99 7NH
From left to right:
H.A. (Tony) Palmer
Non-Executive Chairman
David Booth 
Non-Executive Director
Mary-Lorraine Hughes
Group Chief Executive
Mark Hesketh 
Group Finance Director  The Directors present their report and accounts for the year ended 31 March 2003.
Accounts and dividends
The loss for the year amounts to £1,925,000 (2002 – profit of £656,000).
The Directors do not recommend a final ordinary dividend (2002 :Nil). No interim dividend was paid. (2002 : Nil).
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 of
terrazzo floor tiles and the installation of raised access flooring. The Group was involved in the installation of terrazzo floor
tiles but by the end of the year had substantially withdrawn from that business.
A review of business and an overview of future developments have been included in the Chief Executive’s Review on
pages 6 to 11.
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 2003 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 2003 1 April 2002
Beneficial Beneficial
H A (Tony) Palmer 112,346 112,346
D J Booth 3,440,508 3,440,508
M-L Hughes 366,000 366,000
M J Hesketh 196,560 196,560
The Director retiring by rotation is M-L Hughes who, being eligible, offers herself for re-election.
Details of Directors’ interest in share options under the Executive Share Option Scheme are provided in the Report on
Directors’ Remuneration on pages 20 to 21.
There have been no changes to the Directors’ interests between 31 March 2003 and 30 May 2003.
Substantial shareholdings
As at 30 May 2003 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 %
D. Cicurel 21,700,000 11.73
J.J. Gallagher Limited 16,220,000 8.77
Stable Management Limited 10,200,000 5.52
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 charitable contributions during the year. No political contributions were made
during the year.
Directors’ Report
16 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 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 continues to improve its practice of keeping
them informed on matters affecting them as employees and on various matters affecting the performance of the Group.
Health and Safety Committees are in place at the Group’s factories.
A system of regular team briefing has been in place throughout the current year. Employees participate directly in the
success of the business through the Group’s Save As You Earn share scheme.
Annual general meeting
Resolution 4 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 £3,080,000 which represents
approximately 33% of the nominal amount of issued ordinary share capital of the Company as at 30 May 2003. 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 4 will be proposed as an ordinary resolution.
Resolution 5 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 30 May 2003. 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 5 will be proposed as a special resolution.
Resolution 6 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 effect 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 30 May 2003), 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. Resolution 6 will be proposed as a special resolution.
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
30 May 2003
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  17 The Company is committed to high standards of corporate governance. The Board is accountable to the Company’s
Shareholders for good corporate governance. As a company whose shares are traded on the Alternative Investment
Market, the Company is not required to comply with the Combined Code. The Board uses the provisions of the Code as a
guide, where it considers them appropriate to the circumstances of the Company. 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 15. 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
22.
The Board meets every month, reviewing trading performance, ensuring adequate funding, setting and monitoring
strategy, examining major acquisition possibilities and reporting to Shareholders. 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 has 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 20 to 21 .
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 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 financial 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 financial controls are as follows:
Corporate Governance
18 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 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.
Communication with investors
The Directors, where appropriate, make one to one presentations after issue of full year and interim results to investors, not
exclusively existing Shareholders. Visits to our sites are also encouraged and some investors 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 investors, seek to understand the criteria they expect from their investments and look for
constructive feedback on their views of the Company.
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.
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  19 As a company whose shares are traded on the Alternative Investment Market, the Company is not required to, and does
not, comply with Schedule 7A of the Companies Act 1985. The following disclosures are made on a voluntary basis.
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. 
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. 
Pension Entitlements
One executive Director participates 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 2003 (note [2]) (note [3]) 31 March 2003
£’000 £’000 £’000 £’000
Mary-Lorraine Hughes 51 7.2 3.1 10.2
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.
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.
Report on Directors’ Remuneration
20 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 Pension Entitlements (continued)
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 table.
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 does not participate in any of the Company pension schemes and does not receive any contribution to
personal pension arrangements. D J Booth, who is a pensioner of the Group scheme, no longer receives any contribution
to personal pension arrangements.
Directors’ remuneration
Salary/ Total Total Pension payments
fees Benefits Bonuses 2003 2002 2003 2002
£ £ £ £ £ £ £
Executive
M-L Hughes 134,167 12,397 – 146,564 142,819 5,217 5,200
M J Hesketh 90,002 8,048 – 98,050 55,975 4,367 1,417 
Non-executive
H A (Tony) Palmer 30,000 – – 30,000 32,500 – –
D J Booth 20,000 – – 20,000 82,213 – –
274,169 20,445 – 294,614 313,507 9,584 6,617
Of the above amount paid to DJ Booth in the prior year, £70,547 relates to his service as an executive director until
3 September 2001.
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
M J Hesketh 23 Nov. 01 750,000 23 Nov. 04 23 Nov. 11 5.00p
23 Nov. 01 500,000 23 Nov. 04 22 Nov. 08 5.00p
No options were granted to or exercised by directors during the year. Options over 1,292,371 shares held by D J Booth at
31 March 2002 lapsed during the year following his retirement as an executive director.
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 3.12p to 5.75p, and was 3.25p
at 31 March 2003.
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  21 Directors’ responsibilities
Company law requires the Directors to prepare financial statements 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
financial statements, 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 financial statements. 
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 financial statements 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 financial statements.
Statement of Directors’ Responsibilities in Relation to the Financial Statements
22 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 We have audited the Group’s financial statements for the year ended 31 March 2003 which comprise the Consolidated
Profit and Loss Account, Consolidated Statement of Total Recognised Gains and Losses, Reconciliation of Group
Shareholders’ Funds, 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.
This report is made solely to the company’s members, as a body, in accordance with Section 235 of the Companies Act
1985. Our audit work has been undertaken so that we might state to the company’s members those matters we are
required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors are responsible for preparing the Annual Report, including the financial statements which are required to be
prepared in accordance with applicable United Kingdom law and accounting standards as set out in the Statement of
Directors’ Responsibilities in relation to the financial statements.
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 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 Financial Highlights, Brand Profiles, Chairman’s Statement, Chief
Executive’s Review, Financial Review, Directors’ Report, Corporate Governance Statement, Report on Directors
Remuneration, Five Year Financial Summary and Notice of Annual General Meeting. 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 2003 and of the loss 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
30 May 2003
Independent Auditors Report
to the Members of Pilkington’s Tiles Group plc
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  23 2003 2003 2003 2002 2002 2002
BeforeExceptional Total BeforeExceptional Total
exceptional costs exceptional costs
costs (Note 4) costs (Note 4)
Notes £’000 £’000 £’000 £’000 £’000 £’000
Turnover:
Continuing operations 2 25,771 – 25,771 29,240 – 29,240
Discontinued operations 2 1,603 – 1,603 4,239 – 4,239
2 27,374 – 27,374 33,479 – 33,479
Changes in stocks of finished goods and 
work in progress 50 – 50 244 – 244
Raw materials and consumables 9,170 – 9,170 9,624 – 9,624
Other external charges 8,604 – 8,604 8,897 54 8,951 
Staff costs 5 9,341 206 9,547 11,153 110 11,263
Depreciation of tangible fixed assets 2,056 – 2,056 2,123 – 2,123
Amortisation of goodwill 46 – 46 47 – 47
29,267 20629,47332,088 16432,252
Operating (loss)/profit:
Continuing operations 2 (1,669) (206) (1,875) 1,547 (110) 1,437
Discontinued operations 2 (224) – (224) (156) (54) (210)
2 (1,893) (206) (2,099) 1,391 (164) 1,227
Loss on closure of 
discontinued operations – (188) (188) –––
Interest payable and
similar charges 6 (408) – (408) (387) – (387)
(Loss)/profit on ordinary 
activities before taxation 2&3 (2,301) (394) (2,695) 1,004 (164) 840
Taxation 7 676 94 770 (233) 49 (184)
(Loss)/profit for the financial year (1,625) (300) (1,925) 771 (115) 656
Dividends
– ordinary dividend paid 9 – – 
– ordinary dividend proposed 9 – – 
(Loss)/profit transferred to reserves 22 (1,925) 656 
(Loss)/Earnings per ordinary share
– basic 10 (0.88p) (1.04p) 0.42p 0.35p
– diluted 10 (0.88p) (1.04p)0.42p 0.35p
A statement of movements on reserves is set out in Note 22.
There is no difference between the results stated above and those under an historical cost basis.
Consolidated Profit and Loss Account
for the year ended 31 March 2003
24 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 2003 2002
£’000 £’000
(Loss)/profit for the financial year (1,925) 656
Revaluation of freehold property – 471
Total recognised gains and losses relating to the year (1,925) 1,127
Reconciliation of Group Shareholders’ Funds
2003 2002
£’000 £’000
Total recognised gains and losses (1,925) 1,127 
Shareholders’ funds at 1 April 14,163 13,036
Shareholders’ funds at 31 March 12,238 14,163
Consolidated Statement of Total Recognised Gains and Losses
for the year ended 31 March 2003
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  25 Group Company
2003 2002 2003 2002
Notes £’000 £’000 £’000 £’000
Fixed assets:
Intangible assets 11 790 836 – –
Tangible assets 12 14,904 16,390 – –
Investments 13 – – 10,490 10,490
15,694 17,226 10,490 10,490
Current assets:
Stocks 14 5,083 5,044 – –
Debtors 15 4,368 4,785 11,174 11,785
Cash at bank and in hand 1 500 – –
9,452 10,329 11,174 11,785
Creditors:
Amounts falling due within one year 16 (10,093) (10,121) – –
Net current (liabilities)/assets (641) 208 11,174 11,785
Total assets less current liabilities 15,053 17,434 21,664 22,275
Creditors:
Amounts falling due after more than one year 17 (2,315) (2,178) – –
Provisions for liabilities and charges 18 (500) (1,093) – –
Net assets 12,238 14,163 21,664 22,275
Capital and reserves:
Called up share capital 21 9,247 9,247 9,247 9,247
Share premium account 22 – 25,429 – 25,429
Capital redemption reserve 22 – 645 – 645
Special reserve 22 13,130 – 13,130 –
Merger reserve 22 (1,001) (1,001) – –
Revaluation reserve 22 1,581 1,581 – –
Profit and loss account 22 (10,719) (21,738) (713) (13,046)
Equity Shareholders’ funds 12,238 14,163 21,664 22,275
These financial statements were approved by the Board on 30 May 2003.
Signed on behalf of the Board
M J Hesketh
Director
Balance Sheets
as at 31 March 2003
26 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 2003 2002
£’000 £’000 £’000 £’000
Cash inflow from operating activities (Note 23) 211 2,927
Returns on investment and servicing of finance:
Interest paid (321) (352)
Interest element of finance lease rental payments (36) (63) 
Net cash outflow from returns
on investments and servicing of finance (357) (415)
Taxation:
UK corporation tax paid (79) (69)
UK corporation tax refunded – 536 
Net tax (paid)/refunded (79) 467
Capital expenditure:
Payments to acquire tangible fixed assets (1,774) (841)
Receipts from sales of tangible fixed assets 19 9
Net cash outflow from investing activities (1,755) (832) 
(1,980) 2,147
Equity dividends paid – –
Cash (outflow)/inflow before financing (1,980) 2,147
Financing:
Capital element of finance lease rental payments (429) (367) 
New bank loans 1,250 3,000
Repayment of bank loans (1,000) –
Net cash (outflow)/inflow from financing (179) 2,633
(Decrease)/increase in cash (Note 23) (2,159) 4,780
Consolidated Cash Flow Statement
for the year ended 31 March 2003
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  27 1 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 have been prepared in accordance with applicable Accounting Standards in the United Kingdom.
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 FRS 10. 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, associate 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
All fixed assets are initially recorded at cost. Freehold land and buildings are revalued to their existing use value as at
the balance sheet date.
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.
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 2003
28 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 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 based on tax rates and laws enacted
or substantively enacted at the balance sheet date. 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 the useful
economic life of the asset, 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.
Pension costs are accounted for on the basis of charging the expected cost of providing pensions over the period
during which the Group benefits from the employees’ services. The effects of variations from regular cost are spread
over the expected average remaining service lives of members of the scheme.
The Group also operates a defined contribution scheme. Contributions are charged to the profit and loss account as
they become payable in accordance with the rules of the scheme.
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  29 2 Segmental information
The analysis of sales by business group and geographical area and of profit or loss before taxation and net assets by
business group is set out below:
2003 2002
£’000 £’000
(a) Analysis of sales by business group 
Continuing operations:
Terrazzo 3,196 4,768
Raised access flooring 2,303 3,106
Ceramics 20,382 21,715
Inter Company sales (110) (349)
25,771 29,240
Discontinued operations:
Supply & fix 1,603 4,239
Total Sales 27,374 33,479
2003 2002
£’000 £’000
(b) Analysis of sales by destination 
UK & Republic of Ireland 26,535 32,118
Other Europe 531 762
Rest of the world 308 599
Total Sales 27,374 33,479
All sales originate from the United Kingdom.
2003 2002
£’000 £’000
(c) Profit/(loss) before tax by business group
Continuing operations:
Terrazzo 101 1,146
Raised access flooring 212 464
Ceramics (1,377) 566
Central costs (605) (629)
(1,669) 1,547
Discontinued operations:
Supply & fix (224) (156)
(1,893) 1,391
Exceptional costs (394) (164)
(2,287) 1,227
Finance costs (408) (387)
(Loss)/profit before taxation (2,695) 840
Of the exceptional costs of £394,000 in 2003 operating exceptionals of £206,000 relate to ceramics and non-
operating exceptionals of £188,000 to supply and fix. (2002: £110,000 relates to ceramics and £54,000 to supply and
fix).
Notes to the Accounts
for the year ended 31 March 2003
30 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 2 Segmental information (continued)
2003 2002
£’000 £’000
(d) Net assets (all UK) by business group
Continuing operations:
Terrazzo 2,798 3,245
Raised access flooring 198 171
Ceramics 14,942 14,844
17,938 18,260
Discontinued operation:
Supply & fix 109 444
Net operating assets 18,047 18,704
Tax and other corporate items (596) (1,443)
Net debt (5,213) (3,098)
Net assets 12,238 14,163
3 (Loss)/profit on ordinary activities before taxation
(a) This is stated after charging:
2003 2002
£’000 £’000
Depreciation and amounts written off tangible fixed assets:
– owned 1,866 1,950
– held under finance leases and hire purchase contracts 190 173
Hire of plant and machinery under operating leases 235 273
Auditors’ remuneration 42 40
Auditors’ non audit fees 56 32
(b) Operating costs comprise: 
2003 2002 
Continuing Discontinued Total Continuing Discontinued Total
£’000 £’000 £’000 £’000 £’000 £’000
Changes in stocks of finished
goods and w.i.p. 35 15 50 190 54 244
Raw material 8,517 653 9,170 7,828 1,796 9,624
Other external charges 8,428 176 8,604 8,592 359 8,951
Staff cost 8,593 954 9,547 9,028 2,235 11,263
Depreciation 2,027 29 2,056 2,078 45 2,123
Amortisation 46 – 46 47 – 47 
27,646 1,827 29,473 27,763 4,489 32,252
4 Exceptional costs
Operating exceptional costs comprise:
2003 2002 
Continuing Discontinued Total Continuing Discontinued Total
£’000 £’000 £’000 £’000 £’000 £’000
Provision against contract debts – – – – 54 54
Redundancy costs 206 – 206 110 – 110
206 – 206 110 54 164
Redundancy costs in both years related to the reduction of production facilities following installation of new production
capacity. The provision against contract debts in 2002 related to additional items identified following the fundamental
review of the business in the previous year.
Non-operating exceptional costs in 2003 of £188,000 related to the closure of the supply and fix activity.
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  31 5 Staff costs
Particulars of employees (including executive Directors) are as follows:
2003 2002
£’000 £’000
Wages and salaries 8,242 9,871
Redundancy costs 250 110 
Social security costs 588 714
Other pension costs 511 568
9,591 11,263
The average monthly number of persons employed by the Group during the year was as follows:
2003 2002
No. No.
Production and distribution 279 312
Contract work 23 38
Sales and administration 89 97
391 447 
Details of Directors’ remuneration including pension entitlements and share options are included in the Report on
Directors Remuneration on pages 20 to 21.
6 Finance costs
2003 2002
£’000 £’000
On bank loans and overdrafts 372 324 
Finance leases 36 63
408 387
7 Tax on (loss)/profit on ordinary activities
a) Analysis of the (credit)/charge in the year
2003 2002
£’000 £’000
Current tax:
UK corporation tax on (losses)/profits of the year (101) 254
Adjustments in respect of prior years (76) (184)
Total current tax (note 7b) (177) 70
Deferred tax:
Origination and reversal of timing differences (note 18) (593) 114
Tax on (loss)/profit on ordinary activities (770) 184 
Notes to the Accounts
for the year ended 31 March 2003
32 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 7 Tax on (loss)/profit on ordinary activities (continued)
b) Factors affecting the tax charge for the year
The tax credit assessed for the period is lower than the standard rate of corporation tax in the UK (30%). The differences
are explained below.
2003 2002
£’000 £’000
(Loss)/profit on ordinary activities before tax (2,695) 840
(Loss)/profit multiplied by the standard rate of corporation tax
in the UK of 30% (809) 252
Effects of:
Expenses not deductible for tax purposes 47 111
Captial allowances not claimed 535 –
Capital allowances in excess of depreciation – (104)
Short term timing differences (2) (10)
Adjustment in respect of prior periods (76) (184)
Losses arising the year not relievable against current tax 128 –
Other differences – 5
Current tax (credit)/charge for the year (177) 70
c) Factors that may affect future tax charges
Based on current 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 £830,000 (2002 : £668,000). As a
result of the closure of 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 of approximately £450,000 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 £611,000 (2002 – loss of £16,670,000) before
deducting dividends.
9 Dividends
2003 2002
£’000 £’000
Equity dividends on ordinary shares:
– interim paid Nil (2002 : Nil) – –
– final proposed Nil (2002 : Nil) – – 
– – 
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  33 10 (Loss)/earnings per ordinary share
2003 2002
Pence Pence
(Loss)/earnings per share:
(Loss)/Earnings per share before exceptional costs (0.88) 0.42
Attributable to exceptional costs (0.16) (0.07)
(Loss)/Earnings per share (1.04) 0.35
Diluted (loss)/earnings per share:
(Loss)/earnings per share before exceptional costs (0.88) 0.42
Attributable to exceptional costs (0.16) (0.07)
(Loss)/earnings per share (1.04) 0.35 
£’000 £’000
The calculation of (loss)/earnings per share is based on:
(Loss)/profit on ordinary activities after taxation before exceptional costs (1,625) 771
Exceptional costs (300) (115)
(Loss)/profit on ordinary activities after taxation (1,925) 656
Weighted average number of shares used in basic earnings per share: 
Thousands Thousands
Weighted average for the year 184,949 184,949
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. 
There are no dilutive shares, hence the diluted earnings per share is based on the result for the year and on the
number of ordinary shares as shown above:
11 Intangible fixed assets
£’000
Goodwill
Cost:
Beginning and end of year 990
Amortisation:
Beginning of year 154 
Provided during the year 46
End of year 200
Net book value:
Beginning of year 836
End of year 790 
Goodwill arose on the acquisition of the business of Woolliscroft Tiles and is being amortised evenly over the
Directors’ estimate of its assumed useful economic life of 20 years.
Notes to the Accounts
for the year ended 31 March 2003
34 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 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 4,271 21,313 280 25,864
Additions 127 323 138 588
Disposals – (964) (154) (1,118)
End of year 4,398 20,672 264 25,334
Depreciation:
Beginning of year 237 9,135 102 9,474
Charge for year 64 1,904 88 2,056
Disposals – (964) (136) (1,100)
End of year 301 10,075 54 10,430 
Net book value:
Beginning of year 4,034 12,178 178 16,390
End of year 4,097 10,597 210 14,904
Net book value of leased assets included in the above:
Beginning of year – 1,380 – 1,380
End of year – 1,207 119 1,326
The net book value of land, which is not depreciated, is £2,728,000 (2002 – £2,728,000).
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 2003 is £2,817,000 (2002: £2,690,000), and
the net book value on the historical cost basis at 31 March 2003 is £2,516,000 (2002: £2,453,000).
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
The following are included in the net book value of fixed asset investments:
Company
£’000
Investments in subsidiary undertakings
at 31 March 2002 and 2003 10,490
Subsidiary companies:
The principal subsidiaries at 31 March 2003, all of which are wholly owned and incorporated in England and Wales, are:
Company Business
Pilkington’s Tiles Limited Manufacture of ceramic tiles and terrazzo tiles
Quiligotti Access Flooring Limited Installation of access floors
Quiligotti Contracts Limited Installation of terrazzo tiles
Quiligotti Terrazzo Limited Non-trading (previously the manufacture of terrazzo tiles)
Woolliscroft Tiles Limited Non-trading (previously the manufacture of ceramic floor tiles)
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  35 14 Stocks
Group
2003 2002
£’000 £’000
Raw materials and consumables 516 427 
Work in progress 406 519
Finished goods and goods for resale 4,161 4,098
5,083 5,044
The Company held no stocks as at 31 March 2003 and 31 March 2002.
15 Debtors
Group Company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
Amounts falling due within one year:
Trade debtors 3,833 4,325 – – 
Amounts owed by Group undertakings – – 11,174 11,785
Other debtors 1 7 – –
Prepayments and accrued income 534 453 – –
4,368 4,785 11,174 11,785
The Group and Company have no debtors falling due after more than one year.
16 Creditors: Amounts falling due within one year
Group
2003 2002
£’000 £’000
Bank overdraft 1,660 – 
Bank loans (Note 17) 1,000 1,000
Obligations under finance leases 
and hire purchase contracts 239 420
Trade creditors 4,136 5,214
Corporation tax 96 350 
Other taxes and social security costs 963 1,252
Other creditors and accruals 1,999 1,885
10,093 10,121
The Group has granted a fixed and floating charge on all assets to secure bank loans and overdrafts.
The Company had no creditors falling due within one year at 31 March 2003 and 31 March 2002.
Notes to the Accounts
for the year ended 31 March 2003
36 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 17 Creditors: Amounts falling due after more than one year.
Group
2003 2002
£’000 £’000
Bank Loan 2,250 2,000
Obligations under finance leases and hire purchase contracts 65 178
2,315 2,178
Obligations under finance leases and hire purchase contracts are repayable as follows:
Group
2003 2002
£’000 £’000
Within one year 246 447
Between one and two years 52 181
Between two and five years 20 –
318 628
Less: finance charges allocated to future periods (14) (30)
304 598 
Finance leases and hire purchase contracts are analysed as follows:
Due within one year 239 420
Due after one year 65 178
304 598
The bank loan is payable as follows:
Within one year 1,000 1,000 
Between one and two years 1,000 1,000
Between two and five years 1,250 1,000 
3,250 3,000
Less included within amounts due within one year (1,000) (1,000) 
2,250 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 2003 and 31 March 2002.
18 Provisions for liabilities and charges
Provisions for liabilities and charges comprise:
Group
2003 2002
£’000 £’000
Deferred taxation 500 1,093 
Deferred taxation has been provided as follows
Group
2003 2002
£’000 £’000
Excess of tax allowances over book depreciation of fixed assets 611 1,126 
Tax losses carried forward (79) –
Other timing differences (32) (33)
500 1,093
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  37 18 Provisions for liabilities and charges (continued)
The movement on deferred taxation comprises:
Group
2003
£’000
Beginning of year 1,093
Credited to profit and loss account: (593)
End of year 500
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 14. 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
2003
Total (all sterling) 5,214 4,910 304
2002
Total (all sterling) 3,598 3,000 598
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 1.2
years (2002: 1.5 years) at a weighted average interest rate of 8.6% (2002: 7.8%).
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)
2003 2002
£’000 £’000
Euro (667) (539)
Australian Dollars – 24
US Dollars (43) (77)
Total (710) (592)
Maturity of financial liabilities
The maturity profile of the Group’s financial liabilities at 31 March was as follows:
2003 2002
£’000 £’000
In one year or less, or on demand 2,899 1,420
In more than one year, but not more than two 1,048 1,178
In more than two years, but not more than five 1,267 1,000
5,214 3,598
Notes to the Accounts
for the year ended 31 March 2003
38 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 19 Derivatives and other financial instruments (continued)
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:
2003 2002
£’000 £’000
Expiring in one year or less 1,541 3,200
Expiring between two and five years – 1,250
1,541 4,450
Fair values of financial assets and financial liabilities
In the opinion of the Directors the fair value, at 31 March 2003 and 31 March 2002, of all primary financial
instruments, being short and long term borrowings and cash, approximates to the carrying amount. The book values
of derivatives and financial instruments are nil at both dates.
20 Pensions
The Group provides pension benefits in the UK through the Pilkington’s Tiles Pension Scheme (‘the Scheme’). The
Scheme has a final salary section and money purchase sections. The final salary section is closed to new members.
Accordingly, over time, it is expected that the overall age profile of the active membership of the section will increase
and the current service cost calculated under the Projected Unit method will increase. The money purchase section is
open to new members. 
The pension cost charged to profit and loss for the year amounted to £510,945 (2002: £489,341).
(a) Final salary
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 (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 independent
qualified actuaries on the basis of valuations using the projected unit method. 
The FRS17 disclosures have been based on a 30 November 2002 interim valuation updated to 31 March 2003 by a
qualified independent actuary. The major assumptions used by the actuary were:
At 31 March 2003 At 31 March 2002
Discount rate 5.5% 6.1%
Rate of increase in salaries 4.1% 4.5%
Rate of increase in pensions in payment 3.3% 3.3%
Inflation assumption 2.6% 3.0%
The assets are invested with Merrill Lynch Investment Managers and Schroder Investment Management Limited.
The assets in the Scheme and the expected rate of return were:
31 March 2003 31 March 2002
Long-term expected Long-term expected 
Market value rate of return Market value rate of return
£’000 £’000
Equities 11,471 7.5% 15,840 8.3%
Bonds 2,147 4.5% 2,294 5.3%
Property 402 7.5% 452 8.3%
Cash 589 0.0% 447 0.0%
Total 14,609 19,033
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  39 20 Pensions (continued)
The following amounts were measured in accordance with the requirements of FRS 17.
31 March 2003 31 March 2002
£’000 £’000
Total market value of Scheme assets 14,609 19,033
Present value of Scheme liabilities (24,919) (21,360)
Deficit in the Scheme (10,310) (2,327)
Related deferred tax asset 3,093 698
Net pension liability (7,217) (1,629)
Had the above amounts been recognised in the financial statements, the company’s net assets and profit and loss
reserves would be as follows:
31 March 2003 31 March 2002
£’000 £’000
Net assets excluding pension liability 12,238 14,163
Pension liability (7,217) (1,629)
Net assets including pension liability 5,021 12,534
Profit and loss reserve excluding pension liability (10,719) (21,738)
Pension liability (7,217) (1,629)
Profit and loss reserve including pension liability (17,936) (23,367)
The following amounts would have been recognised in the performance statements in the year to 31 March 2003
under the requirements of FRS 17:
Analysis of operating profit:
£’000
Current service cost 611
Total operating charge 611
Analysis of other financial income:
£’000
Expected return on pension scheme assets 1,474
Interest on pension scheme liabilities (1,303)
Net return 171
Statement of total recognised gains and losses (STRGL): £’000
Actual return less expected return on pension scheme assets (5,950)
Experience gains and losses arising on the scheme liabilities (613)
Changes in the assumptions underlying the present value of the scheme’s liabilities (1,406)
Actuarial loss recognised in STRGL (7,969)
Movement in surplus during the year
£’000
Deficit in scheme at beginning of the year (2,327)
Movement in year:
Current service cost (611)
Employer contributions 426
Other finance income 171
Actuarial loss (7,969)
Deficit in scheme at end of year (10,310)
Notes to the Accounts
for the year ended 31 March 2003
40 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 20 Pensions (continued)
The history of experience gains and losses is:
Difference between the expected and actual return on scheme assets:
amount (£’000s) (5,950)
percentage of scheme assets at end of year -41%
Experience gains and losses on scheme liabilities:
amount (£’000s) (613)
percentage of scheme liabilities at end of year -2%
Total amount recognised in statement of total recognised gains and losses:
amount (£’000s) (7,969)
percentage of scheme liabilities at end of year -32%
(b) Defined contribution:
The Pilkington’s Tiles Pension Scheme also includes a section for a defined contribution pension scheme. The assets
of the schemes 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 schemes during the year and amounted to £79,416 (2002 –
£76,791). 
Post Balance Sheet Event
As a result of the deficit noted above, the Board is proposing certain changes to the final salary section of the pension
scheme. These proposals are designed to maintain the Group’s commitment to fund the existing accrued benefits of
the members and to control the future cost of the pension scheme. 
The Group will be entering into consultation, regarding the proposed changes, with the members of the final salary
section of the pension scheme. The impact of the proposed changes may well be to increase substantially the Group’s
total pension scheme contributions over the level of the past year.
21 Called-up share capital
2003 2002 2003 2002
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 6,348,561 1,194,221
Lapsed (1,301,371) (228,893)
End of year 5,047,190 965,328
At 31 March 2003 options to purchase ordinary shares are outstanding as follows:
Date of Number of Date of
grant shares Price exercise
Executive Share 20.07.94 20,000 18.50p 20.07.97 to 20.07.04
Option Scheme 22.07.97 242,424 24.75p 22.07.00 to 21.07.07
22.07.97 957,576 24.00p 22.07.00 to 21.06.04
06.07.99 677,962 14.75p 06.07.02 to 05.07.09
06.07.99 305,083 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 21.10.05
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 01.11.98 965,328 10.40p 01.11.03
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  41 22 Reserves
The movement on reserves in the year is as follows:
Capital Profit &
Share redemption Special Merger Revaluation Loss
Group premium reserve reserve reserve Reserve account
£’000 £’000 £’000 £’000 £’000 £’000
At beginning of year 25,429 645 – (1,001) 1,581 (21,738)
Capital reorganisation (25,429) (645) 13,130 – – 12,944
Loss for the
financial year – – – – – (1,925)
At end of year – – 13,130 (1,001) 1,581 (10,719)
The cumulative amount of goodwill written off at 31 March 2003 is £25,227,000 (2002 – £25,227,000).
Capital
Share redemption Special Profit & Loss
Company premium reserve reserve account
£’000 £’000 £’000 £’000
At beginning of year 25,429 645 – (13,046)
Capital reorganisation (25,429) (645) 13,130 12,944 
Loss for the
financial year – – – (611)
At end of year – – 13,130 (713) 
The Capital reorganisation relates to the cancellation of the share premium account which was approved at the
last AGM and received court approval on 27 September 2002. The court was asked only to approve the transfer of
sufficient of the share premium account to Profit and Loss to clear the deficit existing at 27 September 2002. The
balance was transferred to a special reserve.
23 Cash flow information
(a) Reconciliation of operating profit to net cash inflow from operating activities:
2003 2002
£’000 £’000
Operating (loss)/profit (2,099) 1,227
Depreciation charges 2,056 2,123
(Profit)/loss on sale of fixed assets (1) 33
Amortisation of goodwill 46 47
(Increase)/decrease in stocks (39) 232
Decrease in debtors 417 803
Decrease in creditors (169) (1,538)
Net cash inflow from operating activities 211 2,927
(b) Reconciliation of net cash flow to movement in net debt:
2003 2002
£’000 £’000
(Decrease)/increase in cash in the period (2,159) 4,780
Cash outflow from repayment of finance leases 429 367
Cash outflow from repayment of bank loans 1,000 –
Cash inflow from new bank loans (1,250) (3,000) 
Change in net debt resulting from cashflows (1,980) 2,147
Other non-cash movements (135) –
Movement in net debt in the period (2,115) 2,147 
Net debt at 1 April (3,098) (5,245)
Net debt at 31 March (5,213) (3,098)
Notes to the Accounts
for the year ended 31 March 2003
42 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 23 Cash flow information (continued)
(c) Analysis of net debt:
Other non-cash
Opening Cash Flows movement Closing
£’000 £’000 £’000 £’000
Cash at bank and in hand 500 (499) – 1 
Overdraft – (1,660) – (1,660)
500 (2,159) – (1,659)
Term Loan (3,000) (250) – (3,250)
Finance lease obligations (598) 429 (135) (304)
Total (3,098) (1,980) (135) (5,213)
(d) Cash flows relating to operating activities include the following which relate to exceptional operating items:
2003 2002
£’000 £’000
Redundancy costs (132) (110)
24 Guarantees and other financial commitments
(a) Capital Commitments:
2003 2002
£’000 £’000
Contracted by Group 81 118
(b) Contingent Liabilities:
Group Company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
Guarantees in respect of bank borrowings of subsidiary undertakings – – 4,917 2,500
Guarantees in respect of hire purchase and finance lease obligations of 
subsidiary undertakings – – 296 598
– – 5,213 3,098
(c) Obligations Under Operating Leases:
Annual commitments under non-cancellable leases are as follows:
2003 2002
Land & Land &
buildings Other buildings Other
£’000 £’000 £’000 £’000
Operating leases which expire:
– within one year – 228 – 235
– in two to five years – 267 – 368
– 495 – 603
The Company has no operating lease obligations (2002 – £Nil)
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  43 1999 2000 2001 2002 2003
£’000 £’000 £’000 £’000 £’000 
Turnover – continuing operations 32,827 34,743 30,362 29,240 25,771
Turnover – discontinued operations 7,146 8,742 3,863 4,239 1,603
Profit before interest, tax and exceptional costs 3,569 4,186 1,095 1,391 (1,893)
Exceptional costs (727) (436) (2,002) (164) (394)
Net interest payable (454) (447) (368) (387) (408)
Taxation (754) (405) 598 (184) 770
Dividends (989) (1,135) (370) – –
Retained profit/(loss)for the year 645 1,763 (1,047) 656 (1,925)
Dividends per share 0.5p 0.6p 0.2p – –
Net debt (4,962) (3,482) (5,245) (3,098) (5,213)
Shareholders’ funds 12,220 12,793 13,036 14,163 12,238
Gearing 40.6% 27.2% 40.2% 21.9% 42.6%
Five Year Financial History
Year ended 31 March
44 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 Notice is hereby given that the fifteenth 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, 24 July 2003, at 11.00 a.m., for the following purposes:
1 To approve and adopt the audited accounts for the year ended 31 March 2003, together with the Directors’ and
Auditors’ reports.
2 To re-elect Mary-Lorraine Hughes as a Director.
3 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 before 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 4 as an ordinary
resolution and as to resolutions 5 and 6 as special resolutions of the Company:
4 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 relevant securities (as defined for the purposes of that Section) up to an aggregate nominal
amount of £3,080,000;
(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 (if sooner); 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.
5 That 
(a) subject to the passing of resolution 4 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 to allot for cash equity securities (as
defined in Section 94 of that Act), pursuant to any general authority conferred on them pursuant to Section 80 of
that Act, as if Section 89(1) of that 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 (if sooner); 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.
Notice of Annual General Meeting
Pilkington’s Tiles Group plc Annual Report and Accounts 2003  45 6 That pursuant to Article 11 of its Articles of Association, the Company be and is hereby generally and unconditionally
authorised for the purpose of Section 166 of the Companies Act 1985 to make one or more market purchases (within
the meaning of Section 163 of that 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 (if sooner); 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. 
By order of the Board,
M J Hesketh
Company Secretary
Registered Office:
PO Box 4
Rake Lane
Clifton Junction
Manchester
M27 8LP
30 May 2003
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 2003 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 2003 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 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.
Notice of Annual General Meeting
46 Pilkington’s Tiles Group plc Annual Report and Accounts 2003 Form of Proxy
Pilkington’s Tiles Group plc (Registered in England and Wales under company number 2282021)
I/We ...........................................................................................................................................................................................................................................
PLEASE USE BLOCK CAPITALS
of .................................................................................................................................................................................................................................................
being a member of Pilkington’s Tiles Group plc hereby appoint the Chairman of the meeting
OR*............................................................................................................................................................................................................................................
as my/our proxy to attend, and on a poll, vote for me/us and on my/our behalf at the ANNUAL GENERAL MEETING of the Company to be held at 11.00am on
Thursday 24 July 2003 at THE CONFERENCE CENTRE, PILKINGTON’S TILES GROUP PLC, RAKE LANE, CLIFTON JUNCTION, MANCHESTER, M27 8LP and at
any adjournment of it.
*You may appoint one or more proxies of your choice, who need not be a member of the Company. If you wish to make such an appointment, delete the words “the
Chairman of the meeting OR” and insert the name of the person(s) you wish to appoint. The appointment of a proxy will not preclude you from attending and voting in
person at the Annual General Meeting if you wish.
Please indicate with an X (in black ink) in the space below how you wish your proxy to vote. If no indication is given, your proxy will vote or abstain from voting as he or she
thinks fit
Dated this....................................................day of ..............................................................................................2003 Signature(s)....................................................................................................................................................
Notes
1. Whether or not you intend to come to the Annual General Meeting, please complete the proxy form above in full.
2. To facilitate arrangements at the Annual General Meeting, please indicate if you propose to attend by placing an “X” here, 
3, You must sign and date the proxy form above. If the proxy form is signed by someone else, on your behalf, their authority to sign (or a notarially certified or office a copy of it) must be returned together with the
proxy form. In the case of a corporation this form should be executed under its common seal or signed on its behalf by a duly authorised officer or attorney. The appropriate power of attorney or other authority
should be returned with this proxy form.
4. When you have completed and signed this proxy form, please detach the top half and return it to the Registrar at Computershare Services plc, PO Box 1075, Bristol, BS99 3FA. To be valid the proxy form must be
received by no later than 48 hours before the time appointed for the Annual General Meeting (11.00am on Tuesday 22 July 2003)
5. In this case of joint holders, this form may be signed by any one of such holders but the vote of the senior who tenders a vote shall be accepted to the exclusion of the votes of the other joint holders. For this
purpose, seniority shall be determined by the order in which the names stand in the register of members.
Admission Card
Pilkington’s Tiles Group plc
Annual General Meeting
To be held at 11.00am on Thursday 24 July 2003 at THE CONFERENCE CENTRE,
PILKINGTON’S TILES GROUP PLC, CLIFTON JUNCTION, MANCHESTER, M27 8LP
Please bring this part of the card with you when you come to the Annual General Meeting and present it at the registration desk after completing the following
information. If you appoint a proxy, please pass this part to your proxy. The proxy should bring this part to the Annual General Meeting, complete the following
information and inform the registration desk he or she is attending as your proxy.
Name & Address of Registered Shareholder
Name & Address of Proxy
ORDINARY RESOLUTIONS FOR AGAINST
1. To approve and adopt the Accounts and the
Directors’ and Auditors’ report
2. To re-elect Mary-Lorraine Hughes as a Director
3. To re-appoint Ernst & Young LLP as Auditors and
authorise the Directors to determine their remuneration
4. Authority to the Directors to allot relevant
securities
SPECIAL RESOLUTIONS FOR AGAINST
5. Authority to empower the Directors
to allot securities for cash on a non pre-emptive basis
6. Authority to purchase own shares
" Computershare Services PLC
PO Box 1075
BRISTOL
BS99 3FA
RESPONSE LICENCE No.
SWB 1002
" " Photograph showing external use of Quiligotti terrazzo, (c) BBC Worldwide Ltd. as featured in Home Front Inside Out 
by Laurence Llewellyn-Bowen and Diarmuid Gavin, published by BBC Worldwide Ltd.
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