head office and registered office
st crispins duke street norwich nr3 1pd
telephone 0845 226 7780 wwwoffice2officecouk
registered in england and wales
registered number 04083206
cover and inside pages
the cover and inside pages of this report 
are printed on antalis cocoon silk 100 which is
100 deinked recycled waste with fsc
®
recycled certification
printed by banner managed communication 
which is part of the office2office group
annual report and accounts 2013
o f f i c e 2 o f f i c e   a n n u a l r e p o r t a n d a c c o u n t s 2 0 1 3
office2office
5587o2oannualreport2013coverlayout 1  14042014  1230  page 1 “office2office plc o2o is a leading provider of office supplies and 
business solutions delivering these through two key operating segments –
managed procurement and business critical services our focus is to
provide our customers with sustainable savings through outsourcing their
noncore yet essential business activities”   simon moate chief executive
contents
financial highlights 1
chairman’s statement 2 – 3
chief executive’s review 4 – 5
strategic report 6 – 8
corporate social responsibility statement 9 – 11
board of directors 12
directors’ report 13 – 16
corporate governance statement 17 – 20
nomination committee report 21
audit committee report 21 – 23
directors’ remuneration report 24 – 36
independent auditors’ report to the 
members of office2office plc 37 – 39
consolidated income statement 40
consolidated statement of comprehensive income 41
consolidated and company balance sheets 42
consolidated statement of changes in equity 43
company statement of changes in equity 44
consolidated and company statements  of cash flows 45
significant accounting policies 46 – 56
notes to the financial statements 57 – 87
shareholder information 88
company details 88
5587o2oannualreport2013coverlayout 1  14042014  1230  page 3 o2o plc report and accounts 2013 1
2013 2012
key financials
revenue £2319m £2270m
profitloss before tax £18m £16m
basic earnings per share 36p 39p
underlying profit before tax
1
£42m £42m
underlying earnings per share
2
87p 85p
operating cash flow £130m £65m
net debt £218m £290m
final dividend proposed
total dividend for the year
£00m £13m
0p per share 36p per share
£00m £26m
0p per share 72p per share
 restated  see significant accounting policies
1 profit  loss before tax nonrecurring costs of £08m 2012 £40m £nil share option charges 2012 £05m and amortisation of
intangibles of £15m 2012 £12m refer to the consolidated income statement on page 40 and note 5 on nonrecurring costscredits
2 profit after tax before the after tax effect of nonrecurring costs share option chargesand amortisation of intangibles divided by the
weighted average number of ordinary shares in issue refer to note 11 to the financial statements
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 1 o2o plc report and accounts 2013 2
we expected the office supplies market to show some improvement in 2013 as the uk
economy came out of recession and that this would benefit our managed procurement activity
during the first half of 2013 however it became clear that the market was not improving
customers’ buying habits have also changed over the last two years with a focus on lower cost
products buying little and often and other changes targeted at reducing their direct costs
the board expects this to be a permanent shift in buying behaviour  this has increased our
cost to serve and impacted our net margins though our managed procurement activity
continued to outperform the market which declined by 9 year on year it remains the larger
part of the group accounting for 635 of group revenue and 528 of group ebita before
central costs 
by contrast our business critical services activities operate in growing segments of the
market  banner managed communication the largest of these activities saw a general
recovery in marketing budgets in its segment with increased spend towards the end of 2013
on digital channels in particular  business critical services now represent some 365 of
group revenue and 472 of group ebita before central costs   
our underlying profit before tax for 2013 was £42m for reasons detailed in the strategic
report and significant accounting policies we are making prior year adjustments that restate
2012’s underlying profit before tax from £65m to £42m this flattening of group
performance over a two year period does no more than confirm the urgency of the need for the
recovery programme we started in the second half of 2013  
we significantly reduced net debt in 2013 by £72m to £218m at 31 december 2013 2012
£290m owing to an increase in operating cash flow to £130m 2012 £65m
these results are reported in more detail in the chief executive’s review and the strategic
report which follow 
chairman’s statement  
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 2 o2o plc report and accounts 2013 3
dividend
at the half year we advised shareholders that we could not
recommend an interim dividend  this was a particular
disappointment as we had shareholders who had been loyal to
us since we listed in 2004   
the board remains of the view that in current circumstances
investing free cash in our recovery programme and where
possible in strengthening our business critical services is in
the best long term interest of shareholders  we therefore do
not recommend a final dividend for 2013 and do not expect
to reinstate the dividend during 2014  
chairman
as reported in november 2013 david callear decided to
stand down as chairman because of his wife’s terminal illness
david has been with the business since before it listed has
made a significant contribution to it remains very committed
to it and is familiar with the industry so we are grateful that
he has felt able to continue as a nonexecutive director 
outlook
trading to date is satisfactory it is in line with expectations
and our operating costs are reducing  however we are
concerned that the office supplies market as a whole will not
improve in 2014 so we remain of the view that underlying
profit in 2014 is likely to fall short of 2013
annual general meeting agm
the agm will be held at the company’s head office st
crispins duke street norwich on 29 may 2014 at 1100 am
notice of the agm will be circulated separately together with
the proxy forms for use at the agm
j l cohen
chairman
2 april 2014
jim cohen  
strategy and change 
we believe our market strategy remains sound   business
critical services has performed satisfactorily since we
committed to diversification in 2008 and we are focused on
growing it organically to become the larger part of the group
managed procurement’s task is to retain its position in the
contract office supplies market protecting margin as it does
so and whenever possible building further profitable market
share which it has shown can still be done we have a
satisfactory pipeline of sales opportunities across the group  
the changes we have to make which we started in the second
half of 2013 remodel the way we support our markets and
we need to use our free cash flow to do this remodelling will
also enable us to refinance the group in advance of our
current term loans which currently stand at £125m
maturing in june 2015  we are working closely with our bank
the royal bank of scotland in this regard
our programme to reduce overheads both centrally and in our
operating activities will run through much of 2014  the next
step is to change the way we handle the logistics side of our
business to give us a platform that fits the changed office
supplies market and takes into consideration the fact that the
leases on our three main sites are due for renewal this year
we shall shortly complete our review of the options for
implementation during the rest of 2014  the recovery
programme should reach its full annualised rate of benefit
from early 2015    
in short our focus is on doing all we can to improve
performance and strengthen the business     
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 3 o2o plc report and accounts 2013 4
results performance
group revenue was some 2 up year on year at £2319m
2012 £2270m  underlying profit before tax at £42m was
similar to 2012 £42m restated with underlying earnings
per share at 87p as against 2012’s 85p
results cashnet debt
group net debt at 31 december 2013 was £218m a
reduction of £72m on 2012 reflecting a similar reduction in
the level of average daily net debt throughout the period
these reductions reflect a number of measures the lower
dividend payment of £13m 2012 £41m lower exceptional
costs with the group’s 2013 restructuring programme
starting in the second half and operational improvements in
particular a focus on overdue debtors and on stock which was
significantly reduced over the year while maintaining product
availability the focus on cash generation and reducing debt
remain key management imperatives    
managed procurement
our managed procurement activity encompasses both our
contract business banner business services which services
large corporate and public sector customers and truline
which services the independent dealer channel through our
contract with the advantia group in 2013 revenue was flat
year on year at £1473m representing 635 of group
revenue 2012 £1475m and 528 of group ebita before
central costs 2012 623
banner business services bbs
bbs revenues increased slightly year on year markedly
outperforming the overall office products market which is
calculated to have declined by 9  this outperformance was
aided by the new contract with the royal bank of scotland
rbs and the retention of existing business with the nhs
although profitability was affected by the mix of business and
continuing pressure on gross margins  we implemented the
rbs contract in february 2013 with no loss of service to the
customer  the contract has traded in line with expectations
from the start and we have become one of rbs’s preferred
suppliers
in the latter part of the year we were formally notified of an
extension to our government office supplies contract
gosc for a minimum of 6 months as well as an extension to
the wider public sector supply framework for 12 months
throughout the year we continued to secure new business
using the bbs “managed procurement model” as a core part
of our offering  the model is an openbook approach allowing
the customer visibility of the product net margin earned by
bbs after taking into consideration all costs to service the
contract  the customer can assess the cost to serve and can
change ordering patterns to manage his costs  
truline
truline maintained a consistently high service level to the
advantia dealer network new dealers have since signed up
and the pipeline is looking strong for 2014  in an industry
sector where service levels are often compromised our last
mile delivery service is proving to be a significant competitive
advantage 
t aken together our managed procurement activity remains a
substantial business and a leader in the office products
market  we have confidence that the changes to optimise our
operations as mentioned in the chairman’s statement will
underpin future profitability 
business critical services
revenues in business critical services grew 6 year on year
as the full year impact of contract wins in 2012 came through
in 2013  in 2013 revenue was £846m which represented
365 of the total group revenue 2012 £795m and
350 and 472 of group ebita before central costs
2012 377
banner managed communication bmc
bmc is the largest business in the business critical activities
of the group  it has grown substantially over recent years
has invested in infrastructure and has market opportunities
chief executive’s review 
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 4 o2o plc report and accounts 2013 5
to grow further organically while enhancing its profitability
in 2013 with revenues of £792m 2012 £757m  it
retained all its major contracts and won and launched
important new accounts which will benefit 2014 including
care uk bourne leisure and harvey  thompson group
the provision of marketing services continues to grow with a
general recovery in budgets and an increased spend on digital
marketing channels in particular towards the end of 2013
we are also seeing a continuing trend to outsource to
companies which are best placed to provide a professional
and targeted service  in 2013 bmc was voted amongst the
top 100 outsourcing firms globally in an iaop poll reflecting
its success in executing multichannel marketing campaigns
for its clients
bmc’s ability to measure accurately the return on client
marketing investment has helped its clients focus their spend
and together with its increased sales in technical applications
to support their marketing communications meant that some
15 of revenue in 2013 derived from services other than
traditional print management  
bmc was also for the first time asked to act for an
established client in the usa an exciting marketplace with
clear potential for further growth  in 2014 we hope to
continue expansion outside the uk through opportunities
provided by existing clients 
banner document services bds
bds our secure document destruction service operating
closed loop
tm
 the fully auditable recycling solution for
customers delivered continued growth during the year with
sales revenue increasing to over £5m 2012 £38m banner
records management which provides an onsite and offsite
digital solution for document storage and retrieval was
launched during the year and is expected to deliver growth in
2014 as we make customers aware of this additional
complementary service offering
private  public sector mix
in 2013 private sector corporate customers provided 70
of group revenue compared to 668 in 2012
operating costs
logistics and distribution are significant costs for the group
but delivering excellent service remains an important
strategic differentiator in 2013 despite the change in
customer buying habits to ‘little and often’  as outlined in the
chairman’s statement we were able to maintain our overall
service costs at the 10 targeted level these efficiency
gains were delivered through greater productivity levels
across all logistics activities most notably in warehouse line
picking and last mile distribution addressing and adapting to
these continuing changes remains a challenge today and is the
imperative driving our remodelling programme 
in the second half of 2013 we started a programme to reduce
our central support costs this is continuing and will yield its
main benefit from the second half of 2014
chief operating officer
in march 2014 steve mckeever resigned as chief operating
officer to take up a leadership role in the it industry we thank
him for his considerable contribution to the group and wish
him well in his new role
employees
the group is essentially a people not an asset business  our
staff deliver outstanding service to our customers and it is
because of them that we are still outperforming our peers in
the office supplies industry the board recognises that 2014
will be a further challenging year and wants to thank them in
advance for their continuing commitment and diligence 
s r moate
chief executive
2 april 2014
simon moate
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 5 o2o plc report and accounts 2013 6
strategic report
principal activities 
the principal activity of the company is
that of a holding company the group’s
principal activities are delivering managed
procurement of office supplies and
business critical services
development and performance
during the year
the chairman’s statement and chief
executive’s review provide an overview of
the underlying performance and
development of the group in 2013
results accounting treatment
during 2013 we reviewed certain
accounting treatments relative to best
practice to provide greater transparency
of the group’s financial performance and
to improve our financial reporting 
we have changed the timing of the
recognition of advance supplier rebates
for contributions to catalogue production
and for other purchasing agreements
which have grown in significance in the
recent past  for these the board has
determined that our policy will now be to
recognise the advance rebate within the
catalogue distribution or purchasing
period with which it is associated our
approach to software recognition has
been revised such that both licence and
maintenance revenues are now being
recognised over the contracted term of
the licence we have also determined that
customer rebate recognition should align
more closely with the relevant reporting
period deficiencies were found too in the
contract cost estimation models used by
banner managed communication which
had led to an under recognition of cost of
sales these and a pensions adjustment
driven by a change in accounting
standards have required us to make prior
year adjustments to 2012 and earlier
years which are explained in full in the
significant accounting policies note in the
accounts   
these adjustments affect comparison
between 2013 and 2012 and indicate
that the financial position in 2013 was in
relative terms stronger than at first
appeared though this does not detract
from the need for change as already
covered in the chairman’s statement and
chief executive’s review  
revenue and profit
t otal revenue was £2319m 2012
restated £2270m underlying profit
before tax was £42m 2012 restated
£42m before nonrecurring costs of
£08m 2012 £40m amortisation of
intangibles relating to acquisitions of
£15m 2012 £12m and share option
charges of £nil 2012 £05m operating
profit before such costs was £65m
2012 restated £63m and operating
profit after such costs was £42m 2012
restated £05m  profit before tax after
such costs was £18m 2012 restated a
loss of £16m and profit after tax was
£13m 2012 restated a loss of £14m
the underlying profit margin was 18
2012 restated 18
nonrecurring costs are those significant
items that by virtue of their size or
incidence are separately disclosed to
enable a better understanding of the
group’s operating performance in 2013
£06m 2012 £07m related to
compensation payments and £02m
2012 £09m to operational efficiency
improvements  in 2012 of other non
recurring costs £19m related principally
to the maintenance of customer service
levels in the early stages of the advantia
contract and the remainder were items to
reshape the business in line with its
diversification strategy a full analysis of
the nonrecurring costs is set out in note
5 to the financial statements
cash flow net debt and financing
as set out on page 45 the group
generated net cash from operating
activities of £101m 2012 £42m at
31 december 2013 net debt was
£218m a decrease of £72m from
£290m at the start of the year
net debt of £218m is supported by
borrowing facilities committed until june
2015 we have agreed with rbs to
amend the committed facilities to allow
headroom for more rapid execution of our
reorganisation programme the facilities
comprise a term loan of £125m
repayable over 5 years with the next
instalment of £15m due in december
2014 a revolving credit facility of
£20m overdraft facilities of £10m a
stock facility of £30m  and an invoice
discounting arrangement of up to
£270m financial covenants are applied
to those committed facilities and the
group has continued to comply with the
set covenants
tax
a full analysis of the tax charge for the
year is set out in note 9 to the financial
statements 
the group’s effective tax rate in 2013
was 276 2012 restated 127
the low effective rate in 2012 is
primarily attributable to expenses not
deductible for tax purposes and the
impact of adjustments in respect of
prior year estimates  the group has a
further £1965000 2012
£1965000 of nontrading losses
where no tax asset is recognised as
there is currently no expectation that
these nontrading losses can be offset
against future profit streams 
the amount of corporation tax paid
during the year was £03m 2012
£03m 
the effective tax rate in the near future
is anticipated to be marginally above the
standard rate of uk corporation tax 
shareholders’ return
basic and diluted earnings per share
were 36p 2012 restated loss of 39p
with underlying earnings per share of
87p 2012 85p  there is no dividend
paid or payable in respect of 2013  the
total dividend paid in respect of 2012
was not covered by earnings although it
was covered 12 times by underlying
earnings  shareholders’ equity at the
end of the year was £145m 2012
restated £156m
the middle market quotation of the
company’s ordinary shares at the end of
the financial year was 310p with a
market capitalisation of £113m
including shares held by the employee
benefit trust
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 6 o2o plc report and accounts 2013 7
change of auditors
we decided that 2013 was an
appropriate time to consider a change
of auditors pricewaterhousecoopers
had given many years of committed
service but we consider it good practice
to refresh professional advisors after a
period  during a formal tender process
we included each of the four largest
audit firms and selected kpmg llp 
business model and strategy
the chairman’s statement and chief
executive’s review summarise our
business models their rationale and
effectiveness and set out the changes in
strategy required by market pressures
and by our performance over 2012 and
the first half of 2013  
principal risks and uncertainties
the principal risks and uncertainties
facing the group are set out below
• loss of a large customer
the group has a number of large
customers and is therefore potentially
vulnerable to the loss of any one of
these our gosc contract is the largest
that will be tendered during 2014 for
award by the end of 2014 with a start in
the first half of 2015  contingency
plans are formulated and quantified
before any large retenders are
submitted to seek to enable the
business to respond rapidly with
minimal disruption to a large contract
loss this coupled with a strategy of
diversifying the customer base and
widening the business portfolio at the
same time as maintaining a high level of
service is designed to help mitigate the
exposure
2013 2012
gross margin  252 252
gross margin percentage is gross profit expressed as a percentage of revenue it is the measure of sales 
profitability after related direct purchase costs and is a measure comparable with other companies
slightly lower margins in managed procurement owing to the dilutive impact of business won on an exworks 
basis have been mitigated by the higher margins in business critical services
distribution cost  101 98
this represents the cost associated with distribution in 2012 before £29m of nonrecurring costs 
expressed as a percentage of revenue  
changes in customer ordering habits have offset distribution efficiencies achieved in 2013
administration cost  127 130
this is the cost associated with administration before £08m of nonrecurring costs 2012 £11m 
amortisation £15m 2012 £12m and share option charges £nil 2012 £05m expressed as 
a percentage of revenue
efficiencies and a small increase in revenue are reflected here 
underlying profit  18 18
this measures underlying profit before nonrecurring costs amortisation and share option charges 
as a percentage of revenue
the stabilisation of underlying profit is a recurring theme here
underlying earnings per share 87p 85p
underlying eps is the profit on ordinary activities after tax before the after tax effect of nonrecurring 
costs amortisation and share option charges divided by the weighted average number of 
ordinary shares in issue during the year
net debt £218m £290m
net debt is calculated by subtracting cash and cash equivalents from the long and short term borrowings
net debt decreased by £72m largely as a result of the focus on working capital management 
and debt reduction 
 restated
key performance indicators kpis
overall measurement of the financial performance of the operating segments managed procurement and business critical
services is based on adjusted earnings before interest taxation and amortisation ebita details can be found in note 3 to
the financial statements
the individual kpis which o2o uses to measure business performance are gross margin distribution costs administration
costs and underlying profit all expressed as a proportion of revenue underlying earnings per share and net debt
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 7 o2o plc report and accounts 2013 8
strategic report continued
• reduction in gross margins
continued pressure on gross margins is
inevitable in a highly competitive market
place  our risk management seeks ways
to mitigate margin reductions by
working with customers and suppliers to
reduce cost while maintaining service
standards and product quality  cost
increases result mainly from adverse
movements in the cost of production or
foreign exchange  the group also
benchmarks suppliers validates
proposed cost increases against raw
material market indices reengineers
product and reviews the logistics
process  we also work with our
customers to review their purchasing
behaviour and required service levels
• interruption of operations or it
services
the business is built around a proven
service with reliance on our warehouses
and it infrastructure a severe
disruption in either of these areas could
have a significant impact on the group
in order to mitigate these risks we
maintain appropriate disaster recovery
plans and insurance cover
• competitors
the group operates in a highly
competitive market the risk exists
therefore that contracts are awarded
simply on the basis of lowest price
irrespective of the overall value
package our strategy is to deliver a
wide range of first rate addedvalue
services at competitive prices recent
contract wins and retentions help
demonstrate that this approach is
valued by our customers across the
group 
• economic backdrop
the group is inevitably affected to
some degree by economic slowdown
and changes in exchange rates and the
potential that lower levels of activity
lead to reduced demand for some of the
goods and services provided by the
group this was particularly evident
with the reduction in public sector sales
volumes as a consequence of
government austerity measures in
addition economic circumstances
affect suppliers however the group has
limited exposure to the failure of any
single supplier since for the majority of
products purchased alternative
sourcing or product options are
normally available 
the group’s committed borrowing
facilities afford some protection against
increased funding requirements should
they arise in addition the widespread
nature of our customers help to
mitigate risks in the wider economy
• financial risk management
the group’s activities expose it to a
variety of financial risks which include
market risk comprising currency risk
commodity price risk cash flow and fair
value interest rate risk credit risk and
liquidity risk the details of which are
described in note 1 to the financial
statements 
• working capital management
the risk from limited availability of
further capital could constrain the
growth of the business the group
mitigates this risk by regular monitoring
of cash flow and funding requirements
to ensure sufficient undrawn facilities
are in place to service its operating
activities 
human rights   
those activities which are directly
controlled by the group are
substantially in developed countries
with strong human rights legislation
with which the group fully complies
however the group does source
products and services globally and
takes active steps to uphold ethical and
responsible behaviour in its dealings
and those of its suppliers
gender    
set out below is an analysis of the
number of employees by gender at the
end of 2013
male female t otal
board of directors including nonexecutives 60 6
senior managers 21 9 30
employees 626 263 889
t otal 653 272 925
 of total workforce 71 29
on behalf of the board
h c l cawley
group finance director
2 april 2014
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 8 o2o plc report and accounts 2013 9
corporate social responsibility statement
o2o is committed to upholding its ‘good
for you good for us good for everyone’
trading ethos csr is important to o2o
because it is important to o2o’s
customers staff and shareholders it
also makes good business sense
leading to greater efficiency lower
costs and improved competitiveness 
workplace
over 900 people are employed across
the group and their experience skills
and commitment are key to o2o’s
success as well as providing a safe and
healthy working environment o2o
promotes a positive internal culture
that enthuses and challenges its
employees and allows them to
challenge what they do openly and
constructively
employees
o2o has a diverse workforce and
recognises the individual needs of its
employees for example it supports
working parents by operating childcare
schemes and offering flexible working
arrangements subject to the
operational needs of the business
the company ensures that its
employees are kept aware of changes in
employeerelated legislation and
arranges groupwide awareness
programmes when appropriate such as
diversity and antidiscrimination
awareness in response to the equality
act 2010 and an understanding of anti
corruption measures to ensure
compliance with the bribery act 2010 
each business has its own internal
communications activity such as
newsletters websites local employee
forums and employee suggestion
schemes groupwide communication is
facilitated by the group’s intranet where
o2o news is published internal
vacancies are posted and a wide range
of hr forms and corporate policies are
available for download 
crossfunctional meetings provide a
valuable forum for employees to share
knowledge on a variety of business
matters such as products and services
warehouse operations logistics
customers and suppliers this has
helped identify crossselling capabilities
within the group in addition relevant
employees have opportunities to meet
the group’s key suppliers and gain a
better understanding of the products
they are selling and for the suppliers to
showcase the new products included in
the group’s catalogues
health  safety
a strong health and safety culture exists
throughout the group and collective
responsibility is encouraged this is led
by a dedicated health and safety
manager to ensure compliance with
statutory regulatory and other industry
requirements and fully supported by
the board who receive monthly health
and safety reports and updates 
all sites operate under an ohsas
18001 certified health and safety
management system audited by bsi
during 2013 11 o2o sites were audited
with no major nonconformities
annual workplace inspectionsaudits
are undertaken by an independent
health and safety consultant with
follow up visits to ensure that all
corrective actions have been completed
internal observation and legal
compliance audits are undertaken by
the o2o quality environment health 
safety qehs teams at all sites and this
has led to the development and group
wide availability of user friendly
intranet web pages on specific qehs
aspects management presentations on
bsi certifications and the impact on the
group and its employees ensure
continued improvement is supported at
the highest level
o2o’s main warehouse is enrolled with
the british safety council bsc
allowing access to information and
training modules our guildford and
manchester sites have previously won
international health and safety awards
with merit from bsc based on their
work practices and health and safety
culture these sites along with the
norwich head office site are entered
for this year’s award 
all employees receive health and safety
awareness training and fire manual
handling display screen equipment and
workplace taskspecific risk
assessments are conducted at each site
o2o’s health and safety procedures are
available on the group intranet and each
o2o location has a health and safety
group comprising employees from
different levels and functions with
responsibility for conducting reviews of
current practices and taking any
corrective action necessary our senior
operations managers are trained to bsc
level 2 and all members of the head
office health and safety group have
attained bsc level 1 certificate
refresher training courses are provided
to ensure knowledge is kept uptodate
all delivery drivers undertake an
internetbased road safety course as
well as cpc training an initiative was
rolledout during the year to promote
safety for all employees driving on
company business all driving licences
are checked with intelligent data
systems ids via dvla and every six
months company car drivers are
required to provide their managers with
vehicle condition reports employees
who have opted for a car allowance are
required to confirm vehicle details
insurance mot  essential service and
maintenance checks etc via an online
portal fleet2 
community
o2o recognises that it has a
responsibility towards the wider
community and is particularly proud of
the efforts of its employees to raise
funds for charity
whilst community relations are
managed at a local level o2o expects its
high standard of business principles to
be maintained in all dealings and
representations
work experience placements are
offered to students and wherever
practicable preference is given to local
businesses when outsourcing services
such as catering cleaning and
recruitment
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 9 o2o plc report and accounts 2013 10
o2o has an established charity
committee to help o2o employees
contribute to community and charitable
events by encouraging and coordinating
fundraising across the group a third of
all revenues received from warehouse
recycling initiatives see page 11 goes
to employee nominated charities and
local causes which also benefit from an
array of fundraising activities including
office ‘dress down’ days cake sales
raffles and various sponsored events
product marketplace
o2o promotes the use of products
containing recycled materials or
manufactured from sustainable
resources and using sustainable
manufacturing methods the group
ensures good practice throughout its
supply chain and helps its customers to
do likewise
ethical sourcing
o2o sources products on a global basis
and encourages all of its suppliers to
operate environmental management
systems o2o will not knowingly trade
with organisations that behave in a
manner that is unethical or
irresponsible
in particular o2o takes active steps to
audit the ethical performance of
suppliers who manufacture the group’s
own brand products first o2o is a
member of sedex the supplier ethical
data exchange in addition o2o’s buyers
visit suppliers’ factories overseas and
use sgs an independent assessor to
ensure compliance with the ethical
trading initiative’s base code which is
founded on the conventions of the
international labour organisation and is
an internationally recognised code of
labour practice 
green optimisa™
the green optimisa™ system enables
customers to calculate the
environmental impacts of their contract
with o2o including the use of paper
co2 emissions and transport fuel
consumption this is important to many
o2o customers and the system
therefore adds value commercially as
well as from a csr perspective
environmentally preferred products
o2o operates the globe  tick™
accreditation scheme which makes it
easy for customers to select
environmentally preferred products
the range of ‘green alternatives’ now
consists of over 1600 products for
every area of the workplace from
office supplies to catering technology
to promotional items globe  tick™
products constitute over 20 of the
lines contained within the o2o
catalogue for 2014 recent additions
to the globe  tick™ range are o2o’s
own brand closed loop™ filing products
made using 100 recycled closed
loop manila
all globe  tick™ products are audited
against independently set criteria
before they are showcased in the o2o
green guide which is published
annually the green guide also
incorporates information on other
sustainable products and services and
how customers can minimise the
impact of their day to day working
practices on the environment
o2o is a certified member of both the
forest stewardship council fsc and
the programme for the endorsement of
forest certification pefc promoting
responsible and sustainable forest
management  
fairtrade is designed to give
disadvantaged farmers a guaranteed
price for products that meet
internationally agreed standards
rainforest alliance focuses on
standards covering worker protection
their environment and their
communities a range of fairtrade and
‘rainforest alliance certified’ catering
supplies are included in o2o’s
catalogue
catalogues and brochures
all of o2o’s main catalogues are printed
on paper made from 100 recovered
waste surplus catalogues are always
recycled and the use of electronic
catalogues is promoted wherever
possible
recycling services 
o2o offers a portfolio of recycling
services notably waste paper through
its closed loop™ service having
supplied its customers with copier
paper the closed loop™ service collects
the waste paper securely shreds it and
a leading paper mill then converts it
back into copier paper to be used again
by the customer thereby ‘closing the
loop’ 
compared to manufacturing a ream of
virgin copier paper 81 less water
71 less energy and 53 less carbon
are used in manufacturing a ream of
closed loop™ recycled paper in 2013
339 million reams were produced
2012 28 million reams
closed loop™ has won several
accolades since its inception including a
green apple award in 2010 a bronze
zero waste award in 2012 and a
t omorrow’s fm award in 2013 it was
also key to the business being named
‘recycling and waste management
large business of the y ear’ in 2012
more information can be found on the
website wwwbannerclosedloopcouk
in addition o2o offers the safe disposal
of batteries printer cartridges
uniforms office furniture and
technology products
environment
the group ensures that in satisfying its
customers’ requirements both the
goods and services supplied and its own
housekeeping comply with legislation
and best practice  o2o operates an
environmental management system
that has been certified to the
international standard iso 14001
2004 and has made significant
progress in reducing the environmental
impact of its business activities 
corporate social responsibility statement continued
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 10 o2o plc report and accounts 2013 11
waste management
o2o is a national distributor of business
products and aims to keep packaging to
a minimum through a combination of
improved box utilisation larger product
pack sizes and customer education
regarding the environmental benefits of
consolidating orders t owards the end of
2012 o2o introduced its trademarked
recyclabox™ a sturdy but easily
collapsible box made from 100
recycled card recyclabox™ is used for all
deliveries and customers are
encouraged to return the folded boxes to
the drivers to be reused again and again
where possible o2o utilises 
ecommerce to reduce the amount of
paper used in the transaction process
the group trades with most of its larger
customers and suppliers electronically  
recycling
all of o2o’s distribution hubs have
procedures to recycle waste materials
a ‘backloading’ process ensures that
waste cardboard and shrinkwrap is
taken back to o2o’s warehouses for
recycling using the same trunker vehicle
that delivers goods for onward
shipment to customers drinks cans and
plastic bottles are also recycled
in november 2012 the manchester
distribution centre achieved ‘zero
landfill’ status assisted by white
recycling limited all general waste
from this site is now 100 recycled
white recycling limited collect the
waste and further segregate items for
recycling with any residual waste going
through its waste exchange operation
transforming waste into quality
secondary fuels of varied specifications
for a variety of end users at the
moment our basingstoke distribution
centre recycles only 925 of its waste
but is working with recycling companies
to achieve ‘zero landfill’ in the near
future 
overall the volume of cardboard and
paper recycled in 2013 was 423 tonnes
2012 420 tonnes and the volume of
plastic that was recycled was 615
tonnes 2012 60 tonnes 
energy management
over the past few years o2o has
invested in improving energy usage the
manchester distribution centre
benefited from an air source heat pump
which converts air drawn from the
atmosphere into a source of heat for
use in radiators and in the basingstoke
warehouse a new heating system with
down fans was installed low energy
lighting was also fitted throughout
these sites and movement sensors were
fitted to light fittings within the office
and warehouse of our new barking hub
to help reduce energy usage
based on kilowatts of gas and electricity
used a total of 236025 tonnes of co2
were emitted in 2013 by o2o’s 23
locations which are a mix of large
warehouses offices and small
distribution hubs the availability of
complete and comparable data for all
sites has been hindered by changes in
locations and a switch in providers as we
aligned and made coterminous our
energy suppliers’ contracts we expect
to have this data available for 2014 
of this total 1642 tonnes of co2 were
emitted by our four larger sites
manchester basingstoke guildford
and norwich in 2013  excluding
guildford as we do not have
comparable data for 2012 the total
tonnage emitted was 1017 tonnes
2012 1089 tonnes  the reduction
reflects a phased transfer to 100
renewable electricity source initiated in
2012 and completed in november
2013 for those sites where we manage
our utilities in 2014 we expect to be
reporting significantly lower emissions
looking further ahead we are currently
exploring the possibility for solar energy
for our freehold site in hinckley
carbon management
as a national distributor o2o operates its
own inhouse fleet of delivery vehicles and
employs a number of initiatives to
maximise efficiency and minimise the
environmental impact of the fleet a four
year renewal scheme means that the
most uptodate clean running and fuel
efficient vehicles are available the hgv
vehicles are euro 5 compliant having
sloping roof trailers and aerodynamic
bodies to minimise fuel usage and utilising
selective catalytic reduction to minimise
pollution almost all of the vehicles are
diesel and some are fitted with stopstart
technology which switches the engine off
when the vehicle has a prolonged stop
journeys are optimised by means of a
sophisticated fleet management system
and navman tracking double deck trailers
are used to transport larger quantities of
goods in a single journey  backloading
arrangements exist whereby delivery
vehicles collect stock on their return to
the warehouse in an otherwise empty
vehicle 
co2 emissions generated by the delivery
fleet were 4439 tonnes in 2013 2012
5801 tonnes a significant reduction
from the previous year this was largely as
a result of ceasing palletised deliveries
for the pallet network which had become
an unprofitable noncore activity  and also
a reduction in the number of vehicles
because of route optimisation
the company car scheme encourages
staff to select cars from a defined range
of low emission vehicles and video and
telephone conferencing are used to
minimise the need for business travel
co2 emissions generated by company car
fleet were 658 tonnes in 2013 a
comparable figure for 2012 is not
available
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 11 o2o plc report and accounts 2013 12
jim cohen chairman
jim aged 72 joined o2o as senior independent director in june 2004  he was a main board
executive director of balfour beatty plc until his retirement in 2007 prior to this he held senior
positions with gte gec and earlier in his career with the department of energy   he is currently
chairman of the management board of green africa power llp  a member of the investment
committee of the netherlands based infrastructure funds dif ii and dif iii and a member of the
investment committee for the get fit programme in uganda jim assumed the role of chairman
when david callear stepped down in november 2013
simon moate chief executive
simon aged 51 joined o2o in july 2007 he was previously an executive director of johnson
service group plc the managed services business where as chief executive of the facilities
management and specialist supplies division he led and integrated a number of acquisitions
prior to this he held a number of senior sales marketing and operations roles with blue chip
companies including well well well ltd aramark plc provend group plc and coca cola simon
is a nonexecutive director of the audit committee for the university of east anglia
chris batterham nonexecutive director 
chris aged 58 joined o2o in june 2008 and is a chartered accountant he was finance director
of unipalm plc the first internet company to float on the london stock exchange and latterly
chief financial officer of searchspace group until 2005 he currently holds a number of non
executive directorships including sdl plc iomart group plc t oumaz and chairman of eckoh plc
hugh cawley group finance director 
hugh aged 57 joined o2o in february 2013 and is a chartered accountant he was previously
chief executive of dawson holdings plc overseeing the reversal of its decline the growth of
its constituent businesses and the subsequent sale of the group for a significant premium
prior to this he held senior financial roles at procter  gamble imperial chemical industries
plc and s daniels plc hugh is also a nonexecutive director on the board of royal academy
enterprises limited and a member of the advisory board of the centre for international
business at the university of leeds
david callear nonexecutive director
david aged 60 is a chartered accountant and joined o2o as chairman in january 2001 his
career has been in financial and general management with both publicly quoted companies
including chief executive positions with tip europe plc and jeyes group plc and private equity
ventures until very recently he held a number of nonexecutive chairman roles with private
companies including rp  martin holdings limited he stepped down as chairman of o2o in
november 2013 but remains a nonexecutive director
board of directors
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 12 o2o plc report and accounts 2013 13
directors’ report
the directors present their report and
the audited consolidated financial
statements for the group for the year
ended 31 december 2013
results and dividends
profit for the year was £13m 2012
£14m loss as restated the results are
shown more fully in the consolidated
financial statements on pages 40 to 45
no interim dividend was paid during the
year 2012 36p per ordinary share
amounting to £13m 
as explained in the chairman’s
statement the directors are not
recommending a final dividend in
respect of the year ended 31 december
2013 2012 36p amounting to £13m
the aggregate dividends recognised as
distributions in the year ended 31
december 2013 was £13m 2012
£41m
future developments
the leases on three of the group’s
principal sites expire or have break
clauses in the next two years this
provides a degree of flexibility in
relation to the group’s infrastructure
and a number of options are being
considered negotiations with the
respective landlords are in progress
market overview and
competitive landscape
an outline of the industry backdrop and
current market dynamics is given in the
chairman’s statement and the chief
executive’s review
overseas branches
all branches are located within the uk
and republic of ireland
post balance sheet event
there have been no events since the
reporting date that materially affect the
position of the company or group
share capital and substantial
shareholders
the company’s issued share capital is
£36308984 divided into 36308984
ordinary shares of 1 pence each all
shares have uniform rights
there are no restrictions on the
transfers of securities in the company
including limitations on the holdings of
securities and requirements to obtain
the approval of the company or of other
holders prior to a transfer of securities
the directors are not aware of any
agreements between holders of the
company’s securities that may result in
restrictions on the transfer of securities
or on voting rights
there are no contracts of significance in
place between the group and its
shareholders 2012 none  
the company has been notified in
accordance with disclosure and
transparency rule 512 of the financial
services authority that as at 28
february 2014 the following
shareholders owned 3 or more of the
issued ordinary share capital of the
company 
aberforth partners llp 7263866 shares 2001
axa framlington 5358315 shares 1476
stifel nicholaus  co inc 3320000 shares 914
vostok trade 1826341 shares 503
barclays wealth management uk 1608471 shares 443
hargreaves lansdown asset management 1511937 shares 416
chelverton asset management 1200000 shares 331
lazard asset management 1187934 shares 327
td direct investing 1100724 shares 303
mark cunningham 1089549 shares 300
executive director resigned 30 january 2013
annual general meeting
directors’ authorities and
resolutions
the agm will be held at the norwich
head office on thursday 29 may
notice of the agm will be circulated
separately together with the proxy
forms for use at the agm
at the last agm the directors were
given authority to allot ordinary shares
within the meaning of s551 companies
act 2006 up to a nominal amount of
£121030 and separately a further
nominal amount of £121030 provided
they are offered by way of a rights issue
to existing shareholders in proportion to
their existing holdings in line with the
association of british insurers
guidelines in total these authorities
represent two thirds of the issued
ordinary share capital 
additionally the directors were given
the power to disapply preemption
rights in respect of the allotment of
shares under s570 companies act
2006 up to an aggregate nominal value
of £18154 representing 5 of the
issued ordinary share capital and on
behalf of the company to make market
purchases of up to 3630898 ordinary
shares of the company being 10 of
the issued ordinary share capital
these authorities are due to expire at
the end of the forthcoming agm and
separate resolutions to renew them will
be proposed
other business to be considered at the
forthcoming agm will include an
ordinary resolution to revoke the
provision in the company’s articles of
association the articles which
currently restrict the maximum number
of shares that may be allotted to
50000000 the company currently
has an issued share capital of
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 13 o2o plc report and accounts 2013 14
36308984 shares and a special
resolution to approve a 14 day notice
period for general meetings other than
agms 
directors
the following were directors during
2013 and held office throughout the
year under review up to the date of
signing the annual report and financial
statements
jim cohen
chairman
1
david callear
nonexecutive director
2
chris batterham
nonexecutive director
3
simon moate
chief executive 
hugh cawley
group finance director
appointed 25 february 2013
steve mckeever
chief operating officer
resigned 10 march 2014
mark cunningham
finance director 
resigned 30 january 2013
1
chairman of the board with effect
from november 2013 previously
senior independent director chairman
of the remuneration committee and
until january 2014 of the risk and
opportunity committee member of the
nomination committee and audit
committee
2
chairman of the nomination
committee and until november 2013
chairman of the board member of the
remuneration committee nomination
committee and audit committee
3
chairman of the audit committee
member of the remuneration committee
and nomination committee chairman of
the risk and opportunity committee
with effect from january 2014
biographical details of the directors are
shown on page 12
david callear and jim cohen having
served three consecutive terms will
offer themselves for annual reelection
at the forthcoming agm
notwithstanding the change in roles
that each has undertaken this was made
for personal rather than business
reasons and the board is reassured of
their commitment to their new
respective roles and to the company
and that they remain key contributors to
board matters 
directors’ interests
directors’ beneficial interests are
disclosed on page 36 of the directors’
remuneration report none of the
directors’ interests carries special
rights with regards to control of the
company 
related party transactions
in 2013 payments totalling £424856
2012 £367322 were made to iomart
plc of which chris batterham is a non
executive director iomart plc provide
managed hosting services over the
past two years o2o has transferred its
server requirements to iomart the
transactions are on normal commercial
terms
directors’ third party indemnity
provisions
a qualifying thirdparty indemnity
provision as defined in s234 of the
companies act 2006 was in force for
the benefit of each of the directors in
respect of liabilities incurred as a result
of his office to the extent permitted by
law during the financial year and also at
the date of approval of the financial
statements in respect of those
liabilities for which directors may not be
indemnified the company maintained a
directors’ and officers’ liability
insurance policy throughout the
financial year
statement of directors’
responsibilities
the directors are responsible for
preparing the annual report the
directors’ remuneration report and the
financial statements in accordance with
applicable law and regulations 
company law requires the directors to
prepare financial statements for each
financial year under that law the
directors have prepared the group and
parent company financial statements in
accordance with international financial
reporting standards ifrss as adopted
by the european union under company
law the directors must not approve the
financial statements unless they are
satisfied that they give a true and fair
view of the state of affairs of the group
and the company and of the profit or
loss of the group for that period  in
preparing these financial statements
the directors are required to
● select suitable accounting policies
and then apply them consistently
● make judgements and accounting
estimates that are reasonable and
prudent
● state whether applicable ifrss as
adopted by the european union have
been followed subject to any material
departures disclosed and explained in
the financial statements and
● prepare the financial statements on
the going concern basis unless it is
inappropriate to assume that the
company will continue in business
the directors are responsible for
keeping adequate accounting records
that are sufficient to show and explain
the company’s transactions and
disclose with reasonable accuracy at
any time the financial position of the
company and the group to enable them
to ensure that the financial statements
and the directors’ remuneration report
comply with the companies act 2006
and as regards the group financial
statements article 4 of the ias
regulation they are also responsible
for safeguarding the assets of the
company and the group and hence for
taking reasonable steps for the
prevention and detection of fraud and
other irregularities
directors’ report continued
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 14 o2o plc report and accounts 2013 15
directors’ responsibility
statement
each of the directors whose names and
functions are listed on page 14 confirms
that to the best of his knowledge
● the group financial statements
which have been prepared in
accordance with ifrss as adopted by
the eu give a true and fair view of
the assets liabilities financial
position and profit of the group  
● the annual report and accounts
taken as a whole is fair balanced and
understandable and provides the
information necessary for
shareholders to assess the
company’s performance business
model and strategy and
● in accordance with s418 companies
act 2006 in the case of each
director in office at the date the
directors’ report is approved that
a so far as the director is aware
there is no relevant audit
information of which the company’s
auditors are unaware and
b he has taken all the steps that he
ought to have taken as a director
in order to make himself aware of
any relevant audit information and
to establish that the company’s
auditors are aware of that
information
employee involvement
employee share schemes
a long term incentive scheme is in
operation for executive directors and
senior managers  details are included in
the directors’ remuneration report on
pages 32 to 33 
the group also has save as y ou earn
sa ye schemes under which employees
are granted an option to purchase
ordinary shares in the company in
either three or five years’ time
dependent upon their entering into a
contract to make monthly contributions
to a savings account over the relevant
period these savings are used to fund
the option exercise there are currently
two live schemes one launched in
november 2011 and one launched in
october 2013 both schemes offer
three or five year savings plans details
of these schemes are given in note 26 to
the financial statements details of the
executive directors’ participation are
included in the directors’ remuneration
report on page 34
a low cost dealing service is available to
employees which provides a simple way
of buying or selling o2o shares in
addition an online share portal
available through the company’s
registrar allows individuals to view and
manage their shareholdings details of
these services are available on the
company’s website
employee benefit trust ebt
no options vested during the year so as
at 31 december 2013 the total number
of ordinary shares held by the ebt
remained at 138155 038 of the
issued ordinary share capital of the
company 2012 138155 038
whilst held in trust the shares do not
attract any payment of dividends
although the trustee may exercise his
right to vote in respect of any shares
held within the trust from time to time
this right is typically waived
equal opportunities
the group is committed to a policy that
provides all employees irrespective of
background or disability with equality of
opportunity for employment training
career development and selection on
the basis of ability qualifications and
suitability for the job  executive
directors managers and employees are
required to promote equality of
opportunity and to take full account of
the policy in their daytoday work  the
aim is to recruit the most appropriate
and qualified staff in the industry and
the group is committed to the principle
of maximising every employee’s
potential  in selecting training and
promoting staff the group has to take
account of the physically demanding
nature of much of its work  employees
who become disabled will be retained
and retrained where possible
diversity and antidiscrimination
o2o’s diversity and antidiscrimination
policy is available to employees via the
group intranet the principles of the
policy are outlined in the nomination
committee report on page 21
bribery and anticorruption
o2o does not tolerate any form of
bribery or corruption and this is codified
in the group policy on anticorruption
available on the group intranet
employees are required to declare
details of any gift or hospitality
received in connection with their
employment and in conjunction with the
business ethics policy set out in the
staff handbook where there is any
doubt of a conflict of interest
employees are asked to seek approval in
advance
corporate and social
responsibility
a summary report on the group policies
and objectives in respect of csr
including health and safety business
ethics and environmental performance
is set out on pages 9 to 11 
independent auditors and
limited liability arrangement
the change of auditor during the year is
detailed in the audit committee report
a resolution to appoint kpmg llp as
auditor will be put to shareholders at
the forthcoming agm
kpmg llp’s terms of engagement
include a limitation on liability for losses
incurred in connection with the
engagement up to a maximum
aggregate of £10m providing claims
are made within 4 years this limitation
is disapplied for statutory audit and
interim financial statement review work
political donations
the group has made no political
donations and incurred no items of
political expenditure during the period
2012 £nil
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 15 o2o plc report and accounts 2013 16
greenhouse gas emissions  
the group emits greenhouse gases
through the operation of its sites gas
and electricity its delivery vehicles and
business travel fuel t able 1 details the
co2 emissions in 2013
the co2 emissions are calculated using
defra and the uk petrol industry
association methodologies full details
are provided on page 11 of the csr
statement
the intensity metric for the group is
given in relation to employees as at 31
december 2013 and total revenue for
2013 see table 2
requirements of the takeover
directive
the following are disclosed in
accordance with the requirements of
the t akeover directive
● details of the group employees’ share
save scheme are given on page 27
● procedures for appointment to the
board are included on the company’s
website wwwoffice2officecouk
under nomination committee 
t erms of reference
● shareholder approval by special
resolution is required before any
changes are made to the articles
● the terms of the company’s
committed borrowing facilities
contain a change of control clause
following a takeover bid that requires
mandatory repayment of all
outstanding monies and accrued
interest the company does not have
any other significant arrangements
that contain onerous change of
control clauses and 
● there are no provisions for
compensation for loss of office or
employment in the agreements with
directors and employees
on behalf of the board
d rodwell
company secretary
2 april 2014 
directors’ report continued
metric tonnes co2
employees 925 745725 81 tonnes per employee
revenue £m 2319 745725 322 tonnes per £m of revenue
activity tonnes co2
gas and electricity 236025
delivery fleet 443900
car fleet 65800
total 745725
t able 1
t able 2
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 16 o2o plc report and accounts 2013 17
statement of compliance with
the uk corporate governance
code 2010 and 2012 the
code
the code sets out standards of good
corporate governance and is publicly
available on the financial reporting
council’s website wwwfrcorguk 
for the majority of 2013 the directors
consider that the company has
complied with the principles set out in
each section of the code however
following the change in board roles in
november 2013 there are now a few
exceptions to this as set out below 
the application of the code’s principles
with respect to the composition and
operation of the board the
remuneration of the directors
shareholder relationships and
procedures for financial reporting and
internal control are described below 
board composition
the board comprises the chairman
chief executive group finance director
and two nonexecutive directors up
until his resignation on 10 march 2014
steve mckeever fulfilled the role of
chief operating officer biographical
details of the board members are set
out on page 12
in november 2013 david callear
stepped down as chairman for personal
reasons he agreed for the time being
to remain on the board as a non
executive director at short notice
having consulted with advisors and with
the support of the board jim cohen
assumed the role of chairman whilst
this provided an immediate practical
solution it was recognised that the
appointment would conflict with the
code’s provisions that the chairman of
the board should not also chair the
remuneration committee code
provision d21 and that boards should
have a nominated senior independent
director code provision a41 the
board considered appointing an
additional nonexecutive director but
having also consulted its advisors
decided against doing so at this point in
time in doing so the board took the
view that the ongoing involvement of
the other members of the remuneration
committee would ensure continuity and
selfgovern any conflicts of interest
with a small board the directors do not
see a need for a senior independent
director to support the board internally
jim cohen simon moate and hugh
cawley are all available to shareholders
on request
the chairman is responsible for leading
the board and ensuring there is timely
and effective communication to and
between all board members he ensures
that board decisions are made after
taking into consideration the interests
of all stakeholders the chief executive
supported by the senior management
team is responsible for the daytoday
management of the group and once
agreed by the board as a whole the
development and implementation of
strategy  he sets the objectives to
ensure the successful delivery of
targets and allocates decisionmaking
and responsibilities accordingly the
normal segregation of responsibilities
between the chairman and the chief
executive has been set out in writing
and approved by the board the
chairman’s other main commitments are
disclosed on page 12 a statement of
directors’ responsibilities is given on
page 14 of the directors’ report the
respective responsibilities of directors
and auditors are given on page 39 of the
independent auditors’ report to the
members of office2office plc
the nonexecutive directors are free
from any business or other relationship
which could materially interfere with the
exercise of their judgement and have no
involvement with the daytoday
management of the group the board
considers the nonexecutive directors
to be independent underpinning their
ability to challenge decisions and bring a
depth of debate and alternative
viewpoint to the board the terms and
conditions of the nonexecutive
directors’ appointments are available
on request from the company’s
registered office
in accordance with the articles no more
than one third of the directors are
required to retire at each agm and all
directors are required to submit
themselves for reelection at least once
every three years directors who have
served three consecutive threeyear
terms must offer themselves for re
election annually details of directors
retiring and seeking reappointment at
the next agm are given on page 14
new appointments to the board are
made following the recommendation of
the nomination committee upon
joining the company directors are
supplied with comprehensive
documentation aimed at providing
information in relation to the remit and
obligations of the role and current
board topics in addition and where
appropriate meetings are arranged with
advisors and key shareholders by way of
introducing the new director
the company secretary reports to the
board and advises individual directors
as required on board procedures
corporate governance matters and
changes in the regulatory environment
a procedure also exists for directors to
take independent professional advice at
the company’s expense 
activities of the board
the board operates formally through
agendadriven board meetings which
are normally held on a monthly basis
the agenda covers both operational and
strategic matters however separate
strategy days are also held to focus on
longer term considerations without the
distraction of the daytoday
operational matters at each meeting
all directors are invited to declare the
nature and extent of their interests in
the matters for discussion frequent
informal dialogue between the directors
supplements the formal board
meetings 
formal presentations by and informal
meetings with senior management
allow the board to keep abreast of
operational matters helps their
understanding of the business and
corporate governance statement
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 17 o2o plc report and accounts 2013 18
improves communications both in and
out of the boardroom 
the board is responsible to
shareholders for the management and
control of the group’s activities its
strategic objectives its system of
corporate governance and the
stewardship of its resources this is
achieved by regular review of the key
activities of the group through the
monthly management accounts reports
and presentations a board pack
comprising information to be reviewed
and discussed is forwarded to all board
members in advance of the monthly
meetings to allow the directors to be
fully prepared regular detailed reports
on the company’s funding and liquidity
position are also circulated upon
release analyst and broker reports are
circulated and the board is updated on
any movements in major shareholdings
there is a formal schedule of matters
reserved for consideration and approval
by the board which is a constituent part
of the group’s commitment and
authority schedule to ensure
appropriate approvals are obtained at
all levels of activity and expenditure 
the types of decision which are taken by
the board are those relating to
strategic group and corporate matters
including financial commitments
acquisitions and disposal of business
activities although operational
decisions are delegated to senior
management any significant matters
are likely to be discussed in advance at
board level in this way the board and
senior management are able to balance
the longer term strategic direction with
immediate operational requirements
and delivery of acceptable financial
results specific responsibilities have
been delegated to board committees as
described below 
under the companies act 2006
directors must avoid any situations in
which they have or could have a direct or
indirect interest that conflicts with
company interests the articles provide
the board with the authority to approve
any such conflict as appropriate
the company maintains appropriate
insurance to cover its directors and
officers against the costs of defending
themselves in legal proceedings taken
against them in that capacity and in
respect of any damages resulting from
those proceedings in addition the
company indemnifies the directors to
the extent permitted by law and its
articles neither the indemnities nor the
insurance provide cover where the
director or officer is proved to have
acted fraudulently or dishonestly
board performance evaluation
a performance evaluation of the board
and its committees is conducted on an
annual basis  in a departure from
previous years where directors have
completed a questionnaire for this
purpose the feedback from individual
discussions between the housebroker
and key shareholders in october 2013
formed an independent basis for a
performance evaluation by the
nomination committee which was later
shared with the board  the house
broker confirmed that the discussions
were not directed in any way but were
an open dialogue on the company its
management and direction past and
present 
in addition during the year the
chairman met the nonexecutive
directors without the executive
directors present to discuss the
performance of individual executive
directors and other senior managers
the nonexecutive directors also met
without the chairman being present to
discuss his performance
committees of the board
specific responsibilities are delegated
to subcommittees of the board the
composition of these subcommittees is
provided below together with reference
to reports on their activities all other
decisions are taken collectively by the
board
board subcommittees are appointed to
act on behalf of the board for specific
projects or oneoff matters as and when
required  this enables matters to be
dealt with quickly and efficiently
without formal scheduled meetings and
proceedings are fully minuted for
approval by the board composition of
the subcommittees varies according to
the nature of the business covered  
the nomination committee is
responsible for reviewing the size
structure and composition of the board
and making recommendations to the
board if it considers that any changes
are required it keeps succession plans
under review and has a formal
procedure for appointments to the
board and senior management team
the nomination committee comprises
the chairman and both nonexecutive
directors david callear continues to
chair this committee a report on its
activities is given on page 21
the remuneration committee reviews
and makes recommendations on the
group’s overall remuneration policy
including individual remuneration
packages for executive directors the
chairman and senior management it is
also responsible for the company’s
share schemes and senior incentive
plans the remuneration committee
comprises the chairman and both non
executive directors as explained on
page 17 and notwithstanding his
appointment as chairman of the board
in november 2013 jim cohen continues
to chair this committee except where
there are matters concerning himself  a
report on its activities is given on page
24
the audit committee assists the board
in discharging its responsibilities
effectively for financial reporting risk
review and internal control it comprises
the chairman and both nonexecutive
directors  all members have financial
literacy chris batterham who chairs
this committee and david callear are
chartered accountants and have
relevant financial expertise as
described in their biographies on page
12  a report on its activities is given on
page 22
the risk and opportunity committee
was formed in 2010 and up to february
2014 was chaired by jim cohen  chris
batterham will chair the meetings going
corporate governance statement continued
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 18 o2o plc report and accounts 2013 19
attendance at meetings
the number of board meetings and committee meetings attended by each director in 2013 was as follows
board remuneration audit nomination
full board subcommittee committee committee committee
number of
meetings held 12 10 77 4
jim cohen 12 47 7 4
david callear 12 97 7 4
chris batterham 12 16 7 3
simon moate 12 8 7 6 3
hugh cawley
joined 25 february 2013
10 90 5 0
steve mckeever
resigned 10 march 2014
12 50 6 0
mark cunningham
resigned 30 january 2013
20 0 1 0
 by invitation
each shareholder receives the annual
report and financial statements
containing the full year results half
yearly results are published on the
company’s website but are available in
hard copy form only on request
following the announcement of results
presentations are given to the
investment community in london and
edinburgh the full year and half year
reports and presentations are made
available on the company’s website
wwwoffice2officecouk additionally
and in accordance with the disclosure
and transparency rules interim
management statements were released
via the rns news service in april and
november 2013
the company’s agm takes place in
norwich and formal notification
together with the annual report and
financial statements is sent to
shareholders at least 20 working days in
advance of the meeting all board
members are available formally during
the agm and informally afterwards for
questions each item of business is the
subject of a separate resolution the
collection and analysis of the proxy
votes is handled independently by the
company’s registrars the chairman
announces the results of the proxy
votes after shareholders have voted on
a show of hands these results are also
made available on the company’s
forward the aim is to provide a forum
for risk and opportunities to be
regularly reviewed by board members
and senior management there is no set
membership as this will vary according
to the matters under review  further
details are provided on page 23
as board packs are issued in advance of
the board meetings all directors are
kept informed of the matters to be
discussed and have the opportunity to
make their views known to the chairman
prior to the meeting if they are unable to
attend minutes of meetings are
circulated to the respective members of
the board or committees
directors’ remuneration
the directors’ remuneration report on
pages 24 to 36 includes details of
remuneration policies and the
remuneration of directors
relationship with shareholders and
constructive use of the agm
the board led by the chairman
recognises the importance of effective
communication and accountability to all
shareholders and is kept informed of
their views through frequent contact
with the housebrokers and feedback
from direct communications with and
presentations to institutional investors
and fund managers  
website details of the 2014 agm are
set out in the notice of the meeting
enclosed with this report
the chairman is available to
shareholders on all matters relating to
governance and strategy all members
of the board may be contacted through
the company’s website
internal control
the board has overall responsibility for
the group’s system of internal control
and delegates the annual review of
internal control processes and their
effectiveness to the audit committee
the internal control systems are
designed to meet the group’s needs and
address the risks to which it is exposed
such systems mitigate rather than
eliminate the risks faced by the
business and can only provide
reasonable and not absolute assurance
against material misstatement or loss
necessary actions are taken to remedy
any significant failings or weaknesses as
they are identified the directors have
conducted a review of the effectiveness
of the group’s system of internal control
and consider it appropriate for the
business as part of this review there
were certain accounting treatment
changes and an adjustment made in
respect of goods received not invoiced
see page 47 no other failings or
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 19 o2o plc report and accounts 2013 20
corporate governance statement continued
weaknesses were identified a detailed
groupwide review of risk and
opportunity is overseen by the risk and
opportunity committee see page 23
for further details 
the key elements of the group’s
procedures and internal financial
control framework are
● the close involvement of the
executive directors in all aspects of
the daytoday operations including
regular meetings with senior staff
from across the group and a review
of the monthly operational reports
compiled by senior management
● clearly defined responsibilities and
limits of authority as set out in the
group’s commitment and authority
schedule the board has
responsibility for strategy and has
adopted a schedule of matters which
are required to be brought to it for
decision
● financial teams dedicated to each
business segment but with a
reporting line to the central finance
function this ensures that the
specific accounting needs of each
segment can be closely managed
whilst ensuring financial discipline is
maintained
● central control of key functions such
as tax treasury payroll legal and
insurance rather than on a divisional
basis
● a comprehensive system of financial
reporting forecasting and budgeting
detailed budgets are prepared
annually for all parts of the business
and consolidated by the central
finance team reviews occur through
the management structure
culminating in a group budget which
is considered and approved by the
board
● an agreed timeplan and schedule of
responsibility for the preparation of
consolidated accounts and a
continual review process with the
board reports and statements are
prepared independently from the
financial statements to ensure
integrity of content
● group management accounts are
prepared monthly and submitted to
the board for review v ariances from
budget and prior year are closely
monitored and explanations are
provided for significant variances
detailed expense reports with
comparisons against budget are
issued monthly to cost centre
managers to assist in cost control 
● a continuous process for identifying
evaluating and managing significant
risks across the group together with
a comprehensive annual review of
risks which covers both financial and
nonfinancial areas and
● an annual review of insurance cover
for the group including a review of
disaster recovery plans for it and the
warehouses the significant risks
facing the business are considered to
be the loss of a large customer or a
major interruption of warehouse
operations or it services further
detail is provided on pages 7 to 8 of
the strategic report
this process is in accordance with the
turnbull guidance and has been in place
throughout the year under review and up
to the date of approval of the annual
report and financial statements
going concern
the group has net current liabilities as
at 31 december 2013 and has traded
profitably since the balance sheet date
with the profits generated contributing
to the funding of the group’s working
capital requirements in addition the
group meets its daytoday working
capital requirements through sufficient
and appropriate credit facilities that are
committed until june 2015 the group’s
forecasts indicate that it is able to
operate within the level of its current
facilities and related covenants for the
foreseeable future accordingly the
directors having made appropriate
enquiries consider it reasonable to
assume that the group and the
company have adequate resources to
continue for the foreseeable future and
for this reason have continued to adopt
the going concern basis in preparing the
financial statements
corporate social responsibility
csr
measures to ensure responsible
business conduct and the identification
and assessment of risks associated with
social ethical and environmental
matters are managed in conjunction
with all other business risks and
reviewed at regular meetings of the
board and senior management 
o2o maintains its csr initiative entitled
‘good for you good for us good for
everyone’ which aims to combine added
value for customers with tangible
benefits for the business and the
environment 
a summary report on the group’s
policies and objectives for csr is set
out on pages 9 to 11
d rodwell
company secretary
2 april 2014 
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 20 o2o plc report and accounts 2013 21
nomination committee report
composition of the nomination
committee
the nomination committee comprises
david callear committee chairman
jim cohen and chris batterham the
company secretary is secretary to the
committee when appropriate the
chief executive is invited to attend
committee meetings
role of the nomination
committee
the nomination committee is a sub
committee of the board responsible for
all appointments to the board giving full
consideration to succession plans and
the leadership of the group the
committee meets as required and
engages with recruitment consultants
when appropriate  it makes
recommendations to the board for any
changes to the board and its
committees that it considers necessary
and also reviews the senior
management structure the committee
has a formal procedure for
appointments to the board and gives
due regard to the diversity of skills
knowledge experience and gender
however given the relatively small size
of the board there are no set objectives
in relation to diversity and
appointments are made by the board
following recommendation by the
nomination committee based on merit
against objective criteria 
the formal procedure for appointments
to the board is available together with
the committee’s terms of reference on
the company’s website
wwwoffice2officecouk
during 2013 the committee met on
four occasions principally to discuss the
resignation of mark cunningham and
the appointment of hugh cawley as
group finance director chairmanship
of the board and also board
performance
further details with regards to mark
cunningham’s termination agreement
are provided on page 31 
details of hugh cawley’s remuneration
are provided in the directors’
remuneration report  harvey nash
plc who has no connection with the
company was engaged in the
recruitment process
the committee also met to discuss the
change of chairman and consulted with
advisors prior to the board’s decision to
accept david callear’s resignation as
chairman and jim cohen’s appointment
further details are provided on page 31
of the directors’ remuneration report
as explained on page 18 of the
corporate governance statement the
committee reviewed feedback from
discussions between the housebroker
and key shareholders on the company
and its management which later became
the basis for the board performance
evaluation
after the year end steve mckeever
resigned as chief operating officer
during his tenure steve mckeever built
a strong team and the committee
therefore advised the board that it
should not replace him at board level
until it has had time to assess whether it
is best served through an internal or
external appointment or indeed can
manage by redistributing his
responsibilities
diversity and anti
discrimination 
the board fully supports a culture that
promotes diversity across a range of
criteria the group’s diversity and anti
discrimination policy was formulated in
response to the equality act 2010 and
is available to employees via the group
intranet and the employee handbook
the policy’s fundamental principle is
that every employee has the right to be
treated fairly in an environment in which
individual differences are recognised
respected and valued it raises
awareness of diversity including
gender in the workplace and what
constitutes unacceptable behaviour it
communicates how the company
undertakes to manage diversity and
eliminate unlawful discrimination within
the group complaints are treated in
confidence and resulting actions will
vary depending on the circumstances of
the discrimination if necessary
employees may be taken through a
formal disciplinary procedure which may
result in dismissal 
d j callear
chairman of the nomination committee
2 april 2014 
audit committee report
composition of the audit
committee
the audit committee comprises chris
batterham committee chairman jim
cohen and david callear  chris
batterham and david callear are
chartered accountants  non
committee members and the company’s
external auditors are invited to attend
meetings as and when appropriate the
company secretary is secretary to the
audit committee   the committee’s
terms of reference are available on the
company’s website
wwwoffice2officecouk
role of the audit committee
the audit committee is a sub
committee of the board and its
responsibilities include
● reviewing and recommending to the
board for approval the halfyear
report the annual report and
financial statements results
announcements of the group and any
other formal announcements relating
to the group’s financial performance
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 21 o2o plc report and accounts 2013 22
● reviewing the impact of changes in
accounting policies and standards
● reviewing the group’s systems of
internal financial control risk
management policies and
procedures 
● monitoring and reviewing the
requirement for an internal audit
function
● considering the appointment of the
external auditors overseeing the
process for their selection and
making recommendations to the
board in relation to their
appointment
● monitoring and reviewing the
effectiveness and independence of
the external auditors agreeing the
nature and scope of their audit their
remuneration and considering their
reports on the group’s accounts and
systems of internal financial control
and risk management and
● monitoring the group’s whistle
blowing procedures
main activities of the audit
committee
the audit committee met on seven
occasions in 2013 with other board
members and the auditors attending as
required in addition to fulfilling its
responsibilities as set out above the
committee also met to conclude the
tender process for a change of auditor
recommending to the board that kpmg
llp be appointed as auditors
subsequent meetings were held with
kpmg llp prior to their review of o2o’s
halfyearly results
change of auditor
pricewaterhousecoopers llp pwc
resigned as auditors with effect from
12 july 2013 and kpmg llp were
appointed as required by section 519
of the companies act 2006 pwc
provided a statement confirming the
circumstances and this was forwarded
to all shareholders on the register at
that point in time the statement
confirmed there were no extenuating
circumstances a resolution to appoint
kpmg llp as auditors will be put to
shareholders at the next agm
significant issues in relation to
the financial statements  
a number of prior year adjustments
have been made to the accounts further
to a review of certain accounting
treatments relative to best practice and
to provide greater transparency of the
groups financial performance and
position  as a consequence of these and
other changes the prior year results
have been restated details are
provided in the significant accounting
policies to the accounts in the current
financial year there is an insignificant
impact overall the board believes these
changes provide greater clarity and a
more appropriate reflection of
underlying financial performance
the significant judgements considered
by the committee in relation to the
2013 accounts including those referred
to above were as follows
intangible asset impairment
the carrying value of the group’s
goodwill has been reviewed to
determine whether there is any
indication of impairment the key
judgements explored further in note 2
to the financial statements are in
determining the forecasted cash flows
the discount rate and the growth rate  in
underlying impairment models
following review and discussion with
management and the external auditors
the committee is satisfied that the
value in use of the cgus exceeds the
carrying value of the intangible assets
revenue recognition
during the year the group took the
decision to revise its accounting policy
for the sale of software licences and
related maintenance services changing
from instant recognition of such
revenues on delivery to recognition over
the contract term to better reflect
industry practice  having made
appropriate enquiry the committee
concurs with this change in approach
accounting for supplier rebates and
catalogue contributions
the committee considered the timing
of the recognition of advance supplier
rebates for contributions to catalogue
production and for other purchasing
agreements together the rebates
these amounts have grown in
significance in the recent past so a
thorough review was carried out to
ensure that all such supplier
agreements were captured and that the
impact on prior years was thoroughly
understood  whilst we understand that
there are other companies in the office
products industry where recognition is
still immediately upon invoicing of the
rebate at the start of the contract
period the committee has
recommended that the policy will now
be to recognise both these advances
over the catalogue distribution or
purchasing period with which they are
associated the committee also
recommended that customer rebate
recognition should align more closely
with the relevant reporting period
going concern
the group meets its daytoday working
capital requirements through a
combination of the profits generated
and the credit facilities it enjoys with
the royal bank of scotland rbs
committed until june 2015  we agreed
with rbs to amend these facilities to
allow headroom for more rapid
execution of our reorganisation
programme  the group’s forecasts
indicate that we are able to operate
within the terms of the amended
facilities so that the committee after
discussion with management and the
external auditors agree that continuing
adoption of the going concern basis is
appropriate in preparing these financial
statements  the directors have
considered the factors that impact the
group’s future development
performance cash flows and financial
position along with the company’s
liquidity in forming their opinion on the
going concern basis the details of the
directors’ assessment are also included
in the significant accounting policies to
the accounts
audit committee report continued
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 22 o2o plc report and accounts 2013 23
risk and opportunity
management – internal audit
function
a risk and opportunity function was
established in 2010 to deliver value to
the business by ensuring risk is
managed at every level throughout the
group reducing inefficiencies through
process improvements and optimising
the opportunities that this brings
individual managers have taken
responsibility for their respective areas
and a formal reporting procedure has
been established by the risk and
opportunity manager overseeing this
function is the risk and opportunity
committee comprising audit
committee representatives the risk
and opportunity manager and those
directors and managers responsible for
key priorities it provides a forum for
discussion enables progress to be
monitored and actions to be prioritised 
the committee does not consider it
necessary to have a separate internal
audit function and considers the risk
and opportunity approach will help
mitigate the principal risks and
uncertainties facing the group which are
set out on pages 7 to 8 of the strategic
business review
the risk and opportunity committee
met on two occasions during 2013 and
more recently in march 2014 to review
the risk register consider the progress
made and reassess priorities
key priorities identified and completed
during the year were
● the migration of it servers to a
secure external hosting environment
● the auto enrolment of pensions and 
● harmonisation of the accounting
treatment of vendor funding
programmes
key risks and opportunities identified
and in progress are
● changes in customer buying behavior
and the impact on revenue
● the cotermination of the main
property leases at the end of 2014
● refinancing and
● the development and integration of
it systems across the group
review of whistleblowing
policy
o2o has a whistleblowing policy in place
which establishes a confidential channel
of communication for employees to
bring matters of concern about the
running of the business to the attention
of senior management upon being
notified of such a concern the policy
sets out a defined process for full
investigation and where necessary
corrective action to be taken the audit
committee reviews the whistleblowing
policy on an annual basis
no concerns were reported in the year
and following a review of the policy no
changes were considered necessary the
policy is available on the company’s
website wwwoffice2officecouk
independence of external
auditors
prior to the change of auditor in mid
2013 pwc had been the company’s
auditors since 2002 maintaining
independence through partner rotation
as required by the auditing practices
board  the appointment of kpmg llp
upholds the independence required of
external auditors  
the committee will continue to review
the effectiveness and independence of
external auditors by
● assessing kpmg llp’s performance
on an annual basis through meetings
with key personnel
● monitoring their independence and
objectivity by reviewing their
relationship with the group and
ensuring group policy is followed in
relation to the provision of nonaudit
services and
● reviewing anticipated future service
requirements and assessing their
ability to meet the requirement by
seeking opportunity to challenge
question and confirm the new service
proposition
the committee meets the external
auditors ahead of the audit to review
and approve scope and fees and obtain
written confirmation of their
independence and following the audit
without the executive directors being
present to discusses the efficiency of
the audit process and any observations
they wish to share with the committee
group policy on the provision of non
audit services requires that other than
for corporate taxation services
approval is sought from the committee
in advance of any engagement  the
committee will consider taking into
account the scope of the work and level
of fees involved whether the provision
of such nonaudit services impairs the
independence and objectivity of kpmg
llp 
as detailed in note 7 to the financial
statements total fees paid to kpmg
llp in 2013 were £177000 of which
£93000 related to audit fees and
£10000 related to the 2013 interim
review in addition kpmg llp were
engaged to perform taxation advisory
and compliance services for fees of
£27000 and £27000 respectively and
also audit related assurance services for
fees of £20000 the committee
approved all fees prior to the work being
undertaken with regards to tax
services these were provided by an
independent team and the committee
was satisfied that the level of fees did
not prejudice kpmg llp’s
independence
c m batterham
chairman of the audit committee
2 april 2014
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 23 o2o plc report and accounts 2013 24
annual statement by the
chairman of the remuneration
committee
this directors remuneration report is
the first report prepared under the new
regulations it sets out our policy on the
remuneration of executive directors for
approval by shareholders as well as
reporting on the year ended 31
december 2013
policy
the objectives of the remuneration
committee and of the board are that
remuneration policy and practice should
motivate reward and retain executive
directors and our senior management
generally as o2o’s leadership team
should be fair and rewarding for all
employees and should align the
interests of our senior executives and all
our employees with the interests of our
shareholders
since o2o listed in 2004 our
remuneration package for executive
directors has been a relatively simple
structure of salary standard benefits
pension annual bonus and a long term
incentive scheme this structure also
applies to the senior management  
unfortunately o2o’s long term incentive
scheme the performance share plan
psp has not been effective for
reasons that are not unique to o2o  in
the early years after listing we
generated enough free cash for a
progressive dividend policy but
nonetheless fell short of the rates of
growth in ueps that we had applied to
the psp as good market practice while
it was difficult to find a truly
representative group for measuring
total shareholder return tsr  we
evolved performance targets to align
the scheme more closely to our
situation but uk recession the decline
in the office supplies market and the
impact on our profitability have meant
that very few awards have reached the
threshold for vesting despite out
performing our peer group   
we decided it would not be appropriate
to consider further changes in 2013
given o2o’s performance during the year
and as a consequence decided not to
grant any psp awards in 2013 other
than for recruitment purposes the psp
in its current form reaches the end of its
10 year term in november 2015 and we
will consult with shareholders in
advance about how to replace it    
we do not intend to change the other
elements of the remuneration package
for executive directors in any material
respect in 2014   for 2015 we will be
considering whether the balance
between our bonus arrangements and
the psp is appropriate for o2o’s market
place 
2013 summary 
routine matters covered by the
committee during the year included
annual salary reviews and bonus target
setting in view of the limitations placed
on pay increases across the group
inflationary increases only were
awarded to the executive directors in
2013 the annual cash bonus plan which
is detailed below covers the immediate
key objectives of the group and was re
set with 2013 targets
the bonuses earned by the executive
directors were in respect of working
capital and personal objectives  the
bonuses earned by the chief operating
officer and the group finance director
were £17460 and £26000
respectively and will be paid in 2014
the chief executive has waived his
entitlement to a bonus of £25428
the psp awards granted in 2010 were
capable of vesting in 2013 however as
explained later the threshold levels of
performance were not met resulting in
these awards lapsing during the year
2014 expectations 
no changes are envisaged to be made to
the base salary levels of executive
directors in 2014
the bonus structure for the executive
directors in 2014 will be targeted at
financial performance progress
towards refinancing from june 2015 or
earlier and change management the
same maximum bonus opportunities
employed last year ie 100 of salary
for the chief executive and 60 of
salary for other executive directors will
apply
directors’ remuneration report
the psp awards granted in 2011 have a
measurement period concluding in may
2014 and a vesting date of 20 june 2014
following which the committee will decide
the extent to which they vest
directors
in 2013 there were two changes to the
board and there has been a further change
in early 2014
mark cunningham resigned as group
finance director on 30 january 2013 and
the board appointed hugh cawley to
succeed him in february of that year hugh
cawley’s remuneration package was
commensurate with the role that the
committee expected from the position
including a greater involvement with the
city the committee was conscious that
the package had to be suitably attractive to
recruit a high calibre candidate but also had
to be in line with the remuneration
structure for the current executive team
as reported in the chairman’s statement
on page 3 david callear sadly felt he must
step down as chairman in november 2013
because of his wife’s terminal illness i
recognise that my continued chairmanship
of the remuneration committee now that i
am also chairman of the board is contrary
to the uk corporate governance code
this was however the only practical
decision in the circumstances and was fully
supported by our advisors  we would not
expect this arrangement to continue in the
long term and the nomination committee
will during 2014 consider how best to
appoint a new chairman of the
remuneration committee
as reported in the nomination committee
report steve mckeever resigned on 10
march 2014 as chief operating officer 
our remuneration policy is set out over
pages 25 to 29 and our implementation
report is set out over pages 30 to 36
shareholders will be asked to vote
separately on these at the company’s agm
on 29 may 2014 the remuneration policy
will be subject to a binding vote and the
implementation report will be subject to
an advisory vote
j l cohen
chairman of the remuneration committee
2 april 2014 
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 24 remuneration committee and its terms of reference
o2o plc report and accounts 2013 25
the remuneration committee is a subcommittee of the board
membership comprises jim cohen committee chairman
chris batterham and david callear all of whom are
independent of management and free from any business or
other relationship which could interfere with the exercise of
their independent judgement as explained on page 17 since
taking the role of chairman of the board and notwithstanding
this is in breach of the uk corporate governance code jim
cohen continues to chair the committee although he is absent
from discussions concerning himself when necessary non
committee members are invited to attend by prior
arrangement  
the committee’s terms of reference are available on the
company’s website wwwoffice2officecouk 
the principal function of the committee is to make
recommendations to the board regarding the company’s policy
on the remuneration benefits and terms of employment of the
executive directors in addition the committee assists with the
recruitment and remuneration of new board members and also
monitors the remuneration of senior management generally 
the committee met on seven occasions in the year and the
principal matters covered were
● annual salary and performance bonus arrangements for
the executive directors
● determination of prior year target achievements 
● termination payment to the previous finance director
● remuneration package for the new group finance
director
● the grant of options under the sa ye scheme to all
employees in october 2013 and
● consideration of alternative long term incentives
in determining remuneration packages and policies due
regard is given to any legal requirements the provisions
of the uk corporate governance code and the ukla
listing rules the committee sought independent advice
from its appointed advisors aon hewitt limited
operating through the brand new bridge street and
macfarlanes llp on an ad hoc basis rather than a retained
fee basis aon hewitt limited did not provide any other
services to the company during the year under review
macfarlanes llp are appointed by the company to
provide advice on various other corporate and legal
matters 
the committee is satisfied that the advice they received
during the year was objective and independent
remuneration policy in respect of
executive directors is aimed to ensure
that the group achieves its potential
and increases shareholder value  
the remuneration packages are
designed to attract and retain high
calibre skilled and experienced
individuals to motivate them to manage
the affairs of the group and to take the
business forward a combination of
annual bonuses and long term incentives
is aimed to ensure immediate and longer
term objectives are met and to drive
exceptional performance in both the
short and the long term pensions and
other benefits are in keeping with the
business and industry
consideration of pay and conditions
for the wider group
the committee does not consult with
employees when formulating or
reviewing remuneration policy for the
executive directors but does have
regard for the pay and employment
conditions across the group generally
including the basis of any salary
increases and at a detailed level the
remuneration of the senior management
team  
employee remuneration packages are
generally simpler than those of the
executive directors with salaries
reflecting local market rates for the
skills and experience employed
salaries are periodically reviewed to
ascertain their competitiveness and
although annual increases are not
guaranteed discretionary increases
may be made based on merit  o2o
operates a defined contribution pension
scheme which is open to all permanent
employees and complies with the
government’s change in workplace
pension provision and autoenrolment
the company’s defined benefit pension
scheme was closed to future accrual on
31 december 2011 full details are
given in note 24 of the financial
statements other benefits and cash
incentives may apply according to the
nature of individual roles and functions
long term incentive awards are limited
to the senior management team on a 
discretionary basis to ensure an
alignment of interests with shareholders
consideration of shareholder views
and abi guidelines
the views of shareholders and the
guidelines of relevant authorities such as
the abi are taken into account when
formulating and implementing
remuneration policy previously the
committee has consulted with key
shareholders and the abi prior to
amending performance measures for long
term incentive awards and will continue
to do so with regards to any proposed
major change to executive remuneration
service agreements
the service agreements for all of the
executive directors are on a rolling basis
and terminable on 12 months’ notice by
either party with the right for the
company to make a payment in lieu of
salary and benefits excluding bonus for
any unexpired period of notice  these
payments may be made on a phased basis
and are subject to mitigation
directors’ remuneration policy
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 25 o2o plc report and accounts 2013 26
directors’ remuneration report continued
purpose and link
to strategy
operation opportunity performance metrics
base salary
t o attract and retain high calibre
executives with the skills
experience and motivation to
direct and manage the affairs of
the group
reviewed and fixed annually with
changes normally effective from
1 april having taken account of
the performance of the individual
changes in their responsibilities
intended pay increases across the
group and when appropriate
externally benchmarked against
salaries for similar jobs
salaries are periodically reviewed
to ascertain their
competitiveness any increases
will generally not exceed
prevailing rates of inflation
none
benefits
contributes to an overall
competitive remuneration
package to attract and retain
executive directors  
benefits include car and fuel
allowances private medical
healthcare life assurance
provision of relocation assistance
ifwhen applicable other
benefits may be offered if
considered appropriate and
reasonable by the committee
the benefits are set at a level
comparable to those offered by
companies of a similar size for
similar roles there is no
automatic annual increase
although they are periodically
reviewed to ensure they remain
competitive the cost of providing
some benefits will be subject to
externally charged premiums
none
annual bonus
t o focus executive directors on
the achievement of annual
financial business targets and
personal objectives
t argets are renewed annually to
ensure they are aligned with the
short term objectives of the
group and those areas of the
business over which the executive
director has responsibility
the bonus payable is determined
after the end of the relevant year
based on performance against
targets
up to 100 of base salary is
offered to the chief executive up
to 60 of base salary is offered
to other executive directors
the committee retains discretion
over payment of each element of
the bonus
a mix of financial operational
departmental and personal
performance metrics are used
typically weighted to financial
targets with the primary aim of
encouraging and rewarding strong
and sustainable annual
performance sliding scales and
de minimis thresholds may apply 
long term incentive
incentivises the executive
directors in the achievement of
longer term objectives and
rewards exceptional
performance 
awards are generally but not
always made annually with actual
vesting dependent upon the
achievement of performance
conditions over a three year
period
for awards granted prior to
2014 a provisional banking
arrangement is in place for the
achievement of targets during the
three year period whereby each
element is measured after pre
agreed trigger points actual
vesting will only occur three years
after the award was granted 
awards may be up to 100 of
salary however the committee
has discretion to make awards of
up to 200 of salary for
recruitment or retention
purposes
the committee has discretion on
whether and to what extent
targets have been met or if an
exceptional event has occurred
that the targets are no longer
appropriate
the committee will set such
targets whether based on
financial andor share price
performance targets as they
consider appropriate from time
to time to ensure that sustained
long term generation of
shareholder value is encouraged
and rewarded 
pension
t o attract and retain high calibre
executives with a competitive
benefit
contributions are made to the
executive directors personal
pension schemes
the contributions are equivalent
to up to 10 of base salary
none
sa ye
encourage participation
alongside other employees in the
growth in share price
hmrc approved scheme open to
all uk employees
maximum savings are in
accordance with hmrc
regulations
none
there is no facility currently in place to provide for the clawback of any remuneration previously paid
remuneration policy table  executive directors
the remuneration policy  if approved by shareholders at the agm on 29 may 2014 will apply with immediate effect until replaced by
a new or amended policy  but no longer than three years any commitments made by the company prior to the approval and
implementation of this policy  but which are consistent with the policy in force at the time will be honoured
each element of the remuneration policy for executive directors is set out in the table below
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 26 o2o plc report and accounts 2013 27
base salary
no changes are envisaged to be made to
the base salary levels of executive
directors in 2014
annual bonus
performance conditions for the annual
bonus scheme focus on short term
objectives that can be measured in the
current financial year these objectives
are typically concerned with improving
profitability and financial strength the
performance metrics are a mix of
financial operational and departmental
targets based on approved budgets and
on a sliding scale basis with a de minims
threshold recognising that each
executive director has in addition to
common group objectives different
areas of control and responsibility an
element of bonus is aimed at the
achievement of individual or operational
objectives
the committee reserves discretion for
the payment of any element of the
bonus in the event of genuinely
unforeseen and exceptional trading
circumstances or where individual
performance merits any such
discretionary payments will not exceed
the maximum indicated in the policy
table
the annual bonus for 2014 will operate
in accordance with the above policy with
performance metrics based on financial
performance progress towards re
financing from june 2015 or earlier and
change management the targets
themselves relate to the 2014 financial
year and as they are deemed to be
commercially sensitive are not
disclosed performance against these
targets will be published in next year’s
directors’ remuneration report
long term incentives
as described above the company has
had a long term incentive plan the
performance share plan psp in
operation since its approval by
shareholders in november 2005 the
psp rules allow awards over ordinary
shares subject to performance criteria
and vesting in three years to be made to
individuals the number of ordinary
shares awarded is calculated by
reference to the three day average of
the closing midmarket quotation of the
company’s share price prior to the
award date these awards are typically
structured as ‘nominal cost’ options with
an exercise price of 01p per share
performance targets are set at the time
of grant however the committee may
under the plan rules adjust performance
targets where they have become unfair
or impractical the committee may also
amend the performance target to take
account of exceptional circumstances
additional notes to the remuneration policy table executive directors
but will consult with major shareholders
before doing so 
in its current form the psp will expire in
november 2015 although outstanding
awards granted under this plan will
continue to operate under its terms and
conditions it is likely that a resolution to
approve a new plan will be put to
shareholders at the 2015 agm 
pension
pension contributions of up to 10  of
basic salary are paid to the individual
pension scheme of the executive
director no additional benefits are
payable by the company in the event of
early retirement 
save as you earn share plan sa ye
the group operates an hmrc approved
sa ye scheme open to all employees
including the executive directors who
have been employed within the group
for a minimum of six months there are
currently four plans in operation three
year and five year plans launched in
2011 and 2013  the sa ye scheme in
its current form will expire in
september 2014 although its
provisions shall nevertheless continue in
full force and effect in relation to
options then subsisting it is likely that a
new sa ye scheme will be put to
shareholders at the 2015 agm
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 27 o2o plc report and accounts 2013 28
directors’ remuneration report continued
illustration of application of remuneration policy for different performance
scenarios
the new regulations require an illustration to be provided of the potential value of
the executive directors’ remuneration packages based on three performance
scenarios
these charts are indicative only share price movement which impact the value of psp
awards has been excluded assumptions made for each scenario are as follows
min – fixed remuneration only ie latest known salary benefits and pension
t arget – fixed remuneration plus 50 of maximum annual bonus opportunity and
50 vesting of psp awards a psp award of 100 of salary has been used for the
purposes of this illustration
max – fixed remuneration plus maximum annual bonus opportunity and full vesting of
psp awards a psp award of 100 of salary has been used for the purposes of this
illustration 
policy for holding external appointments
executive directors are permitted to hold external appointments providing these do
not interfere with the business of the group on a time or conflict of interest basis the
executive directors are required to declare any such appointments to the board in
advance of accepting the appointment any fees received may be retained directly by
the individual
policy for payment on loss of office
the key principle in determining
payments for loss of office will be the
contractual entitlement any
extenuating circumstances would be
dealt with on a case by case basis
although no payments would be made
that could be construed as a reward for
poor performance payment in lieu of
salary and benefits may be staged over
any unexpired period of notice during
which time the executive director must
take all reasonable steps to mitigate
through alternative employment 
there is no automatic entitlement to
annual bonus although the committee
has discretion over the payment of any
annual bonus in respect of the financial
year of cessation based on
performance against predetermined
targets set and taking into account the
timing and circumstances of the
cessation of office
generally any outstanding share awards
granted under the company’s psp
scheme will lapse upon cessation of
employment there are some exceptions
to this notably ‘good leaver’ provisions
and on a change of control
good leaver provisions provide the
committee with discretion to allow the
awards to vest or become exercisable
either on the date falling six months
after the date of cessation of
employment or on the vesting date to
the extent the committee determines
that the performance targets have been
satisfied with a pro rata reduction to
reflect the proportion of the
performance period not served
although the committee has the
discretion to determine such higher or
lower proportion as appropriate
in the event of a change of control or
takeover all awards granted under the
psp vest or become exercisable to the
extent that the performance targets
have been satisfied as determined by
the committee with a pro rata
reduction to reflect the proportion of
the performance period not served
unless determined otherwise by the
committee 
 
     
renumeration £000
1200
1000
800
600
400
200
min t arget max
fixed
bonus
l tip
simon moate – chief executive
£373
£696
£1019
100 54 37
23
23
32
31
  
renumeration £000
600
500
400
300
200
100
min t arget max
fixed
bonus
l tip
hugh cawley – group finance director
£236
 
    
100 60 45 
15
25
22
35
£396
£556
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 28 o2o plc report and accounts 2013 29
the committee has similar discretion in
determining the extent to which awards
vest or become exercisable upon the
passing of a resolution to wind up the
company upon a reorganisation the
committee has discretion to allow the
awards to be exchanged for options
over shares in the new holding company
on such terms determined by the
committee
approach to recruitment
remuneration
the composition of a remuneration
package for the appointment of a new
director would be determined by the
committee having considered where
appropriate any advice from
remuneration or recruitment
consultants generally all of the
elements tabled on page 26 would be
offered  the base salary would take due
account of all the relevant
circumstances such as the previous
incumbent’s salary prevailing market
rates and the experience of the recruit
initial annual bonus arrangements would
take into account the timing of the
appointment and the validity of targets
in common with other executive
directors but would be subject to the
maximum stated in the policy table
under the psp rules an award of up to
200 of basic salary may be offered to
a new recruit if the committee
considered this necessary and in
shareholders’ interests along with
temporary living allowances or
relocation assistance  the committee
retains discretion to make appropriate
remuneration decisions to meet
individual circumstances of the recruit
such as an offer of similar benefits to or
the buyout of forfeited benefits from
previous employment however when
determining the amount of any buyout
arrangement which could be provided
under the psp or utilising rule 942 of
the ukla listing rules the committee
will take full account of the size and
structure of awards forfeited from
previous employment in addition if a
director is recruited from overseas the
committee retains discretion to accord
with standard remuneration practice of
their country of residence
the above policy applies to both internal
promotions and external appointments
to the board if necessary to cover
shortterm situations the committee
may make interim appointments or
appoint a nonexecutive director to an
executive function
service agreements for newly
appointed executive directors could be
terminable on 6 months’ notice by either
party during any probationary period
but are likely to be extended to 12
months’ notice after satisfactory
completion of this period
purpose and link
to strategy
operation opportunity performance metrics
attract and retain highcalibre
individuals
basic fees and additional fees for
chairmanship of board
committees and to the senior
independent director are
reviewed periodically
some benefits such as car
allowance and healthcare may
also be provided
no entitlement to pension
benefits or participation in group
incentive schemes or employee
share plans
fees paid reflect the expected
commitment and contribution of
the roles and are positioned
against comparable roles in
companies of a similar size 
although annual increases are not
prescribed any made would not
exceed prevailing rates of
inflation
additional payments may be
made for time commitments over
and above contract terms 
none
remuneration policy table nonexecutive directors including chairman
the remuneration of the nonexecutive directors is determined by the chairman and the chief executive and the remuneration of
the chairman is determined by the nonexecutive directors and the chief executive
generally three year renewable service agreements are offered to nonexecutive directors terminable on three months’ notice
by either party  upon immediate termination by the company three months’ fees may be paid in lieu of notice after a maximum
of three terms on this basis the nonexecutive directors may continue on renewable one year agreements subject to annual re
election by shareholders 
see resolution 3 of the agm notice in respect of the above directors’ remuneration policy
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 29 o2o plc report and accounts 2013 30
2012 2012 2012 2012 2012 2012 2012
salary  loss of t axable annual psp pension t otal
fees office benefits bonus award
2
£000 £000 £000 £000 £000 £000 £000
non–executive
jim cohen 56     56
david callear 198  10   208
chris batterham 51     51
subtotal 305  10    315
executive
simon moate 314  15  31 360
hugh cawley
4
     
steve mckeever 186  15  19 220
mark cunningham 188  14  19 221
subtotal 688  44   69 801
2012 t otal 993  54   69 1116
1 
the value in 2013 is based on the psp granted in 2011 with a performance measurement that concludes in may 2014 and a
vesting date of 20 june 2014 following which the committee will determine the extent to which they vest steve mckeever’s
psp award will lapse
2 
the value in 2012 is based on the psp granted in 2010 with a performance measurement period from 1 january 2010 to 31
december 2012 the award lapsed in 2013
3 
jim cohen took over from david callear as chairman on 18 november 2013
4 
hugh cawley joined the board on 25 february 2013
5 
steve mckeever resigned from the board on 10 march 2014
6 
mark cunningham resigned from the board on 30 january 2013 
single total figure table of directors’ remuneration earned in 2013 – audited
2013 2013 2013 2013 2013 2013 2013
salary  loss of t axable annual psp pension t otal
fees office benefits bonus award
1
£000 £000 £000 £000 £000 £000 £000
non–executive
jim cohen
3
63     63
david callear
3
155  14   169
chris batterham 51     51
subtotal 269  14    283
executive
simon moate 326  14  33 373
hugh cawley
4
170  16 26  17 229
steve mckeever
5
194  17 17  19 247
mark cunningham
6
111 111 9  11 242
subtotal 801 111 56 43  80 1091
2013 t otal 1070 111 70 43  80 1374
directors’ remuneration report continued
implementation report for the year ended 31 december 2013
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 30 o2o plc report and accounts 2013 31
additional notes to the single total figure table of directors’ remuneration earned in 2013  audited
salary and fees
simon moate and steve mckeever received a 25 increase in salary with effect from 1 april 2013
hugh cawley receives a basic annual salary of £200000 the above figure represents salary paid from when he joined the board
on 25 february 2013
mark cunningham resigned from the board on 30 january 2013 and was paid monthly to the end of july after which in
accordance with his contractual terms a lump sum settlement was made the table above includes 12 months’ pay in lieu of
notice for further details see page 24
in 2012 david callear received an increase in fees for additional time commitments in managing strategic activity and this was
adjusted upon a return to normal time requirements during 2013 in the latter part of 2013 following the change in chairmanship
of the board jim cohen’s annual fee was increased from £56650 to £115000 to reflect the change in his responsibilities and
time commitment david callear’s annual fee was reduced from £137500 to £55000 inclusive of a £5000 fee for his continued
chairmanship of the nomination committee 
benefits
t axable benefits comprised car benefits and private healthcare the executive directors also have life assurance at the rate of
four times annual salary this is not a taxable benefit
in accordance with his contractual terms mark cunningham continued to receive taxable benefits to the end of july 2013 
annual bonus
the following targets and proportion of bonus entitlement applied to the executive directors in 2013
performance measure and
maximum percentage of bonus
performance targets actual performance actual percentage of bonus
achieved
40  growth in ueps 15 of the bonus entitlement
payable on achieving 90 of
budgeted ueps rising to 40 on
achieving 110 of budgeted
ueps with prorating between
these points
the ueps growth target was not
achieved 
nil
25  net debt management
year end and average month end
targets
40 of this element payable for
achieving an annual average month
end net debt target and the
maximum bonus entitlement for
achieving an improved lower level
of net debt prorating applies
between these points
whilst the year end net debt was
better than budget the annual
average net debt was skewed by
higher balances at the start of the
year and hence the target for
average net debt was not
achieved
nil
15  working capital
management
a bonus of up to 5 each for
achieving working capital days for
debtors creditors and stock
within a budgeted range
the year end and annual average
stock days achieved were better
than target debtor days and
creditor days achieved were
outside the budgeted range
simon moate – 5
steve mckeever – 3
hugh cawley – 3
20  personal objectives specific to each director’s role
and responsibility
the achievement of individual
targets is considered
commercially sensitive and is not
disclosed
simon moate – 28
steve mckeever – 6
hugh cawley – 10
simon moate has waived his entitlement to a bonus of £25428 that would otherwise have been paid
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 31 o2o plc report and accounts 2013 32
directors’ remuneration report continued
long term incentive plans
psp awards granted exercised or expired during the year
granted exercised expired face value
1 jan during during during 31 dec at time of exercisable expiry
2013 the year the year the year 2013 award from date
simon moate
2010 award 189711  189711  £295000 210513 211113
2011 award 441948  441948 £590000 200614 200615
2012 award 232727  232727 £320000 180915 180916
864386  189711 674675
hugh cawley
2013 award  214670  214670 £200000 040416 040417
 214670  214670
steve mckeever
2010 award 112540  112540  £175000 210513 211113
2011 award 262172  262172 £350000 200614 200615
2012 award 138182  138182 £190000 180915 180916
512894  112540 400354
mark cunningham
2010 award 118971  118971  £185000 210513 211113
2011 award 147566  147566  £197000 200614 200615
2012 award 137891  137891  £189600 180915 180916
404428  404428 
further to steve mckeever and mark cunningham leaving the company  under the terms of the psp  their awards have lapsed
in accordance with the psp rules the number of shares awarded is determined by reference to the three day average of the
closing midmarket quotation of the company’s share price prior to the award date
psp awards granted in 2010 
the number of shares granted in 2010 were based on 100 of salary using an average share price of 1555p the performance
criteria as measured over the three year period from 1 january 2010 to 31 december 2012 were based in an 8020 proportion
on i ueps growth in excess of rpi and ii a comparative measure of tsr against companies in the ftse small cap index
neither targets were achieved and the awards lapsed without vesting in 2013
psp awards granted in 2011 and thereafter
in 2011 following consultation with key shareholders and the abi the psp became a two part scheme with part a and part b
awards
part a awards have performance measurements split equally between growth in ueps and share price
the ueps component is split into three equal tranches to be measured annually each tranche will provisionally vest 50 for
achieving a minimum ueps growth target proportionate provisional vesting will occur on a straightline basis for ueps growth
up to a higher level target
the share price component is tested on five occasions during the three year performance period if the share price hits an agreed
average price in the 30 day period following the announcement of results average share price then between 20 and 100 of
this component will provisionally vest  
the purpose of part b awards was to provide a recruitment and retention incentive these have no performance conditions
attached but are subject to an underpin as determined by the committee 
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 32 o2o plc report and accounts 2013 33
psp awards granted in 2011
in 2011 part a and part b awards each to the value of 100 of salary were granted to simon moate and steve mckeever the
total number of shares was determined using an average share price of 1335p the performance targets for part a awards were
as follows 
ueps growth over rpi extent to which tranche average extent of provisional 
provisionally vests share price vesting
4 50 160p 20
8 100 200p 30
240p 100
further to an average share price of 160p being achieved in the period following the announcement of the 2011 final results
20 of the part a award 10 of the whole psp award provisionally vested  the psp awards are due to vest on 20 june 2014
following which the committee will decide the extent to which they vest as mentioned above the awards granted to steve
mckeever will lapse
psp awards granted in 2012
the psp awards granted in 2012 to simon moate and steve mckeever were part a awards to the value of 100 of salary the
total number of shares was determined using an average share price of 1375p the same performance targets as 2011 apply
and they have a vesting date of september 2015 t o date there has been no provisional vesting  as mentioned above the awards
granted to steve mckeever will lapse
psp awards granted in 2013
other than those awarded to hugh cawley following his appointment no psp awards were granted in 2013 hugh cawley’s psp
award of 214670 shares at a share price of 932p was equivalent to 100 of salary split equally between part a and part b
awards performance targets for the part a award are as below
ueps growth over rpi extent to which tranche average extent of provisional 
provisionally vests share price vesting
4 50 107p 20
8 100 134p 30
161p 100
average share price as referred to above and rebased proportionately from the 2011 targets to the share price at the date of
grant in april 2013
the first measurements will be made after the announcement of the 2013 full year results
pension
pension contributions to the executive directors’ personal pension schemes were made at a rate of 10 of basic salary none of
the executive directors have arrangements under the group’s defined contribution pension scheme or the defined benefit
pension scheme which is now closed
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 33 o2o plc report and accounts 2013 34
directors’ remuneration report continued
beneficial options granted to directors under the sa ye scheme were as follows
number number number face value exercisable expiry
1 jan 13 granted exercised expired 31 dec 13 of options from date
simon moate 14069 33039  14069 33039 £15000 011118 010519
steve mckeever 12842 33039  12842 33039 £15000 011118 010519
hugh cawley  33039  33039 £15000 011118 010519
the executive directors are eligible to participate in o2o’s sa ye schemes on the same terms as other employees during the year
simon moate and steve mckeever elected to cancel their existing sa ye savings contracts in order to join the new sa ye scheme
launched in october 2013 the options granted during the year were with an exercise price of 454p per share being a 20
discount on the closing share price immediately prior to the launch being eligible hugh cawley also joined the new scheme all of
the executive directors are saving the current maximum monthly amount of £250 in the 5 year scheme as mentioned above the
options granted to steve mckeever will lapse
performance graph 
the graph below shows o2o’s total shareholder return performance tsr compared to the ftse small cap index which the
company considers to be the best comparative index for o2o for these purposes  the values indicated in the graph show the
share price growth plus reinvested dividends from a £100 hypothetical holding of ordinary shares in o2o and in the index from 1
january 2009 to 31 december 2013
office2office plc tsr
ftse small cap tsr
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 34 o2o plc report and accounts 2013 35
chief executive’s remuneration over the last five years
the table below shows the total remuneration figure for the chief executive over the same five year period as the above graph
together with the proportion of bonus and psp award payable in each year  
single figure of annual bonus as a psp shares vesting as a percentage of 
total remuneration percentage of maximum maximum award
£000 
2013 373 00 bonus waived 00
2012 467 00 bonus waived 500
2011 413 169 136
2010 434 00 bonus waived 262
2009 383 300 00
the awards do not vest until june 2014 following which the committee will determine the extent to which they vest 
percentage change in remuneration of chief executive
the percentage change in remuneration of the chief executive during the year is provided below  as the group has a diverse
workforce the senior management team as referenced on page 8 of the strategic report is considered to be the most
appropriate comparator
chief executive senior management team
salary 25 22
benefits 106 03
bonus 00 650
   notice periods and unexpired term of contracts
the service agreements for the executive directors are on a rolling basis and terminable on 12 months’ written notice by either
party david callear and jim cohen are on oneyear terms which are due to be renewed on 28 june 2014 and they have
provisionally agreed to continue for another year chris batterham’s second three year term ends on 25 june 2014 and he has
provisionally agreed to continue for a one year term
payments for loss of office  audited
mark cunningham resigned from the board on 30 january 2013 and took leave from his employment from 28 february 2013 in
line with his contractual terms of a 12 month notice period subject to mitigation mark cunningham continued to be paid monthly
until july 2013 when the committee exercised discretion and agreed a lump sum settlement of £110880 for the remaining
sums due being 7 months’ basic salary all taxable benefits continued to be paid until july 2013 and life assurance will continue
for the current policy period no annual bonus was paid for the 2012 financial year no lost bonus opportunity was included in his
termination payment and all unvested psp awards lapsed  there were no discretionary payments
relative importance of spend on pay
2013 2012 movement
£000 £000 
t otal remuneration for the group see note 6 on page 64 30155 31046 29
dividends paid to shareholders see note 10 on page 66 1302 4113 683
repayment of borrowings see note 20 on page 76 5000 2500 1000
finance costs see note 8 on page 65 2332 2138 91
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 35 o2o plc report and accounts 2013 36
directors’ remuneration report continued
directors’ interests  audited
there is no formal shareholding requirement although it is encouraged by the board the beneficial interests of the directors and
their immediate families in the share capital of o2o at the year end are set out below  
number of ordinary shares
2013 2012
jim cohen 107346 65496 
david callear 650991 450991
chris batterham 7516 7516
simon moate 236832 196832
hugh cawley 50000 
steve mckeever resigned 10 march 2014 12111 6747
mark cunningham resigned 30 january 2013 1089549 1089549
2154345 1817131
no director had any material interest in any contract of significance with the group during the period under review the directors
confirm that they have not given any pledges of o2o shares
statement of voting at general meeting
a resolution to approve the directors’ remuneration report in respect of the year ended 31 december 2012 was passed by
shareholders at the last agm on 22 may 2013 the percentage of votes cast for and against the resolution was 9099 and
901 respectively the number of votes withheld was 731844
shareholder approval 
shareholders will be asked to vote separately on the remuneration policy as set out over pages 25 to 29 and also the
implementation report for the last year as set out over pages 30 to 36 ordinary resolutions for both of these will be proposed at
the agm on 29 may 2014 the remuneration policy will be subject to a binding vote and the implementation report will be subject
to an advisory vote
on behalf of the board
j l cohen
chairman of the remuneration committee
2 april 2014 
see resolution 2 of the agm notice in respect of the above implementation report
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 36 o2o plc report and accounts 2013 37
independent auditors’ report to the members
of office2office plc 
opinions and conclusions
arising from our audit
1 our opinion on the financial
statements is unmodified 
we have audited the financial
statements of office2office plc for the
year ended 31 december 2013 which
comprise the consolidated income
statement the consolidated statement
of comprehensive income the
consolidated and company balance
sheets  the consolidated and company
statements of cash flows the
consolidated statement of changes in
equity the company statement of
changes in equity and the related notes
in our opinion  
● the financial statements give a true
and fair view of the state of the
group’s and of the company’s affairs
as at 31 december 2013 and of the
group’s profit for the year then
ended  
● the group financial statements have
been properly prepared in
accordance with international
financial reporting standards as
adopted by the european union
ifrss as adopted by the eu
● the company financial statements
have been properly prepared in
accordance with ifrss as adopted by
the eu and as applied in accordance
with the provisions of the companies
act 2006 and 
● the financial statements have been
prepared in accordance with the
requirements of the companies act
2006 and as regards the group
financial statements article 4 of the
ias regulation 
2 our assessment of risks of
material misstatement
in arriving at our audit opinion above on
the financial statements the risks of
material misstatement that had the
greatest effect on our audit were as
follows
valuation of goodwill £50523k
refer to the audit committee report
the accounting policy and note 12
financial disclosure
● the risk – the carrying value of
goodwill is a significant part of the
net assets of the group  the group
has experienced lower than expected
profitability over the last few years
and there is a risk of impairment of
the group’s goodwill  goodwill is
assessed for impairment using a
discounted cash flow model to
calculate a value in use  due to the
inherent uncertainty involved in
forecasting and discounting future
cash flows which are the basis of the
assessment of the valuation this is
one of the key judgemental areas
that our audit focused on 
● our response – our audit procedures
included among others challenging
the budgeting procedures upon
which the forecasts are based and
the principles and integrity of the
models used and assessing whether
they were consistent with the
forecasts used to support the going
concern assumption see below  we
explain below the work performed in
respect of the budgets in our
response to the going concern and
financing arrangements risk  we also
assessed the longer term
assumptions including projected
growth rates cost inflation discount
rates and the other key inputs
including the potential risk of
management bias and considered
the market capitalisation of the
group  we assessed the adequacy of
the group’s disclosures see note
12 in respect of impairment testing
and whether disclosures about the
sensitivity of the outcome of the
impairment assessment to changes
in key assumptions properly
reflected the risks inherent in the key
assumptions and the requirements
of relevant accounting standards
accounting for supplier rebates and
catalogue contributions £177k and
£61k respectively
refer to the audit committee report
the accounting policies and the changes
in accounting policies and restatement
section of significant accounting
policies financial disclosure
● the risk – the group has a number of
complex agreements with suppliers
which include rebates from these
suppliers if certain conditions are
met and catalogue contributions
there is often judgement required in
allocating the rebate and
contributions between accounting
periods due to the complexity of the
contractual conditions    the group
has changed its accounting
treatment in the year in respect of
certain supplier rebates and
catalogue contributions such that
their recognition should more closely
align with the relevant reporting
period and this has given rise to
certain prior year adjustments as
described in the changes in
accounting policies and
restatement section of significant
accounting policies  the treatment
of these rebates and contributions
could impact the timing and quantum
of cost of sales other operating
income and profits recognised in
each period and is therefore
considered to be a significant audit
risk
● our response – our audit procedures
included among others obtaining a
list of all supplier rebates and
catalogue contributions and testing a
sample of the significant contracts
our contract analysis focused on
assessing the key clauses in the
contracts in relation to rebates and
contributions and evaluating the
directors’ documentation of their
judgements in determining the timing
and treatment of the rebate and
contribution recognition we have
assessed the disclosure of cost of
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 37 o2o plc report and accounts 2013 38
sales and other operating income in
the financial statements and agreed
this to underlying documentation and
have considered the appropriateness
and consistent application of the
revised accounting treatment   
revenue recognition £231887k
refer to the audit committee report
the accounting policy the changes in
accounting policies and restatement
section of significant accounting
policies and note 3 financial
disclosures
● the risk – the group’s results include
contracted revenues for software for
which the timing of recognition is
judgemental due to the performance
periods often not being contractually
prescribed the judgements relating
to these revenues do impact the
timing and quantum of revenue and
profit recognised in each period the
group has reassessed the
appropriateness of its policies
relating to this source of income and
this has given rise to certain prior
year adjustments as described in the
changes in accounting policies and
restatement section of significant
accounting policies  
● our response – our audit procedures
included among others obtaining a
list of all such revenue and critically
assessing significant contracts  our
contract assessments focused on
key contractual terms and evaluating
the directors’ documentation of their
judgements in determining the timing
of the revenue recognition through
determining the nature of any
performance criteria and confirming
the recognition is consistent with the
group’s accounting policies we have
also evaluated the timing of
contracted cashflows in respect of
these revenues and any impact on
the recognition of revenue  we have
assessed the disclosure of revenue in
the financial statements and agreed
this to underlying documentation  
going concern and financing
arrangements
refer to the audit committee report
the accounting policy note 2 note 20
and the going concern section of
significant accounting policies
financial disclosure
● the risk – the financial statements
explain how the directors have
formed the judgement that the going
concern basis is appropriate in
preparing the financial statements of
the company and the group  the
group had bank debt of £23587k as
at 31 december 2013 the related
facilities include certain covenants
which have been amended favourably
for the group subsequent to the year
end and with which the group was in
compliance at the year end the
directors have concluded that
particularly in view of the revised
banking agreement the degree of
uncertainty attached to whether the
going concern basis is appropriate is
not material as this assessment
involves consideration of future
events there is a risk that the
directors’ judgement is inappropriate
and that the uncertainty should have
been assessed as material in which
case additional disclosures would
have been required
● our response – our audit procedures
included among others obtaining
and analysing the revised banking
agreements in order to understand
the covenants  we assessed the
group’s accuracy in forecasting in
prior periods through comparison to
actual results in order to obtain an
understanding of the accuracy of the
budgeting process and challenged
the group’s cash flow and covenant
forecasts which cover the period
from the date of approval of these
financial statements until 30 june
2015 we also discussed with the
directors the group’s plans beyond
this point  we assessed the
appropriateness of the assumptions
underlying the forecasts including
assumptions over revenue margins
costs discount rates and cash flow
timings using our knowledge of the
group and its industry with reference
to both internal management
information and externally derived
data and benchmarks  we evaluated
the level of headroom between the
cash flow forecasts and available
facilities and in respect of the
revised covenants  we evaluated the
sensitivity analysis performed by the
group around revenue costs and
other key assumptions and also
performed our own further
sensitivities where appropriate to
understand the level of headroom
within the revised facilities  we also
assessed the adequacy of the
group’s disclosures relating to the
use of the going concern basis of
preparation and the associated risks
3 our application of materiality and
an overview of the scope of our audit
the materiality for the group financial
statements as a whole was set at
£350000  this has been determined
using a benchmark of group revenue of
which it represents 015 which we
consider to be one of the principal
considerations for members of the
company in assessing the financial
performance of the group
we agreed with the audit committee to
report to it all corrected and
uncorrected misstatements we
identified through our audit with a value
in excess of £17500 in addition to
other audit misstatements below that
threshold that we believe warranted
reporting on qualitative grounds
the group audit team audited the group
as if it was a single aggregated set of
financial information the audit was
performed using the materiality level
set out above and covered 100 of
total group revenue group profit
before taxation and total group assets
independent auditors’ report to the members
of office2office plc continued
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 38 o2o plc report and accounts 2013 39
4 our opinion on other matters
prescribed by the companies act
2006 is unmodified  
in our opinion  
● the part of the directors’
remuneration report to be audited
has been properly prepared in
accordance with the companies act
2006 and
● the information given in the strategic
report and the directors’ report for
the financial year for which the
financial statements are prepared is
consistent with the financial
statements  
5 we have nothing to report in
respect of the matters on which we
are required to report by exception  
under isas uk and ireland we are
required to report to you if based on the
knowledge we acquired during our audit
we have identified other information in
the annual report that contains a
material inconsistency with either that
knowledge or the financial statements
a material misstatement of fact or that
is otherwise misleading 
in particular we are required to report
to you if 
● we have identified material
inconsistencies between the
knowledge we acquired during our
audit and the directors’ statement
that they consider that the annual
report and financial statements
taken as a whole is fair balanced and
understandable and provides the
information necessary for
shareholders to assess the group’s
performance business model and
strategy or
● the audit committee report does
not appropriately address matters
communicated by us to the audit
committee
under the companies act 2006 we are
required to report to you if in our
opinion  
● adequate accounting records have
not been kept by the company or
returns adequate for our audit have
not been received from branches not
visited by us or  
● the company financial statements
and the part of the directors’
remuneration report to be audited
are not in agreement with the
accounting records and returns or  
● certain disclosures of directors’
remuneration specified by law are not
made or  
● we have not received all the
information and explanations we
require for our audit  
under the listing rules we are required
to review
● the directors’ statement in relation to
going concern and
● the part of the corporate governance
statement relating to the company’s
compliance with the nine provisions
of the 2010 uk corporate
governance code specified for our
review
we have nothing to report in respect of
the above responsibilities
scope of report and responsibilities
as explained more fully in the directors’
responsibilities statement the
directors are responsible for the
preparation of the financial statements
and for being satisfied that they give a
true and fair view  a description of the
scope of an audit of financial statements
is provided on the financial reporting
council’s website at
wwwfrcorgukauditscopeukprivate
this report is made solely to the
company’s members as a body and is
subject to important explanations and
disclaimers regarding our
responsibilities published on our
website at
wwwkpmgcomukauditscopeukco2013a
which are incorporated into this report
as if set out in full and should be read to
provide an understanding of the purpose
of this report the work we have
undertaken and the basis of our opinions
paul gresham senior statutory auditor
for and on behalf of kpmg llp  
statutory auditor
chartered accountants
botanic house
100 hills road
cambridge
cb2 1ar
2 april 2014
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 39 o2o plc report and accounts 2013 40
consolidated income statement
for the year ended 31 december 2013
2013 2012
note £000 £000
revenue 3 231887 227045
cost of sales 4 173427 169725
gross profit 58460 57320
distribution costs 4 23367 25310
administrative expenses 4 31863 32335
other operating income 925 832
operating profit 4155 507
finance costs 8 2332 2138
profitloss before income tax 1823 1631
analysed as
underlying profit before income tax

4192 4156
share option expense 26 48 541
nonrecurring costs 5 834 4002
amortisation of intangibles 12 1487 1244
profitloss before income tax 3 1823 1631
income tax expensecredit 9 503 207
profitloss for the year 1320 1424
earnings per ordinary share attributable to owners of the company
basic 11 36p 39p
diluted 11 36p 39p
 restated see significant accounting policies 

profit before income tax nonrecurring costs amortisation of intangibles and share option expense
the company has elected to take the exemption under s408 of the companies act 2006 not to present the company’s income
statement or statement of comprehensive income  the profit for the company was £97000 2012 £97000 

5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 40 o2o plc report and accounts 2013 41
consolidated statement of comprehensive income
for the year ended 31 december 2013
2013 2012
note £000 £000
profitloss for the year 1320 1424
other comprehensive income
items that will never be reclassified to profit or loss
remeasurements of the defined benefit liability 24 1147 494
t ax on items that will never be reclassified to profit or loss 9 206 99
items that are or may be reclassified subsequently to profit or loss
currency translation differences 25 43
total comprehensive income for the year 404 1862
 restated see significant accounting policies 

5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 41 o2o plc report and accounts 2013 42
consolidated and company balance sheets 
as at 31 december 2013
31 december 31 december 1 january
2013 2012 2012 2013 2012
note £000 £000 £000 £000 £000
assets
noncurrent assets
intangible assets 12 57561 57878 58671  
property plant and equipment 13 2232 3225 3316  
investments in subsidiaries 14   9204 9156
deferred income tax assets 15 1135 1039 1391  
60928 62142 63378 9204 9156
current assets
inventories 16 8637 9045 8974  
trade and other receivables 17 34985 37839 28965 4449 5654
current income tax asset 22 550 1148 532  
cash and cash equivalents 18 1906 1725 1169  
46078 49757 39640 4449 5654
total assets 107006 111899 103018 13653 14810
equity
capital and reserves attributable to the owners of the company
ordinary shares 25 363 363 363 363 363
share premium account 5009 5009 5009 5009 5009
other reserves 66 41 84  
retained earnings 9092 10222 15628 8256 9413
total equity 14530 15635 21084 13628 14785
noncurrent liabilities
borrowings 20 10943 12322 17515  
deferred income tax liabilities 15 830 991 1338  
retirement benefit liability 24 1646 777 622  
provisions 23 432 495 470  
13851 14585 19945  
current liabilities
trade and other payables 19 65741 63123 50009 25 25
borrowings 20 12733 18435 11304  
provisions 23 151 121 676  
78625 81679 61989 25 25
total liabilities 92476 96264 81934 25 25
total equity and liabilities 107006 111899 103018 13653 14810
 restated see significant accounting policies 
the financial statements comprising the consolidated income statement the consolidated statement of comprehensive income the
consolidated and company balance sheets the consolidated and company statements of changes in equity the consolidated and
company cash flow statements the significant accounting policies and information and the notes to the financial statements were
approved for issue by the board of directors on 2 april 2014 
j l cohen  chairman
2 april 2014
registered number 04083206
consolidated company

5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 42 o2o plc report and accounts 2013 43
consolidated statement of changes in equity
for the year ended 31 december 2013
share
ordinary premium other retained total 
shares account reserves earnings equity
note £000 £000 £000 £000 £000
balance at 1 january 2013 as previously reported 363 5009 41 14127 19540
effect of prior year adjustments   3905 3905
balance at 1 january 2013 as restated 363 5009 41 10222 15635
profit for the year   1320 1320
other comprehensive income  25 941 916
total comprehensive income for the
year ended 31 december 2013  25 379 404
employee share options
– value of employee services 26   161 161
– deferred tax on share options 9  368 368
dividends
– ordinary shares 10   1302 1302
 25 1130 1105
balance at 31 december 2013 363 5009 66 9092 14530
share
ordinary premium other retained total 
shares account reserves earnings equity
note £000 £000 £000 £000 £000
balance at 1 january 2012 as previously reported 363 5009 84 17386 22842
effect of prior year adjustments   1758 1758
balance at 1 january 2012 as restated 363 5009 84 15628 21084
loss for the year   1424 1424
other comprehensive income  43 395 438
total comprehensive income for the
year ended 31 december 2012  43 1819 1862
employee share options
– value of employee services 26   476 476
– deferred tax on share options 9  50 50
dividends
– ordinary shares 10   4113 4113
 43 5406 5449
balance at 31 december 2012 363 5009 41 10222 15635
 restated see significant accounting policies 
share premium account
the share premium account represents the difference between the nominal value of the shares issued and the amount received for them
this is a nondistributable reserve
other reserves
other reserves relate to foreign exchange translation differences on the net assets of overseas subsidiaries this is a nondistributable
reserve


5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 43 o2o plc report and accounts 2013 44
share
ordinary premium retained total 
shares account earnings equity
note £000 £000 £000 £000
balance at 1 january 2013 363 5009 9413 14785
profit for the year  97 97
total comprehensive income for the year ended 31 december 2013  97 97
credit to reserves for share based payments 26  48 48
dividends
– ordinary shares 10  1302 1302
 1157 1157
balance at 31 december 2013 363 5009 8256 13628
share
ordinary premium retained total 
shares account earnings equity
note £000 £000 £000 £000
balance at 1 january 2012 363 5009 12888 18260
profit for the year  97 97
total comprehensive income for the year ended 31 december 2012  97 97
credit to reserves for share based payments 26  541 541
dividends
– ordinary shares 10  4113 4113
 3475 3475
balance at 31 december 2012 363 5009 9413 14785
share premium account
the share premium account represents the difference between the nominal value of the shares issued and the amount received for them
this is a nondistributable reserve
company statement of changes in equity
for the year ended 31 december 2013
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 44 o2o plc report and accounts 2013 45
consolidated and company statements of cash flows
for the year ended 31 december 2013
2013 2012 2013 2012
note £000 £000 £000 £000
cash flows from operating activities
cash generated from operations 27 12966 6536 1205 4016
interest paid 2522 2130  
income tax paid 324 255  
net cash generated from operating activities 10120 4151 1205 4016
cash flows from investing activities
purchase of property plant and equipment 307 1140  
capitalised software 1170 451  
proceeds from disposal of trading activities  358  
interest received   97 97
net cash used ingenerated from investing activities 1477 1233 97 97
cash flows from financing activities
finance lease principal payments 143 551  
repayment of borrowings 5000 2500  
dividends paid to company’s shareholders 10 1302 4113 1302 4113
net cash used in financing activities 6445 7164 1302 4113
net increasedecrease in cash cash equivalents
and bank overdrafts 2198 4246  
cash cash equivalents and bank overdrafts at 1 january 18 11744 7498  
cash cash equivalents and bank overdrafts at 31 december 18 9546 11744  
net debt at 31 december comprises
2013 2012 2013 2012
£000 £000 £000 £000
cash cash equivalents and bank overdrafts 9546 11744  
finance leases 89 232  
bank loans 12135 17056  
net debt at 31 december 21770 29032  
consolidated company
consolidated company
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 45 o2o plc report and accounts 2013 46
significant accounting policies for the year ended 31 december 2013
general information
office2office plc the company and its
subsidiaries the group provide managed
procurement and business critical
services the group operates in the
united kingdom and republic of ireland
the company is a public limited company 
which is listed on the london stock
exchange and is incorporated and
domiciled in the united kingdom the
address of its registered office is st
crispins duke street norwich nr3 1pd
basis of preparation
the principal accounting policies applied
in the preparation of these consolidated
financial statements and applied by the
company as appropriate are set out
below these policies have been
consistently applied to all the years
presented unless otherwise stated
the consolidated financial statements
of the group and the individual financial
statements of the company have been
prepared in accordance with
international financial reporting
standards as adopted by the european
union ifrss as adopted by the eu
ifrsic ifrs interpretations
committee interpretations and the
companies act 2006 as applicable to
companies reporting under ifrs the
consolidated financial statements have
been prepared under the historical cost
convention
the preparation of financial
statements in conformity with ifrs
requires the use of certain critical
accounting estimates it also requires
management to exercise its judgement
in the process of applying the group’s
accounting policies the areas
involving a higher degree of judgement
or complexity or areas where
assumptions and estimates are
significant to the consolidated
financial statements are disclosed in
note 2
going concern
the directors in their detailed
consideration of going concern have
reviewed the group’s future cash
forecasts and revenue projections
which they believe are based on prudent
market data and past experience and
believe based on those forecasts and
projections that it is appropriate to
prepare the financial statements of the
company and the group on a going
concern basis 
in arriving at this conclusion the
directors considered the group’s
financing arrangements which comprise
a term loan of £125 million revolving
credit facility of £3m and £30 million of
asset backed bank facilities committed
to june 2015 
during the year the group generated
£7m from both trading and a large
series of sustainable detailed actions
this focus on cash continues and we
anticipate continuing to generate cash
in the future  one of the main
applications of cash during the year was
repayment of £4m of bank debt  the
next repayment is currently scheduled
for december 2014 when £15m is due
to be repaid  the balance of the term
loan is then scheduled to be repaid in
june 2015  
the company has started discussions
with its lender well ahead of the expiry
date regarding the refinancing of these
facilities both the company and its
lender are committed to the
refinancing of both the term loan and
the other facilities on suitable terms
and no matters have been drawn to the
company’s attention to suggest that a
refinancing will not be forthcoming on
acceptable terms the related facilities
including certain covenants have been
amended favourably for the group
subsequent to the year end
in contemplation of revised debt
facilities the company has prepared
detailed cash flow forecasts to the end
of 2016  sales volumes the impact of
ongoing restructuring and trading
continuing to follow current trends are
key assumptions in these forecasts and
relevant sensitivities have been applied
the existing bank facilities are subject
to just two basic financial covenants set
by the lender at the date of this report
the group has complied in all respects
with the terms of its borrowing
agreements including its financial
covenants and forecasts to continue to
do so 
consequently the directors have a
reasonable expectation that the
company and the group will continue to
comply with the covenants in their
facilities and they have adequate
resources to meet their liabilities as
they fall due for a period of at least 12
months from the date of approval of the
financial statements for this reason
they continue to adopt the going
concern basis in preparing the financial
statements
recent accounting developments
standards amendments and
interpretations effective for the first
time in the year ended 31 december
2013
●
amendment to ias 1 ‘financial
statement presentation’  
●
amendment to ias 19 ‘employee
benefits’ 
●
ifrs 13 ‘fair value measurement’ 
the following amendments to existing
standards and interpretations were
also effective for the current year but
the adoption of these amendments to
existing standards and
interpretations did not have a
material impact on the group
●
amendment to ias 32 ‘financial
instruments presentation’ 
●
ifrs 9 ‘financial instruments’ 
standards amendments and
interpretations that are not yet
effective and have not been early
adopted
●
ias 27 revised 2011 ‘seperate
financial statements’ 
●
ifrs 10 ‘consolidated financial
statements’ 
●
ifrs 12 ’disclosures of interests in
other entities’ 
standards amendments and
interpretations that are not yet
effective and not currently relevant to
the group 
●
ias 28 revised 2011 ‘ associates
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 46 o2o plc report and accounts 2013 47
significant accounting policies for the year ended 31 december 2013
and joint ventures’ 
●
ifrs 11 ‘ joint arrangements’ 
basis of consolidation
subsidiaries are all entities over which
the group has the power to govern the
financial and operating policies
generally accompanying a shareholding
of more than one half of the voting
rights the existence and effect of
potential voting rights that are currently
exercisable or convertible are
considered when assessing whether the
group controls another entity
subsidiaries are fully consolidated from
the date on which control is transferred
to the group they are deconsolidated
from the date that control ceases
the subsidiary undertakings included
within these financial statements are
shown in note 14 to the financial
statements
the acquisition method of accounting is
used to account for business
combinations the cost of an acquisition
is measured as the fair value of the
assets given equity instruments issued
and liabilities incurred or assumed at
the date of exchange identifiable
assets acquired and liabilities and
contingent liabilities assumed in a
business combination are measured
initially at their fair values at the
acquisition date irrespective of the
extent of any minority interest the
excess of the cost of the acquisition
over the fair value of the group’s share
of the identifiable net assets acquired is
recorded as goodwill if the cost of the
acquisition is less than the fair value of
the net assets of the subsidiary
acquired the difference is recognised
directly in the income statement
directly attributable costs associated
with a business combination are
recognised in the income statement
intercompany transactions balances and
unrealised gains on transactions between
group companies are eliminated on
consolidation unrealised losses on
transactions between group companies
are also eliminated but are considered for
impairment purposes in respect of the
asset transferred accounting policies of
subsidiaries have been aligned where
necessary to ensure consistency with the
policies adopted by the group
changes in accounting policies
and restatement
the group has adopted the following
changes in accounting policies and
restatements
●
amendments to ias 1 – presentation
of items of other comprehensive
income see a
●
ias 19 – employee benefits 2011
see b
●
amendment to the revenue
accounting policy – sale of software
see c
●
amendment to the treatment
relating to supplier rebates and
contributions for catalogue
production see d
●
amendment to the treatment
relating to customer rebate
recognition see e
●
amendment to the prior year
accruals for goods received not
invoiced see f
●
ifrs 13 – fair v alue measurement
see g
a presentation of items of other
comprehensive income
as a result of the amendments to ias 1
the group has modified the presentation
of items of other comprehensive income
in its statement of comprehensive
income to present separately items that
would be reclassified to profit or loss in
the future from those that would never
be comparative information has also
been represented accordingly 
the adoption of the amendment to ias
1 has no impact on the recognised
assets liabilities and comprehensive
income of the group
b defined benefit plans
as a result of the modifications to ias
19 the group can no longer use the
corridor approach to account for
actuarial gains and losses arising on its
defined benefit pension scheme liability
which are now recognised immediately
within other comprehensive income the
group will immediately recognise all
past service costs and replace interest
cost and expected return on plan assets
with a net interest amount that is
calculated by applying the discount rate to
the net defined benefit liability
further details of the effect of the change
are set out in note h below
c sale of software
during the period the group reassessed
the appropriateness of its accounting
policy in respect of the sale of software
licences and related maintenance services
previously where collection of payments
was deemed likely then both licence and
maintenance revenues were recognised on
initial delivery of the software under the
new policy both licence and maintenance
revenues will be recognised over the
contracted term of the licence better
reflecting industry practice
further details of the effect of the change
are set out in note h below
d supplier rebates and contributions
for catalogue production
supplier contract rebates being payments
received from suppliers as part of
purchasing agreements and contributions
for catalogue production are treated as
deductions in cost of sales and other
operating income respectively  in the past
they have been recognised upon receipt of
payment when there has been no future
liability or commitment towards future
purchases or purchases at uneconomic
pricing the group has taken the decision to
defer the recognition of these payments and
amortise them over respectively  the life of
the supplier contract or the catalogue
distribution period the group believes this
change provides more appropriate
recognition of its obligations and underlying
financial performance
further details of the effect of the change
are set out in note h below
e customer rebate recognition
customer rebates are not recognised
where the probability of payment is
considered remote management have
reconsidered the method by which they
assess the likelihood of payment
following a number of payments being
identified where the rebate provided was
insufficient which has resulted in
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 47 o2o plc report and accounts 2013 48
significant accounting policies for the year ended 31 december 2013
additional rebates being recognised
the group has revised its approach so
as to better assess any liabilities due
under such rebate agreements
further details of the effect of the
change are set out in note h below
f remeasurement of prior year
accrual relating to goods received
not invoiced
following a review of invoices posted in
2013 relating to 2012 it was
established that the goods received not
invoiced accrual of £8251000 had
been understated by £594000  the
prior year balances have been restated
to correct this error there is no impact
on the financial statements for the year
ended 31 december 2013
further details of the effect of the
change are set out in note h below
g fair value measurement
ifrs 13 establishes a single framework
for measuring fair value and making
disclosures about fair value
measurements when such
measurements are required or permitted
by other ifrss in particular it unifies the
definition of fair value as the price at
which an orderly transaction to sell an
asset or to transfer a liability would take
place between market participants at the
measurement date it also replaces and
expands the disclosure requirements
about fair value measurements in other
ifrss including ifrs 7 ‘financial
instruments disclosures’ 
ifrs 13 is applied prospectively and
has had no material impact on the
accounts in the current year
h summary of quantitative impact
the following tables summarise the
impacts resulting from the above
changes in accounting policies on the
group’s financial position profit and
comprehensive income adjustments
have been reflected in the restated
consolidated income statement
consolidated statement of
comprehensive income consolidated
balance sheet consolidated statement
of changes in equity and earnings per
share for the year ended 31 december
2012 for these amounts  there is no
effect on the consolidated statement
of cash flows
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 48 o2o plc report and accounts 2013 49
significant accounting policies for the year ended 31 december 2013
condensed consolidated statement of financial position
1 january 2012 effect of changes in accounting policy
as defined goods
previously benefit sale of supplier catalogue customer received as 
reported plan software rebates contributions rebates not invoiced restated
£000 £000 £000 £000 £000 £000 £000 £000
retirement benefit assetliability 105 727     622
deferred income tax assetliability 129 182     53
trade and other payables 48362  260 1259  128  50009
current income tax asset 98  69 334  31  532
others 71130     71130
net assets 22842 545 191 925  97  21084
retained earnings 17386 545 191 925  97  15628
others 5456     5456
t otal equity 22842 545 191 925  97  21084
31 december 2012 effect of changes in accounting policy
as defined goods
previously benefit sale of supplier catalogue customer received as 
reported plan software rebates contributions rebates not invoiced restated
£000 £000 £000 £000 £000 £000 £000 £000
retirement benefit assetliability 490 1267     777
deferred income tax assetliability 244 292     48
trade and other payables 59200  364 2037 670 258 594 63123
current income tax asset 155  95 518 171 63 146 1148
others 78339     78339
net assets 19540 975 269 1519 499 195 448 15635
retained earnings 14127 975 269 1519 499 195 448 10222
others 5413     5413
t otal equity 19540 975 269 1519 499 195 448 15635
31 december 2013 effect of changes in accounting policy
defined goods
benefit sale of supplier catalogue customer received
plan software rebates contributions rebates not invoiced total
£000 £000 £000 £000 £000 £000 £000
retirement benefit assetliability 2393     2393
deferred income tax assetliability 532     532
trade and other payables  364 1812 592 258 594 3620
current income tax asset  95 479 145 63 146 928
net assets 1861 269 1333 447 195 448 4553
retained earnings 1861 269 1333 447 195 448 4553
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 49 significant accounting policies for the year ended 31 december 2013
o2o plc report and accounts 2013 50
condensed consolidated statement of profit or loss and other comprehensive income
for the twelve months ended 31 december 2012 effect of changes in accounting policy
as defined goods
previously benefit sale of supplier catalogue customer received as 
reported plan software rebates contributions rebates not invoiced restated
£000 £000 £000 £000 £000 £000 £000 £000
revenue 227279  104  130  227045
cost of sales 167683  778 670  594 169725
administrative expenses 31457 46     31503
income tax expensecredit 363 11 26 191 164 32 146 207
others 27448      27448
profit for the period 328 35 78 587 506 98 448 1424
remeasurements of the defined
benefit liability  494     494
t ax on items that will never be
reclassified to profit or loss  99     99
others 43      43
other comprehensive income
for the period 43 395     438
t otal comprehensive income
for the period 285 430 78 587 506 98 448 1862
for the twelve months ended 31 december 2013 effect of changes in accounting policy
defined goods
benefit sale of supplier catalogue customer received
plan software rebates contributions rebates not invoiced total
£000 £000 £000 £000 £000 £000 £000
revenue      
cost of sales  225   225
administrative expenses 29     29
other operating income   78  78
income tax expense 7 48 17  58
overall decreaseincrease in profit for the period 22  177 61  216
other comprehensive income
remeasurements of the defined benefit liability 1097     1097
t ax on items that will never be reclassified
to profit or loss 233     233
overall decrease in other comprehensive income
for the period net of tax 864     864
overall impact on total comprehensive income 
for the period 886  177 61  648
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 50 o2o plc report and accounts 2013 51
significant accounting policies for the year ended 31 december 2013
revenue
revenue is measured by reference to
the fair value of consideration received
by the group from goods supplied and
services provided to external
customers revenue is stated after
deducting rebates returns and other
similar discounts and after eliminating
sales between group companies and is
exclusive of value added tax revenue is
recognised upon the performance of
services or when the significant risks
and rewards of ownership are
transferred to a customer which occurs
on delivery of goods or in the case of ex
works arrangements when custody of
goods is transferred to the customers’
logistics provider
supply of goods
our managed procurement segment
provides a stock and distribution
operation for the supply of stationery
and office products furniture and
technology products revenue is
recognised once the delivery to the
customer has been completed 
supply of services
our business critical services segment
is a service based operation providing
print management document
management marketing services direct
marketing and professional consultancy
and on and off site shredding services
the value attributed to the service is
determined through contractual prices
agreed prior to the commencement of
the work with the customer where
there are retained customer
arrangements and a range of services
are provided the revenue for each
separate service is recognised when all
the elements of that service are
complete with amounts accrued or
deferred on the balance sheet as
appropriate each separate service is
generally subject to specific pricing
supply of software licences and
related maintenance services
a small part of our business critical
services segment relates to the sale of
software licences and related support
and maintenance services  revenue is
recognised over the contractual term of
the agreement with the customer with
amounts accrued or deferred on the
balance sheet as appropriate
supplier admin fees and rebates
supplier admin fees are recognised in
our business critical services as a
supplier management charge and
recognised as revenue against the
period to which purchasing relates
supplier rebates are amounts received
from suppliers in our managed
procurement segment and recognised
as a deduction in product cost against
the period to which purchasing relates
segment reporting
operating segments are reported in a
manner consistent with the internal
reporting provided to the chief
operating decisionmaker  the chief
operating decisionmaker which is
responsible for allocating resources and
assessing performance of the operating
segments has been identified as the
executive board of directors
foreign currency translation
the financial information in this report
is presented in sterling the functional
and presentational currency of the
company rounded to the nearest
thousand
transactions denominated in foreign
currencies are translated into sterling
at the rate of exchange ruling at the
date of transaction all realised foreign
exchange differences are taken to the
income statement monetary assets and
liabilities denominated in foreign
currencies are translated into sterling
at the rates of exchange ruling at the
balance sheet date and differences are
recognised in the income statement
the results and financial position of
the group entities that have a
functional currency different from the
presentational currency are translated
into the presentational currency as
follows
●
assets and liabilities for each balance
sheet presented are translated at the
closing rate at the date of that
balance sheet
●
income and expenses for each
income statement are translated at
average exchange rates unless this
average is not a reasonable
approximation of the cumulative
effect of the rates prevailing on the
transaction dates in which case
income and expenses are translated
at the rate on the dates of the
transactions and
●
all resulting exchange differences are
recognised in the statement of
comprehensive income
other operating income
contributions for catalogue production
are recognised over the life of the
catalogue distribution period catalogue
distribution periods run for one year
contributions for catalogue production
are recognised as other operating
income
nonrecurring costs
nonrecurring costs are those
significant items which are separately
disclosed by virtue of their size or
incidence to enable a full understanding
of the group’s financial performance
transactions which may give rise to non
recurring costs are principally
restructuring related and business
startup or closure costs costs in
respect of key management changes
transaction costs incurred in respect of
business combinations gains or losses
on disposal of trading activities and
costs associated with the closure of
employee pension schemes
business combinations and
goodwill
goodwill arising on consolidation
represents the excess of the cost of
an acquisition over the fair value of the
group’s share of the net assetsnet
liabilities of the acquired subsidiary at
the date of acquisition if the cost of
acquisition is less than the fair value
of the group’s share of the net
assetsnet liabilities of the acquired
entity ie a discount on acquisition
then the difference is credited to the
income statement in the period of
acquisition  goodwill is allocated to
cash generating units for the purposes
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 51 o2o plc report and accounts 2013 52
significant accounting policies for the year ended 31 december 2013
of impairment testing and is tested
annually for impairment refer to
impairment of assets policy and
carried at cost less accumulated
impairment losses 
at the acquisition date of a subsidiary
goodwill acquired is recognised as an
asset and is allocated to each of the
cashgenerating units expected to
benefit from the business
combination’s synergies and to the
lowest level at which management
monitors the goodwill 
on disposal of a subsidiary the
attributable amount of goodwill is
included in the determination of the
profit or loss on disposal
goodwill acquired up to 31 december
2003 was capitalised and amortised
over its useful economic life as
permitted by ifrs1 ‘firsttime
adoption of international financial
reporting standards’  the classification
and accounting treatment of business
combinations made prior to 1 january
2004 was not amended on transition to
ifrs under ifrs goodwill has an
indefinite useful economic life and is not
subject to amortisation
other intangible assets
the group recognises intangible assets
as part of business combinations at
fair value at the date of acquisition
the determination of these fair values
is based upon management’s
judgement and includes assumptions
on the timing and amount of future
incremental cash flows generated by
the assets acquired and the selection
of an appropriate cost of capital the
useful lives of intangible assets are
estimated and amortisation charged on
a straightline basis
customer relationships
customer relationships are recognised
as intangible assets at the fair value of
the consideration paid to acquire them
less provisions for amortisation and
impairment the fair value attributed
to the customer relationships acquired
through a business combination is
determined by discounting the
expected future cash flows to be
generated from that asset at the risk
adjusted post tax weighted average
cost of capital at the time of the
acquisition for that business
combination the residual values of
customer relationships are assumed
to be £nil
amortisation is provided so as to write
off the cost of the customer
relationships over the expected
economic lives of the asset in equal
annual instalments as follows
customer relationships arising on the
acquisition of
t riplearc plc
bmc 10 years
accord office supplies limited
accord 10 years
the print factory london 1991
limited and dsr group limited
bmc 10 years
martin luck limited – newbury branch
accord 10 years
brands
brands are recognised as intangible
assets at the fair value of the
consideration paid to acquire them less
provisions for amortisation and
impairment the fair value attributed to
the brands acquired through a business
combination is determined by
discounting the expected future cash
flows that would be generated by a
royalty stream in respect of the brands
at the risk adjusted post tax weighted
average cost of capital at the time of
the acquisition for that business
combination the residual values of
brands are assumed to be £nil
amortisation is provided so as to write
off the cost of the brands over the
expected economic lives of the asset in
equal annual instalments as follows
t riplearc plc 
bmc 10 years
accord office supplies limited
accord 10 years
software
costs associated with maintaining
software are expensed as incurred
development costs controlled internally
and directly attributable to the design
and testing of identifiable software are
recognised as intangible assets when
there is an ability and intention to use or
sell the software product completion of
the software is reasonably certain and
the expenditure attributable to the
software during its development can be
reliably measured directly attributable
costs that are capitalised as part of the
software project include the software
development employee costs and an
appropriate portion of relevant
overheads
other development expenditures that
do not meet these criteria are
recognised as an expense as incurred
development costs previously
recognised as an expense are not
recognised as an asset in a subsequent
period
purchased software is recognised as an
intangible asset at the fair value of the
consideration paid to acquire it less
provisions for amortisation and
impairment
software is amortised on a straight line
basis over its useful economic life of 35
years
the amortisation charge in respect of
customer relationships brands and
software is recognised within
administrative expenses
impairment of nonfinancial
assets
assets that have an indefinite useful
life for example goodwill are not
subject to amortisation and are tested
annually for impairment assets that
are subject to amortisation or
depreciation are reviewed for
impairment whenever events or
changes in circumstances indicate that
the carrying amount may not be
recoverable an impairment loss is
recognised for the amount by which the
asset’s carrying amount exceeds its
recoverable amount the recoverable
amount is the higher of an asset’s fair
value less costs to sell and value in use
for the purposes of assessing
impairment assets are grouped at the
lowest levels for which there are
separately identifiable cash flows
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 52 o2o plc report and accounts 2013 53
significant accounting policies for the year ended 31 december 2013
cashgenerating units
in respect of assets other than goodwill
an impairment loss is reversed if there
has been a change in the estimates used
to determine the recoverable amount
an impairment loss is reversed only to
the extent that the asset’s carrying
amount does not exceed the carrying
amount that would have been
determined net of depreciation or
amortisation if no impairment loss had
been recognised
impairment losses recognised in
respect of goodwill are not
subsequently reversed
property plant and equipment
property plant and equipment is stated
at historical cost less accumulated
depreciation and any accumulated
impairment losses historical costs
include expenditure that is directly
attributable to the acquisition of the
items the assets’ residual values and
useful lives are reviewed annually and
adjusted as appropriate
subsequent costs are included in the
asset’s carrying amount or recognised
as a separate asset as appropriate
only when it is probable that future
economic benefits associated with the
item will flow to the group and the
cost of the item can be measured
reliably the carrying amount of the
replaced part is derecognised all
other repairs and maintenance are
charged to the income statement
during the financial period in which
they are incurred
gains and losses on disposal are
determined by comparing the proceeds
with the carrying amount and are
recognised in the income statement
depreciation commences in the month
that the assets are fully installed and
commissioned and is provided on a
straight line basis at rates calculated to
write off the cost less estimated
residual value of each asset over its
expected useful life as follows
freehold land
 not depreciated
freehold buildings
 over 40 years
short leasehold land and buildings
 over the lease term
plant and machinery
 over 4 to 15 years
office equipment
 over 3 to 10 years
the depreciation charge in respect of
freehold land and buildings short
leasehold land and buildings plant and
machinery and office equipment is
recognised within distribution costs and
administrative expenses
investments
in the company’s financial statements
investments in subsidiary undertakings
are initially stated at cost being the fair
value of the consideration given
investments are reviewed where an
indication of impairment exists  an
impairment loss is recognised for the
amount by which the asset’s carrying
amount exceeds its recoverable amount
the recoverable amount is the higher of
an asset’s fair value less costs to sell
and value in use
leased assets
assets held under finance leases as
defined under ias 17 ‘leases’  are
capitalised and included as part of
property plant and equipment they
are depreciated over their useful lives
or the lease term if shorter the
capital elements of future obligations
under finance leases are included as
liabilities in the balance sheet the
interest element of the rental
obligations is charged to the income
statement over the period of the lease
and represents a constant proportion
of the balance of capital repayments
outstanding
leases in which a significant
proportion of the risks and rewards of
ownership are retained by the lessor
are classified as operating leases
rentals payable under operating
leases are charged to the income
statement on a straightline basis over
the term of the lease
benefits received and receivable as an
incentive to enter a lease are spread
evenly over the lease term
inventories
inventories comprise of finished goods
and goods held for resale and are stated
at the lower of cost or net realisable
value cost includes all expenditure
directly attributable to bringing each
product to its present location and
condition on a first in first out method
net realisable value is based on
estimated selling price less further
costs expected to be incurred to
completion and disposal
provision for obsolete slow moving and
defective inventories are made on a line
by line basis where necessary in order
to reduce inventory to the lower of cost
or net realisable value
cash and cash equivalents
cash and cash equivalents shown on the
balance sheet comprise cash balances
and deposits with banks that have a
maturity of three months or less from
the date of inception
bank overdrafts are shown within
borrowings in current liabilities on the
balance sheet but are included as a
component of cash and cash equivalents
for the purposes of the statement of
cash flow as they form an integral part
of the group’s cash management
bank overdrafts include cash book
overdrafts and confidential invoice
discounting arrangements whereby the
amount borrowed is limited to a
proportion of the trade receivables
provisions
the group makes provision for liabilities
when it has a legal or constructive
obligation arising from a past event it is
probable that an outflow of resources will
be required to settle the obligation and
the amount can be reliably estimated 
provisions for property dilapidations
represent the current estimated costs
to repair leased properties which are
required to be made good before the
properties are returned at the end of
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 53 o2o plc report and accounts 2013 54
significant accounting policies for the year ended 31 december 2013
the lease term provisions are made on a
property by property basis and the
timing of the utilisation will differ for
each property
provisions for onerous leases are
recognised when the group believes
that the unavoidable costs of meeting
the lease obligations exceed the
economic benefits expected to be
received under the lease 
provisions are measured at the present
value of the expenditures expected to
be required to settle the obligation
using a pretax rate that reflects current
market assessments of the time value
of money and the risks specific to the
obligation the increase in the provision
due to passage of time is recognised as
interest expense
retirement benefit costs
group companies operate both defined
benefit and defined contribution
pension plans
the group maintains a defined benefit
pension scheme for former employees
of her majesty’s stationery office
which requires contributions to be made
to a separately administered fund the
scheme is closed to new members the
scheme closed to future accrual on 31
december 2011 the scheme is
administered by trustee directors of
banner business supplies pensions
limited which is a wholly owned
subsidiary of office2office uk plc a
subsidiary company of office2office plc
the net surplus or deficit of the defined
benefit pension scheme is calculated in
accordance with ias 19 ‘employee
benefits’  based on the fair value of the
plan assets less the present value of the
defined benefit obligation at the
balance sheet date
the defined benefit obligation is
calculated annually by independent
actuaries using the projected unit credit
method the present value of defined
benefit obligations is determined by
discounting the estimated future cash
outflows using interest rates of high
quality corporate bonds that are
determined in the currency in which the
benefits will be paid and have terms to
maturity approximating to the terms of
the related pension liability
where the actuarial valuation of the
scheme demonstrates that the scheme
is in surplus the recognised asset is
limited to that for which the group can
benefit in future for example by
refunds or a reduction in contributions
remeasurements of the net defined
benefit liability which comprise
actuarial gains and losses the return on
plan assets excluding interest and the
effect of the asset ceiling if any
excluding interest are recognised
immediately in other comprehensive
income oci the group determines the
net interest expense income on the net
defined benefit liability asset for the
period by applying the discount rate
used to measure the defined benefit
obligation at the beginning of the annual
period to the thennet defined benefit
liability asset taking into account any
changes in the net defined liability
asset during the period as a result of
contributions and benefit payments
net interest expense and other
expenses related to defined benefit
plans are recognised in profit or loss
when the benefits of a plan are changed
or when a plan is curtailed the resulting
change in benefit that relates to past
service or the gain or loss on
curtailment is recognised immediately
in profit or loss the group recognises
gains and losses on the settlement of a
defined benefit plan when the
settlement occurs
a valuation is performed annually by an
independent actuary further details in
respect of the assumptions used in
providing the valuation are included in
note 24 to the financial statements
since 30 september 1996 all new
employees have been eligible to join
the group’s personal pension scheme
which is a defined contribution scheme
contributions to defined contribution
arrangements are charged to the
income statement in the period in
which they fall due  the assets of the
scheme are held separately from those
of the group in an independently
administered fund
sharebased compensation
the group operates a number of share
based compensation schemes
including a sa ye scheme which is open
to all employees the fair value of the
employee services received in
exchange for the grant of options
approximated by reference to the fair
value of the option granted is
recognised as an expense the fair
value of the option is measured at
grant date and spread over the vesting
period which is the period over which
all of the specified vesting conditions
are to be satisfied through the income
statement with a corresponding
increase in equity the fair value of the
share options and awards are
measured using an optionpricing
model taking into account the terms
and conditions of the individual
schemes the fair value of options
awarded under schemes with market
based performance conditions is
estimated using a montecarlo model
the fair value of options awarded
under schemes with nonmarket based
performance conditions is estimated
using a blackscholes model
shares purchased through the employee
benefit trust ebt are held at cost and
treated as treasury shares and are
deducted from retained earnings the
right to a dividend and voting rights on
these shares has been waived 
when options are exercised the
company sells shares through the ebt
to satisfy the options
the group makes charges to the
income statement for any potential
employer’s national insurance liability
on options granted based on the
directors’ best estimate of the fair
value of the options granted at the
balance sheet date and spread over the
vesting period of the option
the fair value of the options granted
under the various schemes has been
accounted for in the group’s financial
statements the grant by the company
of options over its equity instruments
to the employees of subsidiary
undertakings in the group is treated as
a capital contribution the fair value of
employee services received measured
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 54 o2o plc report and accounts 2013 55
significant accounting policies for the year ended 31 december 2013
by reference to the grant date fair
value is recognised over the vesting
period as an increase to investment in
subsidiary undertakings with a
corresponding credit to equity 
at each balance sheet date the
company revises its estimate of the
number of options that are going to
vest the group recognises the impact
of any revision to original estimates if
any in the income statement with a
corresponding adjustment to equity the
proceeds on exercise of options net of
any directly attributable transaction
costs are credited to share capital at
nominal value and share premium when
the options are exercised
current and deferred income tax
the tax charge for the period comprises
both current and deferred tax t ax is
recognised in the income statement
except to the extent that it relates to
items recognised directly in equity in
which case it is recognised in equity
current tax is the expected tax payable
on the taxable income for the period and
any adjustment to tax payable in
respect of previous periods and is
calculated on the basis of tax rates and
laws that have been substantively
enacted by the balance sheet date
deferred tax is provided in full using the
balance sheet liability method on
temporary differences between the tax
bases of assets and liabilities and their
carrying value for accounting purposes
deferred tax is determined on a non
discounted basis using tax rates and
laws that have been enacted or
substantively enacted by the balance
sheet date and which are expected to
apply when the related deferred tax
asset is realised or deferred tax liability
is settled 
where the intrinsic value of a share
option exceeds the fair value the
corresponding deferred tax on the
excess is recognised directly in equity
a deferred tax asset is recognised only
to the extent that it is probable that
sufficient taxable profit will be available
to utilise the temporary difference
financial assets and liabilities
financial assets and financial liabilities
are recognised on the group’s balance
sheet when the group becomes a party
to the contractual provisions of the
instrument
the group classifies its financial assets
and liabilities in the following
categories loans and receivables and
other financial liabilities the
classification depends on the purpose
for which the financial assets or
liabilities were acquired management
determines the classification of its
financial assets and liabilities at initial
recognition the classification of
financial liabilities is determined in
accordance with ifrs 7 ‘financial
instruments disclosures’  taking
account of the repayment profile of the
liability  for those with fixed or
determinable payment profiles the
amounts are recognised as either
current liabilities or where amounts are
not due for more than 12 months after
the reporting period as noncurrent
liabilities
t rade receivables
trade receivables are recognised
initially at fair value and subsequently
measured at amortised cost using the
effective interest method less
provision for impairment a provision
for impairment of trade receivables is
established when there is objective
evidence that the group will not be able
to collect all amounts due according to
the original terms of the receivables
significant financial difficulties of the
debtor probability that the debtor will
enter bankruptcy or financial
reorganisation and default or
delinquency in payments more than 60
days overdue are considered indicators
that the trade receivable is impaired
the amount of the provision is the
difference between the asset’s carrying
amount and the present value of
estimated future cash flows the
carrying amount of the asset is reduced
through the use of an allowance account
and the amount of the loss is recognised
in the income statement within revenue
when a trade receivable is
uncollectable it is written off against
the allowance account for trade
receivables subsequent recoveries of
amounts previously written off are
credited against revenue in the income
statement
borrowings
borrowings are recognised initially at
fair value net of transaction costs
borrowings are subsequently stated at
amortised cost any difference between
the proceeds net of transaction costs
and the redemption value is recognised
in the income statement over the period
of the borrowings using the effective
interest method
borrowings are classified as current
liabilities unless the group has an
unconditional right to defer settlement
of the liability for at least 12 months
after the balance sheet date
t rade payables
trade payables are not interest bearing
and are recognised initially at fair value
and subsequently measured at
amortised cost using the effective
interest method
equity instruments
equity instruments issued by the
company are recorded at the proceeds
received net of direct issue costs
where any group company purchases
the company’s equity share capital
treasury shares the consideration
paid including any directly attributable
incremental costs net of income taxes
is deducted from equity attributable to
the company’s owners until the shares
are cancelled or reissued where such
shares are subsequently reissued any
consideration received net of any
directly attributable incremental
transaction costs and the related
income tax effects is included in equity
attributable to the company’s owners 
the group assesses at each balance
sheet date whether there is objective
evidence that a financial asset or a
group of financial assets is impaired
the above financial assets and liabilities
are grouped as follows
●
cash and cash equivalents and trade
and other receivables excluding
prepayments are classified as loans
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 55 o2o plc report and accounts 2013 56
underlying profit is calculated as follows
2013 2012
£000 £000
profit before income tax 1823 1631
add
share option charges note 26 48 541
nonrecurring costs note 5 834 4002
amortisation of intangibles note 12 1487 1244
underlying profit before income tax 4192 4156
 restated see significant accounting policies

significant accounting policies for the year ended 31 december 2013
and receivables for the purpose of
ifrs 7 ‘financial instruments
disclosures’ 
●
borrowings finance leases and trade
and other payables excluding
statutory liabilities are classified as
other financial liabilities at
amortised cost for the purpose of
ifrs 7 ‘financial instruments
disclosures’ 
dividends
distributions to owners are disclosed as
a component of the movement in the
statement of changes in shareholders’
equity a liability is recorded for a final
dividend when the dividend is approved
by the company’s shareholders interim
dividends are recognised in the period in
which they are paid 
use of nongaap profit
measures
the directors believe that the use of
underlying profit before income tax
provides a clearer understanding of the
performance of the group this measure
is used for internal performance
analysis underlying profit is not defined
by ifrs and therefore may not be
directly comparable with other
companies’ adjusted profit measures it
is not intended to be a substitute for or
superior to ifrs measurements of
profit
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 56 o2o plc report and accounts 2013 57
notes to the financial statements for the year ended 31 december 2013
the group’s activities expose it to a variety of financial risks market risk including currency risk commodity price risk and cash
flow and fair value interest rate risk credit risk and liquidity risk the group’s overall risk management programme focuses on
the unpredictability of financial markets and seeks to minimise potential adverse effects on the group’s financial performance
a market risk
i currency risk
the group operates in the united kingdom and republic of ireland and accordingly has limited exposure to foreign exchange
risk currency risk is managed by matching where possible cash inflows and outflows denominated in euros
the group does not currently hedge any foreign currency transactions but continues to keep this policy under review
management have considered and concluded that a movement of 10 would be a reasonable benchmark over which to
determine the sensitivity of the group’s performance to foreign exchange rate risk because a movement of this magnitude is
considered to be a reasonable approximation of movements that could be expected to occur  for the year ended 31 december
2013 if the euro had weakenedstrengthened by 10 against sterling with all other variables held constant posttax profit and
the movement in net assets for the year would have been £25000 2012 £29000 lowerhigher as a result of foreign exchange
gainslosses on translation of the eurodenominated transactions and monetary assets and liabilities at fair value through profit
or loss
the calculation applied in determining the impact of a 10 movement in exchange rates is based upon adjusting the average
exchange rates by 10 on the eurodenominated transactions
ii commodity price risk
the group has exposure to changes in commodity prices such as steel oil and paper including supplier price increases as a result
of foreign exchange movements which form a constituent part of many of the products sold it is the policy of the group to pass
on these unavoidable cost price increases to customers as appropriate
the group does not currently hedge its exposure to commodity prices but continues to keep this policy under review
management have considered and concluded that a movement of 1 in gross margin percentage would be a reasonable
benchmark over which to determine the sensitivity of the group’s performance to commodity price risk because a movement of
this magnitude is considered to be a reasonable approximation of movements that could expect to be incurred by the group  for
the year ended 31 december 2013 if the gross margin percentage had weakenedstrengthened by 1 with all other variables
held constant gross profit for the year would have been £2319000 2012 £2270000 lowerhigher
iii cash flow and fair value interest rate risk
the group has interestbearing assets in the form of cash and cash equivalents  the company has interestbearing assets in the
form of loans to subsidiary companies therefore interest income is sensitive to movements in interest rates
the group’s interest rate risk predominantly arises from short and longterm borrowings borrowings issued at variable rates
expose the group to cash flow interest rate risk borrowings issued at fixed rates expose the group to fair value interest rate
risk during 2012 and 2013 the group’s borrowings other than in respect of finance leases were all at variable rates and all
borrowings were denominated in sterling
the group continues to keep its policy of not hedging its exposure to interest rate movements under review
for the year ended 31 december 2013 management have considered and concluded that a movement of 100 basis points would
be a reasonable benchmark over which to determine the sensitivity of the group’s performance to interest rate risk because a
movement of this magnitude is considered to be a reasonable approximation of movements that could be expected to occur if
interest rates on borrowings had been 100 basis points higherlower with all other variables held constant posttax profit for the
year would have been £290000 2012 £316000 lowerhigher as a result of higherlower interest expense on floating rate
borrowings
b credit risk
credit risk is managed on a group basis credit risk arises from cash and cash equivalents and deposits with banks and financial
institutions as well as credit exposure to customers including outstanding receivables and committed transactions
for banks and financial institutions only independently rated parties with a minimum rating of ‘ a ’ are accepted in normal
circumstances
1 financial risk management
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 57 o2o plc report and accounts 2013 58
internally customers are rated according to financial position history of trading and other factors individual credit limits are
based on internal and external ratings in accordance with limits set by management the utilisation of credit limits is regularly
monitored concentrations of credit risk with respect to trade receivables are limited due to the group’s diverse customer base
c liquidity risk
prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount
of committed credit facilities
management monitors rolling forecasts of the group’s liquidity reserve comprising undrawn borrowing facilities and cash and
cash equivalents on the basis of expected cash flows
the table below analyses the group’s financial liabilities which will be settled on a net basis into relevant maturity groupings
based on the remaining period at the balance sheet date to the contractual maturity date 
the amounts shown are contractual including interest undiscounted cash flows 
at 31 december 2013 less than between between over
1 year 1 and 2 years 2 and 5 years 5 years
£000 £000 £000 £000
borrowings
excluding finance lease liabilities 13240 11112 
finance leases 28 22 47 
trade payables and accrued expenses 60870  
74138 11134 47 
at 31 december 2012 less than between between over
1 year 1 and 2 years 2 and 5 years 5 years
£000 £000 £000 £000
borrowings
excluding finance lease liabilities 18928 4281 8570 
finance leases 146 29 65 14
trade payables and accrued expenses 57900  
76974 4310 8635 14
 restated see significant accounting policies
there have been no breaches in the contractual terms of the amounts shown above
in addition to shortterm borrowing facilities the group refinanced a £20000000 loan on 19 may 2011 the loan is repayable in
instalments between june 2012 and june 2015 with interest charged at a floating rate linked to libor a maturity analysis is
provided at note 20 to the financial statements
notes to the financial statements for the year ended 31 december 2013
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 58 o2o plc report and accounts 2013 59
notes to the financial statements for the year ended 31 december 2013
currency risk profile of financial assetsliabilities
the group did not have a material exposure to foreign exchange gains or losses on financial assets and liabilities denominated in
foreign currencies at 31 december 2013 and has not used any instruments to hedge foreign currency transactions
financial assetsliabilities relating to cash balances and overdrafts held at financial institutions are at floating rates
denominated in the currency held below
2013 2012
£000 £000
sterling  deposits 1401 389
sterling  bank overdrafts 11452 13469
10051 13080
euro  deposits 331 1154
swedish krona  deposits 174 182
9546 11744
there is no material currency risk relating to other financial assets or liabilities
fair values of financial instruments
see note 20 for consideration of the differences between the carrying amount and the fair value of borrowings the fair value of
other financial assets and liabilities is not materially different to their book value due to the short term maturity of the instruments 
committed and uncommitted undrawn facilities
the group has the following undrawn borrowing facilities
2013 2012
£000 £000
gross undrawn committed confidential invoice discounting facility 15717 21353
gross undrawn committed stock facility 2998 
revolving credit facility 2000 
shortterm overdraft 1000 1000
cash book overdraft 167 2822
net undrawn facilities 21548 19531
bank balances 1906 1725
available liquidity 23454 21256
as at 31 december 2013 the group had drawn £11283000 against its committed invoice discounting facility at that date the
group had a cash book overdraft of £167000 2012 £2822000 and bank balances of £1906000 2012 £1725000 if all
payments had cleared on the day of issue the group would have had net available liquidity of £23454000 2012
£21256000
the confidential invoice discounting facility is a committed facility subject to sufficient security from trade receivables expiring
in june 2015
the group has sufficient headroom to enable it to conform to covenants on its existing borrowings the group has sufficient
working capital and undrawn financing facilities to service its operating activities
there have been no breaches in the covenants on borrowings in the year ended 31 december 2013 and up to the date of signing
the financial statements
capital risk management
the group’s policy is to maintain a strong capital base defined as facilities plus total shareholders’ equity so as to maintain
investor creditor and market confidence and to sustain future development of the business within this overall policy the group
seeks to maintain an optimum capital structure by a mixture of debt and retained earnings funding needs are reviewed
periodically and also each time a significant acquisition is made a number of factors are considered which include the net
debtearnings before interest tax depreciation and amortisation ebitda ratio future funding needs usually potential
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 59 o2o plc report and accounts 2013 60
notes to the financial statements for the year ended 31 december 2013
acquisitions and group banking arrangements including the monitoring of debt covenants over current funding arrangements
there were no changes to the group’s approach to capital management during the year the primary source of funding for the
group is bank borrowings
in order to maintain or adjust the capital structure the group may adjust the amount of dividends paid to shareholders return
capital to shareholders issue new shares or sell assets to reduce debt
consistent with others in the industry the group monitors capital on the basis of gearing ratio calculated as net debt divided by
total equity net debt is calculated as total borrowings including current and non current borrowings less cash as shown in the
balance sheet t otal equity is defined as total equity as shown in the consolidated balance sheet t otal capital is calculated as
total equity plus net debt
during 2013 the group decreased its gearing ratio from 65 to 60 the gearing ratios at 31 december 2013 and 2012 were
as follows
2013 2012
£000 £000
t otal borrowings note 20 23676 30757
less cash and cash equivalents note 18 1906 1725
net debt 21770 29032
t otal equity 14530 15635
t otal capital 36300 44667
gearing ratio 60 65
2 critical accounting estimates and judgements
estimates and judgements are continually evaluated and are based on historical experience and other factors including
expectations of future events that are believed to be reasonable under the circumstances
the group makes estimates and assumptions concerning the future the resulting accounting estimates will by definition
seldom equal the related actual results the estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below
the estimates and underlying assumptions are reviewed on an ongoing basis revisions to accounting estimates are recognised
in the period in which the estimate is revised if revision affects only that period or in the period of the revision and future periods
if the revision affects both current and future periods
determination of cash flows discount rates used in business combinations and impairment reviews of goodwill and
other intangibles 
discount rates are determined by management for the purpose of valuing fair values of intangible assets arising on business
combinations and to determine the net present value of cash flows in respect of annual impairment reviews of goodwill and other
intangibles when appropriate
the discount rates used for the purpose of impairment reviews are based on the appropriate cost of capital adjusted for
management’s perceived risk
the cash flows attributable to the cashgenerating unit to which goodwill and when appropriate other intangibles is allocated
are based on management’s best estimates of future profitability and the resulting cash flows
while management believes the discount rates and cash flows used are the most appropriate rates changes in these
assumptions could result in impairment of goodwill other intangibles or in the fair value of intangibles in respect of business
combinations differing to the values recorded
income tax
the group is subject to income tax in both the united kingdom and the republic of ireland significant judgement is required in
determining the provision for income tax there are many transactions and calculations for which the ultimate tax determination
is uncertain during the ordinary course of business where the final tax outcome of these matters is different from the amounts
that were initially recorded such differences will impact the income tax and deferred tax provisions in the period in which such
determination is made
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 60 o2o plc report and accounts 2013 61
impairment of inventories
where necessary provision is made for obsolete slowmoving and damaged stock this provision represents the difference
between the cost of the stock and its estimated market value based upon stock turn rates market conditions and trends in
consumer demand
allowances for doubtful receivables
allowances are made for doubtful receivables and for estimated losses resulting from the subsequent inability of customers to
make required payments if the financial conditions of customers were to deteriorate resulting in an impairment of their ability
to make payments additional allowances may be required in future periods
supplier rebates and catalogue contributions
allowances are made for rebates and catalogue contributions to be received from suppliers for purchases which have already
been made if the financial conditions of suppliers were to deteriorate resulting in an impairment of their ability to make
payments these allowances may be required to be reversed in future periods
software licences and related maintenance services
a small part of our business critical services segment relates to the sale of software licences and related support and
maintenance services management have taken the judgement that revenue is recognised over the contractual term of the
agreement with the customer with amounts accrued or deferred on the balance sheet as appropriate 
pensions
the determination of the pension benefit obligation and expense for the defined benefit pension plan is dependent on the
selection of certain assumptions used by actuaries in calculating such amounts those assumptions are described in note 24 to
the financial statements and include among others the discount rate the expected longterm rate of increase in future
compensation levels and expected mortality rates a portion of the plan assets are invested in equity securities the equity
markets have experienced volatility which has affected the value of the pension plan assets this volatility may make it difficult
to estimate the longterm rate of return on plan assets assumptions are based on actual historical experience and external data
regarding compensation and discount rate trends while the directors believe that the assumptions are appropriate significant
differences in the actual experience or significant changes in the assumptions may materially affect the pension obligation and
the future expense
share based payments
the fair value of options awarded under schemes with market based performance conditions is estimated using a montecarlo
model the fair value of options awarded under schemes with nonmarket based performance conditions is estimated using a
blackscholes model these models require the use of estimates and forward looking projections
3 segmental information 
ifrs 8 ‘operating segments’  requires a ‘management approach’  under which segment information is presented on the same
basis as that used for internal reporting purposes  the operating segments are identified on the basis of internal reports
regularly reviewed by the executive board of directors the executive board of directors being the chief operating decision
maker in order to allocate resources to the segments and to assess their respective performance
the board considers the business from a service perspective  the group is organised into two business segments
●
managed procurement and 
●
business critical services
the trading brands of each reportable segment banner business services and t ruline in respect of managed procurement and
banner managed communication and banner document services in respect of business critical services do not qualify as
reportable segments as decisions about the allocation of resources and the assessment of performance are not made at this level
notes to the financial statements for the year ended 31 december 2013
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 61 o2o plc report and accounts 2013 62
notes to the financial statements for the year ended 31 december 2013
the board assesses the performance of the operating segments based on a measure of adjusted earnings before interest
taxation and amortisation ebita  this measurement basis excludes the effects of nonrecurring expenditure from the
operating segments such as restructuring costs an analysis of intangible assets and amortisation although not included in the
performance measure for the segments have been included to aid the reader other information provided to the board except as
noted below is measured in a manner consistent with that in the financial statements
business
managed critical
procurement services total
£000 £000 £000
y ear ended 31 december 2013
revenue 147256 84631 231887
gross margin  245 264 252
adjusted ebita 8379 7476 15855
y ear ended 31 december 2012
revenue 147530 79515 227045
gross margin  252 253 252
adjusted ebita 9917 6005 15922
total assets
31 december 2013 51495 55218 106713
31 december 2012 54689 56860 111549
additions to property plant and equipment
31 december 2013 101 206 307
31 december 2012 633 565 1198
depreciation
31 december 2013 711 215 926
31 december 2012 736 324 1060
additions to intangible assets
31 december 2013 161 1009 1170
31 december 2012 134 317 451
intangible assets
31 december 2013 20370 37191 57561
31 december 2012 20389 37489 57878
amortisation
31 december 2013 265 1222 1487
31 december 2012 218 1026 1244
a reconciliation of total adjusted ebita to profit before income tax is provided as follows
2013 2012
£000 £000
adjusted ebita for reportable segments 15855 15922
central costs 9331 9628
finance costs 2332 2138
underlying profit before income tax 4192 4156
share option expense 48 541
nonrecurring costs 834 4002
amortisation 1487 1244
profit before income tax 1823 1631

5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 62 o2o plc report and accounts 2013 63
notes to the financial statements for the year ended 31 december 2013
reportable segments’ assets are reconciled to total assets as follows
2013 2012
£000 £000
t otal segment assets 106713 111549
unallocated
short leasehold land and buildings – head office 293 350
total assets per balance sheet 107006 111899
revenue generated by geographical segment
2013 2012
£000 £000
united kingdom 230598 225788
republic of ireland 1289 1257
total 231887 227045
 restated see significant accounting policies
of the revenues generated in the united kingdom £225034000 2012 £222554000 are generated from customers in the
united kingdom and the total of revenues from customers from other countries is £5564000 2012 £3234000  all of the
revenues in respect of the republic of ireland are generated from customers in the republic of ireland  of the total assets in the
united kingdom and republic of ireland £59793000 2012 £61103000 and £nil 2012 £nil respectively relate to non
current assets other than deferred tax assets
expenditure on property plant and equipment of £307000 2012 £1198000 was incurred in the united kingdom
expenditure on intangible fixed assets of £1170000 2012 £451000 was incurred in the united kingdom no amounts in
respect of expenditure on property plant and equipment or intangible fixed assets were incurred in the republic of ireland
no single customer generates more than 10 of total revenues
4 expenses by nature
2013 2012
group £000 £000
changes in inventories of finished goods and consumption of goods held for resale 173457 169823
employee benefit expense note 6a 30155 31046
depreciation of property plant and equipment note 13 926 1060
amortisation of intangible assets note 12 1487 1244
nonrecurring costs note 5 834 4002
foreign exchange gains 30 98
operating lease payments 4662 4234
other operating costs 17166 16059
total cost of sales distribution costs and administrative expenses 228657 227370
 restated see significant accounting policies



5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 63 o2o plc report and accounts 2013 64
notes to the financial statements for the year ended 31 december 2013
5 nonrecurring costscredits
the amounts recognised as nonrecurring costscredits are as follows
2013 2012
£000 £000
compensation payments 589 678
business closure costs  659
gain on disposal of trading activity  75
business review costs 245 881
contract implementation and business start up costs  1859
834 4002
compensation payments relate to amounts paid to exemployees of group companies business closure costs and gain on
disposal relates to the closure of noncore activities business review costs relate to costs incurred by the group in relation to
management’s commitment to improve operational efficiency contract implementation and business start up costs relate to
costs incurred with setting up the truline business 
6a employee benefit expense
2013 2012
£000 £000
wages and salaries 26604 26961
social security costs 2521 2771
share based payments note 26 161 476
pension costs – defined benefit note 24 29 22
– defined contribution note 24 840 816
30155 31046
 restated see significant accounting policies
included within the above figures are compensation payments to exemployees of £589000 2012 £678000
key management compensation
key management are the executive directors nonexecutive directors and the senior management teams of the trading divisions
their employment costs during the year were as follows
2013 2012
£000 £000
salaries and other short term employee benefits 2211 2125
postretirement benefits 153 140
share based payments 150 330
2514 2595
a detailed numerical analysis of directors’ remuneration and share options forms part of these financial statements this
analysis is included in the directors’ remuneration report on pages 24 to 36 and shows the highest paid director and the number
of directors accruing benefits under moneypurchase personal pension schemes 
6b average number of people employed
2013 2012
number number
average monthly number of people including executive directors employed
sales and marketing 385 387
production and distribution 447 467
administration 127 129
959 983

5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 64 o2o plc report and accounts 2013 65
7 auditors’ remuneration
services provided by the company’s auditors and its associates
during the year the group including its overseas subsidiary obtained the following services from the company’s auditors and its
associates
2013 2012
group £000 £000
fees payable to company’s auditors for the audit of the company and consolidated financial statements 43 45
fees payable to the company’s auditors and its associates for other services expensed in
the income statement
– audit of company’s subsidiaries 50 80
– interim review fee 10 10
– auditrelated assurance services 20 25
– taxation compliance services 27 25
– taxation advisory services 27 17
177 202
8 finance costs
2013 2012
group £000 £000
finance costs
– bank loans and overdrafts 1517 1604
– finance lease liabilities 9 38
– other financial charges 135 169
– customer procurement card charges 671 327
2332 2138
customer procurement card charges relate to costs incurred in processing customer payments
9 income tax expensecredit
2013 2012
group £000 £000
current tax
united kingdom corporation tax 680 378
adjustments in respect of prior years 242 17
922 361
deferred tax note 15
origination and reversal of temporary differences 164 118
impact of change in the uk tax rate 51 35
adjustments in respect of prior years 204 71
419 154
503 207
notes to the financial statements for the year ended 31 december 2013

5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 65 o2o plc report and accounts 2013 66
notes to the financial statements for the year ended 31 december 2013
tax on items charged to equity
2013 2012
£000 £000
deferred tax credit on share options note 15 368 50
deferred tax credit on remeasurements of the defined benefit liability note 15 206 99
162 149
the standard rate of uk corporation tax changed from 24 to 23 with effect from 1 april 2013 the group tax charge for the
year differs from the standard rate of corporation tax of 2325 2012 245 the differences are explained below
2013 2012
£000 £000
profit before income tax 1823 1631
income tax at the standard rate of uk corporation tax of 2325 2012 245 424 400
t ax effects of
expenses not deductible for tax purposes 92 140
remeasurement of deferred tax  change in the uk tax rate 51 35
adjustments in respect of prior years 38 88
t otal tax chargecredit for the year 503 207
 restated see significant accounting policies
factors affecting future tax charges
the effective tax rate in the near future is anticipated to be similar to the standard rate of corporation tax
during the year the relevant deferred tax balances have been remeasured as a result of the change in the uk main corporation
tax rate to 20 which was substantively enacted on 2 july 2013 and is effective from 1 april 2015 
details with regard to the availability of unrecognised tax losses that may be offset against future taxable profits are given in
note 15
10 dividends
2013 2012
£000 £000
amounts recognised as distributions in the year in respect of
ordinary shares  final dividend 2012 – 36p per share 1302 
ordinary shares  interim dividend 2012 – 36p per share  1302
ordinary shares  final dividend 2011 – 78p per share  2811
1302 4113
the directors have not proposed a dividend for 2013


5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 66 o2o plc report and accounts 2013 67
notes to the financial statements for the year ended 31 december 2013
11 earnings per share
a basic
basic earnings per share is calculated by dividing profit attributable to owners of the company by the weighted average number
of ordinary shares in issue during the year excluding ordinary shares held by the ebt 
2013 2012
profitloss attributable to owners of the company £000 1320 1424
weighted average number of ordinary shares in issue ‘000 36171 36081
basic earnings per share pence 36 39
b diluted
diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares the company has one category of dilutive potential ordinary shares being
share options for share options a calculation is undertaken to determine the number of shares that could have been acquired at
fair value determined as the average annual market share price of the company’s shares based on the monetary value of the
subscription rights attached to outstanding share options the number of shares calculated as above is compared with the
number of shares that would have been issued assuming the exercise of the share options
2013 2012
profitloss attributable to owners of the company £000 1320 1424
weighted average number of ordinary shares in issue ‘000 36171 36081
adjusted for share options ‘000  89
weighted average number of ordinary shares for diluted earnings per share ‘000 36171 36170
diluted earnings per share pence 36 39
c underlying earnings per share
underlying earnings per share is calculated by dividing profit on ordinary activities after tax before the after tax effect of non
recurring costs amortisation and share option expense by the weighted average number of ordinary shares in issue during the
year excluding ordinary shares held by the ebt  
2013 2012
profitloss attributable to owners of the company £000 1320 1424
amortisation net of tax 1141 939
share option expense 48 541
nonrecurring costs net of tax 640 3022
underlying profit attributable to owners of the company £000 3149 3078
weighted average number of ordinary shares in issue ‘000 36171 36081
underlying earnings per share pence per share 87 85



5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 67 o2o plc report and accounts 2013 68
notes to the financial statements for the year ended 31 december 2013
12 intangible assets
customer
goodwill relationships brands software total
2013 £000 £000 £000 £000 £000
cost
at 1 january 2013 50253 8503 3938 652 63346
additions   1170 1170
at 31 december 2013 50253 8503 3938 1822 64516
accumulated amortisation and impairment
at 1 january 2013  3437 1830 201 5468
amortisation for the year  848 393 246 1487
at 31 december 2013  4285 2223 447 6955
net book amount
at 31 december 2013 50253 4218 1715 1375 57561
customer
goodwill relationships brands software total
2012 £000 £000 £000 £000 £000
cost
at 1 january 2012 50253 8503 3938 201 62895
additions   451 451
at 31 december 2012 50253 8503 3938 652 63346
accumulated amortisation and impairment
at 1 january 2012  2590 1436 198 4224
amortisation for the year  847 394 3 1244
at 31 december 2012  3437 1830 201 5468
net book amount
at 31 december 2012 50253 5066 2108 451 57878
net book amount
at 1 january 2012 50253 5913 2502 3 58671
d underlying diluted earnings per share
underlying diluted earnings per share is calculated by dividing profit on ordinary activities after tax before the after tax effect
of nonrecurring costs amortisation and share option expense by the diluted weighted average number of ordinary shares
during the year excluding ordinary shares held by the ebt  
2013 2012
profitloss attributable to owners of the company £000 1320 1424
amortisation net of tax 1141 939
share option expense 48 541
nonrecurring costs net of tax 640 3022
underlying profit attributable to owners of the company £000 3149 3078
weighted average number of ordinary shares in issue ‘000 36171 36081
adjusted for share options ‘000  89
weighted average number of ordinary shares for diluted earnings per share ‘000 36171 36170
underlying diluted earnings per share pence 87 85
 restated see significant accounting policies

5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 68 o2o plc report and accounts 2013 69
customer relationships have 62 years 2012 72 years and brands have 45 years 2012 55 years before the assets are
written down in full  software costs are amortised over three to five years from date of purchase
company
the company had no intangible assets 2012 none
impairment of goodwill
in accordance with ias 36 ‘impairment of assets’  the group regularly monitors the carrying value of its goodwill and reviews it
annually or more regularly if there are indications that goodwill may be impaired for the purposes of assessing impairment
assets are grouped at the lowest levels for which there are separately identifiable cash flows cashgenerating units and
goodwill is allocated to these cashgenerating units the allocation is made to those cashgenerating units or groups of cash
generating units that are expected to benefit from the business combination in which the goodwill arose
the components of goodwill by business segment which represent cashgenerating units are shown below
2013 2012
£000 £000
managed procurement 19116 19116
business critical services 31137 31137
50253 50253
a review was undertaken at 31 december 2013 to assess whether the carrying value of goodwill was impaired by reference to
value in use calculations the value in use calculations use cash flow projections based on financial budgets and forecasts as
approved by the board of directors for a five year period and then into perpetuity based on no changes to the underlying strategy
of the business cash flow projections beyond the five year period are extrapolated using the estimated growth rate referred to
below and are considered appropriate as it is expected that there will be no significant changes in the operation of these
businesses
the key assumptions in the valueinuse calculation were
●
cash flow projections for the five year period are based upon recent observable performance of the group including budgeted
gross margin and expected operating cash inflows
●
the pretax weighted average cost of capital wacc for the group is 108 2012 124 the group believes that the risk
profiles relating to each business segment are not significantly different hence the same wacc is universally applied across
all cashgenerating units and
●
a longterm growth rate of 0 has been used as a prudent growth assumption
whilst management believe the assumptions are realistic it is possible an impairment would be identified if any of the above key
assumptions were changed significantly for instance factors which could cause impairment are
●
significant underperformance relative to the forecast results
●
a further deterioration in the wider economy and
●
an increase in the group’s wacc
the valueinuse is based upon anticipated discounted future cash flows management believe the assumptions used are
appropriate but in addition have conducted sensitivity analysis to determine the changes in assumptions that would result in an
impairment
sensitivity to changes in assumptions
the amount by which the value in use exceeds the carrying amount of the managed procurement cgu is £55m management
have identified two key assumptions where a change could conceivably cause the carrying amount to exceed the recoverable
amount
the following table shows the amount by which these assumptions would need to change individually in order for the estimated
recoverable amount of the managed procurement cgu to be equal to the carrying amount
2013
discount rate increases by 30
ebit for next five years decreases by 20
having performed its impairment test on the managed procurement cgu and having analysed the various sensitivities to this
test management believe that no reasonable change in the above key assumptions will cause the carrying value of the managed
procurement cgu to exceed its recoverable amount
based on the results of the current period impairment review no impairment charges have been recognised by the group in the
year ended 31 december 2013 
notes to the financial statements for the year ended 31 december 2013
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 69 o2o plc report and accounts 2013 70
notes to the financial statements for the year ended 31 december 2013
13 property plant and equipment
group
short
freehold leasehold
land and land and plant and office
buildings buildings machinery equipment total
2013 £000 £000 £000 £000 £000
cost
at 1 january 2013 949 2978 1560 1444 6931
additions at cost  186 23 98 307
disposals  90 414 422 926
at 31 december 2013 949 3074 1169 1120 6312
accumulated depreciation
at 1 january 2013 145 1813 1295 453 3706
charge for the year 28 434 105 359 926
disposals  84 393 75 552
at 31 december 2013 173 2163 1007 737 4080
net book amount
at 31 december 2013 776 911 162 383 2232
short
freehold leasehold
land and land and plant and office
buildings buildings machinery equipment total
2012 £000 £000 £000 £000 £000
cost
at 1 january 2012 949 2809 2519 597 6874
additions at cost  169  1029 1198
disposals  959 182 1141
at 31 december 2012 949 2978 1560 1444 6931
accumulated depreciation
at 1 january 2012 117 1391 1611 439 3558
charge for the year 28 422 417 193 1060
disposals  733 179 912
at 31 december 2012 145 1813 1295 453 3706
net book amount
at 31 december 2012 804 1165 265 991 3225
net book amount
at 1 january 2012 832 1418 908 158 3316
the net book value of assets held under finance leases was £87000 2012 £181000 and is within the plant and machinery
category 
the group leases various vehicles and machinery under noncancellable finance lease arrangements  the lease terms are
between one and five years and ownership of the assets lie within the group
company
the company has no property plant and equipment 2012 none
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 70 o2o plc report and accounts 2013 71
notes to the financial statements for the year ended 31 december 2013
14 investments in subsidiaries
company
2013 2012
£000 £000
at 1 january 9156 8615
options granted to employees of subsidiary undertakings 48 541
at 31 december 9204 9156
the directors consider that the carrying value of the investment is supported by the value of the underlying assets 
details of the subsidiaries are as follows country of 
name of company nature of business incorporation company subsidiary
office2office uk plc non trading holding company england 100
olive 1 limited non trading holding company england 100
truline logistics limited managed procurement england 100
banner business services ltd managed procurement england 100
banner business services ireland limited managed procurement republic of ireland 100
banner document services ltd business critical services england 100
accord office supplies limited managed procurement england 100
triplearc limited business critical services republic of ireland 100
accessplus holdings limited non trading holding company england 100
access plus marketing services limited business critical services england 100
banner business supplies pensions limited non trading  trustee for england 100
pension scheme only
access plus limited non trading holding company england 100
access plus print management limited non trading england 100
access plus marketing logistics limited non trading england 100
adversion limited non trading england 100
alpha data supplies limited non trading england 100
alpha litho limited non trading england 100
alpha office limited non trading england 100
alpha stationers limited non trading england 100
banner business supplies ltd non trading england 100
banner managed communication limited non trading england 100
banner managed services plc non trading england 100
colebrook services limited non trading england 100
esp2office ltd non trading england 100
fileit limited non trading england 100
first2office ltd non trading england 100
image2office ltd non trading england 100
gl2 limited non trading england 100
godfrey lang limited non trading england 100
software stationery holdings limited non trading england 100
software stationery specialists limited non trading england 100
triplearc uk limited non trading england 100
all of the above shareholdings are in the subsidiaries’ ordinary share capital and no companies are excluded from the group consolidated
financial statements    
 non trading companies which are exempt from audit and from preparing and filing individual accounts by virtue of s394a and s448a
of the companies act 2006
 shareholding
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 71 o2o plc report and accounts 2013 72
notes to the financial statements for the year ended 31 december 2013
15 deferred income tax assetliability
2013 2012
£000 £000
deferred income tax asset 1135 1039
deferred income tax liability 830 991
305 48
the net deferred income tax asset is estimated to be payable as follows
2013 2012
£000 £000
deferred income tax assetliability
– to be recovered after more than 1 year 339 157
– to be paid within 1 year 34 109
305 48
the net deferred income tax asset recognised in the financial statements is as follows
2013 2012
£000 £000
t ax effect of timing differences
excess of qualifying depreciation over tax allowances 314 342
t ax losses 193 
employee share schemes 70 397
retirement benefit obligations 329 179
provisions 229 300
intangible assets 830 1170
305 48
group 2013 2012 2013 2012
£000 £000 £000 £000
at 1 january 1039 1391 991 1338
creditedcharged to the income statement note 9 464 402 45 248
debitedcredited to equity note 9 368 50 206 99
at 31 december 1135 1039 830 991
deferred income tax assets and liabilities are only offset where there is a legally enforceable right to offset and there is an
intention to settle the balances net 
group
group
liability asset
group




5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 72 o2o plc report and accounts 2013 73
notes to the financial statements for the year ended 31 december 2013
the movements in deferred tax assetsliabilities during the year is shown below
group
charged
credited to debited
at the income credited at
1 jan 2013 statement to equity 31 dec 2013
£000 £000 £000 £000
depreciation over tax allowances 342 28  314
intangible assets 1170 340  830
provisions 300 71  229
retirement benefit obligations 179 56 206 329
t ax losses  193  193
share options 397 41 368 70
total 48 419 162 305
charged
credited to
at the income credited at
1 jan 2012 statement to equity 31 dec 2012
£000 £000 £000 £000
depreciation over tax allowances 392 50  342
intangible assets 1494 324  1170
provisions 440 140  300
retirement benefit obligations 156 76 99 179
t ax losses 241 241 
share options 318 29 50 397
total 53 154 149 48
 restated see significant accounting policies
deferred income tax assets and liabilities are recognised for tax losses and short term timing differences to the extent that the
realisation of the related tax benefit through future taxable profits is probable
the group has not recognised a deferred tax asset relating to nontrade losses of £393000 2012 £452000 as there are no
expected changes in the operating characteristics of the subsidiary to which they relate that would permit utilisation in future
periods
company
the company had no provided or unprovided deferred tax balances in either year
 
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 73 o2o plc report and accounts 2013 74
notes to the financial statements for the year ended 31 december 2013
16 inventories
2013 2012
group £000 £000
finished goods and goods for resale 8637 9045
the group consumed £173457000 2012 £169823000 of inventories during the year  
the provision to reflect net realisable value being less than cost increased by £128000 2012 £331000 decrease during the year
company
the company held no inventories 2012 £nil
17 trade and other receivables
2013 2012 2013 2012
£000 £000 £000 £000
trade receivables 28047 31308  
less provision for impairment 637 797  
trade receivables net 27410 30511  
prepayments and accrued income 7519 7271  
other receivables 56 57  
receivables from related parties note 30   4449 5654
34985 37839 4449 5654
receivables from related parties are repayable on demand included within receivables from related parties is a loan to banner
business services limited of £4300000 upon which interest is charged at a rate of 175 2012 175 per annum above
bank of england base rate interest is not charged on the other balances
credit risk in respect to trade receivables is limited due to the group’s customers being predominantly comprised of large
companies and public sector entities as a result the directors consider that no further credit risk provision is required in excess
of the normal provision for doubtful receivables
the carrying amounts of trade and other receivables are denominated in the following currencies
2013 2012 2013 2012
£000 £000 £000 £000
sterling 33698 36394 4449 5654
euro 765 1047  
us dollar 292 249  
swedish krona 230 149  
34985 37839 4449 5654
group
trade receivables that are not past due amounting to £19883000 2012 £16863000 are not considered impaired as
amounts within this category generally relate to a number of independent customers for which there is no recent history of
default as of 31 december 2013 trade receivables of £6994000 2012 £13009000 were past due but not impaired the
analysis of these trade receivables by reference to due date are aged as follows
2013 2012
£000 £000
up to 1 month past due 4947 7142
over 1 month past due 2047 5867
6994 13009
group company
group company
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 74 o2o plc report and accounts 2013 75
notes to the financial statements for the year ended 31 december 2013
as of 31 december 2013 trade receivables of £1170000 2012 £1436000 were impaired and partially provided for the
amount of the provision against such impaired trade receivables was £637000 as of 31 december 2013 2012 £797000
the individually impaired receivables mainly relate to issues arising from the current economic climate these receivables are
aged as follows
2013 2012
£000 £000
0 to 3 months overdue 333 334
3 to 6 months overdue 99 233
over 6 months overdue 738 869
1170 1436
movements on the group provision for impairment of trade receivables are as follows
2013 2012
£000 £000
at 1 january 797 871
decreaseincrease in provision for receivables impairment 6 8
receivables written off during the year as uncollectable 154 82
at 31 december 637 797
the creation and release of provision for impaired receivables have been included in ‘revenue’ in the consolidated income
statement amounts charged to the provision are written off when there is no expectation of recovering additional cash the other
classes within trade and other receivables do not contain impaired assets the maximum exposure to credit risk at the reporting
date is the carrying value of each class of receivable mentioned above the group does not hold any collateral as security 
the other classes within trade and other receivables do not contain impaired assets and management consider the credit quality
of these assets as good – preexisting customers with no defaults in the previous six months
18 cash and cash equivalents
2013 2012 2013 2012
£000 £000 £000 £000
cash at bank and in hand 1906 1725  
cash cash equivalents and bank overdrafts include the following for the purpose of the cash flow statement
2013 2012 2013 2012
£000 £000 £000 £000
cash at bank and in hand 1906 1725  
bank overdrafts note 20 11452 13469  
9546 11744  
19 trade and other payables
2013 2012 2013 2012
£000 £000 £000 £000
trade payables 39334 39452  
social security and other taxes 4871 5223  
accrued expenses and deferred income 21536 18448 24 24
payables to related parties note 30   1 1
65741 63123 25 25
 restated see significant accounting policies
group company
group company
group company

5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 75 o2o plc report and accounts 2013 76
notes to the financial statements for the year ended 31 december 2013
20 borrowings
2013 2012
£000 £000
noncurrent
bank borrowings 10879 12228
finance leases 64 94
10943 12322
current
bank overdrafts 11452 13469
bank borrowings 1256 4828
finance leases 25 138
12733 18435
total borrowings 23676 30757
the company does not have any borrowings 2012 £nil
bank borrowings
bank borrowings mature in 2015 and bear interest at a floating rate in the range of 200 to 325 basis points above libor bank
borrowings are secured by an all assets debenture and a cross company guarantee on all assets of the group the company forms
part of the cross guarantee structure
the bank overdraft includes invoice discounting arrangements and cash book overdrafts 
the repayment profile of bank borrowings including overdrafts is as follows 
2013 2012
£000 £000
within one year or on demand 12708 18297
between one and two years 10879 3828
between two and three years  8400
23587 30525
the borrowings are denominated in sterling
the carrying amounts and fair value of the noncurrent borrowings are as follows
2013 2012 2013 2012
£000 £000 £000 £000
bank borrowings 10879 12228 11755 13722
the fair value of the current borrowings equals their carrying amounts as the impact of discounting is not significant the fair
values of bank borrowings are based on cash flows discounted using a rate based on the market rate at 31 december 2013 of
43 included in the above are debt arrangement fees of £121000 2012 £272000
finance leases
the fair value of the group’s lease obligations is not considered to be materially different to their carrying value
group
carrying amount fair value
bank borrowings
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 76 o2o plc report and accounts 2013 77
carrying amount fair value
notes to the financial statements for the year ended 31 december 2013
t otal aggregate future minimum lease payments under finance leases together with the future finance charges and present
value of the net minimum lease payments are as follows
group 2013 2012
£000 £000
within one year 28 146
in more than one year but not more than five years 22 94
in more than five years 47 14
97 254
2013 2012
£000 £000
within one year 3 8
in more than one year but not more than five years 2 9
in more than five years 3 5
8 22
2013 2012
£000 £000
within one year 25 138
in more than one year but not more than five years 20 85
in more than five years 44 9
89 232
finance leases are secured upon the assets to which the lease agreement relates
21 financial instruments
the fair values of financial assets and financial liabilities together with the carrying amounts in the consolidated balance sheet
are as follows
2013 2012 2013 2012
£000 £000 £000 £000
noncurrent financial liabilities
borrowings 10943 12322 11819 13816
current financial liabilities
trade and other payables 65741 63123 65741 63123
borrowings 12733 18435 12733 18435
78474 81558 78474 81558
current financial assets
trade and other receivables 34985 37839 34985 37839
cash and cash equivalents 1906 1725 1906 1725
36891 39564 36891 39564
 restated see significant accounting policies
cash and cash equivalents and trade and other receivables excluding prepayments are classified as loans and receivables for
the purpose of ifrs 7 ‘financial instruments disclosures’ 
borrowings finance leases and trade and other payables excluding statutory liabilities are classified as other financial liabilities
at amortised cost for the purpose of ifrs 7 ‘financial instruments disclosures’ 
minimum lease payments
future finance charges
net minimum lease payments

5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 77 o2o plc report and accounts 2013 78
notes to the financial statements for the year ended 31 december 2013
22 current income tax asset
2013 2012 2013 2012
£000 £000 £000 £000
current income tax asset 550 1148  
 restated see significant accounting policies
23 provisions
property onerous
dilapidations leases total
£000 £000 £000
at 1 january 2013 495 121 616
charged to the income statement
 additional provisions 70  70
utilised during the year  103 103
at 31 december 2013 565 18 583
2013 2012
maturity profile of provisions £000 £000
current 151 121
noncurrent 432 495
at 31 december 583 616
property dilapidations relate to the expected cost for making good leased properties at the end of their lease  the provision
relates to various properties with different lease end dates ranging between one and seven years
onerous leases relate to the future cost of historic lease obligations whereby the group has no future economic benefit from the lease 
company
the company has no provisions 2012 £nil
24 defined benefit obligation
group
the group is the contributing employer to a defined benefit pension scheme the banner business supplies pension scheme
bbs scheme all the members of which were formerly employed by her majesty’s stationery office and were members of the
principal civil service pension scheme who first elected to transfer funds accrued to the stationery office limited scheme and
subsequently elected to transfer funds accrued to the bbs scheme 
the bbs scheme commenced on 1 august 2000 when the funds were transferred in by the stationery office pension scheme
tsops the scheme is funded by the payment of contributions to a separately administered trust fund the scheme was closed
to future accrual on 31 december 2011
the latest full actuarial valuation was carried out on 31 july 2010 and updated to 31 december 2013 by punter southall
limited a qualified independent actuary the pension costs have been determined on the basis of the results of this valuation 
the fair value of the bbs scheme assets at 31 december 2013 amounted to £14684000 2012 £13101000
group contributions in respect of the defined benefit pension scheme for the period were £307000 2012 £361000 group
contributions in 2014 are expected to be approximately £300000
the group also incurred £840000 2012 £816000 in respect of group personal pension arrangements and employees’ own
personal pension arrangements for staff recruited by the stationery office limited and group companies since 30 september
1996 at rates varying between 6 and 15 of pensionable earnings
the outstanding accrual in respect of defined contribution pension contributions at 31 december 2013 was £123000
2012 £166000
group company

5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 78 o2o plc report and accounts 2013 79
notes to the financial statements for the year ended 31 december 2013
the amounts recognised in the balance sheet in respect of the bbs scheme are determined as follows
2013 2012
£000 £000
present value of funded obligations 16330 13878
fair value of plan assets 14684 13101
net liability in the balance sheet 1646 777
the amounts included in the fair value of plan assets are as follows
2013 2012
£000 £000
equities 10815 9919
bonds 2982 2033
property 760 634
other 127 515
14684 13101
the amounts recognised in the income statement are as follows
2013 2012
£000 £000
net interest on the net defined benefit liability 29 22
total expense recognised in the income statement as administrative expenses 29 22
remeasurements of the defined benefit liability shown in other comprehensive income
2013 2012
£000 £000
net remeasurement  financial 1933 938
return on assets excluding interest income 786 444
total expense recognised in the income statement as administrative expenses 1147 494
the movement in the fair value of plan assets is as follows
2013 2012
£000 £000
fair value of plan assets at 1 january 13101 11854
interest income on scheme assets 607 592
return on assets excluding interest income 785 444
employer contribution 307 361
benefits paid 116 150
fair value of plan assets at 31 december 14684 13101
the movement in the defined benefit obligation is as follows
2013 2012
£000 £000
defined benefit obligations at 1 january 13878 12476
interest cost 635 614
net remeasurement gainslosses  financial 1933 938
benefits paid 116 150
present value of funded obligations at 31 december 16330 13878
 restated see significant accounting policies
 



5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 79 o2o plc report and accounts 2013 80
notes to the financial statements for the year ended 31 december 2013
the principal actuarial assumptions were as follows
2013 2012
pa pa
discount rate 45 46
future salary increases na na
future pension increases
– transferred from tsops 28 24
– earned in scheme 35 31
inflation  rpi 35 31
inflation  cpi 28 24
the weighted average life expectancy derived from mortality tables used to determine benefit obligations were
2013 2012
y ears y ears
male member aged 65 current life expectancy 223 222
female member aged 65 current life expectancy 244 243
male member aged 45 life expectancy at age 65 237 236
female member aged 45 life expectancy at age 65 259 259
characteristics of the scheme and the risks associated with the scheme
a information about the characteristics the scheme
i the scheme provides pensions in retirement and death benefits to members pension benefits are linked to a
member’s final salary at retirement or earlier withdrawal and their length of service since 31 december 2011 the
scheme has been closed to future accrual
ii the scheme is a registered scheme under uk legislation and has historically contracted out of the state second
pension 
the scheme is subject to the scheme funding requirements outlined in uk legislation the last scheme funding valuation
of the scheme was completed as at 30 july 2010 and revealed a deficit of £17m in the recovery plan dated 11
october 2011 the company has agreed to pay contributions of £300000 per annum with the view to eliminating the
shortfall by 30 november 2018
under clause 285 of the scheme’s trust deed and rules dated 31 july 2000 the company has an unconditional right to
a refund of any surplus in the scheme if the scheme winds up not as a result of company insolvency therefore there is
no additional liability recognised on the balance sheet as a result of the recovery plan dated 11 october 2011
iii the scheme was established from 1 august 2000 under trust and is governed by the scheme’s trust deed and rules
dated 31 july 2000 the trustees are responsible for the operation and the governance of the scheme including
making decisions regarding the scheme’s funding and investment strategy in conjunction with the company
b information about the risks of the scheme to the company
the ultimate cost of the scheme to the company will depend upon actual future events rather than the assumptions
made many of the assumptions made are unlikely to be borne out in practice and as such the cost of the scheme may be
higher or lower than disclosed 
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 80 o2o plc report and accounts 2013 81
notes to the financial statements for the year ended 31 december 2013
in general the risk to the company is that the assumptions underlying the disclosures or the calculation of contribution
requirements are not borne out in practice and the cost to the company is higher than expected this could result in
higher contributions required from the company and a higher deficit disclosed this may also impact the company’s
ability to grant discretionary benefits or other enhancements to members 
more specifically the assumptions not being borne out in practice could include
i the return on the scheme’s assets being lower than assumed resulting in an unaffordable increase in the required
company contribution rate
ii falls in asset values particularly equities not being matched by similar falls in the value of liabilities
iii unanticipated future changes in mortality patterns leading to an increase in the scheme’s liabilities future
mortality rates cannot be predicted with certainty this is especially so bearing in mind that the youngest scheme
members could be expected to still be alive in 60 years or more and it is not possible to reliably predict what
medical advances may or may not have occurred by this time
iv the potential exercise by members or others of options against the scheme for example taking early retirement or
exchanging a portion of pension for a cash lump sum
v the relatively small number of scheme members is likely to lead to particular volatility in the deficit and the
company contributions as the future demographic experience of such a group is more uncertain than would be the
case for a larger group
c information about any amendments curtailments and settlements
there has not been any amendments curtailments or settlements over the year to 31 december 2013
amount timing and uncertainty of future cash flows
a sensitivity analysis
a sensitivity analysis of the principal assumptions used to measure the scheme’s defined benefit obligation as at 31
december 2013 is
change in assumption impact on the scheme’s
defined benefit obligation
discount rate increase by 025 decrease by £09m
rate of inflation rpi increase by 025 increase by £02m
rate of inflation cpi increase by 025 increase by £09m
assumed life expectancy at age 65 increase by 1 year increase by £04m
changes to the assumptions for the purposes of the sensitivity analysis are made in isolation
extrapolation of the sensitivity analysis beyond the ranges shown may not be appropriate
b description of assetliability matching strategies
the scheme does not invest in swaps or insurance policies but does aim to match some of the liabilities by duration and
pension increase through investment in bonds
c the scheme’s investment strategy
the scheme’s investment strategy is to invest broadly 80 in return seeking assets and 20 in matching assets mainly
government bonds this strategy reflects the scheme’s liability profile and the trustees’ and company’s attitude to risk
d expected future cashflows to and from the plan
in accordance with the schedule of contributions dated 11 october 2011 the company is expected to pay contributions
of £300000 in 2014 in addition the company is expected to directly meet the cost of administrative expenses for the
scheme
the liabilities of the scheme are based on the current value of expected benefit payment cashflows to members of the
scheme over the next 80 years the average duration of the liabilities is approximately 25 years
company
the company has no retirement benefit liabilities 2012 £nil
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 81 o2o plc report and accounts 2013 82
notes to the financial statements for the year ended 31 december 2013
25 ordinary shares
no £ no £
issued and fully paid
ordinary shares of 1p each 36308984 363090 36308984 363090
138155 ordinary shares are held by the ebt 2012 138155 for which the right to receive dividends has been waived 
26 share options
exercise
number number number number number price per exercisable expiry
1 jan 13 granted exercised expired 31 dec 13 share from date
psp
date granted
may 2010 598070  598070  01p 210513 211113
september 2010 58333  58333  01p 240913 240314
june 2011 1466796  205806 1260990 01p 200614 200615
september 2012 935622  137891 797731 01p 180915 180916
april 2013  214670  214670 01p 040416 040417
sa ye scheme
date granted
april 2008 5yr 97629  93409 4220 1194p 010513 311013
december 2011 3yr 353365  249571 103794 1168p 010115 010715
december 2011 5yr 73707  35443 38264 1168p 010117 010717
october 2013 3yr  1225023  7135 1217888 454p 011116 010517
october 2013 5yr  428439  428439 454p 011118 010519
3583522 1868132  1385658 4065996
exercise
number number number number number price per exercisable expiry
1 jan 12 granted exercised expired 31 dec 12 share from date
psp
date granted
march 2009 160606  80303 80303  01p 040312 040912
april 2009 370067  50898 319169  01p 300412 301012
may 2010 641961  43891 598070 01p 210513 211113
september 2010 58333   58333 01p 240913 240314
june 2011 1466796   1466796 01p 200614 200615
september 2012  935622  935622 01p 180915 180916
sa ye scheme
date granted
april 2008 5yr 99035  1406 97629 1194p 010513 311013
december 2011 3yr 376324  22959 353365 1168p 010115 010715
december 2011 5yr 90401  16694 73707 1168p 010117 010717
3263523 935622 131201 484422 3583522
options which expired in the year to 31 december 2013 reflected employees leaving the group nonachievement of
performance conditions and the expiry of the term of exercise
2013 2012
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 82 o2o plc report and accounts 2013 83
notes to the financial statements for the year ended 31 december 2013
at 31 december 2013 there were 14 members 2012 16 members with an average option holding of 162385 2012
191176 of the performance share plan and 226 members 2012 135 members with average holdings of 7932 2012 3887
of the saveasy ouearn sa ye scheme
the performance share plan was introduced on 21 december 2005 to incentivise senior management relative to the long term
strategy of the group financial performance conditions apply to exercise of the options based on the group’s earnings per share
growth and for awards made up to 2010 a comparative measure of total shareholder return tsr against the companies in the
ftse small cap index for awards made after 2010 the tsr measure has been replaced by growth in share price on 4 april
2013 awards were granted over 214670 shares based on a weighted average share price of the three days prior to award of
932p per share no options were exercised during the year under review the weighted average remaining contractual life is 11
years
the sa ye scheme was first introduced in october 2004 the exercise price is determined at a 20 discount to the closing mid
market price on the date of invitation the schemes have either a three or five year vesting period the weighted average
remaining contractual life is 33 years
the summary of share options by expiry date in relation to the above schemes were as follows
exercise price shares
expiry date grant per share 2013 2012
2013 2008 1194p  97629
2014 200810 1194p 4220 656403
2015 2011 90p 1364784 1820161
2016 2012 01p 797731 935622
2017 201113 406p 1470822 73707
2019 2013 454p 428439 
4065996 3583522
the ifrs 2 and associated national insurance costs before tax incurred in relation to the above schemes were as follows
2013 2013 2012 2012
ifrs 2 ni ifrs 2 ni
£000 £000 £000 £000
psp
date granted
march 2009  23
april 2009  2 4
may 2010 6 16 222 32
september 2010 29 7 20 3
june 2011 62 91 546 83
september 2012 223 1 82 12
april 2013 36 2 
sa ye scheme
date granted
october 2008 5yr 2 7
december 2011 3yr 10  34 
december 2011 5yr 1 5
october 2013 3yr 5 
october 2013 5yr 1 
161 113 476 65
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 83 o2o plc report and accounts 2013 84
notes to the financial statements for the year ended 31 december 2013
the following valuation assumptions have been applied in respect of schemes introduced in the current year the assumptions in
respect of prior year schemes may be found in the prior year annual report and accounts
performance share plan – april 2013 option value information
fair value per option £0725
option exercise price £0001
weighted average share price £0932
v aluation assumptions
expected option term 325 years
expected volatility 252
expected dividend yield 77
risk free interest rate 08
sa ye – october 2013 3yr option value information
fair value per option £0071
option exercise price £0454
weighted average share price £0390
v aluation assumptions
expected option term 325 years
expected volatility 469
expected dividend yield 71
risk free interest rate 20
sa ye – october 2013 5yr option value information
fair value per option £0080
option exercise price £0454
weighted average share price £0390
v aluation assumptions
expected option term 525 years
expected volatility 458
expected dividend yield 71
risk free interest rate 32
 estimated using the blackscholes option pricing models
all of the above relate to equity settled sharebased payment transactions
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 84 o2o plc report and accounts 2013 85
notes to the financial statements for the year ended 31 december 2013
group company
27 cash generated fromused in operations
2013 2012 2013 2012
£000 £000 £000 £000
profit before income tax 1823 1631 97 97
adjustments for
amortisation of intangible assets 1487 1244  
depreciation of property plant and equipment 926 1060  
lossprofit on disposal of property plant and equipment 374 14  
finance income   97 97
finance costs 2332 2138  
share option expense 161 476  
decreaseincrease in inventories 408 71  
decreaseincrease in trade and other receivables 2854 8874 1205 4016
increase in trade and other payables and provisions 2601 12208  
cash generated from operations 12966 6536 1205 4016
 restated see significant accounting policies

5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 85 o2o plc report and accounts 2013 86
notes to the financial statements for the year ended 31 december 2013
28 analysis of movement in net debtcash 
at at
group 1 january cash noncash 31 december
2013 flow movements 2013
£000 £000 £000 £000
cash at bank and in hand 1725 181  1906
bank overdrafts 13469 2017  11452
11744 2198  9546
t erm loan – current 4828 5000 1428 1256
finance leases – current 138 143 30 25
t otal current net debt 16710 7341 1458 10827
t erm loan – noncurrent 12228  1349 10879
finance leases – noncurrent 94  30 64
t otal noncurrent debt 12322  1379 10943
net debt 29032 7341 79 21770
at at
1 january cash noncash 31 december
2012 flow movements 2012
£000 £000 £000 £000
cash at bank and in hand 1169 556  1725
bank overdrafts 8667 4802  13469
7498 4246  11744
t erm loan – current 2338 2500 4990 4828
finance leases – current 299 329 168 138
t otal current net debt 10135 1417 5158 16710
t erm loan – noncurrent 17089  4861 12228
finance leases – noncurrent 426 222 110 94
t otal noncurrent debt 17515 222 4971 12322
net debt 27650 1195 187 29032
noncash movements relates to the movement of finance leases and movements in the term loan between noncurrent and
current movements in bank arrangement fees and new finance lease agreements taken out during the year
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 86 o2o plc report and accounts 2013 87
notes to the financial statements for the year ended 31 december 2013
29 guarantees and other financial commitments
bank guarantees
the company is a member of the group banking arrangement under which it is party to unlimited crossguarantees in respect of
the banking facilities of other group undertakings amounting to £12500000 2012 £17500000 subject to facility at 31
december 2013 the directors do not expect any material loss to the company to arise in respect of the guarantees
operating lease commitments
2013 2012 2013 2012
group £000 £000 £000 £000
amounts payable under noncancellable operating leases
no later than one year 2135 2512 2263 2049
later than one year and no later than five years 4682 4350 3686 3671
later than five years 2262 1362 168 201
9079 8224 6117 5921
company
the company has no obligations under operating leases 2012 none
30 related parties
group
directors’ and key management compensation is disclosed in note 6
company
during the year the company had the following transactions with its subsidiaries note 14
2013 2012
£000 £000
interest received 97 97
97 97
as at 31 december the following amounts were due tofrom the company fromto its subsidiaries
2013 2012
£000 £000
banner business services limited note 17 4449 5654
banner business services ireland limited note 19 1 1
4448 5653
other than disclosed above all movements in balances due to and from related parties relate to the movement of cash and other
working capital transactions between group companies
land and buildings other
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 87 o2o plc report and accounts 2013 88
registered office
st crispins
duke street
norwich nr3 1pd
united kingdom
t elephone 44 0 1603 691 102
website wwwoffice2officecouk
email infooffice2officebiz
professional advisers
independent auditors
kpmg llp
chartered accountants and statutory auditors
botanic house
100 hills road
cambridge cb2 1ar
broker
wh ireland ltd
24 martin lane
london ec4r 0dr
financial advisers
rothschild 
1 park row
leeds ls1 5nr
solicitors
macfarlanes llp
20 cursitor street
london ec4a 1l t
dla piper uk llp
princes exchange
princes square
leeds ls1 4by
company details shareholder information 
financial calendar 2014
announcement of final results for the year ended 31 december 2013
2 april 2014
annual general meeting
29 may 2014
registrar and transfer office
enquiries about administrative matters relating to
shareholding and dividends should be addressed to the
company’s registrars
capita registrars
northern house
woodsome park
fenay bridge
huddersfield
west y orkshire hd8 0la
t elephone 0871 664 0300 calls cost 10p per minute plus
network extras
international 44 0 208 639 3399
lines are open 830am to 530pm monday to friday
or by email to ssdcapitaregistrarscom
share price
information concerning the day to day movement of the
share price of the company can be found on our website
wwwoffice2officecouk or that of the london stock
exchange wwwpriceslondonstockexchangecom the share
price can also be found in the appropriate sections of
national newspapers under the classification ‘support
services’ and under the ticker code ‘off l ’ or ‘off’ 
unsolicited mail
as the company’s share register is by law open to public
inspection shareholders may receive unsolicited mail from
organisations that use it as a mailing list t o reduce the
amount of unsolicited mail you receive contact 
the mailing preference service
freepost 22
london w1e 7ez
t elephone 44 0 845 703 4599
website wwwmpsonlineorguk  
5587o2oareport2013pp4088v43973o2oareport2010pp34–84  11042014  1605  page 88 head office and registered office
st crispins duke street norwich nr3 1pd
telephone 0845 226 7780 wwwoffice2officecouk
registered in england and wales
registered number 04083206
cover and inside pages
the cover and inside pages of this report 
are printed on antalis cocoon silk 100 which is
100 deinked recycled waste with fsc
®
recycled certification
printed by banner managed communication 
which is part of the office2office group
annual report and accounts 2013
o f f i c e 2 o f f i c e   a n n u a l r e p o r t a n d a c c o u n t s 2 0 1 3
office2office
5587o2oannualreport2013coverlayout 1  14042014  1230  page 1


Summary:
 o2o plc report and accounts 2013 1
2013 2012
key financials
revenue £2319m £2270m
profitloss before tax £18m £16m
basic earnings per share 36p 39p
underlying profit before tax
1
£42m £42m
underlying earnings per share
2
87p 85p
operating cash flow £130m £65m
net debt £218m £290m
final dividend proposed
total dividend for the year
£00m £13m
0p per share 36p per share
£00m £26m
0p per share 72p per share
 restated  see significant accounting policies
1 profit  loss before tax nonrecurring costs of £08m 2012 £40m £nil share option charges 2012 £05m and amortisation of
intangibles of £15m 2012 £12m refer to the consolidated income statement on page 40 and note 5 on nonrecurring costscredits
2 profit after tax before the after tax effect of nonrecurring costs share option chargesand amortisation of intangibles divided by the
weighted average number of ordinary shares in issue refer to note 11 to the financial statements
5587o2oareport2013pp139v103973o2oareport2010pp133  11042014  1437  page 1