annual report and accounts 2011 “office2office plc o2o is now a leading provider of office supplies and
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
financial highlights                                                                                                                                      1
chairman’s statement                                                                                                                       2 – 4
chief executive’s review                                                                                                                 5 – 6
business and financial review                                                                                                   7 – 9
corporate social responsibility statement                                                             10 – 12
board of directors                                                                                                                                     13
directors’ report                                                                                                                            14 – 17
corporate governance statement                                                                                   18 – 21
nomination committee report                                                                                                       22
audit committee report                                                                                                          22 – 23
directors’ remuneration report                                                                                        24 – 29
independent auditors’ report to the 
members of office2office plc                                                                                               30 – 31
consolidated income statement                                                                                                   32
consolidated statement of comprehensive income                                                     33
consolidated and company balance sheets                                                                        34
consolidated statement of changes in equity                                                                   35
company statement of changes in equity                                                                             36
consolidated and company cash flow statements                                                       37
significant accounting policies                                                                                           38 – 44
notes to the financial statements                                                                                  45 – 74
five y ear summary                                                                                                                                   75
shareholder information                                                                                                                      76
company details                                                                                                                                         77
contents o2o plc report and accounts 2011 1
2011 2010
key financials
revenue £1935m £2076m
profit before tax £43m £46m
basic earnings per share 120p 120p
underlying profit before tax
1
£84m £112m
underlying earnings per share
2
207p 251p
operating cash flow £109m £50m
net debt £277m £314m
final dividend proposed
total dividend for the year
£28m £28m
78p per share 78p per share
£41m £41m
114p per share 114p per share
1 profit before tax nonrecurring costs of £24m 2010 £53m £04m share option charges 2010 £01m £nil negative goodwill
2010 £02m and amortisation of intangibles of £13m 2010 £13m refer to the consolidated income statement on page 32
2 profit after tax before the after tax effect of nonrecurring costs share option charges negative goodwill and amortisation of
intangibles divided by the weighted average number of ordinary shares in issue refer to note 11 to the financial statements
 restated for adjustments arising  from prior year business combinations relating to negative goodwill amortisation of intangible
assets and deferred income tax expense resulting in no change to underlying profit before tax and a £50000 reduction in profit
after tax in 2010 refer to note 2 to the financial statements o2o plc report and accounts 2011 2
results
notwithstanding the public sector sales volumes and noncore
expenditure shortfalls we managed to hold revenue at
£1935m 2010 £2076m and underlying profit before tax
was £84m 2010 £112m
administrative expenses excluding nonrecurring costs
amortisation of intangibles and share option expense were
whilst this has been a year of unprecedented new business wins revenue and profitability fell
back in 2011 driven entirely by the shortfall in public sector sales volumes and noncore
expenditure relative to prior years by contrast private sector trading performance was broadly
in line with our expectations 
business wins and retention rates have been high during the year notably two new managed
procurement contracts secured in 2011 are expected to generate additional annual revenue in
excess of £50m in 2012 and compensate for continuing albeit now stable lower levels of
public sector sales volumes
the first is a four year contract to supply and distribute office products to the sme sector
through an independent office product dealership network the advantia contract this is
expected to generate revenues in excess of £25m per annum for our new supply chain business
truline which was launched during the year
secondly in august following a competitive tender process for the government office supplies
contract gosc we were appointed as sole provider of office products and closed loop
services to the uk central government for a minimum of three years with the option to extend
gosc embraces all central government departments and as well as securing all our existing
public sector office product and closed loop business it is expected to generate at least £25m
of additional annual revenue further gosc is based on our openbook pricing model which
should protect the group from any adverse product cost increases 
having overcome the unexpected implementation delays which limited its impact in 2011
gosc has been trading in line with expectations so far in 2012 and other public sector sales
volumes now appear to be stable
£273m 2010 £273m and distribution costs reduced to
£184m 2010 £193m nonrecurring costs as detailed in
note 5 to the financial statements were £24m 2010
£53m comprising compensation costs following
restructuring of £13m 2010 £18m truline start up costs
of £07m 2010 £nil and £07m 2010 £33m of business
and strategic review costs offset by a curtailment gain on
closure of the defined benefit pension scheme of £03m
chairman’s statement  
david callear o2o plc report and accounts 2011 3
2010 £nil in addition in 2010 there were transaction
costs of £02m relating to the investment in tpf  
profit before tax was £43m 2010 £46m and following a
tax charge credit profit after tax remained at £43m 2010
£43m basic and fully diluted earnings per share were 120p
and 120p respectively 2010 120p and 120p underlying
earnings per share were 207p 2010 251p
cash generated from operations and net debt
cash generated from operations increased by £59m to
£109m 2010 £50m this reflected the unusual investment
in working capital and integration costs reported in 2010
following the acquisition of tpf and subsequently the impact
of the improved management of tpf working capital as part
of the enlarged group net indebtedness fell to £277m
2010 £314m primarily as a direct consequence of this
improvement
during the year the group’s banking facilities were
renegotiated increased and the term extended the revised
facilities of £48m now mature in june 2015 with repayments
due from june 2012 and are based on competitive terms
interest rates and arrangement fees 
business strategy
over the past year we have continued with our long term
strategy to build on the base of the traditional contracted
revenue office products business to
● develop higher addedvalue managed procurement
activities 
● expand our product range to encompass a breadth of
consumable products for business 
● extend into market areas which sit naturally alongside the
traditional business where there are opportunities to
grow and utilise our core skills in procurement and
logistics and 
● benefit from a wider customer base 
as a result of this broad diversification strategy our
operations now comprise
managed procurement
● banner business services our traditional contracted
office products business which now supplies a broader
range of consumable products and
● truline a business startedup in the year to provide supply
chain services mainly product procurement and logistics
to third parties such as advantia as well as to group
operations
business critical services
● banner managed communication bmc which is an
outsourced business process provider specialising in print
management and related services with good growth
prospects through a diverse and predominantly private
sector customer base and
● bds a waste paper service provider which is expanding
the ‘closed loop’ initiative our patented environmentally
friendly paper recycling process this appeals to the
sustainability goals of both public and private sectors and
was a key factor in the award of gosc
bmc and bds operate within our business critical services
business segment and each is important to our strategy for
complementary market area extension given their
particular product focus similarly truline which operates
within the managed procurement business segment
provides a platform both to develop our managed
procurement activities and widen the customer base into
the sme sector
the shift in our trading emphasis over the last four years to
business product and managed services provider has been
accompanied by a shift in the office2office customer base
which originally comprised mainly government departments
at the end of 2011 two thirds of group revenue was
accounted for by private sector corporate customers a
balance largely maintained following the award of gosc and
the advantia contract
finally we have improved the longterm business efficiency
by further reducing our underlying cost base year on year in
response to continued changes in economic conditions this o2o plc report and accounts 2011 4
has helped to protect the business from product margin
pressure particularly in our traditional product ranges
the 2011 trading performance of the business segments and
our shorter term strategy for the coming year are discussed
in more detail in the chief executive’s review  
dividend
the board believes that the payment of dividends should be
closely linked to affordability and the group’s trading
prospects 
we remain sufficiently confident in the long term prospects
of the group underpinned by the award of the two major
contracts during the year to recommend maintaining the level
of the final dividend at 78p per share 2010 78p when
combined with the interim dividend paid on 21 october 2011
this makes a total dividend per share of 114p 2010 114p
and amounts to a total distribution of £41m 2010 £41m
the total dividend paid and payable for the year is covered by
earnings 11 times 2010 11 times and by underlying
earnings 20 times 2010 27 times
if approved at the annual general meeting agm the final
dividend will be paid on 18 may 2012 to shareholders on the
register at the close of business on 20 april 2012
employees
our employees have remained focused on delivering a quality
service despite the background of falling sales volumes and
tougher market conditions generally and huge efforts were
expended to secure and implement both gosc and the
advantia contract during the year
i would like to thank all our staff for their continued hard work
and commitment to the group
outlook
the shortfall in public sector sales volumes compounded by
the unfavourable product mix was disappointing albeit
perhaps inevitable as the government sought to reduce
spending further the unexpected delays to the
implementation of gosc limited its compensatory impact in
the year however public sector sales volumes now appear to
have stabilised and the additional sales volumes promised by
gosc and the advantia contract position the group for
growth in 2012 
whilst we expect the economic environment to remain
challenging we believe this will be mitigated by extracting
value from our mainly contracted customer base maintaining
margins and tightly controlling costs while at the same time
focusing on cash generation
we start the current year with overall trading in line with
expectations gosc and the advantia contract fully
operational significant interest in our closed loop initiative
and our business critical services activity having already
secured those of its major contracts due for renewal in 2012
t ogether these underpin the board’s confidence in the
group’s prospects
agm
the agm will be held at the company’s head office st
crispins duke street norwich on 26 april 2012 at 1100
am notice of the agm together with the proxy forms for use
at the agm will be circulated with the annual report and
financial statements 
d j callear 
chairman
29 february 2012
chairman’s statement  
continued chief executive’s review  
simon moate
o2o plc report and accounts 2011 5
for much of 2011 group revenue suffered from below
expectation public sector sales volumes down 13
compared with last year coupled with margin erosion in
managed procurement principally due to a change in the
product mix to more basic products the impact of whitehall’s
austerity measures has affected our entire industry but by
winning gosc we believe we have mitigated the impact of
any future volume shortfall and margin dilution 
managed procurement – revenue £1310m
2010 £1457m adjusted ebita £135m
2010 £164m see note 3 to the financial statements
our managed procurement activity competes in the office
product market which has progressively suffered from
product commoditisation our response to this has been both
to broaden our product range beyond office products and to
introduce an open book pricing model which allows our
customers to benefit from our purchasing scale low cost
supply chain and systems while at the same time reducing
our exposure to product cost fluctuations this has enabled
the business to focus on longer term strategic relationships
with customers supported by a competitive pricing model
which delivers sustainable margins for o2o 
overall private sector trading performance typically with
large organisations and subject to long term contracts was in
line with our expectations 
public sector sales volumes fell during the year but stabilised
in q4 and together with a less favourable product mix as
expenditure on noncore items reduced have negatively
impacted trading results in 2011 gosc deliveries started
during 2011 the group has both won and retained record levels of long term contract business
the most significant business wins were gosc and the advantia contract which together
demonstrate our ability to secure significant opportunities in line with our strategy in both the
public and private sectors we are confident that our success has come from delivering a low
cost supply chain on sustainable terms ensuring selling price transparency for the customer
and margin protection for o2o using our open book pricing model
late in the year initially at lower rates than had been planned
and therefore did not have a significant impact on the 2011
results
the gosc contract is now being implemented across all
relevant government departments as well as providing an
additional £25m annual revenue over its three and
potentially four year term the scope of gosc allows us to
cross sell with other “arms length” government bodies and
agencies 
our strategic move to enter and grow sales to the sme sector
became a reality in may 2011 with the signing of the four
year exclusive contract to use our startup truline business to
provide supply chain services to the advantia dealership
network subsequently we have integrated with the advantia
it systems completed employee transfers where required
liaised with each of the dealerships and modified our product
range and catalogue to meet the demands of the dealers and
their customers  we began trading in january with over 40
members of the dealer group already signed up to use our
services
business critical services – revenue £625m
2010 £620m adjusted ebita £66m 2010
£54m see note 3 to the financial statements
bmc is our key activity in this business segment which has
been built by acquisition it operates in the large and growing
bpo market providing document outsourcing services such as
logistics print management data solutions digital marketing
creative design and campaign management usually under
long term contract to a wide variety of blue chip customers o2o plc report and accounts 2011 6
chief executive’s review  
continued
ranging from pet care providers to political parties  we
typically achieve an average saving of 20 for bmc clients
by bringing specialist skills and a more streamlined supply
chain to a business activity that is absolutely crucial for them 
bmc has maintained a solid performance throughout 2011
and achieved growth over the prior year at a time when we
would have anticipated some stress in volumes gross margins
have increased through effective product cost control instilled
postacquisition this has been achieved by rationalising the
number of suppliers and negotiating improved terms t wo
significant accounts t alk t alk and ladbrokes were recently
renewed both on sustainable margins in addition bmc
secured a number of new business wins during 2011 including
hastings direct insurance for a five year period v alued at
£15m per annum this contract will utilise available capacity
through our existing digital print operation
bmc is an increasingly important and growing activity it
continues to perform in line with our expectations and is now
a key part of the group 
bds with its closed loop initiative is our other activity in
this segment closed loop securely destroys confidential
documents and recycles them through the closed loop
patented process into a unique copier paper product  as well
as providing copier paper this initiative also helps our
customers including the government and a variety of banks
to meet their recycling targets  
we believe that closed loop was a key part in securing gosc
as based on ministerial comment it represents for many in
government a clear example of business delivering a
sustainable and commercially viable environmental solution
there is no doubt that awareness of closed loop has
increased substantially following our success in securing
gosc 
2012 operating objectives 
our aim for 2012 is to 
● establish the truline business through the recently won
advantia contract and deliver on this important
opportunity for growth
● implement deliveries to all government departments and
armslength bodies covered by gosc and to win supply to
those departments which are not specifically named and 
● continue to organically expand the bmc product and
service ranges
t o date this is going to plan we are also working on the
additional opportunities for revenue that both gosc and the
advantia contract have to offer including the potential for the
closed loop initiative 
our focus is to provide our customers with sustainable cost
saving solutions which provide long term profitability for o2o
our managed procurement and business critical services
activities are geared to deliver these the success we have
had with recent contract awards is testament that our
remodelled proposition is not only delivering value to our
customers but will deliver growth for o2o in the coming year
s r moate
chief executive
29 february 2012
chief executive’s review  
continued o2o plc report and accounts 2011 7
    
business and financial review
revenue and profit
total revenue was £1935m 2010
£2076m underlying profit before tax
was £84m 2010 £112m before non
recurring costs of £24m 2010
£53m amortisation of intangibles
relating to acquisitions of £13m
2010 £13m negative goodwill of
£nil 2010 £02m and share option
charges of £04m 2010 £01m
operating profit before such costs was
£100m 2010 £122m and operating
profit after such costs was £58m
2010 £56m  profit before tax after
such costs was £43m 2010 £46m
and profit after tax was £43m 2010
£43m the underlying profit margin
was 43 2010 54
nonrecurring costs are those
significant items that are separately
disclosed by virtue of their size or
incidence to enable a full understanding
of the group’s operating performance
transactions which may give rise to
nonrecurring costs are principally
restructuring and business integration
related charges in this year we also
incurred £07m 2010 £nil of non
recurring costs which included
expenditure on it systems
development consultancy and
branding relating to the start up of the
truline business a full analysis of the
nonrecurring costs is set out in note 5
to the financial statements
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 2011
was negative 1 2010 73 the
negative rate in 2011 is attributable to
the utilisation of previously
unrecognised brought forward trading
losses of £522000 the recognition of a
deferred tax asset in respect of trading
losses available for offset in future
periods of £241000 where there is
now certainty that these losses can be
offset against future taxable income
and the impact of adjustments in
respect of prior year estimates of
£245000  the lower effective tax rate
in the prior year also reflected the
utilisation of previously unrecognised
brought forward trading losses of
£519000 and the impact of
adjustments in respect of prior year
estimates £459000 the group has a
further £491000 2010 £550000 of
nontrading losses where no tax asset is
recognised as there is currently no
expectation that these nontrade losses
can be offset against future profit
streams
the amount of corporation tax paid
during the year is £08m 2010 £14m
the effective tax rate in the near future
is anticipated to be similar to the
standard rate of corporation tax
shareholders’ return
basic earnings per share were 120p
2010 120p with underlying earnings
per share of 207p 2010 251p  the
total dividend paid and payable for the
year of 114p per share 2010 114p
including the 36p interim dividend
2010 36p paid on 21 october 2011
is covered 11 times by earnings 2010
11 times shareholders’ equity at the
end of the year was £228m 2010
£223m
the middle market quotation of the
company’s ordinary shares at the end
of the financial year was 1395p with a
market capitalisation of £507m
including shares held by the employee
benefit trust
cash flow
as set out on page 37 the group
generated net cash from operating
activities of £88m 2010 £27m at
31 december 2011 net debt
amounted to £277m a decrease of
£37m compared to £314m at the
start of the year
the net debt of £277m is supported by
borrowing facilities of £480m
committed until june 2015 the
facilities comprise a term loan
£200m repayable over 5 years with
the next installment of £25m due in
june 2012 a revolving credit facility of
£30m and an invoice discounting
arrangement up to £250m for which
we are charged interest at 325 over
libor and 185 over bank base rate
respectively financial covenants are
applied to the committed facilities and
the group has continued to comply with
these with significant headroom
key contractual arrangements
the group has always had a number of
large customers  with our major
customers our approach is to seek long
term strategic relationships based on
managed services and shared interests
the term for a typical supply
arrangement is between three and five
years and we enjoy a record of
consistent contract retention
a key aim for the group has been to
enlarge and diversify the customer
base  this has been achieved both
organically and by taking advantage of
suitable acquisition opportunities as a
consequence the group’s reliance on
any one individual customer has been
reduced 
the group has a wide range of suppliers
and it is possible that the challenging
economic conditions could impact
some however the group has limited
exposure to the failure of any single
supplier as the nature of the majority of
products purchased is such that other
supply options are normally readily
available the group maintains
flexibility with its suppliers by typically
not making contractual volume
commitments
it is the group’s policy to negotiate with
each of its principal suppliers terms of
trade appropriate to the business and
to operate within those terms once
agreed  given the wide range of
suppliers the terms of trade operated
by the group are diverse with no
standard characteristics prevailing
the group works in partnership with
suppliers to ensure as far as
reasonably practicable that its
sourcing of products meets recognised
standards of corporate social
responsibility csr  the csr o2o plc report and accounts 2011 8
statement on pages 10 to 12 gives a
description of the approach o2o takes
in this regard
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 contingency plans are
formulated and quantified before any
large retenders are submitted so that
the business is able 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
helps mitigate the exposure
● reduction in gross margins
gross margins are adversely impacted
by product cost increases due to raw
material costs foreign currency
exchange movements and customers
reducing their demand the group has
sought to mitigate this impact by
passing cost increases on to customers
but some resistance and lag is
inevitable our experience has shown
that widening the group’s portfolio of
business products and services and
driving efficiency improvements helps
mitigate the risk and a focus on
customer profitability allows for the
situation to be monitored our open
book pricing model which offers
customers transparency in their
procurement and the benefits of o2o’s
purchasing scale also reduces o2o’s
exposure to commodity price
fluctuations
● 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
would potentially have a high impact on
the group in order to mitigate these
risks we maintain appropriate
insurance cover and disaster recovery
plans
● competitors
the group operates in a highly
competitive market the risk exists
therefore that contracts are awarded
on the basis of lowest price our
strategy is to deliver a wide range of
first rate addedvalue services at
competitive prices recent contract
wins and retentions underpin our
confidence that this approach is valued
by our customers across the group 
● economic downturn
the group is impacted by economic
slowdown with the weakening of
sterling leading to cost price pressure
and the potential that lower levels of
employment lead to reduced demand
for some of the goods and services
provided by the group this was
particularly evident with the shortfall in
public sector sales volumes as a
consequence of government austerity
measures in addition the economic
downturn could impact suppliers
however the group has limited
exposure to the failure of any single
supplier as the nature of the majority of
products purchased is such that
alternative sourcing or product options
are normally available the group also
has limited exposure to the failure of
customers
the group’s committed borrowing
facilities afford some protection
against increased funding requirements
should they arise in addition the wide
spread nature of our customers and the
public sector element of our account
base helps to mitigate risks in the wider
economy and
● 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 
m a cunningham
finance director
29 february 2012 o2o plc report and accounts 2011 9
2011 2010
gross margin  288 283
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
despite downward pressure in managed procurement the gross margin  increased by 05 as effective
purchase cost control was instilled in bmc post acquisition of tpf 
distribution cost  95 93
the distribution cost percentage is the cost associated with distribution expressed as a percentage of
revenue  
distribution costs reduced by £09m notwithstanding the increase in fuel prices and the cost of preparing
warehouses for the implementation of gosc and the advantia contract however the distribution cost 
increased by 02 as a consequence of the drop in revenue
administration cost  141 132
the administration cost percentage is the cost associated with administration before £24m of nonrecurring
costs 2010 £53m amortisation £13m 2010 £13m negative goodwill £nil 2010 £02m and share
option charges £04m 2010 £01m expressed as a percentage of revenue  
administration costs before nonrecurring costs amortisation negative goodwill and share options charges
were held at £273m 2010 £273m however the administration cost  increased by 09 as a
consequence of the drop in revenue whilst there was a further reduction in the underlying headcount during
the year the implementation requirements of gosc and advantia limited this 
underlying profit  43 54
the underlying profit percentage is the underlying profit before nonrecurring costs amortisation negative
goodwill and share option charges expressed as a percentage of revenue
the underlying profit  decreased as the reduction in revenue was not matched by proportionate reductions
in distribution and administration costs as defined and explained above in addition there was £06m
increase in finance costs following the renegotiation of loan facilities during the year an improved gross
margin partly offset this
underlying earnings per share 207p 251p
underlying earnings per share is the profit on ordinary activities after tax before the after tax effect of non
recurring costs amortisation negative goodwill and share option charges divided by the weighted average
number of ordinary shares in issue during the year
the underlying earnings per share decreased as a result of the reduction in underlying profit as explained
above 
net debt £277m £314m
net debt is calculated by subtracting cash and cash equivalents from the long and short term borrowings
net debt improved by £37m largely as a result of a return to normalised working capital requirements
following the unusual demand in 2010 due to the acquisition and integration of tpf  offset by a £25m
repayment of the term loan 
health and safety 953 949
all sites now operate under an ohsas 18001 certified health and safety management system audited by
bsi no major nonconformities were recorded in the 2011 audits
annual workplace inspections are undertaken by an independent assessor with follow up visits to ensure that
all corrective actions have been completed the external assessment of our performance was rated at 953
2010 949 which compares favourably to their assessment of the average for our industry sector 878 
further information on group health and safety is provided in the csr statement on pages 10 to 12
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
individual kpis which o2o uses to measure business performance are gross profit distribution costs administration
costs and underlying profit all expressed as a proportion of revenue underlying earnings per share net debt and in
respect of nonfinancial kpis health and safety o2o plc report and accounts 2011 10
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 critical to o2o’s
success as well as providing them with
a safe and healthy working
environment o2o promotes a positive
internal culture that both challenges its
employees and allows them to
challenge what they do openly and
constructively
employees
o2o 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
employee related legislation  in
response to the equality act 2010 o2o
arranged for comprehensive groupwide
diversity awareness training
programmes for management to ensure
understanding of and compliance with
diversity legislation and its own related
corporate policies a short presentation
outlining the salient points for staff was
then rolled out via line management
feedback from these sessions was very
positive a similar communication
programme to promote awareness of
the bribery act 2010 and compliance
with o2o’s anticorruption policy is
planned to be rolled out across the
group in 2012
the group intranet has become an
important communication link with the
group’s employees and it continues to
grow in scope as employees become
more familiar with it o2o news is
published on the site’s home page and a
wide range of departmental and
corporate policies are available for
download 
the company aims to provide an
agreeable working environment taking
into account the views and opinions of
its employees the refurbishment of the
canteen facilities in the manchester
distribution centre was based on an
employee initiative including artwork
and ‘naming’ the facility  similarly 
following the acquisition of tpf in 2010
improvements were made to the
guildford premises to make them a
brighter and more enjoyable place to
work
online staff surveys are regularly
conducted which in 2010 achieved their
highest ever response rate of 89 a
survey was not undertaken during 2011
but has been scheduled for 2012
health  safety
o2o is committed to ensuring the health
and safety of its employees fire manual
handling display screen equipment and
workplace taskspecific risk
assessments are conducted at each site
and all delivery drivers undertake an
internetbased road safety course
all sites now operate under an ohsas
18001 certified health and safety
management system audited by bsi no
major nonconformities were recorded in
the 2011 audits
annual workplace inspections are
undertaken by an independent assessor
with follow up visits to ensure that all
corrective actions have been completed
the external assessment of our
performance was rated at 953 2010
949 which compares favourably to
their assessment of the average for our
industry sector 878 
during the year our 5 main sites enrolled
with the british safety council bsc
improving access to information and
training modules in addition the
manchester site won an international
health and safety award with merit
from bsc based on its work practices
and health and safety culture 
all our employees receive health and
safety awareness training and o2o
health and safety procedures are
available on the group intranet a health
and safety group comprising employees
from different levels and functions is in
place at every o2o location with
responsibility for conducting ongoing
reviews of current practices and taking
any corrective action necessary  our
senior operations managers are trained
to british safety council bsc level 2
and all members of the head office
health and safety group have attained
bsc level 1 certificate 
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
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
the o2o charity committee was
established towards the end of 2009 to
help o2o employees contribute to
community and charitable events by
encouraging and coordinating
fundraising across the group it has
delivered an array of activities including
office ‘dress down’ days cake sales
raffles and various sponsored events
such as the london marathon and the
great manchester run among the many
charities to benefit have been cash for
kids sense enham various cancer
research and awareness funds and also
local hospitals 
product marketplace
o2o takes seriously csr initiatives for
its products 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 o2o plc report and accounts 2011 11
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 proactive steps
to audit the ethical performance of
suppliers who manufacture the group’s
own brand products firstly  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
t rading 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 co
2
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 1400 products for
every area of the workplace from office
supplies to catering technology to
promotional items in 2011 globe 
tick™ products constituted 195 of the
lines contained within the o2o catalogue
2010 catalogue 17 though this has
fallen slightly to 189 for the 2012
catalogue
all globe  tick™ products are
independently audited against the
scheme’s 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
fairtrade and rainforest alliance
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
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’ 
over 2 million reams have been
produced equating to a saving of 86000
trees a reduction in co
2
emissions of
3373 tonnes a reduction in energy
consumption of 406 million kilowatts
and a reduction in water consumption of
226 million litres
closed loop received a green apple
award in 2010 and was shortlisted for
the 2011 european office products
awards in the best environmental
product category  more information can
be found on the website
wwwbannerclosedloopcouk
in addition o2o offers the safe disposal
of batteries printer cartridges office
furniture and technology products
environment
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 
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 o2o has in the last
two years reduced the volume of
packaging specifically cardboard and
plastic to circa 370 tonnes from
previously much higher levels 2009
circa 430 tonnes 
where possible o2o utilises e
commerce to reduce the amount of
paper used in the transaction process
most of the group’s larger customers
and suppliers are traded with
electronically  
recycling
new procedures have been implemented
to recycle waste materials at o2o’s
distribution hubs a new ‘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
overall the volume of cardboard and
paper recycled in 2011 was in excess of
380 tonnes 2010 300 tonnes and the
volume of plastic that was recycled
increased to over 50 tonnes 2010 40
tonnes 
energy management
o2o has made a number of investments
to increase the efficiency of the heating
and lighting system and reduce energy
usage in the national distribution
centre in manchester an air source heat o2o plc report and accounts 2011 12
corporate social responsibility statement continued
pump converts air drawn from the
atmosphere into a source of heat for use
in radiators and in the basingstoke
warehouse a new heating system
including down fans has been installed
low energy lighting has also been fitted
throughout these sites 
in 2011 a total of 1038 tonnes of co
2
were emitted by o2o’s largest sites
manchester basingstoke swindon and
norwich in relation to gas and electricity
usage representing a significant
improvement on prior year consumption
across the same sites 2010 1245
tonnes
as o2o embraces new smartenabled
technology provided by energy suppliers
to give realtime consumption
information it is hoped that further
reductions in energy usage will be
achieved 
carbon management
as a national distributor o2o operates
its own inhouse fleet of delivery
vehicles in addition since april 2010
the fleet has performed a large number
of palletised deliveries for the pallet
network tpn co
2
emissions
generated by the fleet were 4657
tonnes in 2011 2010 4386 tonnes
and reflects the increase in work for tpn
and towards the end of last year the
commencement of deliveries for the
gosc and advantia contracts however
o2o 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 stop start 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 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 
the company car scheme encourages
staff to select cars from a defined range
of low emission vehicles and video and
telephone conferencing is used to
minimise the need for business travel o2o plc report and accounts 2011 13
david callear chairman
david aged 58 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 europewide vehicle rental and jeyes
group plc international household products manufacture and supply and private equity
ventures he currently holds a number of nonexecutive chairman roles working with the boards
of private companies including rp martin holdings ltd
mark cunningham finance director
mark aged 45 is a chartered accountant and joined her majesty’s stationery office in 1994
he was appointed finance director of banner business services ltd in 1999 having previously
worked as finance controller  mark became finance director of o2o in december 2000
steve mckeever chief operating officer
steve aged 47 was appointed to the board in august 2010 he joined o2o in december 2007
with responsibility for the group’s it function and later assumed additional responsibility for
o2o’s integrated supply chain until recently he acted as temporary managing director of bmc
before joining o2o he was a director of johnson group management services ltd holding both
it and operations director roles
jim cohen senior nonexecutive director
jim aged 70 joined o2o in june 2004  he was a main board executive director of balfour beatty
plc until his retirement in february 2007 prior to joining balfour beatty in 1993 he held senior
management positions with gte and gec and was a senior civil servant at the department of
energy  since 2009 he has been a member of the investment committee of the netherlands
based infrastructure fund dif ii and is currently an adviser to logikal projects limited a
privately owned project management company     
chris batterham nonexecutive director 
chris aged 56 joined o2o in june 2008 and is a chartered accountant with significant
experience in the business services sector 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 nonexecutive directorships
including sdl plc drs data and research services plc iomart plc and chairman of eckoh plc 
simon moate chief executive
simon aged 49 joined o2o as chief executive 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
board of directors o2o plc report and accounts 2011 14
directors’ report
the directors present their report and
the audited consolidated financial
statements for the group for the year
ended 31 december 2011
principal activities and results
the principal activity of the parent
company the company is that of a
holding company office2office plc is
registered at companies house under
company number 04083206
the group’s principal activities are
delivering managed procurement and
business critical services net profit
after tax for the financial year was
£43m 2010 £43m
business and financial review
the business and financial review has
been prepared in accordance with the
requirements for a business review
under the companies act 2006 the
intent is to provide information to
shareholders and should not be relied on
by any other party or for any other
purposes
the group’s strategy objectives and
likely future developments in the
business are reviewed in the chairman’s
statement on pages 2 to 4 and in the
chief executive’s review on pages 5 to
6 the kpis are defined and the principal
risks and uncertainties including
financial risks facing the business are
described in the business and financial
review on pages 7 to 9 the board has
delegated the responsibility for
monitoring financial risk management to
the audit committee
where the annual report contains
forward looking statements these are
made by the directors in good faith
based on the information available to
them at the time of their approval of
this report consequently such
statements should be treated with
caution due to the inherent
uncertainties including both economic
and business risk factors underlying
such forward looking statements or
information
dividends
an interim dividend of 36p 2010 36p
per ordinary share amounting to £13m
2010 £13m was paid on 21 october
2011 to shareholders on the register at
close of business on 23 september
2011
the directors recommend a final
dividend in respect of the year ended 31
december 2011 of 78p 2010 78p
per ordinary share amounting to £28m
2010 £28m  if authorised at the
agm the dividend will be paid on 18
may 2012 to shareholders on the share
register at close of business on 20 april
2012 
the aggregate dividends recognised as
distributions in the year ended 31
december 2011 amounted to £41m
2010 £41m
share capital and substantial
shareholders
the issued and fully paid share capital
of the company is shown in note 25 to
the financial statements
there are no contracts of significance in
place between the group and its
shareholders 2010 none  
the company has been notified in
accordance with disclosure and
transparency rule 512 of the financial
services authority that as at 6
february 2012 the following
shareholders in the table below owned
3 or more of the issued ordinary
share capital of the company
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
separate resolutions to renew these
authorities will be set out in the notice
of meeting and proposed at the agm on
26 april 2012
special business to be
considered at the forthcoming
agm
there will be two items of special
business to consider at the forthcoming
agm an ordinary resolution to revoke
the provision in the company’s articles
of association the articles setting the
maximum amount of shares that may be
allotted and a special resolution to
approve a 14 day notice period for
general meetings
aberforth partners 8842000 shares 2435
axa framlington 4406715 shares 1214
f  c asset management 2460905 shares 678
aviva investors 2249251 shares 619
henderson global investors 1892768 shares 521
baillie gifford  co 1722359 shares 474
mark cunningham 1089549 shares 300 o2o plc report and accounts 2011 15
ordinary resolution
as mentioned above the directors will
be seeking to renew their authority to
allot ordinary shares up to a total
nominal amount of £242060 being
twothirds of the issued ordinary share
capital the company currently has
issued share capital of £363090 and is
restricted by its articles to a maximum
nominal amount of £500000
shareholder approval via ordinary
resolution will therefore be sought to
revoke this restriction in the articles
special resolution
changes made to the companies act
2006 by the shareholder rights’
regulations increase the notice period
required for general meetings of the
company to 21 days unless
shareholders approve a shorter notice
period which cannot however be less
than 14 clear days  agms will continue
to be held on at least 21 clear days’
notice
before the coming into force of the
shareholder rights’ regulations on 3
august 2009 the company was able to
call general meetings other than an
agm on 14 clear days’ notice without
obtaining such shareholder approval
therefore a special resolution will be
proposed in order to preserve this
ability  the shorter notice period would
not be used as a matter of routine for
such meetings but only where the
flexibility is merited by the business of
the meeting and is thought to be to the
advantage of shareholders as a whole
the approval will be effective until the
company’s next agm when it is
intended that a similar resolution will be
proposed  
directors
the following were directors during
2011 and held office throughout the
year under review up to the date of
signing the annual report and financial
statements
david callear
chairman
1
simon moate
chief executive 
mark cunningham
finance director
steve mckeever
chief operating officer
jim cohen
nonexecutive director
2
chris batterham
nonexecutive director
3
1
chairman of the board and of the
nomination committee member of the
remuneration committee and audit
committee
2
chairman of the remuneration
committee the risk and opportunity
committee and senior independent
director member of the audit
committee and nomination committee
3
chairman of the audit committee
member of the remuneration
committee and nomination committee
biographical details of the directors are
shown on page 13
david callear and chris batterham both
chartered accountants will retire at the
forthcoming agm in accordance with
the articles and being eligible will offer
themselves for reelection the
chairman confirms that chris
batterham continues to make an
effective contribution to the board and
demonstrates commitment to the role
the board reviewed its performance in
2011 as it does annually and believes
that it has a balanced and effective
membership this review included
separate assessments of the chairman
and the nonexecutive directors and
indicated that the knowledge and
experience that both david callear and
chris batterham bring to the board
from their other business experience is
an important factor of a balanced and
effective membership  accordingly the
board recommends their reelection
corporate governance
details of the corporate governance
arrangements are provided on pages 18
to 21
directors’ interests
directors’ interests are detailed in the
directors’ remuneration report on
pages 24 to 29
directors’ third party indemnity
provisions
a qualifying third party 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 their 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 o2o plc report and accounts 2011 16
● 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 presume 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
each of the directors whose names and
functions are listed on page 15 confirm
that to the best of their 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 directors’ report contained in
the annual report includes a fair
review of the development and
performance of the business and the
position of the group together with
a description of the principal risks
and uncertainties that it faces 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
the group has a policy of providing
employees with information through
● an intranet facility which hosts
amongst other things internal
vacancies o2o news items group
policies hr forms and procedures
● corporate and divisional newsletters
and announcements
● local employee forums which bring
together a cross section of employees
to cover separately  matters such as
health and safety  site improvements
and fundraising activities
● operation of an employee suggestion
scheme which facilitates a twoway
flow of information and ideas
● supplier meetings which provide an
opportunity for relevant employees
to meet with the group’s key
suppliers and get a better
understanding of the products they
are selling and for the suppliers to
showcase the new products included
in the group’s catalogues 
● group sales meetings which bring
together the different sectors of the
business to share knowledge on
products and services to promote
crossselling capabilities
● staff satisfaction surveys involving
all employees across the whole
group
the group operates a long term
incentive scheme for executive
directors and senior managers  details
are included in the directors’
remuneration report on pages 24 to
29 
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
three live schemes a new three and five
year scheme which was launched in
november 2011 and a five year 2008
scheme which is exercisable in 2013
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
pages 24 to 29
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
as at 31 december 2011 the total
number of ordinary shares held by the
ebt was 269356 074 of the issued
ordinary share capital of the company
2010 433198 119 the
reduction in shares held was due to the
exercise of options over shares by a
number of employees under the group’s
performance share plan and the sa ye
schemes during the year 45883 shares
were purchased on the open market by
the t rust 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
directors’ report continued o2o plc report and accounts 2011 17
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 employees’
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 all employees via
the group intranet in response to the
new equality act 2010 a training
program was rolled out across the group
to promote awareness of diversity in the
workplace and to communicate the
potential consequences of
discrimination and how to avoid it 
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 further
to adoption of the bribery act 2010 a
groupwide training program is planned
to be run in 2012 to promote awareness
of it and also compliance with o2o’s
policy on this 
health and safety
o2o is committed to maintaining the
health safety and welfare of its
employees details of the group health
and safety activities are given on pages
10 to 12 of the csr statement
creditor payment policy
it is group policy to negotiate with each
of its principal suppliers terms of trade
appropriate to the business and to
operate within those terms of trade
once agreed  trade payable days based
on the year end figures are 86 2010
76 days for the group the increase in
creditor days arose because of the
increase in stock levels towards the end
of 2011 to service the new contract
wins the company has no trade
payables 2010 nil
environmental policy
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  the group
continually reviews its environmental
performance across the business
further details of group environmental
policies are provided in the csr
statement on pages 10 to 12
corporate and social
responsibility
a summary report on the group policies
and objectives in respect of csr is set
out on pages 10 to 12
requirements of the takeover
directive
the following are disclosed in
accordance with the requirements of
the t akeover directive
● the company’s issued share capital is
£363090 divided into 36308984
ordinary shares of 1 pence each all
shares have uniform rights except
where referred to below
● 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 
● there are no restrictions on voting
rights however for those shares held
in the ebt  as referred to on page 16
the trustee typically waives his right
to vote 
● 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
● the directors’ beneficial interests are
disclosed on page 28 of the directors’
remuneration report none of the
directors’ interests carry special rights
with regards to control of the company
● details of the group employees’ share save
scheme are given on page 16
● 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 directors have authority to allot
ordinary shares of the company disapply
preemption rights and make market
purchases of ordinary shares of the
company details of these authorities and
their limitations are provided on page 14
● 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
independent auditors
the audit committee has considered and
recommends the reappointment of
pricewaterhousecoopers llp pwc as
auditors  a resolution proposing their re
appointment will be put to the forthcoming
agm
for and on behalf of the board
d rodwell
company secretary
29 february 2012 o2o plc report and accounts 2011 18
statement of compliance with
the uk corporate governance
code 2010   
the uk corporate governance code
the code was issued in may 2010
replacing the 2008 combined code and
sets out standards of good corporate
governance the code is publicly
available on the financial reporting
council’s website wwwfrcorguk
the directors consider that the
company has fully complied with the
principles set out in each section of the
code throughout the period and the
application of these 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 
directors and the board
the board comprises the chairman
chief executive chief operating
officer finance director and two non
executive directors 
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 13 a statement of
directors’ responsibilities is given on
pages 15 to 16 of the directors’ report
the respective responsibilities of
directors and auditors are given on page
30 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 both nonexecutive directors
to be independent underpinning their
ability to challenge decisions and feels
that their diverse experience and
background bring a depth of debate and
alternative viewpoint to the board jim
cohen is the senior independent non
executive director the terms and
conditions of the nonexecutive
directors’ appointments are available
on request from the company’s
registered office
the board operates formally through
agendadriven board meetings which
are normally held on a monthly basis
usually at the company’s head office
meetings are occasionally convened at
the group’s other locations with site
reviews conducted to provide the non
executive directors with an opportunity
to assess the operations at first hand
the monthly 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 on a number of
occasions during the year the chairman
met with 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
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
improves communications both in and
out of the boardroom 
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  newly
appointed directors are provided with
comprehensive documentation aimed at
providing information in relation to the
remit and obligations of the role and
current areas under consideration for
the board
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 and specific
responsibilities have been delegated to
board committees as described below 
over a number of years the board has
balanced the longer term strategic
direction with immediate operational
requirements and delivery of acceptable
financial results 
in summary the board
● 2008  facing unfolding economic
uncertainties balanced the
integration of accessplus and accord
and the operational restructuring
corporate governance statement o2o plc report and accounts 2011 19
following the withdrawal from the
ministry of defence contract in
2007 
● 2009  further streamlined the cost
base to meet the challenges of a
recession while creating a strong
position for the start of any
economic recovery and maintained
an attractive dividend yield balanced
by a focus on funding and
affordability and 
● 2010  against a background of
political and economic uncertainty
leading up to and immediately
following a change in government
scaled the business critical services
segment by the acquisition of tpf
and undertook further restructuring 
in 2011 when public sector sales
volumes fell and economic uncertainty
prevailed the board encouraged the
strategy to grow in the sme sector a
market with different demands on the
business including service levels and
credit terms this move had been two
years in the making culminating in the
advantia contract win news of the
gosc contract win followed both
contracts required significant resource
for implementation and rollout and
timing issues meant that any inyear
compensation for the adverse impact of
sales volume shortfall was limited the
board further addressed the group’s
cost base while mindful to maintain the
means to realise the long term potential
of these contracts 
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 directors are entitled to be
indemnified by the company to the
extent permitted by law and the articles
in respect of all losses arising out of or
in connection with the execution of their
powers duties and responsibilities the
company has provided letters of
indemnity for the benefit of each
director in respect of liabilities which
may attach to them in their capacity as
directors of the company these
indemnities were independently
assessed as being in line with market
practice the company also maintains
appropriate directors’ and officers’
liability insurance neither the
indemnities nor the insurance provide
cover in the event that the director is
proved to have acted fraudulently  
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 accordingly at the
next agm david callear and chris
batterham will offer themselves for re
election 
in response to the recent
communication from lord davies in
respect of women on boards it should
be noted that the board will continue to
recruit in line with the requirements of
the board and ensure that the correct
mix of skills and experience is
maintained the nomination committee
has a formal procedure for
appointments to the board and this
welcomes candidates from both sexes
the board will ensure this is
communicated to any recruitment
agencies that are engaged in the future
appointments are made on merit
against objective criteria following
recommendation by the nomination
committee 
board performance
the board undertakes a critical
evaluation of itself and its committees
on an annual basis the 2011
performance evaluation questionnaire
comprised a series of statements which
required a rating between “strongly
disagree” to “strongly agree” and
individual comment was invited on each
the review concluded that the size of
the board its composition and balance
together with its open and inclusive
culture remain appropriate for the
current business and that the
committees remain effective in
addition it was recognised that the
nomination committee kept the
leadership needs of the group under
review notwithstanding the limitations
on succession planning within a small
company
a number of recommendations were
made in respect of information
requirements and board reports and it
was agreed to introduce changes as
soon as practicable
the 2011 performance questionnaire
included a section to allow the directors
to assess their personal involvement in
various board matters on a scale from
“too much involvement” to “not enough
involvement”  given the need to
regularly review and agree with each
director their training needs the
purpose was to determine whether
there were any time experience or
development issues with individual roles
and to address these there were
however no issues raised
going concern     
the group has net current liabilities as
at 31 december 2011 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
committees of the board
specific responsibilities are delegated
to subcommittees of the board the
composition of these subcommittees is o2o plc report and accounts 2011 20
provided below together with reference
to reports on their activities all other
decisions are taken collectively by the
board
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 includes
both independent nonexecutive
directors and is chaired by david
callear a report on its activities is given
on page 22
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 review of the
company’s share schemes and senior
incentive plans the remuneration
committee which is chaired by jim
cohen comprises the independent non
executive directors and david callear
when necessary noncommittee
members are invited to attend by prior
arrangement 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 independent non
executive directors and david callear
all members have financial literacy
chris batterham who chairs the
committee and david callear are
chartered accountants and have
relevant financial expertise as
described in their biographies on page
13 noncommittee members and the
external auditors are invited to attend
by prior arrangement a report on its
activities is given on page 22
the risk and opportunity committee
was formed in 2010 and is chaired by
jim cohen 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 22
corporate governance statement continued
attendance at meetings
the number of full board meetings and committee meetings attended by each director in 2011 was as follows
remuneration audit nomination
full board committee committee committee
held attended held attended held attended held attended
chairman
david callear 13 13 66 66 55
executive directors
simon moate 13 12 6 5 6 4 5 5
mark cunningham 13 13 60 6 6 50
steve mckeever 13 12 60 6 3 50
non–executive directors
jim cohen 13 13 66 66 55
chris batterham 13 12 65 66 55
 by invitation
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 29 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 during the year the
remuneration committee wrote to and
discussed directly with the major
shareholders to gauge opinion on
proposals relating to senior
management incentives this is covered
in more detail on page 25
each shareholder receives the annual
report and financial statements
containing the full year results and an
interim report on the half year results
following the announcement of results
presentations are given to the
investment community in london and o2o plc report and accounts 2011 21
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 may and
october 2011
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
website details of the 2012 agm are
set out in the notice of the meeting
enclosed with this report
the chairman and the senior
independent director are 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 mis
statement 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 no
significant failings or weaknesses were
identified further to a review
undertaken by the risk and opportunity
committee a number of areas have been
prioritised for improvement see page
22 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 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 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 to 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
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
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 dedicated csr brochure
is published under separate cover
a summary report on the group’s
policies and objectives for csr is set
out on pages 10 to 12
d rodwell
company secretary
29 february 2012 o2o plc report and accounts 2011 22
nomination
committee
report
audit committee report
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 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 senior
management team where due regard is
given to diversity including gender this
is available together with the
committee’s terms of reference which
were updated during the year on the
company’s website
wwwoffice2officecouk
composition of the nomination
committee
the nomination committee comprises
the chairman and the independent non
executive directors the company
secretary is secretary to the
nomination committee the committee
meets to deal with assignments in
accordance with company needs and
best practice in corporate governance 
main activities of the
nomination committee
during the year the committee met on
five occasions to review succession
plans for executive and senior
management  no new appointments
were required but the committee
recognises the importance of keeping
the leadership needs of the group under
review as o2o evolves to meet the
challenges of the business environment  
d j callear
chairman of the nomination committee
29 february 2012
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
● 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
composition of the audit
committee
the audit committee comprises chris
batterham committee chairman jim
cohen and david callear their
biographical details are included on
page 13 and their remuneration on
pages 24 to 29  chris batterham and
david callear are chartered
accountants  noncommittee members
and the company’s external auditors
pwc are invited to attend meetings as
and when appropriate  at least once
each year representatives of pwc meet
the audit committee without any
executive directors being present  the
company secretary is secretary to the
audit committee  the committee’s
terms of reference were updated
during the year and are available on the
company’s website
wwwoffice2officecouk
main activities of the audit
committee
the audit committee met on six
occasions in 2011 with other board
members and the auditors attending as
required these meetings covered
pwc‘s presentation of their audit
approach and procedures including
matters relating to scope auditor
independence and fees consideration of
changes in accounting policies and
standards discussions concerning the
external audit reports and any matters
arising and reviews of the financial
results and investor presentations at
the fullyear and halfyear prior to
recommending them to the board for
approval the group whistleblowing
policy and the banner business pension
scheme accounts were also reviewed by
the committee the fees paid to pwc
for audit services are disclosed in note 7
to the financial statements
internal audit function – risk
and opportunity management
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 prioritised 
the audit committee is pleased by the
progress achieved to date and is keen o2o plc report and accounts 2011 23
for the risk and opportunity ethos to be
further embedded in the business
consequently the committee does not
consider it necessary to have a separate
internal audit function
review of risk management and
internal control
the risk and opportunity committee
had its inaugural meeting in january
2011 this meeting which was fully
attended by the board included a
review of the financial infrastructure
commercial and reputational matters
identified specific risks and
opportunities that each presents and
recommended actions the key
priorities centred on strengthening the
core administrative health of the
business to ensure the group could
capitalise on commercial opportunities
as they arise and included new financial
arrangements for the business and
improving the it infrastructure the
group’s banking facilities were
renegotiated on favourable terms in
may 2011 and significant
improvements have been made to the
latter including offsite secure hosting
of the group’s it infrastructure with
further efficiencies to follow  
followup meetings were convened in
september 2011 and january 2012
the approach adopted will help mitigate
the principal risks and uncertainties
facing the group which are set out on
pages 7 to 9 of the business and
financial review
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 the
only change made was to enhance the
contact details by providing telephone
numbers in addition to directors’ email
addresses the policy is available on the
company’s website
wwwoffice2officecouk
independence of external
auditors
pwc have been the company’s auditors
since 2002 a new audit partner was
assigned to the group following the
2009 year end process in line with
pwc’s own partner rotation policy the
audit committee is satisfied with their
effectiveness and independence and
has not considered it necessary to
require an independent tender process
the committee formally validates this
and therefore its recommendation to
the board with regards to appointment
and reappointment by
● assessing pwc’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 with the external
auditors to review and approve audit
scope and fees and obtain written
confirmation of their independence
following the audit the committee
meets with pwc without the executive
directors being present and also
discusses the efficiency of the audit
process with the executive directors
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 pwc
as detailed in note 7 to the financial
statements total fees paid to pwc in
2011 were £152000 of which
£122000 related to audit fees fees
for the interim review amounted to
£10000 and were £20000 for tax
services 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 pwc’s
independence
c m batterham
chairman of the audit committee
29 february 2012 o2o plc report and accounts 2011 24
this report outlines the membership
and workings of the remuneration
committee together with details of
directors’ remuneration in respect of
the year ended 31 december 2011  a
resolution to approve this report will be
proposed at the forthcoming agm
remuneration committee and
its terms of reference
the remuneration committee is a sub
committee 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  when
necessary noncommittee members are
invited to attend by prior arrangement
the committee met six times in the
year
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 the board in ensuring that the
group’s executive directors are
recruited developed and remunerated
in an appropriate fashion the
committee also monitors the
remuneration of senior management
generally
in determining remuneration packages
and policies due regard is given to any
legal requirements the provisions of the
uk corporate governance code and the
listing rules of the financial services
authority the committee seeks
independent advice from aonhewitt
limited operating through the brand
new bridge street and macfarlanes
llp  neither aonhewitt limited nor any
other part of the aon corporation
group provided other services to the
company during the year under review
macfarlanes llp are consulted on
various other corporate and legal
matters in 2010 an independent
comparative remuneration review for
the executive and senior management
team was conducted by hyperion hr
limited 
the committee’s terms of reference are
available on the company’s website
wwwoffice2officecouk 
executive directors’
remuneration
remuneration policy in respect of
executive directors is designed to
ensure that the group achieves its
potential and increases shareholder
value  in respect of basic salary the
objective is to ensure that the group
attracts and retains high calibre
executives with the skills experience
and motivation necessary to direct and
manage the affairs of the group  annual
bonuses and long term incentive
schemes are seen as an important part
of each director’s total remuneration
and are designed to drive and reward
exceptional performance
the current remuneration package of
the executive directors consists of
basic salary annual bonus long term
incentive schemes taxable benefits
sa ye option schemes and pension
arrangements these are described in
more detail below
the executive directors’ basic salaries
are reviewed annually by the
committee taking into account the
performance of the individual changes
in their responsibilities the group’s
performance against financial
objectives intended pay increases
across the group and when deemed
appropriate information from
independent remuneration consultants’
sources on levels of salary for similar
jobs no changes were made to their
remuneration in 2011 
the maximum annual bonus potential
for simon moate is 100 of basic
salary for mark cunningham and steve
mckeever this maximum is 60 of
basic salary
each year the committee reviews the
bonus arrangements and may
recommend different targets or
performance conditions to keep the
objectives aligned with shareholder
interests 
as with 2010 the 2011 annual cash
bonus scheme was designed to reward
growth in underlying eps and rigorous
management of net debt and working
capital a varying proportion of the
bonus was based on personal targets
tailored to each director and objectively
measurable  
no bonus is payable with regards to the
eps and net debt performance targets
however an element of bonus relating
to the management of working capital
and the fulfilment of personal targets
was achieved accordingly bonuses
equating to 169 286 and 114
of basic salary are payable to simon
moate steve mckeever and mark
cunningham respectively the bonuses
details of which are on page 27 will be
paid in april 2012
it is intended that the 2012 cash bonus
will continue to take account of the key
kpis on o2o’s performance personal
targets will again be included and the
committee will reserve the right to
apply discretion
pension contributions to the executive
director’s personal pension schemes
were made at a rate of 10 of basic
salary
the service agreements for the
executive directors are on a rolling basis
and terminable on 12 month’s 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
save as you earn share option
scheme sa ye
the group operates an hmrc approved
sa ye scheme open to all employees in
which simon moate and steve
mckeever participate details are
provided on page 29
long term incentive plans
the company currently operates a long
directors’ remuneration report o2o plc report and accounts 2011 25
term incentive plan the performance
share plan psp as detailed below the
company also has a deferred share
bonus plan dsbp which has been
inactive since inception both these
plans were approved by shareholders in
november 2005 following a review by
an independent adviser and
consultation with shareholders and the
abi in line with abi guidelines awards
granted under this plan are subject to
dilution limits 
performance share plan    
the psp rules allow awards over
ordinary shares subject to performance
criteria as detailed below and vesting in
three years to be made to individuals in
any year of a value of up to 100 of
basic salary in exceptional
circumstances the remuneration
committee has discretion to increase
the award to up to 200 of basic salary
in accordance with the scheme rules 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 the exercise
price of options under the psp scheme
is 01p per share
from inception in 2005 to awards made
in 2010 the performance criteria were
based on i a comparative measure of
total shareholder return tsr against
companies in the ftse small cap index
and ii the company’s earnings per
share eps growth the combined use
of tsr and eps targets was intended to
incentivise participants to deliver
substantial real earnings growth in
addition to generating above market
returns for shareholders 
the portion of the award based on tsr
vests on a scale for median to upper
quartile level performance  tsr is
measured over a three year
performance period and independently
calculated 
the portion of the award based on the
company’s eps growth vests initially if
eps grows by an average of 4 per
annum more than the increase in rpi
over a three year performance period  if
eps grows by an average of 8 per
annum more than the increase in rpi
over the period this portion of the
award vests in full  for eps growth
between the lower and upper levels
quoted above the proportion vesting
increases on a straightline basis 
as indicated in the 2010 annual report
the committee was concerned that the
psp had lost credibility with senior
management and had thus lost
effectiveness as only a small proportion
118 had vested since the scheme
was implemented management
understood that they had not delivered
the required eps growth the issue has
been with tsr which far from uniquely
management found difficult to use as a
practical basis for driving value in the
business not least because none of the
company’s competitors feature in the
comparator group as the significant
ones are either privately owned or
quoted in the usa 
the committee followed up in 2011
with a detailed review of incentive
arrangements consulting with their
independent remuneration advisors as
mentioned above
rather than implement a different
incentive scheme the committee
proposed to keep within the remit of the
existing scheme in relation to matters
such as individual award levels and
dilution limits whilst modifying the
performance criteria to provide
participants with targets that they could
identify with but which remained
challenging the committee believed
these changes which are a modification
of standard practice would make the
psp an effective incentive and retention
scheme for key management and in a
way that keeps them aligned with the
interests of shareholders
the committee presented these
proposals to each of the major
shareholders in writing and in person to
gauge their views the abi were also
consulted  shareholder feedback
acknowledged that management had
performed well in protecting investors’
interests during a period when the
economy and trading in the company’s
sector had been more difficult than
expected a clear majority were
supportive of the changes
for prospective awards the psp is now
a two part scheme each part allowing
awards up to 100 of salary part a is
open to the executive directors and a
number of senior management with
performance measurements split
equally between growth in both
underlying eps and share price  the
latter was chosen as it is understood by
all and unites the team around a goal in
common with shareholders part a is
also subject to a judgemental underpin
of performance see below part b
awards which are only open to
executive directors and only in special
circumstances rely solely on the
judgemental underpin of performance
see below exercised by the committee
in 2011 part b awards were granted to
simon moate and steve mckeever
for part a awards the eps component
operates on a similar basis to that
mentioned above but is split into three
equal tranches to be measured annually 
each tranche will provisionally vest 50
if eps grows by an average of 4 more
than rpi in the year with full provisional
vesting if eps grows by an average of 8
more than rpi in the year proportionate
provisional vesting will occur on a
straightline basis between the lower and
upper level t o the extent that targets are
not met the relevant portion of the first
and second tranches are measured with
the following year’s tranche
the share price component is measured
on 5 occasions during the period of the
award if the share price hits a sliding
scale of challenging targets for a period
of 30 days after the announcement of
full year and half year results then
provisional vesting will occur  any
unvested provisional award is carried
over to the next measurement period
but vesting will only occur if a higher
share price target is met than with
earlier testing
for the 2011 psp awards the first
testing date of the share price
component will be after the expiry of 30 o2o plc report and accounts 2011 26
days following the announcement of the
company’s final results for 2011 if the
average closing share price over that 30
day period hits 160p then 20 of that
component will provisionally vest a
sliding scale applies with proportionate
provisional vesting up to 240p where
full provisional vesting occurs 
the provisional vesting of the awards
provides participants with a barometer
of how their award is faring within its
three year wrapper  actual vesting will
only occur at the end of the three years
following grant of the award and subject
to continued employment and
satisfaction of the same underpin
judgement by the committee as the
part b awards
the underpin is a check by the
remuneration committee to ensure
there are no irrational outcomes and
amongst other things whether the
company has been able to declare
appropriate dividends throughout the
period 
current holdings
in may 2011 the executive directors
exercised their options under the 2008
psp awards  although an eps growth of
137 over the three year period was
achieved this was below the minimum
performance target and accordingly no
shares vested under the eps element
conversely 272 of the tsr element
did vest equating to 18156 25583
and 14104 shares to simon moate
mark cunningham and steve mckeever
respectively further to shares being
sold at 1300p to settle the related tax
obligations the remaining 8686
12239 and 6747 shares were
transferred to the executive directors
simon moate currently holds awards
over 792265 ordinary shares following
grants made in march 2009 may 2010
and june 2011 based on an average
share price of 825p 1555p and
1335p respectively  the june 2011
grant comprises two awards over
220974 shares each under part a and
part b of the scheme as mentioned
above equating to 200 of salary in
total
mark cunningham currently holds
awards over 266537 ordinary shares
following grants made in may 2010 and
june 2011 based on an average share
price of 1555p and 1335p respectively
steve mckeever currently holds awards
over 374712 ordinary shares following
grants made in may 2010 and june 2011
based on an average share price of
1555p and 1335p respectively the
june 2011 grant comprises two awards
over 131086 shares each under part a
and part b of the scheme as mentioned
above equating to 200 of salary in
total
the above awards are detailed on page
28 and in note 26 to the financial
statements
in the event of a takeover all awards
granted under the psp vest or become
exercisable to the extent that the
performance targets have been
achieved as determined by the
remuneration committee in the event
of a reorganisation the awards may be
exchanged for options over shares in the
new holding company on such terms
determined by the committee
company share option plan
csop
as a separate exercise during the year
the committee sought approval from
hmrc to operate a csop  this is not an
additional incentive award but is
intended to be linked to and operate in
conjunction with the existing psp  its
purpose is to improve the tax efficiency
of psp awards approval was received
after the june 2011 awards were
granted and as it cannot be applied
retrospectively the committee will
consider this facility for future awards
this amendment will not increase the
cost to the company of the awards
chairman and nonexecutive
directors
david callear’s and jim cohen’s three
year service agreements were renewed
on 29 june 2010 and cover their third
terms since o2o floated on the stock
market in june 2004 chris batterham’s
three year service agreement was
renewed on 26 june 2011 david and
chris will both retire and seek re
election at the forthcoming agm all of
these service agreements are
terminable on three months’ notice by
either the company or the relevant
director  the chairman’s and non
executive directors’ remuneration is
nonpensionable
the remuneration of the nonexecutive
directors is determined by the
chairman and the executive directors
and the remuneration of the chairman is
determined by the remuneration
committee there were no changes to
their remuneration during the year 
the chairman and nonexecutive
directors are not eligible to participate
in any of the company’s share option or
group bonus schemes
performance graph
the graph at the top of the next page
shows o2o’s total shareholder return
performance tsr compared to the
ftse small cap index of which o2o
was until 17 december 2007 a
constituent member  this index is
stipulated in the psp scheme rules and
for those psp awards that have a tsr
performance target the board
considers that it continues to be the
most appropriate comparator 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 flotation to 31
december 2011
directors’ remuneration report continued o2o plc report and accounts 2011 27
directors’ remuneration earned in 2011  audited
the emoluments of the directors excluding pension contributions are shown below
2011 2011 2011 2011 2010
salary allowances and annual
fees benefits in kind bonus t otal t otal
£000 £000 £000 £000 £000
chairman
david callear 138  138 134
executive
mark cunningham 185 14 21 220 203
steve mckeever 175 14 50 239 75
simon moate 295 14 50 359 309
subtotal 655 42 121 818 587
non–executive
jim cohen 55  55 54
chris batterham 50  50 50
subtotal 105  105 104
t otal 898 42 121 1061 825
 from the period of appointment to the board
other allowances and benefits in kind provided to executive directors comprise car benefits family private health care
permanent health insurance and life assurance at the rate of four times annual salary
no amounts have been waived in the current or prior year o2o plc report and accounts 2011 28
directors’ remuneration report continued
long term incentive plans – audited
awards granted to directors under the psp were as follows
exercise
price per exercisable expiry
1 jan 11 granted exercised expired 31 dec 11 share from date
mark cunningham
2008 psp award 188113  25583 162530  01p 240411 241011
2010 psp award 118971  118971 01p 210513 211113
2011 psp award  147566  147566 01p 200614 201214
307084 147566 25583 162530 266537
steve mckeever
2008 psp award 103704  14104 89600  01p 240411 241011
2010 psp award 112540  112540 01p 210513 211113
2011 psp award  262172  262172 01p 200614 201214
216244 262172 14104 89600 374712
simon moate
2008 psp award 133499  18156 115343  01p 240411 241011
2009 psp award 160606  160606 01p 040312 040912
2010 psp award 189711  189711 01p 210513 211113
2011 psp award  441948  441948 01p 200614 201214
483816 441948 18156 115343 792265
directors’ pensions – audited
pension contributions reflect amounts payable to defined contribution personal pension schemes the contributions payable to personal
pension schemes in the year are shown below
pension contributions
2011 2010
£000 £000
mark cunningham 20 18
steve mckeever 18 6
simon moate 30 55
68 79
directors’ interests – unaudited
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
2011 2010
david callear 450991 450991
mark cunningham 1089549 1089549
steve mckeever 6747 
simon moate 158497 119811
jim cohen 65496 38506 
chris batterham 7516 7516
1778796 1706373
there have been no changes in the directors’ interests between 31 december 2011 and the date of this report
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 o2o plc report and accounts 2011 29
the awards granted during the year were made on 20 june 2011 the market price of ordinary shares at the date of grant was
1335p for those awards vesting during 2011 the market price of ordinary shares on the exercise date was 1300p the notional
gains made by each director were as follows
v alue of shares
v alue of shares transferred
on date of shares shares on date of
exercise sold to settle transferred exercise
exercised £000 tax liabilities to individual £000
mark cunningham 25583 33 13344 12239 16
steve mckeever 14104 18 7357 6747 9
simon moate 18156 24 9470 8686 11
57843 75 30171 27672 36
beneficial options granted to directors under the sa ye scheme were as follows 
exercise
price per exercisable expiry
1 jan 11 granted exercised expired 31 dec 11 share from date
mark cunningham 8039  8039  1194p 010511 301111
steve mckeever  12842  12842 1168p 010117 300617
simon moate 14069  14069 1194p 010513 301113
the closing market price of ordinary shares at 31 december 2011 was 1395p  the shares traded in the range 1125p to
1665p during the year
the details and the performance criteria in respect of the above schemes are discussed on pages 25 and 26
j l cohen
chairman of the remuneration committee
29 february 2012  o2o plc report and accounts 2011 30
independent auditors’ report to the members
of office2office plc 
we have audited the financial
statements of office2office plc for the
year ended 31 december 2011 which
comprise the consolidated income
statement the consolidated statement
of comprehensive income the
consolidated and company balance
sheets the consolidated statement of
changes in equity the company
statement of changes in equity the
consolidated and company cash flow
statements the significant accounting
policies and information and the related
notes the financial reporting
framework that has been applied in their
preparation is applicable law and
international financial reporting
standards ifrss as adopted by the
european union and as regards the
parent company financial statements
as applied in accordance with the
provisions of the companies act 2006
respective responsibilities of
directors and auditors 
as explained more fully in the directors’
responsibilities statement set out on
page 15 to 16 the directors are
responsible for the preparation of the
financial statements and for being
satisfied that they give a true and fair
view our responsibility is to audit and
express an opinion on the financial
statements in accordance with
applicable law and international
standards on auditing uk and ireland
those standards require us to comply
with the auditing practices board’s
ethical standards for auditors 
this report including the opinions has
been prepared for and only for the
company’s members as a body in
accordance with chapter 3 of part 16 of
the companies act 2006 and for no
other purpose  we do not in giving
these opinions accept or assume
responsibility for any other purpose or
to any other person to whom this report
is shown or into whose hands it may
come save where expressly agreed by
our prior consent in writing
scope of the audit of the
financial statements 
an audit involves obtaining evidence
about the amounts and disclosures in
the financial statements sufficient to
give reasonable assurance that the
financial statements are free from
material misstatement whether caused
by fraud or error this includes an
assessment of whether the accounting
policies are appropriate to the group’s
and the parent company’s
circumstances and have been
consistently applied and adequately
disclosed the reasonableness of
significant accounting estimates made
by the directors and the overall
presentation of the financial
statements in addition we read all the
financial and nonfinancial information
in the financial statements to identify
material inconsistencies with the
audited financial statements if we
become aware of any apparent material
misstatements or inconsistencies we
consider the implications for our report
opinion on financial statements 
in our opinion 
● the financial statements give a true
and fair view of the state of the
group’s and of the parent company’s
affairs as at 31 december 2011  and
of the group’s profit and group’s and
parent company’s cash flows for the
year then ended
● the group financial statements have
been properly prepared in
accordance with ifrss as adopted by
the european union 
● the parent company financial
statements have been properly
prepared in accordance with ifrss
as adopted by the european union
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
las regulation 
opinion on other matters
prescribed by the companies
act 2006 
in our opinion 
● the part of the directors’
remuneration report to be audited
has been properly prepared in
accordance with the companies act
2006
● the information given in the
directors’ report for the financial
year for which the financial
statements are prepared is
consistent with the financial
statements and
● the information given in the
corporate governance statement
set out on pages 18 to 21 with
respect to internal control and risk
management systems and about
share capital structures is consistent
with the financial statements
matters on which we are
required to report by exception 
we have nothing to report in respect of
the following 
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 parent
company or returns adequate for our
audit have not been received from
branches not visited by us or 
● the parent 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 or
● a corporate governance statement
has not been prepared by the parent
company  o2o plc report and accounts 2011 31
under the listing rules we are required
to review 
● the directors’ statement set out on
page 19 in relation to going concern
● the parts of the corporate
governance statement relating to
the company’s compliance with the
nine provisions of the uk corporate
governance code specified for our
review and
● certain elements of the report to
shareholders by the board on
directors’ remuneration
s newman
senior statutory auditor 
for and on behalf of
pricewaterhousecoopers llp
chartered accountants and statutory
auditors norwich
29 february 2012 o2o plc report and accounts 2011 32
consolidated income statement
for the year ended 31 december 2011
2011 2010
note £000 £000
revenue 3 193498 207631
cost of sales 4 137860 148817
gross profit 55638 58814
distribution costs 4 18375 19298
administrative expenses 4 31418 33884
operating profit 5845 5632
finance costs 8 1555 1000
profit before income tax 4290 4632
analysed as
underlying profit before income tax

8412 11176
share option expense 26 409 138
nonrecurring costs 5 2398 5336
negative goodwill  188
amortisation of intangibles 12 1315 1258
profit before income tax 3 4290 4632
income tax creditexpense 9 22 336
profit for the year 4312 4296
earnings per ordinary share attributable to owners of the company
basic 11 120p 120p
diluted 11 120p 120p
 restated for adjustments arising from prior year business combinations relating to negative goodwill decrease of £56000
amortisation of intangible assets decrease of £108000 and deferred income tax expense increase of £102000 resulting in no
change to underlying profit before tax and a £50000 reduction in profit after tax in 2010 refer to note 2 to the financial statements

profit before income tax nonrecurring costs amortisation of intangibles negative goodwill and share option expense
the company has elected to take 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 £4097000 2010 £4097000  o2o plc report and accounts 2011 33
consolidated statement of comprehensive income
for the year ended 31 december 2011
2011 2010
£000 £000
profit for the year 4312 4296
other comprehensive income
currency translation differences 75 37
total comprehensive income for the year 4237 4259
 restated for adjustments arising from prior year business combinations relating to negative goodwill decrease of £56000
amortisation of intangible assets decrease of £108000 and deferred income tax expense increase of £102000 resulting in no
change to underlying profit before tax and a £50000 reduction in profit after tax in 2010 refer to note 2 to the financial statements o2o plc report and accounts 2011 34
consolidated and company balance sheets 
as at 31 december 2011
2011 2010 2011 2010
note £000 £000 £000 £000
assets
noncurrent assets
intangible assets 12 58671 59986  
property plant and equipment 13 3316 3168  
investments in subsidiaries 14   8615 8206
retirement benefit asset 24 105   
deferred income tax assets 15 1391 1801  
63483 64955 8615 8206
current assets
inventories 16 8974 5993  
trade and other receivables 17 28965 28831 9670 9617
current income tax asset 22 98   
cash and cash equivalents 18 1169 3693  
39206 38517 9670 9617
total assets 102689 103472 18285 17823
equity
capital and reserves attributable to the owners of the company
ordinary shares 25 363 363 363 363
share premium account 5009 5009 5009 5009
other reserves 84 159  
retained earnings 17386 16770 12888 12426
total equity 22842 22301 18260 17798
noncurrent liabilities
borrowings 20 17515 20704  
deferred income tax liabilities 15 1520 1934  
provisions 23 470 1061  
retirement benefit obligations 24  778  
19505 24477  
current liabilities
trade and other payables 19 48362 40763 25 25
borrowings 20 11304 14361  
provisions 23 676 861  
current income tax liabilities 22  709  
60342 56694 25 25
total liabilities 79847 81171 25 25
total equity and liabilities 102689 103472 18285 17823
 restated for adjustments arising from prior year business combinations for intangible assets reduction of £1099000 and deferred
income tax liabilities reduction of £1049000 see note 2
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 29 february 2012
d j callear  chairman
29 february 2012
registered number 04083206
consolidated company o2o plc report and accounts 2011 35
consolidated statement of changes in equity
for the year ended 31 december 2011
total
share attributable
ordinary premium other retained to owners minority total 
shares account reserves earnings of the parent interest equity
note £000 £000 £000 £000 £000 £000 £000
balance at 1 january 2011 363 5009 159 16770 22301  22301
profit for the year   4312 4312  4312
other comprehensive income  75  75  75
total comprehensive income for the
year ended 31 december 2011  75 4312 4237  4237
employee share options
 value of employee services 26   342 342  342
 deferred tax on share options 9  6 6  6
sale of shares by employee benefit trust   51 51  51
dividends
 ordinary shares 10   4095 4095  4095
 75 616 541  541
balance at 31 december 2011 363 5009 84 17386 22842  22842
total
share attributable
ordinary premium other retained to owners minority total 
shares account reserves earnings of the parent interest equity
note £000 £000 £000 £000 £000 £000 £000
balance at 1 january 2010 363 5009 196 17023 22591 196 22787
profit for the year   4296 4296  4296
other comprehensive income  37  37  37
total comprehensive income for the
year ended 31 december 2010  37 4296 4259  4259
employee share options
 value of employee services 26   135 135  135
 deferred tax on share options 9  14 14  14
acquisition of minority interest   613 613 44 569
dividends
 ordinary shares 10   4085 4085  4085
 minority interest   240 240
 37 253 290 196 486
balance at 31 december 2010 363 5009 159 16770 22301  22301
 restated for adjustments arising from prior year business combinations relating to negative goodwill decrease of £56000
amortisation of intangible assets decrease of £108000 and deferred income tax expense increase of £102000 resulting in no
change to underlying profit before tax and a £50000 reduction in profit after tax in 2010 refer to note 2 to the financial statements 
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 o2o plc report and accounts 2011 36
share
ordinary premium retained total 
shares account earnings equity
note £000 £000 £000 £000
balance at 1 january 2011 363 5009 12426 17798
profit for the year  4097 4097
total comprehensive income for the year ended 31 december 2011  4097 4097
credit to reserves for share based payments 26  409 409
sale of shares by employee benefit trust  51 51
dividends
 ordinary shares 10  4095 4095
 462 462
balance at 31 december 2011 363 5009 12888 18260
share
ordinary premium retained total 
shares account earnings equity
note £000 £000 £000 £000
balance at 1 january 2010 363 5009 12276 17648
profit for the year  4097 4097
total comprehensive income for the year ended 31 december 2010  4097 4097
credit to reserves for share based payments 26  138 138
dividends
 ordinary shares 10  4085 4085
 150 150
balance at 31 december 2010 363 5009 12426 17798
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
company statement of changes in equity
for the year ended 31 december 2011 o2o plc report and accounts 2011 37
consolidated and company cash flow statements
for the year ended 31 december 2011
2011 2010 2011 2010
note £000 £000 £000 £000
cash flows from operating activities
cash generated fromused in operations 27 10870 5037 53 13
interest paid 1251 1000  
income tax paid 783 1369  
net cash generated fromused in operating activities 8836 2668 53 13
cash flows from investing activities
purchase of property plant and equipment 960 411  
acquisition of subsidiaries including overdrafts  838  
interest received   97 97
dividends received   4000 4000
net cash used ingenerated from investing activities 960 1249 4097 4097
cash flows from financing activities
finance lease principal payments 288 446  
repayment of borrowings 2500 2500  
arrangement fee on refinancing 683   
acquisition of minority interest  569  
sale of shares by employee benefit trust 51  51 
dividends paid to company’s shareholders 10 4095 4085 4095 4085
dividends paid to minority interests  240  
net cash used in financing activities 7515 7840 4044 4085
net increasedecrease in cash cash equivalents
and bank overdrafts 361 6421  1
cash cash equivalents and bank overdrafts at 1 january 18 7859 1438  1
cash cash equivalents and bank overdrafts at 31 december 18 7498 7859  
net debt at 31 december comprises
2011 2010 2011 2010
£000 £000 £000 £000
cash cash equivalents and bank overdrafts 7498 7859  
finance leases 725 1013  
bank loans 19427 22500  
net debt at 31 december 27650 31372  
consolidated company
consolidated company o2o plc report and accounts 2011 38
significant accounting policies for the year ended 31 december 2011
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 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 ifric 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 group has net current liabilities as
at 31 december 2011 the group 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 day
today 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
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
recent accounting
developments
standards amendments and
interpretations effective for the first
time in the year ended 31 december
2011
there are no ifrss or ifric
interpretations that are effective for
the first time for the financial year
beginning on or after 1 january 2011
that would be expected to have a
material impact on the group
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 –
classification of rights issues
●
ifric 19 ‘extinguishing financial
liabilities with equity instruments’ 
●
amendment to ifrs 1 ‘firsttime
adoption of ifrs – limited
exemption from comparative ifrs 7
disclosures for firsttime adopters’ 
●
ias 24 revised ‘related party
disclosures’ 
●
amendment to ifric 14 ‘ias 19 –
the limit on a defined benefit asset
minimum funding requirements and
their interaction’ 
standards amendments and
interpretations that are not yet
effective and have not been early
adopted
●
amendments to ias 19 employee
benefits
●
ifrs 9 financial instruments
●
ifrs 10 consolidated financial
statements
●
ifrs 12 disclosures of interests in
other entities
●
ifrs 13 fair value measurement
standards amendments and
interpretations that are not yet
effective and not currently relevant to
the group 
●
amendment to ifrs 1 on
hyperinflation and fixed dates
●
amendment to ifrs 7 financial
instruments disclosures
●
amendment to ias 12 income
taxes on deferred tax
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 o2o plc report and accounts 2011 39
significant accounting policies for the year ended 31 december 2011
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
transactions with noncontrolling
interests that do not result in a loss of
control are accounted for as equity
transactions – that is as transactions
with the owners in their capacity as
owners the difference between fair
value of any consideration paid and the
relevant share acquired of the carrying
value of net assets of the subsidiary is
recorded in equity gains or losses on
disposals to noncontrolling interests
are also recorded in equity
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
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 each separate service is
generally subject to specific pricing
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
t ransactions 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 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
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  t ransactions
which may give rise to nonrecurring
costs are principally restructuring
related and business startup costs
costs in respect of key management
changes transaction costs incurred in
respect of business combinations and
costs associated with the closure of
employee pension schemes
business combinations and
goodwill
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 o2o plc report and accounts 2011 40
significant accounting policies for the year ended 31 december 2011
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 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 cash
generating 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 
other intangible assets
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
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 cash
generating 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 o2o plc report and accounts 2011 41
significant accounting policies for the year ended 31 december 2011
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 and 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 cash flow
statement 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 the
leases 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 currently has 162 members and
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 o2o plc report and accounts 2011 42
significant accounting policies for the year ended 31 december 2011
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 
the group has in respect of ias 19
and ifrs 1 adopted the corridor
approach to account for its pension
scheme liability as a result all
cumulative actuarial gains and losses
at the date of transition to ifrs 1
january 2004 have been taken
directly to reserves in respect of
actuarial gains and losses that arise
subsequent to that date to the extent
that cumulatively they exceed 10 per
cent of the greater of the present value
of the defined benefit obligation and
the fair value of the plan assets that
portion is recognised in the income
statement over the expected average
remaining working lives of the
employees participating in the plan
from the accounting period following
the year of exceeding the corridor
otherwise the accumulated actuarial
gains and losses are not recognised
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
the cost charged to administrative
expenses in the income statement
consists of current service cost interest
cost expected return on plan assets and
the impact of any settlements or
curtailments as well as actuarial gains or
losses to the extent that they are
recognised
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 t reasury 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 director’s 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 where these amounts are in
respect of subsidiaries they are
accounted for as an adjustment to the
company’s carrying value of
investments 
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 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 o2o plc report and accounts 2011 43
significant accounting policies for the year ended 31 december 2011
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 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 non
current liabilities
t rade receivables
t rade 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 cost of sales 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 cost of sales 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
t rade 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
and receivables for the purpose of
ifrs 7
●
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
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 o2o plc report and accounts 2011 44
significant accounting policies for the year ended 31 december 2011
underlying profit is calculated as follows
2011 2010
£000 £000
profit before income tax 4290 4632
add
share option charges note 26 409 138
nonrecurring costs note 5 2398 5336
negative goodwill  188
amortisation of intangibles note 12 1315 1258
underlying profit before income tax 8412 11176
 restated for adjustments arising from prior year business combinations relating to
negative goodwill decrease of £56000 amortisation of intangible assets decrease of
£108000 and deferred income tax expense increase of £102000 resulting in no
change to underlying profit before tax and a £50000 reduction in profit after tax in
2010 refer to note 2 to the financial statements o2o plc report and accounts 2011 45
notes to the financial statements for the year ended 31 december 2011
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
2011 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 £75000 2010 £84000 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 euro denominated 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 2011 if the gross margin percentage had weakenedstrengthened by 1 with all other variables
held constant gross profit for the year would have been £1935000 2010 £2076000 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 interest bearing 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 2010 and 2011 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 2011 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 £339000 2010 £238000 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 o2o plc report and accounts 2011 46
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 2011 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 11888 4101 14583 
finance leases 327 341 97 16
trade payables and accrued expenses 45219  
57434 4442 14680 16
at 31 december 2010 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 14697 7958 12613 
finance leases 344 367 356 23
trade payables and accrued expenses 36742  
51783 8325 12969 23
there have been no breaches in the contractual terms of the amounts shown above
interest rate risk profile of financial liabilities
the interest rate risk profile of financial liabilities was as follows
2011 2010
£000 £000
fixedrate borrowings 725 1013
v ariablerate borrowings 28667 34052
29392 35065
the fixedrate borrowings comprise finance leases with an effective weighted average interest rate of 39 2010 38 fixed
for a weighted average period of 23 years 2010 27 years
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 2011 o2o plc report and accounts 2011 47
notes to the financial statements for the year ended 31 december 2011
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 2011 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
2011 2010
£000 £000
sterling  deposits 824 2914
sterling  bank overdrafts 8667 11552
7843 8638
euro  deposits 345 779
7498 7859
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
2011 2010
£000 £000
gross undrawn committed confidential invoice discounting facility 18290 20000
gross undrawn uncommitted confidential invoice discounting facility  1200
revolving credit facility 3000 
cash book overdraft 1957 11552
net undrawn facilities 19333 9648
bank balances 1169 3693
available liquidity 20502 13341
as at 31 december 2011 the group had drawn £6710000 against its committed and uncommitted invoice discounting facility
at that date the group had a cash book overdraft of £1957000 2010 £11552000 and bank balances of £1169000 2010
£3693000 if all payments had cleared on the day of issue the group would have had net available liquidity of £20502000
2010 £13341000
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 and finance further suitable acquisition
opportunities should they arise
there have been no breaches in the covenants on borrowings in the year ended 31 december 2011 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
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 o2o plc report and accounts 2011 48
notes to the financial statements for the year ended 31 december 2011
in order to maintain or adjust the capital structure the group may adjust the amount of dividends paid to shareholders retain
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 noncurrent 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 2011 the group reduced its gearing ratio from 58 to 55 the gearing ratios at 31 december 2011 and 2010 were as
follows
2011 2010
£000 £000
t otal borrowings note 20 28819 35065
less cash and cash equivalents note 18 1169 3693
net debt 27650 31372
t otal equity 22842 22301
t otal capital 50492 53673
gearing ratio 55 58
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
restatement of comparative balances 
adjustments have been made to the acquisition accounting for business combinations made in february 2010 these
adjustments are in respect of the recognition of deferred tax liabilities on identified customer relationships and relatedly to the
value of these customer relationships which were both overstated in the 2010 annual report and accounts as this is outside the
hindsight period these are made as prior year adjustments and have no effect on 2010 underlying profit before income t ax of
£11176000 and decrease profit after tax by £50000
the effect of these prior year adjustments is to decrease the negative goodwill arising on the business combinations by £56000
to reduce the amortisation of intangible assets by £108000 and to increase the deferred tax charge by £102000 adjustments
have been reflected in the restated consolidated income statement consolidated statement of comprehensive income
consolidated statement of changes in equity and earnings per share for the year ended 31 december 2010 for these amounts 
at 31 december 2010 the balance sheet has been adjusted for a reduction in the value attributed to customer relationships of
£1099000 and a reduction in the deferred income tax liability of £1049000 
as the restatement relates only to the financial information previously presented in the 2010 financial statements no additional
balance sheet is presented in respect of earlier 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 o2o plc report and accounts 2011 49
the cash flows attributable to the cashgenerating unit to which goodwill and when appropriate other intangibles is allocated
are based on managements’ best estimates of future profitability and the resulting cash flows
while management believe 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
assets and liabilities
the preparation of the consolidated financial statements requires management to make judgements estimates and assumptions
that affect the application of policies and reported amounts of assets and liabilities income and expenses the estimates and
associated assumptions are based on historical experience and various other factors that are believed to be reasonable under
the circumstances the results of which form the basis of making judgements about carrying values of assets and liabilities that
are not readily apparent from other sources actual results may differ from these estimates
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 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
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 business units of each reportable segment banner business services and accord 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 2011 o2o plc report and accounts 2011 50
notes to the financial statements for the year ended 31 december 2011
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
t otal assets include the bank balance of office2office plc which is managed for the basis of dividend distributions as at 31
december 2011 the bank balance was £nil 2010 £nil this is part of the reconciliation to total balance sheet assets
business
managed critical
procurement services total
£000 £000 £000
y ear ended 31 december 2011
revenue 130979 62519 193498
adjusted ebita 13502 6550 20052
y ear ended 31 december 2010
revenue 145660 61971 207631
adjusted ebita 16397 5435 21832
total assets
31 december 2011 50105 52178 102283
31 december 2010 52123 50886 103009
additions to property plant and equipment
31 december 2011 851 109 960
31 december 2010 342 150 492
depreciation
31 december 2011 461 334 795
31 december 2010 449 355 804
intangible assets
31 december 2011 20475 38196 58671
31 december 2010 20729 39257 59986
amortisation
31 december 2011 254 1061 1315
31 december 2010 198 1060 1258
a reconciliation of total adjusted ebita to profit before income tax is provided as follows
2011 2010
£000 £000
adjusted ebita for reportable segments 20052 21832
central costs 10085 9656
finance costs 1555 1000
underlying profit before income tax 8412 11176
share option expense 409 138
nonrecurring costs 2398 5336
negative goodwill  188
amortisation 1315 1258
profit before income tax 4290 4632
 restated refer to note 2 o2o plc report and accounts 2011 51
notes to the financial statements for the year ended 31 december 2011
reportable segments’ assets are reconciled to total assets as follows
2011 2010
£000 £000
t otal segment assets 102283 103009
unallocated
short leasehold land and buildings  head office 406 463
total assets per balance sheet 102689 103472
 restated refer to note 2
revenue generated by geographical segment
2011 2010
£000 £000
united kingdom 189829 203524
republic of ireland 3669 4107
total 193498 207631
of the revenues generated in the united kingdom £188059000 2010 £201163000 are generated from customers in the
united kingdom and the total of revenues from customers from other countries is £1770000 2010 £2361000  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 £62092000 2010 £63154000 and £nil 2010 £nil respectively relate to non
current assets other than deferred tax assets
expenditure on property plant and equipment of £960000 2010 £492000 was incurred in the united kingdom  expenditure
on intangible fixed assets of £nil 2010 £nil 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
2011 2010
group £000 £000
changes in inventories of finished goods and consumption of goods held for resale 138070 148513
employee benefit expense note 6a 28742 30435
depreciation of property plant and equipment note 13 795 804
amortisation of intangible assets note 12 1315 1258
negative goodwill  188
nonrecurring costs note 5 2398 5336
foreign exchange gainslosses 19 194
impairment to trade and other receivables 191 110
operating lease payments 3249 2836
other operating costs 13294 12701
total cost of sales distribution costs and administrative expenses 187653 201999
 restated refer to note 2 o2o plc report and accounts 2011 52
notes to the financial statements for the year ended 31 december 2011
5 nonrecurring costscredits
the amounts recognised as nonrecurring costscredits are as follows
2011 2010
£000 £000
compensation payments 1264 1832
transaction costs in respect of business combinations  201
business and strategic review costs 734 3303
net curtailment gain on cessation of defined benefit scheme 333 
business start up costs 733 
2398 5336
compensation payments relate to amounts paid to exemployees of group companies  transaction costs in respect to business
combinations are costs incurred which did not qualify to be capitalised business and strategic review costs relate to costs
incurred by the group in relation to management’s commitment to improve operational efficiency business start up costs relate
to costs incurred with setting up the truline business the curtailment gain arises following the closure of the defined benefit
pension scheme to future accrual net of costs incurred
6a employee benefit expense
2011 2010
£000 £000
wages and salaries 25508 26668
social security costs 2594 2613
share based payments note 26 342 135
pension costs  defined benefit note 24 378 402
 defined contribution note 24 676 617
28742 30435
included within the above figures are compensation payments to exemployees of £1264000 2010 £1832000
key management compensation
the employment costs of key management personnel including executive directors during the year were as follows
2011 2010
£000 £000
salaries and other short term employee benefits 2026 2286
postretirement benefits 146 161
share based payments 299 121
2471 2568
key management are the executive directors and the senior management teams of the trading divisions
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 29 and shows the highest paid director and the number
of directors accruing benefits under moneypurchase personal pension schemes 
6b average number of people employed
2011 2010
number number
average monthly number of people including executive directors employed
sales and marketing 388 436
production and distribution 394 400
administration 129 123
911 959 o2o plc report and accounts 2011 53
7 auditor’s remuneration
services provided by the company’s auditor and its associates
during the year the group including its overseas subsidiary obtained the following services from the company’s auditors and its
associates
2011 2010
group £000 £000
fees payable to company’s auditors for the audit of the company and consolidated financial statements 45 45
fees payable to the company’s auditors and its associates for other services expensed in the income statement
 audit of company’s subsidiaries pursuant to legislation 77 78
 interim review fee 10 7
 tax services 20 20
152 150
8 finance costs
2011 2010
group £000 £000
finance costs
 bank loans and overdrafts 1102 559
 finance lease liabilities 55 38
 other financial charges 119 123
 customer procurement card charge 279 280
1555 1000
9 income tax creditexpense
2011 2010
group £000 £000
current tax
united kingdom corporation tax on profits of the year 792 1665
adjustments in respect of prior years 816 519
24 1146
deferred tax note 15
origination and reversal of temporary differences 278 297
impact of change in the uk tax rate 84 54
adjustments in respect of prior years 192 459
2 810
22 336
notes to the financial statements for the year ended 31 december 2011 o2o plc report and accounts 2011 54
notes to the financial statements for the year ended 31 december 2011
tax on items charged to equity
2011 2010
£000 £000
deferred tax credit on share options note 15 6 14
the group tax charge for the year differs from the standard rate of corporation tax of 265 the differences are explained below
2011 2010
£000 £000
profit before income tax 4290 4632
income tax at the standard rate of uk corporation tax of 265 2010 28 1137 1297
t ax effects of
expenses not deductible for tax purposes 60 124
utilisation of previously unrecognised tax losses 127 
negative goodwill not taxable  53
remeasurement of deferred tax  change in the uk tax rate 84 54
adjustment in respect of prior years 1008 978
t otal tax charge for the year 22 336
 restated refer to note 2
adjustments in respect of prior years 
current tax
the adjustment relates to the utilisation of previously unrecognised tax losses £522000 2010 £519000 and differences
between the tax charged to the income statement and the submitted return £294000 2010 £nil unrecognised tax losses
related predominantly to business combinations arising in 2008 where at the time there was significant uncertainty with regard
to the group’s ability to utilise them subsequently greater clarification with regard to their future offset has been obtained
deferred tax
the adjustment relates to the recognition of a tax asset on trading losses available for offset in future periods £241000 2010
£nil and adjustments in respect of prior period estimates £49000 2010 £459000
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 26 which was substantively enacted on 29 march 2011 and was effective from 1 april 2011 and to 25 which
was substantively enacted on 5 july 2011 and will be effective from 1 april 2012 further reductions to the uk corporation tax
rate were announced in the march 2011 budget  the changes which are expected to be enacted separately each year propose to
reduce the rate by 1 per annum to 23 by 1 april 2014  the changes had not been substantively enacted at the balance sheet
date and therefore are not recognised in these financial statements
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
2011 2010
£000 £000
amounts recognised as distributions in the year in respect of
ordinary shares  interim dividend 2011 – 36p per share 1297 
ordinary shares  final dividend 2010 – 78p per share 2798 
ordinary shares  interim dividend 2010 – 36p per share  1292
ordinary shares  final dividend 2009 – 78p per share  2793
4095 4085
the directors have proposed a final dividend of 78p per ordinary share total £2832000 payable on 18 may 2012 to
shareholders on the register at the close of business on 20 april 2012 the dividend has not been included as a liability as at
31 december 2011 o2o plc report and accounts 2011 55
notes to the financial statements for the year ended 31 december 2011
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 
2011 2010
profit attributable to owners of the company £000 4312 4296
weighted average number of ordinary shares in issue 000 35974 35828
basic earnings per share pence 120 120
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
2011 2010
profit attributable to owners of the company £000 4312 4296
weighted average number of ordinary shares in issue 000 35974 35828
adjusted for share options 000 95 80
weighted average number of ordinary shares for diluted earnings per share 000 36069 35908
diluted earnings per share pence 120 120
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  
2011 2010
profit attributable to owners of the company £000 4312 4296
amortisation net of tax 966 718
share option expense 409 138
nonrecurring costs net of tax 1763 3842
underlying profit attributable to owners of the company £000 7450 8994
weighted average number of ordinary shares in issue 000 35974 35828
underlying earnings per share pence per share 207 251 o2o plc report and accounts 2011 56
notes to the financial statements for the year ended 31 december 2011
12 intangible assets
customer
goodwill relationships brands software total
2011 £000 £000 £000 £000 £000
cost
at 1 january 2011 50253 8503 3938 201 62895
at 31 december 2011 50253 8503 3938 201 62895
accumulated amortisation and impairment
at 1 january 2011  1700 1034 175 2909
amortisation for the year  890 402 23 1315
at 31 december 2011  2590 1436 198 4224
net book amount
at 31 december 2011 50253 5913 2502 3 58671
customer
goodwill relationships brands software total
2010 £000 £000 £000 £000 £000
cost
at 1 january 2010 50253 5593 3938 201 59985
additions arising on business combinations  2910  2910
at 31 december 2010 50253 8503 3938 201 62895
accumulated amortisation and impairment
at 1 january 2010  906 637 108 1651
amortisation for the year  794 397 67 1258
at 31 december 2010  1700 1034 175 2909
net book amount
at 31 december 2010 50253 6803 2904 26 59986
 restated refer to note 2
d underlying diluted 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  
2011 2010
profit attributable to owners of the company £000 4312 4296
amortisation net of tax 966 718
share option expense 409 138
nonrecurring costs net of tax 1763 3842
underlying profit attributable to owners of the company £000 7450 8994
weighted average number of ordinary shares in issue 000 35974 35828
adjusted for share options 000 95 80
weighted average number of ordinary shares for diluted earnings per share 000 36069 35908
underlying diluted earnings per share pence 207 250
 restated refer to note 2 customer relationships have 82 years 2010 92 years and brands have 65 years 2010 75 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 2010 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 are shown below
2011 2010
£000 £000
managed procurement 19116 19116
business critical services 31137 31137
50253 50253
a review was undertaken at 31 december 2011 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 120 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 cash
generating units and
●
longterm growth rate of 25 which is not greater than the longterm growth assumption for the sector
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 groups 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
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 2011 having assessed the anticipated future cash flows the directors do not consider there to be any
reasonably possible changes in assumptions that would lead to such an impairment charge in the year ended 31 december 2011
o2o plc report and accounts 2011 57
notes to the financial statements for the year ended 31 december 2011 o2o plc report and accounts 2011 58
notes to the financial statements for the year ended 31 december 2011
13 property plant and equipment
group
short
freehold leasehold
land and land and plant and office
buildings buildings machinery equipment total
2011 £000 £000 £000 £000 £000
cost
at 1 january 2011 944 2173 2662 615 6394
additions at cost 5 660 138 157 960
disposals  24 281 175 480
at 31 december 2011 949 2809 2519 597 6874
accumulated depreciation
at 1 january 2011 89 1187 1475 475 3226
charge for the year 28 228 400 139 795
disposals  24 264 175 463
at 31 december 2011 117 1391 1611 439 3558
net book amount
at 31 december 2011 832 1418 908 158 3316
short
freehold leasehold
land and land and plant and office
buildings buildings machinery equipment total
2010 £000 £000 £000 £000 £000
cost
at 1 january 2010 944 1955 2475 523 5897
additions arising on business combinations  45 8 53
additions at cost  218 142 132 492
disposals   48 48
at 31 december 2010 944 2173 2662 615 6394
accumulated depreciation 
at 1 january 2010 61 953 1088 368 2470
charge for the year 28 234 387 155 804
disposals   48 48
at 31 december 2010 89 1187 1475 475 3226
net book amount
at 31 december 2010 855 986 1187 140 3168
the net book value of group plant and equipment held under finance leases was £807000 2010 £1062000 
the group leases various vehicles and machinery under noncancellable finance lease arrangements  the lease terms are
between one and six years and ownership of the assets lie within the group
company 
the company has no property plant and equipment 2010 none o2o plc report and accounts 2011 59
notes to the financial statements for the year ended 31 december 2011
14 investments in subsidiaries
company
2011 2010
£000 £000
at 1 january 8206 8068
options granted to employees of subsidiary undertakings 409 138
at 31 december 8615 8206
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 limited managed procurement england 100
first2office ltd managed procurement england 100
esp2office ltd managed procurement england 100
image2office ltd business critical services england 100
banner business supplies ireland limited managed procurement republic of ireland 100
banner document services ltd business critical services england 100
alpha office limited managed procurement 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
accessplus marketing services limited business critical services england 100
accessplus marketing logistics limited business critical services england 100
banner business supplies limited non trading england 100
banner business supplies pensions limited non trading trustee for pension england 100
scheme only
alpha data supplies limited non trading england 100
alpha stationers limited non trading england 100
alpha litho limited non trading england 100
colebrook services limited non trading england 100
fileit limited non trading england 100
accessplus limited non trading england 100
accessplus print management limited non trading england 100
triplearc uk limited non trading england 100
gl2 limited non trading england 100
godfrey lang limited non trading england 100
adversion limited non trading england 100
software stationery holdings limited non trading england 100
software stationery specialists limited non trading england 100
banner managed services plc non trading england 100
banner managed communication limited non trading england 100
all of the above shareholdings are in the subsidiaries’ ordinary share capital    
 shareholding o2o plc report and accounts 2011 60
notes to the financial statements for the year ended 31 december 2011
15 deferred income tax liabilityasset
2011 2010
£000 £000
deferred income tax asset 1391 1801
deferred income tax liability 1520 1934
129 133
the net deferred income tax liability is estimated to be payable as follows
2011 2010
£000 £000
deferred income tax liabilityassets
 to be recovered after more than 1 year 74 102
 to be recovered within 1 year 203 235
129 133
the deferred income tax liabilityasset recognised in the financial statements is as follows
2011 2010
£000 £000
t ax effect of timing differences
excess of qualifying depreciation over tax allowances 392 595
t ax losses 241 
employee share schemes 318 318
retirement benefit obligations 26 210
provisions 440 576
intangible assets 1494 1832
129 133
group 2011 2010 2011 2010
£000 £000 £000 £000
at 1 january 1801 1240 1934 2197
chargedcredited to the income statement note 9 416 547 414 263
credited to equity note 9 6 14  
at 31 december 1391 1801 1520 1934
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 o2o plc report and accounts 2011 61
notes to the financial statements for the year ended 31 december 2011
the movements in deferred tax assetsliabilities during the period is shown below
group
charged
credited to
at the income credited at
1 jan 2011 statement to equity 31 dec 2011
£000 £000 £000 £000
depreciation over tax allowances 595 203  392
intangible assets 1832 338  1494
provisions 576 136  440
retirement benefit obligations 210 236  26
t ax losses  241  241
share options 318 6 6 318
total 133 2 6 129
charged
credited to
at the income credited at
1 jan 2010 statement to equity 31 dec 2010
£000 £000 £000 £000
depreciation over tax allowances 265 330  595
intangible assets 2199 367  1832
provisions 461 115  576
retirement benefit obligations 250 40  210
share options 266 38 14 318
total 957 810 14 133
 restated refer to note 2
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 had an unrecognised deferred tax asset relating to trading losses of £nil 2010 £404000  additionally the group
has not recognised a deferred tax asset relating to nontrade losses of £491000 2010 £550000 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 o2o plc report and accounts 2011 62
notes to the financial statements for the year ended 31 december 2011
16 inventories
2011 2010
group £000 £000
finished goods and goods for resale 8974 5993
the group consumed £138070000 2010 £148513000 of inventories during the year  
the provision to reflect net realisable value being less than cost decreased by £278000 2010 decreased by £80000 during
the year
company
the company held no inventories 2010 £nil
17 trade and other receivables
2011 2010 2011 2010
£000 £000 £000 £000
trade receivables 24208 26062  
less provision for impairment 871 1309  
trade receivables net 23337 24753  
prepayments and accrued income 5573 4020  
other receivables 55 58  
receivables from related parties note 30   9670 9617
28965 28831 9670 9617
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 2010 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
2011 2010 2011 2010
£000 £000 £000 £000
sterling 27704 27005 9670 9617
euro 1175 1826  
us dollar 86   
28965 28831 9670 9617
group
trade receivables that are not past due amounting to £11551000 2010 £12890000 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 2011 trade receivables of £11080000 2010 £10718000 were past due but not impaired the
analysis of these trade receivables by reference to due date are aged as follows
2011 2010
£000 £000
up to 1 month past due 8899 8943
over 1 month past due 2181 1775
11080 10718
group company
group company o2o plc report and accounts 2011 63
notes to the financial statements for the year ended 31 december 2011
as of 31 december 2011 trade receivables of £1577000 2010 £2454000 were impaired and partially provided for the
amount of the provision against such impaired trade receivables was £871000 as of 31 december 2011 2010 £1309000
the individually impaired receivables mainly relate to issues arising from the current economic climate these receivables are
aged as follows
2011 2010
£000 £000
0 to 3 months overdue 498 721
3 to 6 months overdue 335 952
over 6 months overdue 744 781
1577 2454
movements on the group provision for impairment of trade receivables are as follows
2011 2010
£000 £000
at 1 january 1309 1309
decreaseincrease in provision for receivables impairment 191 110
receivables written off during the year as uncollectable 247 110
at 31 december 871 1309
the creation and release of provision for impaired receivables have been included in ‘cost of sales’ 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
2011 2010 2011 2010
£000 £000 £000 £000
cash at bank and in hand 1169 3693  
the effective average interest rate on overnight deposits for the year ended 31 december 2011 was 03 2010 08
cash cash equivalents and bank overdrafts include the following for the purpose of the cash flow statement
2011 2010 2011 2010
£000 £000 £000 £000
cash at bank and in hand 1169 3693  
bank overdrafts note 20 8667 11552  
7498 7859  
19 trade and other payables
2011 2010 2011 2010
£000 £000 £000 £000
trade payables 33336 27551  
social security and other taxes 3143 4021  
accrued expenses and deferred income 11883 9191 24 24
payables to related parties note 30   1 1
48362 40763 25 25
group company
group company
group company o2o plc report and accounts 2011 64
notes to the financial statements for the year ended 31 december 2011
20 borrowings
2011 2010
£000 £000
noncurrent
bank borrowings 17089 20000
finance leases 426 704
17515 20704
current
bank borrowings 2338 2500
bank overdrafts 8667 11552
finance leases 299 309
11304 14361
total borrowings 28819 35065
the company does not have any borrowings 2010 £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 represents cash book overdrafts 
the repayment profile of bank borrowings including overdrafts is as follows 
2011 2010
£000 £000
within one year or on demand 11005 14052
between one and two years 3338 7500
between two and three years 3838 12500
between three and four years 9913 
28094 34052
the borrowings are denominated in sterling
the carrying amounts and fair value of the noncurrent borrowings are as follows
2011 2010 2011 2010
£000 £000 £000 £000
bank borrowings 17089 20000 19934 21999
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 2011
of 47
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 o2o plc report and accounts 2011 65
notes to the financial statements for the year ended 31 december 2011
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 2011 2010
£000 £000
within one year 327 344
in more than one year but not more than five years 438 723
in more than five years 16 23
781 1090
2011 2010
£000 £000
within one year 28 35
in more than one year but not more than five years 24 41
in more than five years 4 1
56 77
2011 2010
£000 £000
within one year 299 309
in more than one year but not more than five years 414 682
in more than five years 12 22
725 1013
finance leases are secured upon the assets to which the lease agreement relates
21 financial instruments by category
cash and cash equivalents and trade and other receivables excluding prepayments are classified as loans and receivables for
the purpose of ifrs 7
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
22 current income tax assetliabilities
2011 2010 2011 2010
£000 £000 £000 £000
current income tax assetliabilities 98 709  
minimum lease payments
future finance charges
net minimum lease payments
group company o2o plc report and accounts 2011 66
notes to the financial statements for the year ended 31 december 2011
23 provisions
property onerous
dilapidations leases total
£000 £000 £000
at 1 january 2011 589 1333 1922
charged to the income statement
 additional provisions  39 39
 unwinding of discount  20 20
utilised during the year 62 773 835
at 31 december 2011 527 619 1146
2011 2010
maturity profile of provisions £000 £000
current 676 861
noncurrent 470 1061
at 31 december 1146 1922
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 eight years
onerous leases relate to the future cost of historic lease obligations whereby the group has no future economic benefit from the
lease  these leases have varying end dates between one and five years
company
the company has no provisions 2010 £nil
24 retirement benefit assetliability
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 currently
has 162 members and 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 2011 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 2011 amounted to £11854000 2010 £11299000
group contributions in respect of the defined benefit pension scheme for the period were £505000 2010 £518000 group
contributions in 2012 are expected to be approximately £337000
the group also incurred £676000 2010 £617000 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 2011 was £203000 2010
£411000 o2o plc report and accounts 2011 67
notes to the financial statements for the year ended 31 december 2011
the amounts recognised in the balance sheet in respect of the bbs scheme are determined as follows
2011 2010
£000 £000
present value of funded obligations 12476 13010
fair value of plan assets 11854 11299
622 1711
unrecognised actuarial losses 727 933
assetliability in the balance sheet 105 778
the amounts included in the fair value of plan assets are as follows
2011 2010 2011 2010
£000 £000
equities 60 72 9116 8887
bonds 30 42 1195 953
property 50 62 979 891
other 03 03 564 568
11854 11299
the amounts recognised in the income statement are as follows
2011 2010
£000 £000
current service cost 219 239
scheme interest cost 735 735
expected return on plan assets 752 643
amortisation of unrecognised loss  71
curtailment – removal of ill health allowance 222 
curtailment – removal of salary link 394 
net actuarial losses gains recognised in the year curtailment 36 
expenses recognised in the income statement as administrative expenses 378 402
the movement in the fair value of plan assets is as follows
2011 2010
£000 £000
fair value of plan assets at 1 january 11299 9181
expected return on plan assets 752 643
actuarial lossgain 700 938
employer contribution 505 518
member contributions 75 81
benefits paid 77 62
fair value of plan assets at 31 december 11854 11299
the movement in the defined benefit obligation is as follows
2011 2010
£000 £000
defined benefit obligations at 1 january 13010 12762
current service cost 219 239
interest cost 735 735
member contributions 75 81
actuarial gains 870 745
benefits paid 77 62
curtailment – removal of ill health allowance 222 
curtailment – removal of salary link 394 
present value of funded obligations at 31 december 12476 13010
expected return pa o2o plc report and accounts 2011 68
notes to the financial statements for the year ended 31 december 2011
the principal actuarial assumptions were as follows
2011 2010
pa pa
discount rate 50 56
expected rate of return on plan assets 53 65
future salary increases na 36
future pension increases
 transferred from tsops 25 36
 earned in scheme 32 36
inflation  rpi 32 36
inflation  cpi 25 29
the expected return on plan assets for 2011 is based on market conditions at 31 december 2011 for returns over the entire life
of the obligation
2011 2010
£000 £000
actual return on plan assets 52 1581
the weighted average life expectancy derived from mortality tables used to determine benefit obligations were
2011 2010
y ears y ears
male member aged 65 current life expectancy 221 220
female member aged 65 current life expectancy 242 249
male member aged 45 life expectancy at age 65 235 231
female member aged 45 life expectancy at age 65 258 259
history of experience gains and losses
2011 2010 2009 2008 2007
£000 £000 £000 £000 £000
present value of funded obligations 12476 13010 12762 10487 10413
fair value of plan assets 11854 11299 9181 7128 8542
deficit in the plan 622 1711 3581 3359 1871
experience adjustments arising on scheme assets 700 938 1172 2283 102
experience adjustments arising on scheme liabilities 768  199 436
company
the company has no retirement benefit liabilities 2010 £nil
25 ordinary shares
issued and fully paid no £ no £
ordinary shares of 1p each 36308984 363090 36308984 363090
269356 ordinary shares are held by the ebt 2010 433198 for which the right to receive dividends has been waived 
2011 2010 o2o plc report and accounts 2011 69
notes to the financial statements for the year ended 31 december 2011
26 share options
exercise
number number number number number price per exercisable expiry
1 jan 11 granted exercised expired 31 dec 11 share from date
psp
date granted
december 2007 189566  25781 163785  01p 010411 011011
april 2008 542649  73800 468849  01p 240411 241011
march 2009 160606   160606 01p 040312 040912
april 2009 370067   370067 01p 300412 301012
may 2010 669292  27331 641961 01p 210513 211113
september 2010 58333   58333 01p 240913 240314
june 2011  1466796  1466796 01p 200614 201214
sa ye scheme
date granted
october 2005 5yr 9179  9179  2244p 011210 310511
april 2008 3yr 162677  110144 52533  1194p 010511 311011
april 2008 5yr 110289  11254 99035 1194p 010513 311013
december 2011 3yr  379406  3082 376324 1168p 010115 010715
december 2011 5yr  90401  90401 1168p 010117 010717
2272658 1936603 209725 736013 3263523
exercise
number number number number number price per exercisable expiry
1 jan 10 granted exercised expired 31 dec 10 share from date
psp
date granted
september 2007 232907  61022 171885  01p 110910 110311
december 2007 189566   189566 01p 010411 011011
april 2008 542649   542649 01p 240411 241011
march 2009 160606   160606 01p 040312 040912
april 2009 370067   370067 01p 300412 301012
september 2010  58333  58333 01p 240913 240314
may 2010  669292  669292 01p 210513 211113
sa ye scheme
date granted
october 2004 5yr 125931  125931  1716p 011209 310510
october 2005 5yr 9179   9179 2244p 011210 310511
april 2008 3yr 184377  1607 20093 162677 1194p 010511 311011
april 2008 5yr 126609  16320 110289 1194p 010513 311013
1941891 727625 62629 334229 2272658
options which expired in the year to 31 december 2011 reflected employees leaving the group nonachievement of
performance conditions and the expiry of the term of exercise
at 31 december 2011 there were 18 members 2010 11 members with an average option holding of 149876 2010
175653 of the performance share plan and 154 members 2010 92 members with average holdings of 3674 2010 3304
of the saveasy ouearn sa ye scheme o2o plc report and accounts 2011 70
notes to the financial statements for the year ended 31 december 2011
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 in 2011 the tsr measure has been replaced by growth in share price on 20 june 2011
awards were granted over 1466796 shares based on a weighted average share price of the three days prior to award of
1335p per share 99581 options were exercised during the year under review the weighted average share price as at the date
of exercise was 1255p per share the weighted average remaining contractual life is 18 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 share
price as at the date of exercise was 14723p per share the weighted average remaining contractual life is 30 years
exercise price shares
expiry date grant per share 2011 2010
2011 20058 238p  904071
2012 2009 01p 530673 530673
2013 200810 160p 740996 779581
2014 201011 01p 1525129 58333
2015 2011 1168p 376324 
2017 2011 1168p 90401 
3263523 2272658
the ifrs2 and associated national insurance costs before tax incurred in relation to the above schemes were as follows
2011 2011 2010 2010
ifrs 2 ni ifrs 2 ni
£000 £000 £000 £000
psp
date granted
december 2005   4
april 2006   4
september 2007  13 10
december 2007  26 5
april 2008 26  78 11
march 2009 12  22 6
april 2009 80 4 67 14
may 2010 187 32 114 17
september 2010 16 4 
june 2011 204 35 
sa ye scheme
date granted
october 2005 5yr 8  1
october 2008 3yr 4 16 
october 2008 5yr 5 6
342 67 135 3 o2o plc report and accounts 2011 71
notes to the financial statements for the year ended 31 december 2011
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 – september 2010 option value information
fair value per option £065
option exercise price £0001
weighted average share price £1200
v aluation assumptions
expected option term 325 years
expected volatility 508
expected dividend yield 94
risk free interest rate 370
performance share plan – june 2011 option value information
fair value per option £084
option exercise price £0001
weighted average share price £1342
v aluation assumptions
expected option term 325 years
expected volatility 385
expected dividend yield 84
risk free interest rate 200
sa ye 3 year scheme – december 2011 option value information
fair value per option £029
option exercise price £1168
weighted average share price £1430
v aluation assumptions
expected option term 325 years
expected volatility 373
expected dividend yield 79
risk free interest rate 121
sa ye 5 year scheme – december 2011 option value information
fair value per option £032
option exercise price £1168
weighted average share price £1430
v aluation assumptions
expected option term 525 years
expected volatility 419
expected dividend yield 79
risk free interest rate 240
 estimated using the montecarlo simulation and blackscholes option pricing methods 
 estimated using the blackscholes option pricing models
expected volatility was determined by reference to historic share price information of similar companies
all of the above relate to equity settled sharebased payment transactions o2o plc report and accounts 2011 72
notes to the financial statements for the year ended 31 december 2011
group company
27 cash generated fromused in operations
2011 2010 2011 2010
£000 £000 £000 £000
profit before income tax 4290 4632 4097 4097
adjustments for
amortisation of intangible assets 1315 1258  
negative goodwill  188  
depreciation of property plant and equipment 795 804  
loss on disposal of property plant and equipment 17   
finance income   97 97
finance costs 1665 1000  
income from investments   4000 4000
share option expense 342 135  
increasedecrease in inventories 2981 795  
increase in trade and other receivables 134 4780 53 13
increase in trade and other payables and provisions 5561 1381  
cash generated fromused in operations 10870 5037 53 13
 restated refer to note 2 o2o plc report and accounts 2011 73
notes to the financial statements for the year ended 31 december 2011
28 analysis of movement in net debtcash 
at
group at 1 january cash noncash 31 december
2011 flow movements 2011
£000 £000 £000 £000
cash at bank and in hand 3693 2524  1169
bank overdrafts 11552 2885  8667
7859 361  7498
t erm loan – current 2500 2500 2338 2338
finance leases – current 309 288 278 299
t otal current debt 10668 3149 2616 10135
t erm loan – noncurrent 20000  2911 17089
finance leases – noncurrent 704  278 426
t otal noncurrent debt 20704  3189 17515
net debt 31372 3149 573 27650
at
at 1 january cash noncash 31 december
2010 flow movements 2010
£000 £000 £000 £000
cash at bank and in hand 5987 2294  3693
bank overdrafts 7425 4127  11552
1438 6421  7859
t erm loan – current 2500 2500 2500 2500
finance leases – current 385 446 370 309
t otal current debt 4323 3475 2870 10668
t erm loan – noncurrent 22500  2500 20000
finance leases – noncurrent 993  289 704
t otal noncurrent debt 23493  2789 20704
net debt 27816 3475 81 31372
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 o2o plc report and accounts 2011 74
notes to the financial statements for the year ended 31 december 2011
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 £20000000 2010 £22500000 subject to facility at 31
december 2011 the directors do not expect any material loss to the company to arise in respect of the guarantees
operating lease commitments
2011 2010 2011 2010
group £000 £000 £000 £000
amounts payable under noncancellable operating leases
no later than one year 2190 1985 1518 1022
later than one year and no later than five years 4543 4571 2544 1343
later than five years 1331 1120 8 
8064 7676 4070 2365
company
the company has no obligations under operating leases 2010 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
2011 2010
£000 £000
dividends received 4000 4000
interest received 97 97
4097 4097
as at 31 december the following amounts were due tofrom the company fromto its subsidiaries
2011 2010
£000 £000
banner business services limited 9670 9617
banner business supplies ireland limited 1 1
9669 9616
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 o2o plc report and accounts 2011 75
2011 2010 2009 2008 2007
£000 £000 £000 £000 £000
revenue 193498 207631 187464 180999 167862
operating profit  before amortisation negative goodwill
nonrecurring costs and share option expenses 9967 12176 13986 13425 11694
amortisation 1315 1258 999 624 
negative goodwill  188  
nonrecurring costs 2398 5336 3645 1812 2333
share option expense 409 138 363 23 243
operating profit 5845 5632 8979 10966 9118
net interest payable 1555 1000 856 1359 115
profit before tax 4290 4632 8123 9607 9003
capital employed
shareholder funds 22842 22301 22591 20160 16907
statistics
basic underlying earnings per ordinary share

207p 251p 271p 241p 226p
basic earnings per ordinary share 120p 120p 172p 185p 174p
diluted earnings per ordinary share 120p 120p 171p 185p 173p
dividends per share 114p 114p 114p 110p 100p
share price period end 1395p 1245p 1455p 655p 1195p
 restated refer to note 2

basic underlying earnings per ordinary share before the after tax effect of nonrecurring costs amortisation and share option
expense has been disclosed to give a clearer understanding of the group’s underlying trading performance 
five y ear summary o2o plc report and accounts 2011 76
shareholder information 
financial calendar 2012
announcement of final results for the year ended 31 december 2011 01 march 2012
annual general meeting 26 april 2012
payment of final dividend on ordinary shares to shareholders on
the share register at the close of business on 20 april 2012 18 may 2012
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   o2o plc report and accounts 2011 77
registered office
st crispins
duke street
norwich nr3 1pd
united kingdom
t elephone 44 0 1603 691 102
fax 44 0 1603 691 106
website wwwoffice2officecouk
email infooffice2officebiz
professional advisers
independent auditors
pricewaterhousecoopers llp
chartered accountants and statutory auditors
the atrium
st georges street
norwich nr3 1ag
broker
panmure gordon  co
moorgate hall
155 moorgate
london ec2m 6xb
financial advisers
n m rothschild  sons
1 park row
leeds ls1 5nr
solicitors
macfarlanes llp
20 cursitor street
london ec4a 1l t
company details
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we are committed to environmental practices 
so this annual report has been laminated with cel
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cover and inside pages
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Summary:
 o2o plc report and accounts 2011 2
results
notwithstanding the public sector sales volumes and noncore
expenditure shortfalls we managed to hold revenue at
£1935m 2010 £2076m and underlying profit before tax
was £84m 2010 £112m
administrative expenses excluding nonrecurring costs
amortisation of intangibles and share option expense were
whilst this has been a year of unprecedented new business wins revenue and profitability fell
back in 2011 driven entirely by the shortfall in public sector sales volumes and noncore
expenditure relative to prior years by contrast private sector trading performance was broadly
in line with our expectations 
business wins and retention rates have been high during the year notably two new managed
procurement contracts secured in 2011 are expected to generate additional annual revenue in
excess of £50m in 2012 and compensate for continuing albeit now stable lower levels of
public sector sales volumes
the first is a four year contract to supply and distribute office products to the sme sector
through an independent office product dealership network the advantia contract this is
expected to generate revenues in excess of £25m per annum for our new supply chain business
truline which was launched during the year
secondly in august following a competitive tender process for the government office supplies
contract gosc we were appointed as sole provider of office products and closed loop
services to the uk central government for a minimum of three years with the option to extend
gosc embraces all central government departments and as well as securing all our existing
public sector office product and closed loop business it is expected to generate at least £25m
of additional annual revenue further gosc is based on our openbook pricing model which
should protect the group from any adverse product cost increases 
having overcome the unexpected implementation delays which limited its impact in 2011
gosc has been trading in line with expectations so far in 2012 and other public sector sales
volumes now appear to be stable
£273m 2010 £273m and distribution costs reduced to
£184m 2010 £193m nonrecurring costs as detailed in
note 5 to the financial statements were £24m 2010
£53m comprising compensation costs following
restructuring of £13m 2010 £18m truline start up costs
of £07m 2010 £nil and £07m 2010 £33m of business
and strategic review costs offset by a curtailment gain on
closure of the defined benefit pension scheme of £03m
chairman’s statement  
david callear o2o plc report and accounts 2011 3
2010 £nil in addition in 2010 there were transaction
costs of £02m relating to the investment in tpf  
profit before tax was £43m 2010 £46m and following a
tax charge credit profit after tax remained at £43m 2010
£43m basic and fully diluted earnings per share were 120p
and 120p respectively 2010 120p and 120p underlying
earnings per share were 207p 2010 251p
cash generated from operations and net debt
cash generated from operations increased by £59m to
£109m 2010 £50m this reflected the unusual investment
in working capital and integration costs reported in 2010
following the acquisition of tpf and subsequently the impact
of the improved management of tpf working capital as part
of the enlarged group net indebtedness fell to £277m
2010 £314m primarily as a direct consequence of this
improvement
during the year the group’s banking facilities were
renegotiated increased and the term extended the revised
facilities of £48m now mature in june 2015 with repayments
due from june 2012 and are based on competitive terms
interest rates and arrangement fees 
business strategy
over the past year we have continued with our long term
strategy to build on the base of the traditional contracted
revenue office products business to
● develop higher addedvalue managed procurement
activities 
● expand our product range to encompass a breadth of
consumable products for business 
● extend into market areas which sit naturally alongside the
traditional business where there are opportunities to
grow and utilise our core skills in procurement and
logistics and 
● benefit from a wider customer base 
as a result of this broad diversification strategy our
operations now comprise
managed procurement
● banner business services our traditional contracted
office products business which now supplies a broader
range of consumable products and
● truline a business startedup in the year to provide supply
chain services mainly product procurement and logistics
to third parties such as advantia as well as to group
operations
business critical services
● banner managed communication bmc which is an
outsourced business process provider specialising in print
management and related services with good growth
prospects through a diverse and predominantly private
sector customer base and
● bds a waste paper service provider which is expanding
the ‘closed loop’ initiative our patented environmentally
friendly paper recycling process this appeals to the
sustainability goals of both public and private sectors and
was a key factor in the award of gosc
bmc and bds operate within our business critical services
business segment and each is important to our strategy for
complementary market area extension given their
particular product focus similarly truline which operates
within the managed procurement business segment
provides a platform both to develop our managed
procurement activities and widen the customer base into
the sme sector
the shift in our trading emphasis over the last four years to
business product and managed services provider has been
accompanied by a shift in the office2office customer base
which originally comprised mainly government departments
at the end of 2011 two thirds of group revenue was
accounted for by private sector corporate customers a
balance largely maintained following the award of gosc and
the advantia contract
finally we have improved the longterm business efficiency
by further reducing our underlying cost base year on year in
response to continued changes in economic conditions this o2o plc report and accounts 2011 4
has helped to protect the business from product margin
pressure particularly in our traditional product ranges
the 2011 trading performance of the business segments and
our shorter term strategy for the coming year are discussed
in more detail in the chief executive’s review  
dividend
the board believes that the payment of dividends should be
closely linked to affordability and the group’s trading
prospects 
we remain sufficiently confident in the long term prospects
of the group underpinned by the award of the two major
contracts during the year to recommend maintaining the level
of the final dividend at 78p per share 2010 78p when
combined with the interim dividend paid on 21 october 2011
this makes a total dividend per share of 114p 2010 114p
and amounts to a total distribution of £41m 2010 £41m
the total dividend paid and payable for the year is covered by
earnings 11 times 2010 11 times and by underlying
earnings 20 times 2010 27 times
if approved at the annual general meeting agm the final
dividend will be paid on 18 may 2012 to shareholders on the
register at the close of business on 20 april 2012
employees
our employees have remained focused on delivering a quality
service despite the background of falling sales volumes and
tougher market conditions generally and huge efforts were
expended to secure and implement both gosc and the
advantia contract during the year
i would like to thank all our staff for their continued hard work
and commitment to the group
outlook
the shortfall in public sector sales volumes compounded by
the unfavourable product mix was disappointing albeit
perhaps inevitable as the government sought to reduce
spending further the unexpected delays to the
implementation of gosc limited its compensatory impact in
the year however public sector sales volumes now appear to
have stabilised and the additional sales volumes promised by
gosc and the advantia contract position the group for
growth in 2012 
whilst we expect the economic environment to remain
challenging we believe this will be mitigated by extracting
value from our mainly contracted customer base maintaining
margins and tightly controlling costs while at the same time
focusing on cash generation
we start the current year with overall trading in line with
expectations gosc and the advantia contract fully
operational significant interest in our closed loop initiative
and our business critical services activity having already
secured those of its major contracts due for renewal in 2012
t ogether these underpin the board’s confidence in the
group’s prospects
agm
the agm will be held at the company’s head office st
crispins duke street norwich on 26 april 2012 at 1100
am notice of the agm together with the proxy forms for use
at the agm will be circulated with the annual report and
financial statements 
d j callear 
chairman
29 february 2012
chairman’s statement  
continued