2017704  22032011 proof 12
ocado group plc
titan court 3 bishops square  
hatfield business park hatfield al10 9ne uk
tel 44 0 1707 227800
fax 44 0 1707 227999
wwwocadogroupcom
visit our online annual report and accounts at
results10ocadogroupcom
ocado group plc   annual report and accounts 2010
delivering growth
establishing profitability
ocado group plc
annual report and accounts 2010
stock code ocdo 2017704  22032011 proof 11
2017704  22032011 proof 12
company information
registered office ocado group plc
 titan court
 3 bishops square
 hatfield business park
 hatfield
 hertfordshire
 al10 9ne   
    
company number 07098618   
    
auditors pricewaterhousecoopers llp   
 chartered accountants and registered auditors   
 10 bricket road   
 st albans   
 hertfordshire   
 al1 3jx   
    
registrars capita registrars   
 the registry   
 34 beckenham road   
 beckenham   
 kent   
 br3 4tu   
2017704ocadogr cover9mmspineindd   2 23032011   150654 01
chairman’s statement
stock code ocdo wwwocadogroupcom
2017704  22032011 proof 12
01
chairman’s statement
stock code ocdo wwwocadogroupcom
our performance
welcome to ocado
established in 2000 and listed on the lse’s main market 
in july 2010 ocado is the uk’s largest dedicated online 
grocery retailer providing an innovative market leading 
customer experience
 about ocado
08 marketplace
10 the future of grocery shopping 
is online
12 the ocado way
14 strategy addressing the market
16 board of directors
18 our values
 our performance
02 highlights
03 chairman’s letter
04 chief executive officer’s review
06 chief financial officer’s review
 our responsibilities
19 directors’ report
26 corporate social responsibility 
report 
29 principal risks and uncertainties
33 statement of corporate governance 
41 directors’ remuneration report
 our financials
47 independent auditors’ report
48 consolidated income statement
49 consolidated statement of 
comprehensive income
50 consolidated balance sheet
51 consolidated statement of 
cash flows
52 consolidated statement of 
changes in equity
53 notes to the consolidated 
financial statements
92 independent auditors’ report
93 company balance sheet
94 company statement of cash flows
95 company statement of changes 
in equity
96 notes to the company financial 
statements
106 glossary
investment themes
significant market 
opportunity
unique business model 
with structural 
advantages
superior customer offer 
in online food retailing 
driving market share
proprietary intellectu al 
property providing high 
barriers to entr y
significant opportunity 
for continued 
expansion
considerable 
operational leverage 
with margin potential
strong track record of 
growth
✔
✔
✔
✔
✔
✔
✔ 02
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010 02
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
2017704  22032011 proof 12
highlights
financial highlights
● 	 gross sales up 29 to £5511m
● 	 adjusted
1
 ebitda up 138 to £220m adjusted
1
 ebitda margin 40
● 	 adjusted
1
 ebt loss £87m
● 	 profitability reached in second half 
● 	 adjusted
1
 h2 ebit profit £09m
● 	 q4 ebt profit £03m
● 	 cash including treasury deposits of £1546m at year end
statutory highlights
● 	 net revenue up 28 to £5157m
● 	 operating loss reduced by 63 to £54m including £35m of oneoff ipo costs
● 	 loss before tax reduced by 52 to £122m including £35m of oneoff ipo cost
operational highlights
● 	 average orders per week up 31 to 92916
● 	 items delivered exactly as ordered were 99 for the year
● 	 deliveries on time or early were 95 for the year
10 10
10
262k
09
220k
08 09 10
193k
active customers
262000
2009 220000
09 08 09 10
10
£551m
09 08
£341m
gr oss sales
£551m
2009 £427m
net assets
£172m
2009 £32m
£427m
£0000m
£220m
1
£92m
£22m
ebitda
2009 £92m
£220m
1
10
£172m
09
£32m
08
£38m
08 09 10
1
 adjusted to exclude oneoff ipo costs of £35m 03
chairman’s statement
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03
chairman’s statement
stock code ocdo wwwocadogroupcom
our performance
chairman’s letter
lord grade of  yarmouth
dear shareholder
overview
the major corporate event during 2010 was our initial public offering and i would like to take this opportunity to welcome both 
pre and post ipo shareholders to our first annual report as a public listed company  as a result of the ipo the group has been 
able to accelerate its growth plans
in the lead up to the ipo a new ten year agreement was negotiated and completed with waitrose the grocery division of john 
lewis partnership our sourcing partner from day one  without the support of the john lewis partnership and subsequently the 
john lewis pension fund ocado would not be the exciting business it is today and it is fitting to record their crucial role in the 
ocado story with our gratitude
corporate governance
we continue to be a flexible and entrepreneurial company while recognising the importance of high standards of corporate 
governance  our values underpin our approach to doing business  we have worked over the year towards complying with the 
corporate governance requirements and continue to do so  
board changes 
as part of our transition towards compliance with the corporate governance requirements the board has said farewell to t om 
clayton jonathan faiman jeremy frampton patrick lewis and michael robarts  on behalf of the board i would like to pay thanks 
to them for their valuable contributions and wish them every success in their future endeavours  we have welcomed ruth 
anderson and david grigson to the board as independent nonexecutive directors  they bring with them a wealth of experience 
and have already settled in as integral members of the board  david is the senior independent director and chairman of the 
nomination committee and ruth is chairman of the audit committee
people
our customers are the people who drive our business and we continue to find ways to respond to their needs by creating a better 
customer experience and new ideas to improve their online shopping experience  our employees continue to demonstrate their 
willingness to respond  i would like to thank all members of the ocado family for their continued energy passion expertise and 
commitment during this milestone year
looking forward
i believe our focus on ocado’s superior customer offer continues to position us favourably as the market expands – delighting 
our customers and creating value for our shareholders  i look forward to our shareholders customers employees and suppliers 
continuing to share in ocado’s growth and successes
lord grade
chairman 04
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010 04
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
2017704  22032011 proof 12
chief executive officer’s review
the past year has been a year of significant progress for ocado  
in the core operations we delivered a strong set of results for 
2010  our strategy of continuously improving our market leading 
customer offer continued to drive sales growth which has delivered 
through to the bottom line  this was a tremendous achievement by 
all the members of the ocado team
delivering gross sales growth of 29 to £5511 million against the 
backdrop of a weak uk economy is a strong result  as the business 
grows and starts to achieve scale we are seeing the benefits of 
considerable operational leverage  the business achieved numerous 
financial milestones in the year including reporting an adjusted ebit 
profit for the second half of the year and being profitable at the ebt 
level for the final quarter 16 trading weeks
the uk online grocery market is still at an early stage of 
development  we believe the most effective way ocado can increase 
adoption is to continue improving our customer offering  as in 
previous years we have worked hard to improve this on many levels 
including working on range price availability accuracy ease of use as 
well as other service initiatives
this year we expanded our range to 215k skus from 205k at the 
end of fy09 all of which are available to customers in the whole 
of our delivery geography  t o put this in context we have now 
taken our range from being among the smallest offered in any uk 
supermarket three years ago to one of the largest ranges today  as 
we expand the capacity of the cfc further we expect to be able to 
offer the largest grocery range of any major uk supermarket
a particularly important addition to our range this year has been the 
launch of the ocado ownlabel range which has been introduced to 
complement the waitrose ownlabel products  it offers the ocado 
customer a range that matches closely in price and quality the core 
ownlabel ranges of the major uk supermarkets  it has been a 
great achievement to build the team and the supplier relationships 
necessary to source and develop the ocado ownlabel range  while 
it is still early days we have seen strong takeup with 64 of all 
baskets containing an ocado product in the final four week period 
of the year  the ocado ownlabel range now has over 250 products 
and we expect this to grow substantially in the coming years
the launch of the ocado range touches on another key area where 
we have improved this year pricing  we have continued to invest in 
our price positioning over the year through both range and absolute 
pricing  due to our increasing scale we managed to maintain 
margin while making these investments in price  we continued our 
commitment to match the standard prices of all identical items of the 
uk’s largest supermarket group  as we have expanded our range 
we have increased the number of t esco price match items to c7200  
we also launched “switch and save” which allows our customers to 
move to lower priced products with improved value as they check 
out  this year we have run more promotions than ever before 
increasing the value of our service to our customers  the investments 
made in pricing over recent years have been recognised by the 
consumer and have led to a broadening of our customer base from a 
demographic perspective
we also made substantial improvements this year to our customer 
interfaces with the aim of providing the customer with the best 
possible experience in online grocery shopping regardless of how 
they want to interact with ocado whether on the website mobile 
phone or ipad  this year we also upgraded the website and iphone 
app and launched apps on the ipad and android mobile devices with 
mobile checkouts reaching 12 since the new y ear
in november we launched the new version of the ocado website  
this has been a major operation involving teams across the business 
from trading through to creative to it   we have had a positive 
reaction from our customers and its introduction has driven an 
increased average spend per order  beyond the improved customer 
interface the new website provides a new back end platform which 
will allow us to continue to innovate over the coming years
ocado received numerous industry awards for its customer offer 
including world etailer of the y ear 2010 at the oracle world retail 
awards  however we are not resting on our laurels and there are 
many customer offer developments planned for the coming year
tim steiner 
chief executive officer
jan 2010 jul 2010 jan 2011 10
215k
09
205k
08
16k
sku count checkouts on mobile devices by month
15
10
5
0
 checkouts 05
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05
chairman’s statement
stock code ocdo wwwocadogroupcom
our performance
the customer offer improvements have led to both a significant 
increase in new customers using the service and an increase in spend 
per customer  average orders per week increased from 70873 in 
fy09 to 92916 in fy10 and exceeded 100000 for the first time in 
the week commencing 10 may 2010  as expected average order 
size showed a slight decrease to £11406 for the year  this is due to 
changing customer behaviour with customers continuing to increase 
their frequency of shop but with a slight decline in order size  we are 
pleased to note that we have seen the rate of decline slow over the 
course of the year
significant effort was also spent over the year on the behind the 
scenes projects which enable us to deliver capacity growth and 
customer offer improvements  these occurred in all areas of the 
business affecting processes software and hardware  for example 
in the cfc one of the major projects was the addition of three new 
chill aisles  this enabled the termination of the relatively inefficient 
process of trolley picking for chilled goods  on the software side over 
1500 individual changes were made to our cfc systems
as we explained at the time of the ipo increasing the scale of 
the business at this rate presents operational challenges  the cfc 
capacity grew in line with expectations with a slight impact on 
productivity gains  we reintroduced a number of processes such as 
trolley picking to help cope with increased demand  this impacted 
cfc efficiency with units per hour “uph” decreasing by 22 to 
121 uph  as our planned capital spend is invested in cfc1 over 
the coming years we expect productivity to rise substantially and the 
longterm target of 180 uph remains in place  at 99 for the year 
the accuracy of our offer remained at a level we believe is significantly 
higher than our competitors  this is slightly down on last year and we 
expect the capital projects planned for the cfc will improve this
on the delivery side of the business the progress towards the long
term target is more linear and we have seen significant improvement 
this year
the increasing scale combined with upgrades to the routing software 
and vans has led to drops per van per week “dpvwk” increasing 
by 10 to 133  in the most productive week of the year we achieved 
159 dpvwk compared to our longterm target of 175 dpvwk
outside the core operations this has been a significant year for the 
business  three major events occurred that are the building blocks 
for the longterm success of the business  in may we signed a new 
ten year agreement with waitrose  we were delighted to sign this 
agreement which is our fifth and longest contract with waitrose  this 
ensures that we will continue our relationship which is now in its 
eleventh year  in july ocado group plc the “company” listed on 
the london stock exchange  this has many benefits for the company 
and its shareholders but the primary benefit was to raise significant 
funds  these will be used to fund the capital projects required to 
serve the demand we expect to see in the online grocery market  in 
october we reached agreement to purchase the site for a second 
cfc “cfc2” this is the most substantial capital project in the plan 
to more than triple the capacity of the business from 2009 to 2013
current trading and outlook 
as we announced on 4 march 2011 our growth has continued into 
the new financial year seeing gross sales increase by 25 in q1  
we are focused on positioning ourselves to take advantage of the 
significant latent demand for online grocery in the uk  we continue 
to improve the customer offer while at the same time build capacity 
to serve the increasing demand  
“this was a landmark year for ocado with gross sales up 29 for the year we have delivered on 
the targets set out at the flotation  we have continued our focus on improving the customer 
offer which has led to a record number of customers and sales with the achievement of 
profitability in the final quarter  ocado’s growth continues to outpace the market”
tim steiner chief executive officer
deliver y pr oductivity 
dr ops per v an per week
longterm target
175
106
08
121
09
133
10
cfc pr oductivity units per hour
longterm target
08
114
09
124
10
121
180 06
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010 06
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
2017704  22032011 proof 12
chief financial officer’s review
andrew bracey 
chief financial officer
2010 was a landmark year for ocado with the group reaching 
ebit profitability preexceptional item for the second half of the 
financial year and ebt profitability in the last quarter of the financial 
year  this is the first time the group has achieved ebit profitability 
and demonstrates the operational leverage of the ocado model  
this was further demonstrated by the incremental ebitda margin 
increasing to 103 for the whole year up from 91 in h1 to 113 
in h2
1
  this increased operational leverage has contributed to an 
increase in ebitda margins from 22 of gross sales in fy09 to 40 
in fy10
1

revenue
gross sales were up 29 to £5511 million for the year  the growth 
was driven by a substantial increase in orders per week offset by a 
slight decrease in average order size  the number of active customers 
increased by 19 to 262258 at the end of fy10 with average weekly 
new customers up by 37 to 2948  there was minimal geographic 
expansion during the year  revenue grew by 28 to £5157 million  
spend on marketing vouchers remained broadly flat at 15 of sales 
increasing by 25 to £81 million which was slightly less than the rate 
of growth in gross sales
gross profit
gross profit increased 32 to £1616 million  this equates to a 58 
basis point increase in gross margin over the period to 293  this was 
driven by positive changes in input prices retail price inflation supplier 
support and changes in product mix as well as the effects of the 
increasing scale of the business  over the period the average price of 
items sold increased by 08
other income increased by 136 to  £62 million  this was primarily 
driven by a 161 rise in marketing revenue  the increased space on 
the new website launched at the end of the year has provided us 
with further opportunities to generate additional marketing revenue
operating costs
distribution costs increased by 20 to £1328 million  this increase 
was slower than sales growth demonstrating the developing 
operating leverage of the business  distribution costs decreased as a 
percentage of sales from 26 to 24  the two major components 
of distribution costs are cfc costs and trunking and delivery costs  
cfc costs increased by 17  variable cfc costs increased broadly 
in line with revenue due to limited productivity gains  however the 
operating leverage of the fixed cost base on increased volume meant 
that total cfc costs continued to fall as a percentage of revenue  
trunking and delivery costs increased by 23 with productivity gains 
more than offsetting inflationary pressures  administrative expenses 
increased by 25 to £369 million  the main drivers of these 
cost increases were additional employment costs and associated 
infrastructure including the additional costs of being a public listed 
company
operating profitloss
operating loss preexceptionals for the full year decreased from 
£144 million to £18 million a decrease of 87  this decrease was 
primarily due to the growth in revenue that enabled greater operating 
efficiencies as highlighted above  this is demonstrated clearly in h2 
when the business made a preexceptionals ebit of £09 million  this 
compares to an ebit loss of £70 million in the equivalent period in 
fy09  in q4 the business achieved pbt  for the first time of  
£03 million
in the second half of the year the company incurred the one
off exceptional costs associated with the ipo  these along with 
associated fees for a £100 million credit facility came in at £124 
million substantially under the budget set out in the prospectus of 
£15 million  £35 million was charged as a oneoff exceptional item 
to the income statement with the remainder taken as financing costs 
and through the share premium account
net finance costs
net finance costs decreased by 38 to £69 million from £111 
million  this reduction in costs was primarily due to the proceeds of 
the ipo enabling repayment of debt shortly after the ipo in july  the 
interest paid on borrowings reduced to £84 million
taxation
the statutory rate of tax applicable was 28  a deferred tax credit 
of £50 million was recognised  ocado had approximately £260 
million of unutilised carried forward tax losses as at the end of fy10
ebitda margin
08
07
22
09
40
1
10
gr oss margin
08
301
09
287
10
293
1
 adjusted to exclude oneoff ipo costs of £35m 07
chairman’s statement
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2017704  22032011 proof 12
07
chairman’s statement
stock code ocdo wwwocadogroupcom
our performance
loss per share
basic and diluted losses per share decreased from 605p to 163p  
this reduction in loss per share is due primarily to the improved 
financial performance as well as an increased number of shares on 
issue after the ipo
cash flow
net operating cash flow doubled this year to £82 million  this  
was primarily due to a significant reduction in loss before tax and a 
reduction in interest paid offsetting the impact of minimal net changes 
in working capital this year
balance sheet
the ipo enhanced the strength of the balance sheet with net assets 
increasing by over £200 million to £1718 million  £455 million of 
debt was repaid in the financial year and the company ended the 
financial year with cash and cash equivalents including shortterm 
treasury deposits of £1546 million  in addition the arrangement of 
a £100 million credit facility further increased the financial flexibility of 
the business
capital investment
in fy10 there was capital expenditure of £350 million an increase 
of 52  the capital investment increased the capacity of the hatfield 
cfc “cfc1” expanded the van fleet and funded the internal 
development of new computer software
capital expenditure plans remain as described during the ipo  
completion of cfc1 is expected to cost £80 million  this will 
increase both capacity to 180k orders per week and the range 
stocked  cfc2 is expected to cost £210 million  the construction of 
the new cfc in dordon warwickshire will commence in the coming 
months and will continue into 2012 and beyond
“strong sales growth has led to ocado reaching ebit profitability preexceptionals for the 
second half of the financial year and ebt profitability in the last quarter of the financial year  
achieving profitability clearly demonstrates the operational leverage of the ocado model 
with ebitda margin from additional sales at 113 in the second half of the year”
andrew bracey chief financial officer
kpis
the following table sets out a summary of selected unaudited operating information for fy10 and fy09
 fy10 fy09
 unaudited unaudited  change
average order size £
1
 11406 11594 16
average orders per week 92916 70873 311
cfc efficiency units per hour
2
 121 124 22
average deliveries per van per week dpvwk 133 121 103
average number of operational staff fulltime equivalent 3835 3151 217
average product wastage  of gross sales
3
 061 057 na
items delivered exactly as ordered 
4
 990 994 na
deliveries on time or early  949 930 na
source the information in the table above is derived from information extracted from management accounts and internal financial and operating reporting systems and is unaudited
1 
average retail value of goods a customer receives including vat and delivery charge per order
2
 measured as units dispatched from the cfc per hour worked by cfc operational personnel
3
  value of products purged for having passed ocado’s “use by” life guarantee and stock adjustments net of sales to company shop divided by gross sales  as expected the 
introduction of the service counter increased the level of waste
4 
percentage of all items delivered exactly as ordered ie the percentage of items neither missing nor substituted 08
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
2017704  22032011 proof 12
08
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
 
 
ocado provides an opportunity to fully access developments and 
growth in this early stage market unhindered by bricks and mortar 
customer fulfilment processes
the uk grocery market is huge
at £151bn the uk grocery market is as large as all other uk 
retail markets combined  the uk grocery marketplace is highly 
competitive and is dominated by the big four grocers asda 
morrisons sainsbury and t esco  competition for market share is 
intensive as retailers strive to create new growth opportunities 
reformulate propositions and build more multichannel customer 
relationships  
retail is moving online
spurred on by the continuing rise of broadband penetration 
smartphone ownership internet familiarity within the home and the 
evolution of website design consumers are increasingly becoming 
more comfortable with and place more confidence in online retail  
online retail markets have grown as shoppers have broadened 
from the original tech savvy early adopters to a customer base that 
broadly reflects the demographics of the uk  this means that online 
penetration has reached almost 10 for categories such as clothing 
which commentators previously suggested would not move online
however grocery has been slower to move online
historically online grocery retail has lagged the development of other 
online categories due to the specific nature and logistical challenges 
traditionally associated with grocery  only a small proportion of 
grocery has so far moved online estimated to be less than 3 of the 
overall grocery market
although online grocery is at an early stage of development it is 
widely anticipated to become an increasingly important segment 
of the overall grocery market  igd expects online grocery sales to 
become a larger proportion of the overall grocery market over the 
coming years with total sales forecast to be over £7bn by 2014  this 
represents a forecast annual growth rate many times faster than that 
of the wider grocery sector  
structural drivers fuel future growth
consumers seeking a better experience in how they buy their 
groceries are driving the transition to online grocery shopping  as long 
as online grocery retail continues to become more desirable from a 
customer’s perspective the market will show substantial growth  
simultaneously there has been an ongoing drive towards providing 
greater consumer choice particularly across a range of online 
food and nonfoodstuffs catering for issues around wellbeing 
sustainability provenance as well as greater differentiation across 
the valuepremium spectrum  operating models that support 
consumer diversity have the ability to unlock further potential within 
this market
marketplace
 
“we operate in an exciting and demanding marketplace where we have the opportunity to 
use our intellectual property to improve our market leading service and shape the future of 
online grocery retailing”
jason gissing director of people culture and communications
potential
marketplace
pure exposure to 
structural growth
as the online proposition gets better the market 
opportunity gets bigger  delighting customers by 
improving the service will encourage adoption and drive 
demand for online grocery
the uk 
grocery market 
is forecast to 
grow at less 
than 5 
per annum
the uk 
grocery market 
is as large 
as all other 
retail markets 
combined 
£151bn
uk gr ocer y market £bn
source third party estimates 
2007
2008
2009
151
2010
155
2011
159
2012
164
2013
169
2014
146
140
133 09
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09
chairman’s statement
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getting to know ocado getting to know ocado about ocado
overcoming the unique challenges of online grocery retail
demand for online grocery in the uk has previously been hindered 
by the unique challenges associated with online grocery retailing 
for online grocery penetration to catch up with other online markets 
retailers have to overcome these challenges and meet consumers’ 
needs
the logistical challenges associated with online grocery are immense 
and represent one of the greatest barriers to entry  the retailing 
mantra of providing outstanding customer service is simple to 
understand  however customer service and fulfilment within the 
online grocery space is complicated picking an average of 55 items 
an order across a product range of over 20000 skus that have a 
varied but limited life requiring handling and storage across three 
temperature regimes chilled ambient and frozen for onward 
delivery to customers in narrow time slots is not for the fainthearted  
different approaches to addressing the market opportunity
the approach of the traditional grocery retailers to these online 
challenges has been based on using their stores and storebased 
systems  this contrasts with the ocado centralised picking model – a 
pioneering approach based on complex systems and software that 
are bespoke to ocado and difficult to replicate as the key intellectual 
property resides within ocado
growth rates 
of over 15 
per annum 
forecast for 
online grocery 
market for the 
next 5 years
less than 3 
of total grocery 
market has 
moved online 
forecasters 
predict up to 
40 to move 
online by 2025
uk online gr ocer y market £bn
source third party estimates 
2010
26
2007
32
2008 37
2009
43
49
2011
57
2012
64
2013
72
2014
marketplace
ocado’s
coverage over 70 of uk 
households and growing
delivery area spoke cfc 10
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
2017704  22032011 proof 12
10
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
the future of grocery shopping is online
 
the uk grocery market is £151 billion per annum of which online represents around 
3  over the foreseeable future the online grocery market is expected to experience 
significant growth at the expense of traditional grocery channels  online grocery 
adoption is expected to be in line with other retail categories driven by a number 
of complementary drivers 
✔
✔
✔
✔
1
price
br oad price 
positioning 
attracts 
consumers
price is intrinsically linked 
to consumer’s perception 
of value with value driving 
interest  online retailing 
provides consumers with 
greater visibility on price 
and value
the online grocery 
challenge to offer sufficient 
items across multiple 
price points without 
compromising quality and 
freshness
2
range
range 
expansion 
increases 
consumer 
choice
consumers have more 
choice and are able to 
discover new products 
more effectively  this in 
turn influences consumer 
demand – attracting new 
customers and driving 
online sales growth  
the online grocery 
challenge to provide a 
range of products across 
three temperatures 
that reflects and drives 
consumer interest without 
leading to excessive waste 
due to the perishable 
nature of groceries  
3
availability
real time 
pr oduct 
availability 
increases 
consumer 
loyalty
high product availability 
increases customer 
satisfaction and loyalty  
the online grocery 
challenge maintaining high 
product availability across 
a range of categories to 
ensure that the average 
shop of 55 items is 
delivered in full
4
freshness
access t o 
fresh pr oduce 
increases 
consumer 
confidence
increasingly efficient online 
supply chains picking and 
delivery processes lead to 
more confident purchasing 
of fresh produce by 
consumers
the online grocery 
challenge dealing with 
short product life spans 
and handling and storing 
varied products across 
different temperatures 
zones from source to 
consumers’ kitchens 11
chairman’s statement
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2017704  22032011 proof 12
11
chairman’s statement
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getting to know ocado getting to know ocado about ocado
✔
✔
✔
✔
✔
9
information
pr oduct 
information 
influences 
customer 
decision making
realtime accurate 
intuitive and predictive 
information informs 
consumers’ choice and 
enriches the customer 
experience  
the online grocery 
challenge consumers 
want to make informed 
purchasing decisions 
requiring large amounts 
of product information 
including expiry dates
5
quality
at least as 
good as in 
store
providing consumers 
with produce of equal or 
better quality than they 
can choose for themselves 
instore drives consumers 
online  
the online grocery 
challenge food can be an 
emotive purchase requiring 
consumers to be confident 
in their purchases and to 
build trust with an online 
grocer
6
ease of use
convenience 
 intuitive 
ordering brings 
customers back
greater online access and 
the introduction of smart 
mobile devices enable 
consumers to shop any 
time any place anywhere  
this increases consumer 
support for online retailing  
the online grocery 
challenge providing easy 
and fast access to the 55 
products in an average 
order across a large range 
of products
7
time
freeing up 
consumers’ 
most precious 
asset
reducing time spent 
on grocery shopping 
allows consumers greater 
flexibility and releases 
precious time for other 
activities  
the online grocery 
challenge grocery 
shopping takes up a 
significant proportion of 
consumers shopping time 
compared to purchases 
of other goods  getting 
consumers to change 
deeply engrained attitudes 
and habits is challenging
8
reliability
on time as 
ordered  
ever y time
on time delivery 
and minimal product 
substitution builds 
consumer loyalty and 
increases willingness to 
shop online  
the online grocery 
challenge limited product 
life combined with the 
logistical challenges of 
delivering diverse customer 
orders on time within a 
tight delivery window
uk retail sales by sector £bn
source third party estimates
151
grocery
41
clothing  
footwear
23
electricals
17
health  
beauty
14
diy and 
gardening
13
furniture  
floorcoverings
11
homewares
10
book news  
stationery
5
music  v ideo
uk retail online penetration
source third party estimates 
53
music  
v ideo
27
electricals
9
homewares
8
clothing  
footwear
8
book news 
 stationery
5
furniture  
floorcoverings
4
diy  
gardening
4
health  
beauty
3
grocery 12
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
the ocado way 
✔
✔
✔
✔
1
price
we price match 
a leading 
competitor on 
over 7200 skus
the automation and 
aggregation of our model 
strips out costs and 
increases efficiency  these 
savings allow us to offer 
products at compelling 
prices
2
range
at full capacity 
cfc1 will be able 
to stock up to 
40000 gr ocer y 
skus  this is over 
50 more than 
a typical large 
supermarket
cfc1 is able to stock 
a bigger grocery range 
than any other uk 
supermarket  this 
reduces the need to shop 
elsewhere
3
availability
more than 95 
of our range 
is available 
for next day 
deliver y at any 
one time
proprietary integrated 
systems inc website 
and cfc give control 
over the product flow  
this combined with the 
scale of cfc1 leads to 
structurally higher product 
availability  this reduces 
the chance of products 
being out of stock and 
minimises substitutions
4
freshness
we guarantee 
the pr oduct  
life of all our 
fresh pr oducts
our model removes 
one stage of the grocery 
supply chain  this 
combined with rapid 
stock turn means we 
often get product to 
customers same or next 
day following receipt into 
cfc1  this can be quicker 
than other supermarkets 
get the product to their 
stores 
we deliver online groceries from a central warehouse  this is a different approach to 
most competitors who primarily deliver from stores  this enables us to address the 
challenges of online grocery and deliver superior customer service
pictured cfc1 13
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chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado about ocado
ocado
ocado cfc
customers
suppliers
c  85
waitrose 
regional distribution 
centre
c  15
✔
✔
✔
✔
✔
9
information
customers’ 
receipts list all 
gr ocer y items in 
order of expir y
online businesses offer 
customers a wide range of 
product information  our 
warehouse model allows 
customers to see the life 
of the products when 
ordering  this enables 
customers to plan their 
shopping choices better 
and reduces food waste
5
quality
our gr oceries 
are handled 
less preserving 
quality
our automated systems 
and inhouse distribution 
model means we have 
better control over our 
products  the processes 
minimise product touch 
points and maintain 
the correct product 
temperature
6
ease of use
12 of all 
checkouts are 
made using 
mobile apps
inhouse software 
development allows for 
rapid introduction of new 
functionality  we were 
the first grocer to launch 
a transactional mobile 
app offering increasing 
convenience to the 
customer
7
time
95 of orders 
are on time or 
early
our proprietary software 
allows us to offer up 
to 27 delivery slots in  
1 hour windows every 
day  tight and reliable 
delivery windows allow 
customers to save time 
compared to visiting a 
store
8
reliability
99 of items are 
delivered as 
ordered
the combination of the 
centralised model and our 
proprietary software leads 
to unrivalled reliability  
our systems have evolved 
following much iteration 
to integrate all aspects of 
the customer fulfilment 
process
store picked model both instore and online
customers
suppliers
rdc

rdc

rdc

store store store store
 regional distribution centre 14
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
strategy addressing the market
 
we continuously focus on improving the service we offer our customers   
in doing this we focus on three key elements product price and service combined 
effectively these elements are drawing new customers to ocado  simultaneously we 
are constantly working to improve our infrastructure to serve this growth
product offering
✔	 wide range  we aim to offer a wide range of quality 
products at a valueformoney price point  we are able 
to offer dedicated online inventory across a wide range 
of skus that traditional sales channels cannot stock 
economically  in 2010 we
	 ● stocked 21500 skus at year end
	 ● introduced ocado ownlabel over 250 skus 
and growing
	 ● added convenience product range
	 ● rolled out service counter
✔	quality and freshness  we offer guaranteed “use by 
dates” to customers that are visible at both point of 
order and on receipt listing purchased items by expiry 
date as a useful reminder to customers  in addition 
the fulfilment process is designed to maximise product 
quality by minimising the number of human touch points 
and maintaining the optimum product temperature
price
✔	 value for money  we have improved our price 
positioning over the last three years  since march 2008 
we have price matched t esco on all identical branded 
products  we have also launched the ocado ownlabel 
range to improve our value credentials  in 2010 we
	 ● expanded t esco price match to 7200 skus
	 ● introduced “switch and save”
	 ● substantially increased the number of promotions
customer service
✔	 accuracy and availability  we deliver over 100000 
orders per week the equivalent of 1 million items per 
day and we do this more accurately than any other 
online grocery retailer  99 of items are delivered 
exactly as ordered  we have 95 of our products 
available for next day delivery
✔	delivery service  we have the widest range of delivery 
slots of any online grocery retailer and 95 of customer 
orders are delivered on time or early  the ocado 
delivery pass provides customers with an opportunity 
to subscribe for their deliveries for a monthly or annual 
fee  in 2010 we
	 ● launched midweek ocado delivery pass
	 ● rolled out sunday deliveries
✔	userfriendly interface our website is the first point 
of contact for our customers  we have designed it 
to be engaging intuitive and with good functionality  
complementing the website is our dedicated call centre 
focused on helping customers with queries  finally our 
cstms who make the deliveries and who are much 
more than drivers are key to getting “hasslefree” 
groceries to customers  in 2010 we
	 ● launched the 5th version of the website which 
is easier to navigate has more personalisation 
increased dietary filtering additional recipes and 
more supplier opportunities
	 ● added reviews and ratings
	 ● launched ipad and android apps
	 ● upgraded the ocado iphone app
improving the customer offer 
driving
 growth 15
chairman’s statement
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chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado about ocado
cfc
✔	 we currently operate from a 295000 sqft customer 
fulfilment centre in hatfield  85 of inbound goods are 
delivered direct from producers to cfc1 whilst 15 are 
delivered from the waitrose supply chain  all customer 
orders are processed at cfc1 and around a quarter of 
orders are delivered direct from cfc1 in 2010 we
	 ● increased capacity by 30 to serve 112000 orders 
per week in peak week
	 ● added 3 new chill aisles
	 ● identified and reached agreement on a site for cfc2
spokes
✔	 the majority of orders are relayed from cfc1 to spokes for 
ultimate outward delivery to customers  in 2010 we
	 ● acquired a new spoke in bristol which opened in 
march 2011
	 ● expanded white city spoke
it
✔	 the business runs on proprietary software  this software 
allows us to know exactly where each product is from order 
to delivery resulting in increased order accuracy  in 2010 we
	 ● developed a new range management system
	 ● deployed more than 1500 individual changes to our 
cfc systems
delivery fleet
✔	 we deliver direct to our customers’ kitchens using our fleet of 
bespoke vans  in 2010 we
	 ● developed 5th generation of van which increases 
payload by 10
	 ● put winter tyres on our vans to improve safety and 
delivery performance
	 ● trialled new electric vehicles
 growth
delivering
improving our infrastructure 
10
£551m
09
£427m
08
£341m
gr oss 
sales
10
£220m
1
09
£92m
08
£22m
ebitda
10
93k
09
71k
08
56k
average 
weekly 
orders
09
220k
08
193k
number 
of active 
customers 
at fy end
10
262k
1
 adjusted to exclude oneoff ipo costs of £35m 16
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
board of directors
 
lord grade of y armouth
nonexecutive chairman
lord grade joined the board as chairman in 
2006  he has had a long and distinguished career 
in broadcasting encompassing itv bbc and 9 years 
as chief executive of channel 4 t elevision  he is 
currently nonexecutive chairman of pinewood 
and shepperton film studios  in november 2010 
a peerage of the united kingdom for life was 
conferred upon michael
david grigson
nonexecutive director
david joined the board in march 2010  he is 
chairman of the nomination committee and the 
board’s designated senior independent director  
he was chief financial officer of reuters group 
plc until may 2008  prior to joining reuters in 
2000 he was group finance director of emap 
plc and chairman of emap digital  his current 
nonexecutive directorships include standard life 
plc which he joined in october 2009 and he 
is chairman of creston plc  until march 2010 
he was a nonexecutive director of carphone 
warehouse plc
tim steiner
chief executive officer
tim is a founding director  as well as having 
general oversight of the business the it  logistics 
and engineering warehouse operations business 
planning and retail divisions of ocado report 
directly to him  prior to ocado tim spent eight 
years as a banker at goldman sachs  during his 
time there he was based in london hong kong 
and new y ork in the fixed income division  tim 
graduated from manchester university with 
an honours degree in economics finance and 
accountancy in 1992
ruth anderson
nonexecutive director
ruth joined the board in march 2010  she is 
chairman of the audit committee  until april 
2009 she was a vicechairman of kpmg in the 
uk  she joined kpmg in 1976 and became a 
partner in 1989  she has worked extensively as an 
adviser with uk and international businesses and is 
a fellow of the institute of chartered accountants 
in england and wales and a member of the 
chartered institute of  t axation  ruth is a non
executive director of  the royal parks an executive 
agency of the department of culture media 
and sport
robert gorrie
nonexecutive director
robert joined the board in 2000 as the logistics 
director  in may 2006 he became a non
executive director  prior to ocado he was group 
director of information t echnology at transport 
development group plc where he spent 10 years 
establishing its ebusiness  prior to that he spent 10 
years in north america with the logistics service 
business christian salvesen plc where he reached 
the position of director of business development 
robert graduated from corpus christi college 
oxford with an honours degree in modern history 
and economics 
jörn rausing
nonexecutive director
jörn joined the board in 2003 with the initial 
investment by apple trust of which he is a 
beneficiary in ocado  he is a nonexecutive 
member of the t etra laval group board and 
a member of the boards of alfa laval ab and 
delaval holdings ab  jörn is also t etra laval 
group’s head of mergers and acquisitions  he 
holds a degree in business administration from 
lund university sweden 17
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getting to know ocado getting to know ocado about ocado
neill abrams
director of legal and business affairs
neill has been a director since september 2000 
having previously advised ocado since its founding  
he is responsible for ocado’s business support 
including legal insurance risk management and 
service delivery divisions  prior to ocado neill was 
a barrister in practice at one essex court and an 
executive director and counsel at goldman sachs 
in london  neill graduated from sidney sussex 
college cambridge with a masters degree in law 
in 1989 having previously obtained ba and llb 
degrees from the university of the witwatersrand 
in johannesburg  he is also admitted as a member 
of the new y ork bar and as a south african 
advocate
andrew bracey
chief financial officer
andrew joined the ocado board as chief financial 
officer in november 2009 having previously 
advised ocado since its commencement  
previously he had an 18year career in investment 
banking at jefferies international at barclays capital 
as managing director of principal investments 
where he undertook a number of consumer and 
retail investments including somerfield as managing 
director in investment banking at credit suisse 
and at ubs  he studied history of architecture at 
magdalene college cambridge having previously 
obtained a ba from the university of east anglia
jason gissing
director of people culture 
and communications
jason is a founding director  he has board 
responsibility for ocado’s people culture and 
communications  he leads customer and employee 
engagement working on internal and external 
communication including marketing brand and 
people motivation retention and development  in 
addition jason leads ocado’s green initiatives and 
some operational aspects of the business such 
as service delivery and product range  he was 
previously chief financial officer  prior to ocado 
jason spent eight years as a banker at goldman 
sachs  he graduated from worcester college 
oxford with an honours degree in jurisprudence 
in 1992
david young cbe
nonexecutive director
david joined the board in 2000 with the initial 
investment in ocado by john lewis  he is the 
chairman of the remuneration committee  he 
retired from john lewis in 2002 where he was 
deputy chairman  david previously worked for the 
ministry of defence between 1963 and 1982 with 
a secondment to the cabinet office from 1975 to 
1977  david joined john lewis in february 1982 
where he became finance director and a member 
of the board in 1987 and was appointed deputy 
chairman in february 1993  david served as an 
independent member of the steering board of 
companies house from 1988 to 1993  he was 
treasurer of the open university from 1997 until 
2001 and a member of its council from 1996 until 
2001  he was a trustee of the royal air force 
museum from 1999 until 2005 a trustee of the 
t extile industry children’s trust from 2000 to 2008 
and a member of the advisory panel of greenwich 
hospital from 2002 to 2007  david was the 
chairman of the higher education funding council 
for england from 2001 to 2007  he is currently the 
treasurer of sheffield university and a member of 
its council and was the honorary treasurer of the 
soil association from 2004 to 2010
committees
audit committee 
ruth anderson chairman
robert gorrie 
david grigson
david y oung 
remuneration committee 
david y oung chairman 
ruth anderson
robert gorrie 
jörn rausing
nomination committee 
david grigson chairman 
ruth anderson
robert gorrie
lord grade
jörn rausing
david y oung 18
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
 
our values
 
 value
ocado
we use inspired thinking and cuttingedge 
technology to keep honing our uniquely 
efficient delivery model  this helps us to drive 
down prices and guarantee exceptional value 
for money
price and good value for money are key elements in 
consumer choice  delivering value to our customers is about 
ensuring that we have the products that customers want 
to buy and sell them at a fair price  the unique model that 
we operate allows us to remove operating costs  we invest 
these savings in the customer by operating a number of 
competitive price matching features and continue to expand 
our ownlabel range ‘ocado’ demonstrating our commitment 
to provide attractively priced products  
we continue to focus on our core values that underpin our mission  
“to revolutionise the way people shop forever by giving them a uniquely 
innovative and greener alternative to traditional grocery shopping”
we have a passion for delivering quality 
groceries in perfect condition and on time 
while treating our customers with care and 
honesty  this helps us to share our vision of 
a different way of shopping a better greener 
and more convenient one
we are a service orientated retailer and we never forget that 
our relationship with our customers is key to our success  
we strive to exceed our customers’ expectations in all that 
we do  we aim to develop and provide an innovative and 
bespoke service that allows us to deliver to our customers 
what they want when they want and in a way that exceeds 
their expectations  as a result we continue to attract 
increasingly loyal customers from a broad demographic
 service
ocado
we love what we do and are proud of all the 
wonderful groceries that we sell  this drives 
us on to offer the widest choice imaginable 
and ensures everything we sell is always of 
the highest quality
we pride ourselves at being able to offer our customers a 
wide range of products including being at the forefront of food 
trends enabling us to confidently recommend to our customers 
new or alternative product ideas that are aligned to customers’ 
purchasing profiles  we look to create successful relationships 
with suppliers who share our values and who are focused 
on customer service technical innovation and continuous 
improvement – criteria at the centre of our longterm 
procurement ambitions enabling us to offer greater choice  this 
enables us to build strong and mutually beneficial relationships 
with our suppliers and customers  
 choice
ocado
we care passionately about our environment  
this spurs us on to provide a greener more 
sustainable alternative to oldfashioned 
storebased supermarket chains
we strive to make shopping at ocado better for our 
customers better for their groceries and better for the planet  
we have a revolutionary green approach to selling groceries  
each delivery van replaces multiple car journeys every 
single day by saving our customers a trip to a supermarket 
we help to reduce the number of cars on the road each 
day  because our groceries are delivered directly from a 
dedicated warehouse the time from grower or supplier to 
the customer’s home is reduced  this means customers get 
longer to enjoy their purchases and reduces the amount of 
food waste  
 way
ocado 19
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chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado our responsibilities
directors’ report
directors’ report and business review
the business review sets out a comprehensive review of the 
performance of the business of the group for the 52 weeks ended 
28 november 2010 and of future developments 
the companies act requires the company to set out in this annual 
report a fair review of the business of the group during the 52 
weeks ended 28 november 2010 including an analysis of the 
position of the group at the end of the period and a description of 
the principal risks and uncertainties facing the group known as the 
“business review”  the information that fulfils the business review 
requirements is set out in the chairman’s letter on page 3 chief 
executive officer’s review on pages 4 to 5 the chief financial officer’s 
review on pages 6 to 7 the ‘about ocado’ section on pages 8 to 18 
the principal risks and uncertainties description on pages 29 to 32 
and the corporate social responsibility report on pages 26 to 28 of 
this annual report  the directors’ report and the business review or 
parts thereof are the “management report” for the purposes of the 
disclosure and transparency rule 418  this information together 
with the sections of the annual report incorporated by reference 
consist of a directors’ report that has been drawn up and presented 
in accordance with and in reliance upon applicable english company 
law and the liabilities of the directors in connection with that report 
shall be subject to the limitations and restrictions provided by 
such law  
principal activities
ocado group plc the “company” is a public limited company 
incorporated and registered in england and wales under the 
companies act with registered number 07098618  its registered 
office is titan court 3 bishops square hatfield business park hatfield 
hertfordshire al10 9ne  
the company is the holding company of the ocado group of 
subsidiary companies the “group”  the principal activity of the 
company is that of a holding company  the company owns directly 
the entire issued share capital of ocado holdings limited which 
holds the entire issued share capital of ocado limited  the principal 
activities of ocado limited are the retailing and distribution of 
grocery and consumer goods  further information in relation to 
the principal activities of the subsidiary undertakings can be found in 
note 28 of the consolidated financial statements  
the group currently operates out of a dedicated cfc based at a 
site in hatfield hertfordshire together with eight operational spokes 
based in coventry dartford leeds manchester southampton 
weybridge and white city as well as bristol which started operating 
after the end of the period
corporate governance
the corporate governance statement as required by the disclosure 
and transparency rule 721 is set out on pages 33 to 40 and is 
incorporated by reference into this directors’ report
risk management
the group’s procedures for managing risk are described on page 40 
and the group’s principal risks and uncertainties are described on 
pages 29 to 32 and those descriptions are incorporated by reference 
into this directors’ report
the group’s policies and strategies for managing financial risk are 
summarised in note 25 to the consolidated financial statements and 
in the principal risks and uncertainties as set out on pages 29 to 32 as 
required by disclosure and transparency rule 418  
employee involvement equal opportunities and disabled 
employees
the corporate social responsibility section sets out the group’s 
policies on employee engagement and disabled employees  they are 
incorporated by reference into this directors’ report
charitable and political contributions
the particulars of the group’s charitable and political contributions 
made during the period are set out in the corporate social 
responsibility section  they are incorporated by reference into this 
directors’ report
board of directors
the membership of the board and biographical details of the 
directors are given in the board of directors section and are 
incorporated into this directors’ report by reference  the changes to 
the membership of the board during the period are described in the 
statement of corporate governance
appointment and replacement of directors
the articles set out the rules applicable to the appointment 
retirement and removal of a director of the company described 
below
appointment of directors a director may be appointed by the company 
by ordinary resolution of the shareholders or by the board  a director 
appointed by the board holds office only until the next annual general 
meeting of the company and is then eligible for reappointment  the 
board or any committee authorised by the board may from time 
to time appoint one or more directors to hold any employment 
or executive office for such period and on such terms as they may 
determine and may also revoke or terminate any such appointment
retirement of directors  at every annual general meeting of the 
company each director shall retire from office and may offer himself 
for reappointment by the members
removal of directors by special resolution the company may by special 
resolution remove any director before the expiration of his period 
of office
vacation of office the office of a director shall be vacated if i he 
resigns or offers to resign and the board resolve to accept such offer 
ii his resignation is requested by all of the other directors and all of 
the other directors are not less than three in number iii he is or has 
been suffering from mental or physical illhealth and the board resolves 
that his office be vacated iv he is absent without the permission of 
the board from meetings of the board whether or not an alternate 
director appointed by him attends for six consecutive months and 
the board resolves that his office is vacated v he becomes bankrupt 
or compounds with his creditors generally vi he is prohibited by law 
from being a director vii he ceases to be a director by virtue of 
the companies act or viii he is removed from office pursuant to the 
articles  if the office of a director is vacated for any reason he must 
cease to be a member of any committee of the board 20
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
directors’ report continued
 
directors’ interests
the directors’ beneficial interests in the shares of the company are 
shown in the directors’ remuneration report
directors’ indemnity
the directors’ indemnity arrangements are described in the 
statement of corporate governance  
amendment of the articles 
the company’s articles may be amended by a special resolution of 
its shareholders
share capital
pursuant to the disclosure and transparency rules the listing rules 
the companies act  and the large and mediumsized companies 
and groups accounts and reports regulations 2008 no 410 
the directors’ report must contain certain disclosures regarding the 
company’s share capital and the rights and restrictions attaching to 
the company’s shares as set out in the following sections  these 
statements are included so as to comply with disclosure and 
transparency rule 726 regarding the corporate governance 
statement
the company’s authorised and issued ordinary share capital as at 
28 november 2010 comprised a single class of ordinary shares  the 
shares have a nominal value of 2 pence each  the isin of the shares 
is gb00b3mbs747
details of movements in the company’s issued share capital can be 
found in note 23 to the consolidated financial statements  during 
the period shares in the company were issued as set out in note 23 
to the consolidated financial statements disclosed in accordance with 
listing rule 9847  
rights attaching to shares
the company’s shares when issued are credited as fully paid and free 
from all liens equities charges encumbrances and other interests  all 
shares have the same rights including voting and dividend rights and 
rights on a return of capital and restrictions as set out in the articles 
described below  
except in relation to dividends which have been declared and rights 
on a liquidation of the company the shareholders have no rights to 
share in the profits of the company
the company’s shares are not redeemable  however the company 
may purchase or contract to purchase any of the shares on or off
market subject to the companies act and the requirements of the 
listing rules as described below  
no shareholder holds shares in the company which carry special 
rights with regard to control of the company  there are no shares 
relating to an employee share scheme which have rights with regard 
to control of the company that are not exercisable directly and solely 
by the employees other than in the case of the group’s joint share 
ownership scheme the “jsos” where interests can be transferred 
to a spouse civil partner or lineal descendant of a participant in the 
jsos or certain trusts as noted below  
share rights subject to the companies act any resolution passed 
by the company under the companies act and other shareholders’ 
rights shares may be issued with such rights and restrictions as the 
company may by ordinary resolution decide or if there is no such 
resolution or so far as it does not make specific provision as the 
board may decide  such rights and restrictions will apply as if they 
were set out in the articles  redeemable shares may be issued  
the directors can decide on the terms and conditions and the 
manner of redemption of any redeemable shares  such terms and 
conditions will apply as if they were set out in the articles  subject 
to the articles the companies act and other shareholders’ rights the 
unissued shares in the company are at the disposal of the board
voting rights
shareholders will be entitled to vote at a general meeting or class 
meeting of the company whether on a show of hands or a poll as 
provided in the companies act  the companies act  provides that 
a on a show of hands every member present in person has one 
vote and every proxy present who has been duly appointed by one 
or more members will have one vote except that a proxy has one 
vote for and one vote against if the proxy has been duly appointed by 
more than one member and the proxy has been instructed by one 
or more members to vote for and by one or more other members 
to vote against  for this purpose the articles provide that where a 
proxy is given discretion as to how to vote on a show of hands this 
will be treated as an instruction by the relevant shareholder to vote 
in the way that the proxy decides to exercise that discretion and b 
on a poll every member has one vote per share held by him and he 
may vote in person or by one or more proxies  where he appoints 
more than one proxy the proxies appointed by him taken together 
shall not have more extensive voting rights than he could exercise in 
person  this is subject to any rights or restrictions which are given 
to any shares or on which shares are held  if more than one joint 
shareholder votes including voting by proxy the only vote which 
will count is the vote of the person whose name is listed before the 
other voters on the register for the share  
deadlines for exercising voting rights the articles provide a deadline for 
submission of proxy forms of not than less than 48 hours before the 
time appointed for the holding of the meeting or adjourned meeting
restrictions on voting rights no shareholder shall be entitled to vote 
at any general meeting or class meeting in respect of any share held 
by him if any call or other sum then payable by him in respect of 
that share remains unpaid or if a member has been served with a 
restriction notice as defined in the articles described below
jsos voting rights disclosed in accordance with the listing rules 
98412 and 98413 and the relevant company regulation appleby 
trust jersey limited the independent company which is the trustee 
of the company’s employee benefit trust the “ebt trustee” will not 
normally exercise the voting rights of unvested shares held under the 
jsos but may exercise such rights on vested shares at the request 
of the relevant participants of the jsos  of the company’s issued 
shares 32476700 ordinary shares are held by the ebt trustee  in 
respect of 8119400 ordinary shares which have vested under the 
jsos the ebt trustee may vote in respect of such ordinary shares 
at the request of a participant  the total of 24357300 unvested  21
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chairman’s statement
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getting to know ocado getting to know ocado our responsibilities
ordinary shares held by the ebt trustee are treated as treasury 
shares in the groups consolidated balance sheet in accordance with 
ias 32 “financial instruments presentation”  as such calculations 
of earnings per share for the company exclude the 24357300 
unvested ordinary shares held by the ebt trustee  however the 
company does not hold any shares in treasury 
dividends and other distributions
the company may by ordinary resolution from time to time declare 
dividends not exceeding the amount recommended by the board  
subject to the companies act the board may pay interim dividends 
and also any fixed rate dividend whenever the financial position of 
the company in the opinion of the board justifies its payment  if 
the board acts in good faith it is not liable to holders of shares with 
preferred or pari passu rights for losses arising from the payment 
of interim or fixed dividends on other shares  except insofar as the 
rights attaching to or the terms of issue of any share otherwise 
provide all dividends shall be apportioned and paid pro rata 
according to the amounts paid up on the share during any portion of 
the period in respect of which the dividend is paid  except as set out 
above dividends may be declared or paid in any currency  
the board may if authorised by an ordinary resolution of the 
company offer shareholders excluding any member holding shares 
as treasury shares in respect of any dividend the right to elect to 
receive shares by way of scrip dividend instead of cash  
any dividend unclaimed after a period of 12 years from the date 
when it was declared or became due for payment shall be forfeited 
and revert to the company  the company may stop sending 
cheques warrants or similar financial instruments in payment of 
dividends by post in respect of any shares or may cease to employ 
any other means of payment including payment by means of a 
relevant system for dividends if either i at least two consecutive 
payments have remained uncashed or are returned undelivered 
or that means of payment has failed or ii one payment remains 
uncashed or is returned undelivered or that means of payment 
has failed and reasonable enquiries have failed to establish any new 
postal address or account of the holder  the company may resume 
sending dividend cheques warrants or similar financial instruments 
or employing that means of payment if the holder requests such 
resumption in writing  
restriction on dividends the board may withhold payment of all or 
any part of any dividends or other monies payable in respect of 
the company’s shares from a person with a 025 per cent  interest 
as defined in the articles if such a person has been served with a 
restriction notice as defined in the articles after failure to provide 
the company with information concerning interests in those shares 
required to be provided under the companies act  
jsos dividend rights disclosed in accordance with the listing rules 
98412 and 98413 and the relevant company regulation  shares 
held under the jsos will not receive any dividends paid but the 
hurdles of the jsos will be reduced proportionally so as not to 
distort the value of the jsos participants’ interests in the shares  
restrictions on transfer of securities
the company’s shares are freely transferable save as set out below  
the company may under the companies act send out statutory 
notices to those it knows or has reasonable cause to believe have an 
interest in its shares asking for details of those who have an interest 
and the extent of their interest in a particular holding of shares  
when a person receives a statutory notice and fails to provide any 
information required by the notice within the time specified in it 
the company can apply to the court for an order directing among 
other things that any transfer of shares which are the subject of the 
statutory notice is void
the transferor of a share is deemed to remain the holder until the 
transferee’s name is entered in the register  the board can decline 
to register any transfer of any share which is not a fully paid share  
the company does not currently have any partially paid shares  
the board may also decline to register a transfer of a certificated 
share unless the instrument of transfer in any usual form or in any 
other form which the board may approve a is duly stamped or 
certified or otherwise shown to the satisfaction of the board to be 
exempt from stamp duty and is accompanied by the relevant share 
certificate or such other evidence of the right to transfer as the board 
may reasonably require b is in respect of only one class of share 
and c if to joint transferees is in favour of not more than four 
such transferees  registration of a transfer of an uncertificated share 
may be refused in the circumstances set out in the uncertificated 
securities rules as defined in the articles and where in the case of 
a transfer to joint holders the number of joint holders to whom the 
uncertificated share is to be transferred exceeds four  
jsos participants’ interests under the jsos are generally non
transferable during the period beginning on acquisition of the 
interest and ending on 31 december 2013  however interests can 
be transferred to a spouse civil partner or lineal descendant of a 
participant a trust under which no person other than the participant 
or their spouse civil partner or lineal descendant has a vested 
beneficial interest or any other person approved by the ebt trustee  
if a participant purports to transfer assign or charge his interest other 
than as set out above the ebt trustee may acquire the participant’s 
interest for a total price of £1  
lockup agreements certain shareholders in the company and 
the directors pursuant to the underwriting agreement and selling 
shareholders agreement and certain standalone lockup deeds 
entered into on 6 july 2010 in conjunction with the company’s ipo 
have agreed to be subject to certain lockup arrangements  each 
of these people have given undertakings to the underwriters of the 
ipo that for a period ending 365 days in the case of directors and 
for a period of 180 days in the case of certain shareholders from 6 
july 2010 that he or they will not and will procure that none of his 
or their ‘connected persons’ as defined in the relevant agreement 
or persons acting on his or their behalf will transfer any shares in 
existence at the time of admission without the consent of the joint 
global coordinators of the ipo subject to certain exceptions including 
accepting a takeover offer  in the case of the steiner 2008 millennium 
trust of which tim steiner ocado’s chief executive officer is one of  22
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ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
a number of discretionary beneficiaries it was subject to a 180 day 
lockup pursuant to the above ipo arrangements  on 18 february 
2011 which coincided with the steiner 2008 millennium trust 
selling 2 million shares the company announced that the steiner 
2008 millennium trust agreed to be bound by a further lockup 
which expires on 6 july 2011 in line with the directors’ ipo lockup 
arrangements
other than as described above the company is not aware of 
any agreements between holders of securities that may result 
in restrictions on the transfer of securities or that may result in 
restrictions on voting rights
variation of rights 
subject to the companies act rights attached to any class of shares 
may be varied with the written consent of the holders of not less 
than threefourths in nominal value of the issued shares of that class 
calculated excluding any shares held as treasury shares or with the 
sanction of a special resolution passed at a separate general meeting 
of the holders of those shares  at every such separate general 
meeting except an adjourned meeting the quorum shall be two 
persons holding or representing by proxy not less than onethird in 
nominal value of the issued shares of the class calculated excluding 
any shares held as treasury shares
the rights conferred upon the holders of any shares shall not unless 
otherwise expressly provided in the rights attaching to those shares 
be deemed to be varied by the creation or issue of further shares 
ranking pari passu with them
powers for the company issuing shares
subject to the provisions of the companies act any equity securities 
issued by the company for cash must first be offered to shareholders 
in proportion to their holdings of shares  the companies act and 
the listing rules allow for the disapplication of preemption rights 
which may be waived by a special resolution of the shareholders 
either generally or specifically for a maximum period not exceeding 
five years
by written resolutions of the company’s shareholders passed on 
23 june 2010 it was resolved that 
a the board be generally and unconditionally authorised to exercise 
all powers of the company to allot shares in the company and to 
grant rights to subscribe for or to convert any security into shares in 
the company i up to an aggregate nominal amount of £5000000 
in connection with the ipo ii up to an aggregate nominal amount of 
£50000 as required for the purposes of arrangements requiring the 
company to satisfy the entitlements of nonemployee optionholders 
who have entitlements to shares following admission iii up to 
an aggregate nominal amount of £6666666 such amount to be 
reduced by the nominal amount of any shares in the company under 
paragraph iv below in excess of such sum and iv comprising 
equity securities as defined in section 5601 of the companies act 
up to an aggregate nominal amount of £13333333 such amount 
to be reduced by any shares in the company under paragraph iii 
above in connection with an offer by way of a rights issue a to 
holders of shares in proportion as nearly as may be practicable to 
their existing holdings and b to holders of other equity securities as 
required by the rights of those securities or as the board otherwise 
considers necessary and so that the board may impose any limits or 
restrictions and make any arrangements which it considers necessary 
or appropriate to deal with treasury shares fractional entitlements 
record dates legal regulatory or practical problems in or under the 
laws of any territory or any other matter such authorities to apply 
until the end of the next annual general meeting of the company 
or if earlier until the close of business on 19 september 2011 but 
in each case during this period the company may make offers and 
enter into agreements which would or might require shares to be 
allotted or rights to subscribe for or convert securities into shares to 
be granted after the authority ends and the board may allot shares or 
grant rights to subscribe for or convert securities into shares in the 
company under any such offer or agreement as if the authority had 
not ended
b the board be given power to allot equity securities as defined 
in the companies act for cash under the authority given by the 
resolution described in paragraph a above andor to sell shares 
held by the company as treasury shares for cash as if section 561 of 
the companies act did not apply to any such allotment or sale such 
power to be limited i to the allotment of equity securities up to an 
aggregate nominal amount of £5 million in connection with the ipo 
offers ii to the allotment of equity securities and sale of treasury 
shares for cash in connection with an offer of or invitation to apply 
for equity securities but in the case of the authority granted under 
paragraph aiv above by way of a rights issue only a to holders 
of shares in proportion as nearly as may be practicable to their 
existing holdings and b to holders of other equity securities as 
required by the rights of those securities or as the board otherwise 
considers necessary as permitted by the rights of those securities 
and so that the board may impose any limits or restrictions and make 
any arrangements which it considers necessary or appropriate to 
deal with treasury shares fractional entitlements record dates legal 
regulatory or practical problems in or under the laws of any territory 
or any other matter and iii in the case of the authority granted 
under paragraph aiii andor in the case of any sale of treasury 
shares for cash to the allotment otherwise than under paragraph ii 
above of equity securities or sale of treasury shares up to a nominal 
amount of £1 million such power to apply until the end of the next 
annual general meeting of the company or if earlier until the close 
of business on 19 september 2011 but in each case during this 
period the company may make offers and enter into agreements 
which would or might require equity securities to be allotted and 
treasury shares to be sold after the power ends and the board may 
allot equity securities and sell treasury shares under any such offer 
or agreement as if the power had not ended  
the directors undertake that to the extent that the authority 
conferred under 1 paragraph aiii above is in respect of an 
aggregate nominal amount which exceeds the aggregate of a the 
aggregate nominal amount of the company’s issued share capital 
immediately following admission the “admission capital” and 
b onethird of the admission capital they will not exercise that 
authority in respect of such excess 2 paragraph aiv above is in 
respect of an aggregate nominal amount which exceeds the aggregate 
of a the aggregate nominal amount of the admission capital and 
b twothirds of the admission capital they will not exercise that 
authority in respect of such excess  the directors undertake to 
directors’ report continued 23
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chairman’s statement
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getting to know ocado getting to know ocado our responsibilities
important contracts or arrangements
under section 4175c of the companies act the company is 
required to disclose information about persons with whom the 
company has contractual or other arrangements which are essential 
to the business of the company  
whilst the loss of or disruption to certain of the group’s supply 
financing or manufacturing arrangements for example vans and cfc 
machinery or other key contracts could affect the operations or 
growth of the group until a replacement solution is found none are 
considered to be essential to the business of the company  however 
as noted in the principal risks and uncertainties ocado’s reputation 
and brand is based at least in part on its relationship with waitrose  
if the sourcing agreement with waitrose were to end or if waitrose 
were unable to source products for the group ocado would need 
to engage additional personnel to i find or create replacement 
ownlabel products and ii find appropriate suppliers and negotiate 
equivalent prices itself  waitrose through whom ocado sources 
the vast majority of products it sells and whose ownlabel products 
it sells is a uk supermarket chain and the food division of the 
    percentage of  
 number of issued share nature of 
 ordinary shares capital holding
s n roditi and associated holdings 61512060 1111 direct  indirect 
apple t rust 59080100 1068 direct 
fmr llc 56083721 1012 indirect 
generation investment management llp 34735685 627 indirect 
appleby trust jersey limited 32476700 587 direct 
blackrock inc 32156700 581 indirect 
ubs holdings cayman limited and ubs ag 33016844 596 direct  indirect 
tim steiner and the steiner 2008 millennium trust 27687600 500 direct  indirect 
fil limited 27287909 493 indirect 
t empest capital limited 24437400 441 direct 
the nomad investment partnership lp  22960546 416 indirect 
jason gissing and the jason gissing life settlement ii 17316900 313 direct  indirect
limit the exercise of the power in paragraph b above as limited 
by paragraph biii to an aggregate nominal amount which is not 
more than the aggregate of a the aggregate nominal amount of the 
admission capital and b 5 per cent  of the admission capital
this standard authority for issuing shares on a non preemptive basis 
for cash may be renewed annually  the directors will seek to renew 
this authority at the agm as set out in the notice of meeting  
powers for the company buying back its own shares
the description below concerning the company acquiring its own 
shares is made in accordance with the disclosure and transparency 
rule 41114 listing rule 9864 and the relevant company 
regulation  
the company may purchase shares only out of distributable reserves 
or the proceeds of a new issue of shares made for the purpose of 
funding the repurchase
by written resolutions of the company’s shareholders passed on 
23 june 2010 it was resolved that the company be authorised for 
the purposes of section 701 of the companies act to make one 
or more market purchases as defined in section 6934 of the 
companies act of its shares such power to be limited i to a 
maximum number of 100000000 shares ii by the condition that 
the minimum price which may be paid for a share is 2 pence and 
the maximum price which may be paid for a share is the highest 
of a an amount equal to 5 per cent  above the average market 
value of a share for the five business days immediately preceding the 
day on which that share is contracted to be purchased and b the 
higher of the price of the last independent trade and the highest 
current independent bid on the trading venues where the purchase 
is carried out such power to apply until the end of the next annual 
general meeting of the company or if earlier 19 september 2011 
but in each case so that the company may enter into a contract to 
purchase shares which will or may be completed or executed wholly 
or partly after the power ends and the company may purchase 
shares pursuant to any such contract as if the power had not ended  
the directors undertake that to the extent that the authority 
conferred in the above resolution is in respect of an aggregate 
number of shares which exceeds the aggregate of a the aggregate 
number of shares in issue immediately following admission the 
“aggregate number” and b 10 per cent of the aggregate number 
they will not exercise that authority in respect of such excess
this standard authority for the company to purchase its shares may 
be renewed at the annual general meeting  the directors will seek to 
renew this authority at the agm on the terms set out in the notice 
of meeting
the company has not acquired its shares during the period  it is 
the company’s present intention to cancel any shares it buys back in 
future rather than hold them in treasury
significant shareholders 
as required under the listing rule 9862 and relevant company 
regulations the table below sets out the notifications that the 
company had received from its shareholders of the significant direct 
or indirect holdings being 3 per cent or more in the company’s 
shares pursuant to disclosure and transparency rule 5 which were 
also published on a regulatory information service and on the 
company’s corporate website up to 22 march 2011 being not 
more than one month prior to the likely date of the notice 
of meeting  24
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
privately owned retailer john lewis  waitrose has over 240 branches 
across the uk sells high quality food and places an emphasis on the 
provenance and traceability of the food that it sells  in its last financial 
year ended 29 january 2011 it had gross sales of £50 billion and 
made an operating profit of £2749 million source  
wwwjohnlewispartnershipcouk  
the principal risks and uncertainties section describes the principal 
risks facing the group that may have an adverse impact on the 
group’s operations performance or future prospects  
change of control under significant agreements
there are a number of agreements to which the group is a party 
that take effect alter or terminate upon a change of control of 
the company following a takeover bid  details of the significant 
agreements of this kind are as follows
	 ● sourcing agreement if the parties terminate the sourcing 
agreement after certain competitors of waitrose or john lewis 
acquire 50 per cent  or more of the shares or control of the 
company’s board ocado is obliged to pay waitrose the lower 
of £40 million and 4 per cent  of the market capitalisation of the 
company  this change of control provision will cease to bind the 
parties if prior to the change of control any party has already 
given a valid notice of termination
	 ● debt facility agreement the group has a £100 million term 
loan facility with barclays bank plc hsbc bank plc and lloyds 
tsb bank plc for the acquisition of land building materials plant 
machinery and equipment for the existing cfc andor the 
second cfc andor the spokes  if ocado or waitrose gives 
notice to terminate the sourcing agreement it will be an event of 
default under this facility  
	 ● hsbc equipment finance uk limited  on 22 july 2004 ocado 
as lessee and hsbc equipment finance uk limited as lessor 
entered into a master sale and leaseback agreement  since then 
there have been 24 sale and leaseback agreements covering the 
majority of the conveyor systems and associated capital goods 
that have been added to the cfc since august 2004 with 
outstanding sums totalling £28 million  as well as either party 
having the right to terminate it on one month’s notice pursuant 
to side letters between ocado and hsbc varying the original 
agreement hsbc is able to terminate the agreement if there is a 
change of control of the company or if the sourcing agreement 
is terminated for any reason 
change of control for director and employee agreements
the company does not have any agreements with any director 
or employee that would provide compensation for loss of office or 
employment resulting from a takeover except that provisions of the 
company’s share schemes may cause options and shares granted to 
employees under such schemes to vest on a takeover  
directors’ report continued
research and development and future developments
the group has dedicated inhouse software design and development 
teams with primary focus on it and improvements to the cfc and 
its material handling equipment  costs relating to the development 
of computer software are capitalised if they relate to internal capital 
projects
the group’s likely future developments are described in the ‘about 
ocado’ section chief executive officer’s review and the chief 
financial officer’s review
results and dividends
the group’s results for the period are set out in the consolidated 
income statement on page 48  the group’s loss after tax for the 
period amounted to £72 million 2009 £232 million 
the directors do not propose to pay a dividend for the period 
2009 £nil
post balance sheet events
events occurring after the balance sheet date that affect the group 
are disclosed in note 33 to the consolidated financial statements
creditor payment policy
it is the group’s policy in respect of the current financial year for all 
trade creditors to agree payment terms in advance of the supply of 
goods with the supplier to make the supplier aware of the terms of 
payment and to adhere to those payment terms  the company is a 
holding company and therefore has little trade creditors  the group 
does not follow any code or standard on payment practice in respect 
of the current financial year  the group’s average trade creditor 
payment period for the 52 weeks ended 28 november 2010 was 
26 days 2009 27 days based on the ratio of group trade creditors 
at the end of the year to the amounts invoiced during the year by 
trade creditors
market value of properties
the directors are of the opinion that the aggregate market value of 
the group’s properties as at 28 november 2010 is in line with the 
net book value as set out in note 11 to the consolidated financial 
statements
going concern
after making appropriate enquiries and having considered the 
business activities as set out on page 19 and the group’s principal 
risks and uncertainties as set on pages 29 to 32 the directors are 
satisfied that the company and the group as a whole have adequate 
resources to continue in operational existence for the foreseeable 
future  accordingly the financial statements have been prepared 
on the going concern basis in accordance with going concern 
and liquidity risk guidance for directors of uk companies 2009 
published by the financial reporting council in october 2009
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 25
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chairman’s statement
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getting to know ocado getting to know ocado our responsibilities
company law requires the directors to prepare financial statements 
for each financial year  under that law the directors have prepared 
the group and the company financial statements in accordance 
with international financial reporting standards ifrss as adopted 
by the european union “ifrseu”  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 company and the group and of profit or loss of the group for 
that period  in preparing these financial statements the directors are 
required to
	 ● select suitable accounting policies and then apply them 
consistently
	 ● make judgements and accounting estimates that are reasonable 
and prudent
	 ● state whether applicable ifrss as adopted by the european 
union have been followed subject to any material departures 
disclosed and explained in the financial statements and
	 ● prepare the financial statements on the going concern basis 
unless it is inappropriate to 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 and enable them to 
ensure that the financial statements and the directors’ remuneration 
report comply with the companies act 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
the directors are responsible for the maintenance and integrity of 
the company’s website  legislation in the united kingdom governing 
the preparation and dissemination of financial statements may differ 
from legislation in other jurisdictions
each of the directors confirms 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 and loss of 
the group and
	 ● the directors’ report contained in this annual report includes a 
fair review of the development and performance of the business 
and the position of the group and contains a description of the 
principal risks and uncertainties facing the group
disclosure of information to auditors
each director who held office at the date of the approval of this 
directors’ report confirms that so far as he or she is aware there 
is no relevant audit information of which the group’s auditors are 
unaware and that each director has taken all the steps that they 
ought to have taken as a director in order to make himself or herself 
aware of any relevant audit information and to establish that the 
group’s auditors are aware of that information
independent auditors
the company’s auditors pricewaterhousecoopers llp  have 
indicated their willingness to continue their role as the company’s 
auditors  resolutions concerning the reappointment of 
pricewaterhousecoopers llp as auditors of the company and to 
authorise the directors to determine their remuneration will be 
proposed at the agm and set out in the notice of meeting  
unaudited interim financial information
unaudited interim financial information relating to the group for the 
24 weeks ended 16 may 2010 was published in the companys ipo 
prospectus dated 6 july 2010
forwardlooking statements
certain statements made in this report are forwardlooking 
statements  such statements are based on current expectations and 
assumptions and are subject to a number of risks and uncertainties 
that could cause actual events or results to differ materially from any  
expected future events or results expressed or implied in these 
forwardlooking statements  they appear in a number of places 
throughout this report and include statements regarding the 
intentions beliefs or current expectations of the directors concerning 
amongst other things the group’s results of operations financial 
condition liquidity prospects growth strategies and the business  
persons receiving this report should not place undue reliance on 
forwardlooking statements  unless otherwise required by applicable 
law regulation or accounting standard ocado does not undertake to 
update or revise any forwardlooking statements whether as a result 
of new information future developments or otherwise
approved by the board
neill abrams
company secretary and director of legal and business affairs 
23 march 2011 26
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
corporate social responsibility report
environment
ocado aims to provide a greener more sustainable alternative to 
storebased supermarkets
a traditional supermarket requires deliveries first to be made to a  
regional distribution centre and then to the supermarket itself  
customers will often drive to the supermarket in order to shop and 
the supermarkets themselves require energy to be lit and heated 
and tend to have open fridges and freezers in an otherwise ambient 
environment  ocado delivers from the cfc sometimes via a spoke 
to a customer’s home which eliminates much of the carbon emissions 
generated by traditional supermarkets and their stores and also 
reduces the number of cars on the road  each ocado delivery van 
replaces a significant number of car journeys every day
this sustainable alternative has been reflected in awards made to 
ocado in recent years  ocado was voted green retailer of the y ear 
2009 in the grocer gold awards large retailer of the y ear 2008 in 
the online green awards and won ethicalgreen practice 2009 at the 
imrg ecommerce awards for excellence
environmental management 
ocado’s management is conscious that the company’s operations 
have an impact on the environment and will regularly consider 
new measures and innovations to make the business more 
environmentally friendly
in early 2008 the company established a green team comprising 
over 40 staff members from across the business  this team has 
introduced new initiatives to reduce the impact of the business 
on the environment and raised awareness within ocado of 
environmental issues
carbon reduction
ocado is seeking to minimise the environmental impact and carbon 
footprint associated with its operations
ocado has had its operations independently audited to measure the 
extent of its carbon footprint  ocado’s total emissions for the period 
from july 2009 to june 2010 were 37532 tco2e  in this period the 
group’s normalised emissions normalised by the total value of the 
group’s sales decreased from 849tco2e per million of sales in 
pounds in september 2009 to 715tco2e per million of sales in 
pounds in june 2010  so while the group’s absolute energy emissions 
have increased as its sales have increased the actual carbon emissions 
attributable to each order has decreased with the greater efficiency of 
the group’s operations  part of the improved efficiency is due to the 
opening of a new spoke which resulted in some shorter van routes 
as well as continuing improvements in the group’s delivery routing 
software which optimises the delivery route for each van journey  a 
breakdown of the source of the group’s carbon footprint is set out in 
the diagram below
the directors believe that the carbon footprint of the group’s 
operations have been considerably lower carbon intensity than that of 
many of its competitors taking into account the relative size of each 
operation because the group’s business model is more efficient than 
that of the traditional storebased model  
t o continue to reduce its carbon footprint the group is 
implementing measures such as van monitoring devices which help 
identify areas for reducing fuel use in delivery vans for example as a 
result of vans sitting idle
the group has taken a number of other steps in response to new 
carbon reduction legislation and to address the lessening of its carbon 
footprint as set out below
climate change agreement ocado has signed up to the climate 
change agreement with the carbon trust which places certain 
obligations on the group to monitor and lower carbon usage
1010 campaign in 2010 the company signed up to the 1010 
campaign which is a campaign run by an independent uk charity 
the 1010 trust aimed at reducing carbon emissions by 10 in a 
year  the company has not had its carbon emissions audited for the 
period since signing up to the 1010 campaign so cannot yet measure 
whether it has met this target  however as noted above ocado has 
shown it has been reducing its carbon emissions against previous 
periods when measured as a percentage of sales
electric vans ocado has codeveloped two prototype electric 
powered vans which are currently being trialled in central london as 
part of ocado’s delivery fleet
green van deliveries customers can choose a ‘green van slot’ when 
booking a delivery time that is when a delivery van is already 
booked in that customer’s area which helps minimise the carbon 
impact of that customer’s delivery
energy efficiency project ocado invested about £200000 in 2010 on a 
project aimed at making the group’s operations more energy efficient  
the investment included the purchase of energy saving equipment and 
facilities for the cfc such as the modernisation of the lighting systems 
installation of more energy efficient chilling equipment and improved 
door seals and automated controls  ocado makes it a standard 
requirement for new sites and new fitouts of existing buildings that 
they use energy efficient lighting motion detectors and daylight controls 
as part of its energy saving commitments
carbon footprint constituents
  electricity hatfield 296
  gas 05
  diesel lgv tractor 155
  diesel lgv trailer 25
  other 05
  spokes 32
  diesel vans 482 27
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getting to know ocado getting to know ocado our responsibilities
environmental initiatives undertaken 
the group has taken a number of measures to reduce its 
environmental impact as set out below  
responsible bag recycling the business has a closedloop grocery bag 
recycling system whereby when making a delivery cstms offer to 
collect used bags both ocado bags and any other company’s plastic 
bags from customers which are then recycled within the uk to make 
new ocado grocery bags  
reducing food wastage  the group’s food waste as a percentage 
of gross sales 061 for the period is significantly less than any of 
its competitors  food wastage is an important key performance 
indicator measured by the business as noted in the chief financial 
officers review  ocado also helps customers to reduce their food 
waste by being the first online food retailer to show guaranteed 
product life on the website and by including ‘useby’ dates on each 
order receipt which assists customers to plan meals and reduce 
their waste  food that is beyond the guaranteed product life but 
within the useby date is often donated to various charities including 
vineyard in southend ymca in watford and new hope in watford  
any food that isn’t fit for ocado’s company shop or charities but is 
suitable for animals is sent to paradise wildlife park in broxbourne  
anaerobic digestion ocado recently completed a trial of a process 
called “anaerobic digestion”  that is a process whereby any food 
supplied that is no longer edible is mixed with bacteria and burnt to 
produce electricity  ocado expects to implement this means of food 
waste disposal as part of its operations
meat free monday the company supports the “meat free monday” 
campaign which raises awareness of the climatechanging impact of 
meat production and consumption  the meat free monday campaign 
encourages people to reduce their greenhouse gas emissions by 
having at least one meatfree day every week
recycled office furniture ocado fitted out much of its new head office 
space in january 2010 with used office furniture  the benefits of this 
for the environment were that ocado helped divert a large amount 
of used furniture from being disposed of in landfill sites and that there 
was no environmental impact related to the production and delivery 
of new furniture for ocado
suppliers and products
product range the ocado ownlabel product range has been 
introduced to broaden the choice for our customers and offers 
good quality at competitive prices  one of the key criteria when 
developing the ocado ownlabel range is that it be responsibly 
sourced  the company supports british and eu farming and where 
possible sources relevant ocado ownlabel products from the 
british isles when in season and available  ocado fish is responsibly 
caught ocado fresh meat and poultry is raised to british eu or new 
zealand welfare standards ocado boxed eggs are freerange and all 
of the ocado ownlabel bread is made using british wheat  
waitrose foundation through its supply agreement with waitrose 
ocado supports the waitrose foundation  the waitrose foundation 
is a supply chain partnership that returns a percentage of profits 
from the sale of produce flowers and prepared fruit to fund 
projects chosen by the farm workers and smallholders who grew 
or produced it  since its beginnings in south africa in 2005 the 
waitrose foundation has raised nearly £3 million and launched over 
170 projects  ocado has already contributed over £115000 to the 
waitrose foundation  these projects are diverse and reflect the 
individual needs of the communities ranging from supporting crèches 
to adult literacy programmes and from supporting sports teams to 
provision of equipment for medical clinics
duchy originals products ocado makes a significant charitable 
donation to the prince’s charities foundation a group of 20 nonprofit 
organisations through its sales of duchy originals branded products  
fair trade ocado aims to trade fairly with its suppliers and supports 
established schemes such as fairtrade and traidcraft which contribute 
to the sustainable development of the communities where farmers 
and workers live  ocado has one of the largest fairtrade range of 
products of all uk grocers
organic farming ocado has a large selection of organic groceries  
organic farming helps promote biodiversity by using crop rotation 
and clover to build soil fertility  with organic farming there are strict 
rules around animal welfare and how food is produced  
people
ocado’s employees are key to its business and are the most visible 
part of the business to its customers  management is committed 
to high standards of employment practice and to providing equality 
of opportunity training and development and a safe workplace in 
addition to developing initiatives which encourage innovation
ocado aims to be an exceptional employer one that recognises 
talent and develops people to the best of their abilities  we ask our 
people to share our determination to succeed  we deliver superior 
customer service and business success through our people which is 
why it is important for us to appropriately reward engage listen to 
and develop our employees
rewarding our people
since its commencement as a privately owned business ocado’s policy 
has been to issue share options to its employees  the rationale is that 
we want to give all of our employees the opportunity to own a part 
of the business  we continue to grant share options in the company 
to each new employee as part of their employee benefits package 
t o continue our philosophy of employee share ownership we 
established the group’s ‘sharesave scheme’ after the company’s 
admission  a large number of our employees have chosen to 
participate in ocado’s sharesave scheme which is the savingsrelated 
share option plan where each participating employee is granted 
options over shares in the company in proportion to the amount 
saved by that employee 
we expect that in future ocado will introduce additional share 
schemes to both reward employees and to offer employees further 
opportunities to become shareholders in the company  
in addition to share schemes we provide a range of employee 
benefits including a staff discount on orders with free deliveries on 
certain days discount shopping membership pension life assurance 
healthcare and an employee assistance programme 28
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ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
engaging our people
engaged staff help us to continue to be successful and grow  we have 
this year launched our first formal employee survey across the whole 
business  this will measure current levels of employee engagement and 
identify the areas where we can become a better employer  
we continue to hold regular events to connect with our people 
such as our annual family fun day interspoke football tournament 
charity golf day woodland trust tree plant team days business results 
briefings and our christmas parties  these reinforce our informal 
relaxed culture and promote our family and community focus
our unique and informal culture means that many of our people 
have direct access to our senior leaders but as we continue to grow 
we know this will be more challenging  we hold weekly board 
lunches with employees from across the whole business to increase 
dialogue between staff and business leaders  ocado’s employees 
are kept well informed of the performance of the group and key 
events concerning the business through regular staff briefings done 
by management and through communications via the internet email 
and video and audio recordings which are particularly helpful for 
communicating with our large number of cstms  
giving our people a voice
in order to better facilitate employee involvement and feedback 
in our rapidly growing business we have introduced the ‘ocado 
council’ which is a representative forum for dialogue between 
ocado employees and leaders of the business  the ocado council 
was formed in january 2010 when elections were held to select 
47 council representatives from across the business  the council’s 
achievements over its first year of existence include involvement in 
changes to terms and conditions of employment pay and bonus 
awards performance reviews organisational changes and physical 
working environment improvements
developing our people
every employee plays a part in the company’s success and we are 
focused on developing our people to the best of their abilities  when 
joining the business employees undertake a thorough induction which 
includes training on how to do their new job and orientation around 
different areas of the business  
ocados people have a range of backgrounds and we work hard 
to provide opportunities to move around the business where 
appropriate and provide training to develop skills for current and 
future roles  our excellent inhouse training team deliver customer 
focused training that prioritises the health and safety of our people 
and meets individual needs
attracting talent
we rely on talented people with drive and dedication to deliver 
excellent customer service  this is why we are careful to recruit the 
right people for the right roles  our graduate programme plays an 
important part in developing talented people for our future and our 
newly launched careers website allows timely recruitment of talented 
people for business growth
ocado creating new jobs
during the period the group created an additional 883 jobs  the 
average number of employees employed by the group for the period 
was 4252 2009 3494  
the group purchased a 352 acre site in dordon warwickshire on 
which the second cfc will be built  when this second cfc is at full 
operational capacity ocado expects that it will have created in excess 
of 2000 jobs in the region  
diversity of our people
we are committed to equal opportunities for all of our people 
regardless of disability or background from recruitment and selection 
through training and development and promotion 
it is the policy of the group that applications for employment by 
disabled persons are always fully considered bearing in mind the 
respective aptitudes and abilities of the applicant concerned  in the 
event of employees becoming disabled all reasonable effort is made 
to ensure that their employment within the group continues  it is 
the policy of the group that the training career development and 
promotion of a disabled person should as far as possible be identical 
to that of an able bodied person
social and community issues
making a positive difference in the community  ocado supports a 
number of community projects  one of these is the woodland trust 
which is aimed at restoring and protecting ancient woods and 
native trees
charitable and political donations  ocado has a charity committee 
made up of a number of employees with the aim of encouraging 
support of certain charitable organisations by ocado employees 
through the organisation of various fundraising initiatives  during the 
period ocado employees raised more than £15000 for a number of 
charities the details of which are set out below 
british heart foundation £6190 
nspcc £4143 
macmillan cancer relief £2493 
cancer research uk £990 
the harry christie surgery fund £820 
paul dix appeal princess alexandra hospital £650  
kent air ambulance £361 
sick children’s fund coventry £117
ocado made charitable donations during the period of over £14000 
2009 £2000  included in the amount for the current period is a 
donation of £10000 to the 1010 trust which as noted above is a 
charity committed to reducing carbon emissions by 10 a year  
no political donations were made during the period by the group 
2009 £nil  
the group also donates money to the waitrose foundation and the 
prince’s charities foundation as noted above
corporate social responsibility report continued 29
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getting to know ocado getting to know ocado our responsibilities
principal risks and uncertainties
strategy
new cfc and 
expansion of current 
cfc 
a critical part of the group’s strategy is to expand 
its operations by further developing the current cfc 
and building at least one additional cfc in the uk to 
increase its capacity to service customers  the group’s 
ability to develop the current cfc and replicate its 
business model in the second cfc costeffectively and 
in a timely fashion will depend upon a variety of factors 
notably the group’s ability to hire and train employees 
to operate the cfcs management resources the 
group’s ability to roll out the business systems 
and infrastructure in particular in any new cfc 
reliable developers and the availability of appropriate 
equipment and the contractors to design and install 
such equipment
the group has purchased a 999year lease on a site 
in dordon warwickshire for the construction of the 
second cfc and groundworks have commenced  
the group has a detailed plan for the management 
and resourcing of the second cfc project and the 
directors have oversight of the project to ensure that 
it stays on schedule and within budget
the directors are confident that the business systems 
of the existing cfc can be replicated and enhanced 
in the second cfc and in any further cfcs in 
the future within the parameters of the capital 
expenditure budget set for the project and that it can 
continue to successfully complete projects to expand 
the existing cfc  
operational
single cfc the group is dependent on the continued operation 
of the cfc and to a lesser extent the spokes in 
order to satisfy customer orders  any disruption 
such as an it failure or a fire to the operation of the 
existing cfc in particular or a spoke may therefore 
have an adverse effect on the group’s financial position 
or affect the ability of the group to economically 
deliver products to certain customers
the group has disaster recovery procedures in place 
to minimise possible disruption to the business  the 
group is in the advanced stages of a plan aimed at 
achieving the industry recognised “highly protected 
status”  the cfc is protected by fire and security 
systems and has a full contingency plan to manage 
power outages  the group also has insurance policies 
in place which cover business interruption to certain 
maximum levels  in addition the group’s plans to 
build at least one additional cfc in the uk will limit in 
part the effect of any failure at the current cfc  also 
spokes are able to some extent to serve geographies 
of neighbouring spokes
road network the group’s delivery service is reliant on deliveries 
by road from suppliers to the cfc and from the 
cfc and the spokes to customers  this means that 
inclement weather particularly snow and sometimes 
traffic congestion may reduce the number of  deliveries 
that can be made andor increase their cost
the group fits winter tyres to its delivery fleet for the  
winter period and can optimise its delivery routing  
system with road speed adjustments for example for  
inclement weather  the group also subscribes to a  
dedicated weather information service to give it early 
warning and more accurate details of extreme weather
identifying and monitoring risks
the group faces a number of risks and uncertainties that may have an adverse impact on the group’s operation performance or future 
prospects
it is important for the board to effectively manage risks and opportunities in seeking to achieve the groups objectives  the directors have 
overall responsibility for risk management and internal control systems the boards system of risk management is described in the statement of 
corporate governance
the risks and uncertainties described below represent those which the directors consider to be the most significant in achieving the potential 
success of the group’s strategy  however these risks and uncertainties do not comprise all of the risks associated with the group and are not 
set out in any order of priority  additional risks and uncertainties currently not known to the directors andor which the directors believe to 
be less material may also have a material adverse effect on the group’s business  financial condition or future prospects  the relevant mitigating 
factors are also described below  
risk area potential impact mitigation 30
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risk area potential impact mitigation
relationships with third parties
relationship with 
waitrose
ocado’s reputation and brand is based at least in 
part on its relationship with waitrose  if the sourcing 
agreement with waitrose were to end or if waitrose 
were unable to source products for the group 
ocado would need to engage additional personnel to 
i find or create replacement ownlabel products and 
ii find appropriate suppliers and negotiate equivalent 
prices itself
the sourcing agreement also contains provisions 
which restrict the extent to which ocado can 
source products other than from waitrose and the 
extent to which ocado’s range of ocado ownlabel 
products may be expanded  if the parties terminate 
the sourcing agreement after certain competitors of 
waitrose or john lewis gain control of the company 
ocado is obliged to pay waitrose £40 million
the group has a successful relationship with waitrose 
which is now in its eleventh year and in may 2010 
agreed a new sourcing arrangement which will 
continue this relationship until at least 2017  the 
group is not particularly dependent on the waitrose 
supply chain as about 85 of products are delivered 
directly to the cfc by the relevant supplier or 
manufacturer
ocado currently stocks approximately 250 ocado 
ownlabel products and is in the process of extending 
this range  the directors do not believe that the 
restrictions on ocado ownlabel products will have 
a significant impact on the growth of the business or 
their intended expansion of the range of products 
stocked by ocado  
it systems and security and intellectual property
it systems the group relies to a significant degree on the 
efficient and uninterrupted operation of the internet 
and its it and communications systems  the group’s 
business model relies on the complex integration 
of the group’s website the highly automated cfc 
goods handling equipment and the order fulfilment 
and delivery operations  operational problems in 
the group’s core systems and technologies such as 
computer server or system failures network outages 
software performance problems or power failures can 
result in customer orders being unable to be captured 
on the group’s website or processed through the 
cfc or errors and delays in their delivery
the group has an it strategy that is aimed at ensuring 
plans are in place to have information systems and 
new technology that provide the capabilities necessary 
for the group to maintain the integrity and reliability 
of its business  the group has disaster recovery and 
business continuity contingency plans to maintain the 
security integrity and efficiency of its it infrastructure  
the group’s it systems are housed in a purposebuilt 
data centre and it has a separate disaster recovery data 
centre which houses standby servers for all the critical 
systems and resilient data storage systems  all critical 
communication links are provided via two diversely 
routed fibres and the internet connectivity is provided 
by two major internet service providers
it security and fraud if any compromise in the group’s it security measures 
or payment processing systems were to occur the 
group’s reputation may be harmed and it could lose 
its customers  the group relies on third parties to 
provide payment processing services and is exposed 
to typical fraud risk in relation to card payments  the 
group is also subject to it regulations and compliance 
requirements
the group uses encryption and authentication 
technology to provide the security necessary to 
effect the secure transmission of information from 
its customers such as card payments and to reduce 
possible fraud  the group’s customers’ confidential data 
is protected by a range of both physical and industry 
standard systems controls  the group’s website is 
regularly tested for vulnerability by both internal and 
external teams  relevant accounting it and other 
procedures and controls at all levels are clearly set out 
and some of which are audited across the business to 
reduce the risk of fraud  ocado is undertaking a plan 
to ensure compliance with the payment card industry 
data security standards  
intellectual property 
rights
the business and it systems and intellectual property 
are not protected by patents or registered design 
rights which means that the group cannot inhibit 
competitors from entering the same market if they 
develop the similar technology independently  in 
addition third parties may independently discover 
ocado’s trade secrets and proprietary information or 
systems
the group is reliant on copyright and confidentiality 
and licence agreements with its employees customers 
suppliers consultants and others to protect its 
intellectual property rights  
principal risks and uncertainties continued 31
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getting to know ocado getting to know ocado our responsibilities
risk area potential impact mitigation
governmental 
regulation
a change in regulations relating to the internet and 
online retail operations consumer protection laws the 
processing of customer data the environment such 
as carrier bags or the sale licensing or storage of 
products could adversely affect the manner in which 
the group currently conducts its business  regulations 
govern the weight limits of the loads that each van can 
take and the number of hours that drivers can work 
on consecutive days impacting the potential efficiency 
of the business
the group has an established governance process 
in place to monitor regulatory developments and to 
ensure that all existing regulations are complied with  
the group’s delivery routing software and customised 
vans which are specifically designed to improve 
loadcarrying capacity help maximise the operational 
efficiency of the group’s delivery infrastructure within 
the scope of the existing regulatory requirements  
financing
funding for capital 
expenditure
the group’s £100 million debt facility may be 
terminated by the lenders if the sourcing agreement 
with waitrose is terminated for any reason
the group is able to manage whether any such 
termination rights will arise under the sourcing 
agreement and hence any potential impact on the 
debt facility with the exception of the change of 
control termination right described above
regulation
health and 
safety law
a violation of health and safety laws relating to the 
group’s operations or construction of the second 
cfc or expansion of the current cfc could lead to 
injury to employees negative publicity and reputational 
damage fines costly compliance procedures and in 
very serious circumstances a temporary shutdown of 
all or part of the business or a delay in construction of 
the second cfc  
the group’s health and safety department maintains 
and monitors procedures which are aligned with 
the relevant regulations and industry standards  the 
group’s staff are trained in safe workplace practices  
the group is in the process of developing safety 
procedures and reporting structures for the second 
cfc construction project
exchange rate 
interest rate and 
commodity 
fluctuations
any depreciation of sterling in relation to the euro will 
increase the sterling equivalent of the price paid for 
the machinery used in the second cfc and to expand 
the capacity of the current cfc which is mostly 
purchased from suppliers located in countries that 
have adopted the euro  fluctuations in the cost of 
commodities in particular steel required to build the 
second cfc and in interest rates will impact on the 
costs to the business
the group has a policy controlled by the treasury 
committee and authorised by the directors to hedge 
certain foreign currency and interest rate exposures 
through the use of derivative financial instruments and 
fixed and floating instruments  there are approval 
parameters for hedging arrangements and a policy to 
monitor and review hedging arrangements including 
short and longterm foreign exchange rates interest 
rates and counterparty risk  
product safety the group is subject to a wide variety of regulatory 
requirements including those in relation to the manner 
in which it sources stores handles and sells products 
such as meat and fish to customers and relating to 
the operating of its physical facilities  any assertion 
or regulatory investigation that the products supplied 
by the group caused illness or injury to customers or 
others could adversely affect the group’s reputation 
with existing and potential customers
there is an established legal and regulatory team in 
place to monitor developments and to ensure that 
all existing regulations are complied with  the group 
has a food technology department which monitors 
procedures to ensure quality standards and compliance 
with applicable food law and which liaises with the 
waitrose food technology department   32
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risk area potential impact mitigation
staff
key management 
staff retention and 
recruitment
the group is reliant on its key management and staff 
for the operation of its business  the group’s ability 
to recruit or adequately replace retain and motivate 
suitably qualified and experienced staff is important 
for the group’s success  the relationship between the 
group and its workforce could change if the company 
were to formally recognise a union to represent its staff
the business has had good relations with its workforce 
to date  the ocado council the group’s employee 
council was established by the group in january 2010 
with a remit to discuss the terms and conditions of 
employment for the workforce and provide for further 
engagement with staff  the directors continue to keep 
staff remuneration and incentivisation under review to 
ensure it remains competitive  the directors expect 
to have constructive communications with any union 
seeking recognition by the group  
risks relating to the industry
competition and the 
online grocery 
market
the trend in uk food retailing of moving from the 
traditional grocery market to the online grocery 
market may not continue  
the group may be adversely affected in loss of 
market share by the entrance of new competitors in 
the online grocery market or if the traditional grocery 
retailers invest heavily in their online operations  the 
group also expects some increased competition 
from the waitrose online business waitrosecom 
when certain exclusivity provisions which limit the 
extent to which the waitrosecom service may 
compete with the group in the greater london area 
expire in june 2011
the directors believe that the online grocery market 
will continue to grow rapidly in the uk particularly as 
the number of people shopping online continues to 
increase
ocado has a business model which is predicated on 
offering our customers a superior service in terms 
of product quality and convenience reliability and 
accuracy of delivery as well as environmental efficiency  
the directors believe that as the group’s proprietary 
intellectual property and bespoke it systems including 
the group’s website the stock management systems 
the cfc the customer delivery system and the van 
routing system become more sophisticated so the 
barriers to entry for a potential online competitor 
become greater  the directors do not anticipate a 
significant overall impact on the company from the 
increased competition from waitrosecom
uk and global 
economic conditions
the group’s performance may depend on factors 
outside the control of the group which impact on uk 
consumer spending including  political financial and 
economic conditions
the group regularly reviews its approach to pricing  
marketing and product range for appropriateness to  
market conditions and to adapt to customer feedback  
despite the recent economic downturn the group’s 
sales have continued to grow rapidly  
principal risks and uncertainties continued 33
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chairman’s statement
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getting to know ocado getting to know ocado our responsibilities
statement of corporate governance
introduction
the following sections explain how the company applies the main 
principles set out in section 1 of  the combined code on corporate 
governance june 2008 issued by the financial reporting council the 
“combined code” as required by the listing rules of the financial 
services authority and where relevant the main principles of the 
uk corporate governance code june 2010 issued by the financial 
reporting council the “2010 code”  
the new 2010 code applies to all companies with a premium listing 
of equity shares with accounting periods beginning on or after 29 
june 2010  hence the 2010 code is not applicable to the current 
period presented  however in anticipation of its application the 
board has voluntarily implemented a number of changes to its 
governance arrangements to reflect the requirements of the new 
2010 code because the board is committed to the highest standards 
of corporate governance
the combined code applies to the current period  prior to its 
admission on 26 july 2010 the company was privately owned  
although not obliged prior to admission to apply the combined 
code or the 2010 code to its governance arrangements the 
company had voluntarily adopted some governance standards 
commensurate with a uk listed company as noted below  
since its recent admission the company has applied the principles 
and complied with the provisions of the combined code save 
as described below  where the company has not complied the 
reasons for noncompliance are stated including the period where 
it has not complied if relevant  recognising that it is a newly listed 
company the board has the goal of moving the company towards 
full compliance with all provisions of the 2010 code as swiftly 
as practicable  the company will continue to put in place new 
governance arrangements in order to meet that objective
further information on the combined code and the 2010 code can 
be found at wwwfrcorguk  
the board
the company is led by the board  subject to the articles the 
companies act and any directions given by special resolution the 
business of the company will be managed by the board who may 
exercise all of the powers of the company  
the names responsibilities and details of the current directors on 
the board are set out in the board of directors section  during 
the period there were a number of changes to the board   the 
nonexecutive directors t om clayton jonathan faiman and jeremy 
frampton resigned from the ocado limited board on 9 march 2010  
in addition michael robarts was appointed on 19 january 2010 as a 
nonexecutive director and resigned on 26 july 2010  the company 
announced on 18 february 2011 the resignation of patrick lewis 
from the board  
director election
the rules that the company has about the appointment and 
replacement of directors are described in the directors’ report  
in order to maintain high standards of corporate governance 
the articles require each director to retire at every annual 
general meeting each director may offer himself or herself for 
reappointment by the members at such meeting  the combined 
code does not contain such a stringent requirement except 
for directors serving longer than nine years and this 2010 code 
requirement did not apply to the company for the current period  
however each director will seek reelection by shareholders at the 
company’s agm on 11 may 2011  
john lewis pension fund right to appoint a director
as stated in the company’s prospectus on 6 july 2010 the 
john lewis pension fund agreed with ocado that patrick lewis a  
nonexecutive director originally appointed to the board in october 
2009 by the john lewis pension fund would step down from the 
ocado board if the john lewis pension fund’s holding of ordinary 
shares in ocado falls below 10 per cent  of the issued ordinary  
share capital of ocado  on 11 february 2011 the company 
announced that john lewis pension fund had sold its entire 
shareholding in the company  as noted above patrick lewis has 
resigned from the board
chief executive officer
the company’s chief executive officer is tim steiner  his 
biographical details are set out on page 16
the chairman
lord grade joined the board as an independent nonexecutive 
director and chairman in 2006 and along with some of the other 
members of the ocado board he became a director of the 
company in march 2010  his biographical details are set out on 
page 16  during the period a peerage of the united kingdom for 
life was conferred upon michael  he notified the board of this new 
commitment outside of the company  
division of responsibilities between chairman and  
chief executive officer
there is a clearly established and longstanding division of 
responsibilities between the chairman and the chief executive 
officer which is set out in writing and has been approved by the 
board  the chairman is responsible for leadership of the board 
ensuring its effectiveness and setting its agenda  he facilitates both 
the contribution of the nonexecutive directors and constructive 
relations between the executive and nonexecutive directors  the 
chief executive officer is responsible for the daytoday management 
operations and results of the group executing the strategy once 
agreed by the board and making proposals to the board for the 
strategic development of the group  he creates a framework of 
strategy values organisation and objectives to ensure the successful 
delivery of results and allocates decision making and responsibilities 
accordingly  he takes a leading role with the chairman in the 
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ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
senior independent director
david grigson joined the board of ocado as an independent non
executive director in february 2010 and along with some of the 
other members of the ocado board he became a director of the 
company in march 2010  the board appointed david to act as senior 
independent director  his biographical details are set out on page 16  
the senior independent director is available to shareholders of the 
company to assist in resolving concerns of such shareholders  
independence
the combined code recommends that at least half of the board 
of directors of a uk listed company excluding the chairman should 
comprise nonexecutive directors determined by the board to be 
independent in character and judgement and free from relationships 
or circumstances which may affect or could appear to affect the 
director’s judgement  the ocado board comprises ten members 
including the chairman two independent nonexecutive directors 
four executive directors and three nonexecutive directors who are 
not deemed to be independent for the purposes of the combined 
code  the company does not therefore currently comply with the 
relevant requirements of the combined code in relation to the 
balance of executive and independent nonexecutive directors 
although it intends to do so
the company expects that as existing members of the board step down 
and new directors are appointed the company will become compliant 
with the combined code and the 2010 code in this respect
of the six nonexecutive directors on the board the chairman 
david grigson and ruth anderson are independent as defined in the 
combined code  however
	 ● robert gorrie is not deemed independent for the purposes of 
the combined code because he was an executive director of 
ocado from april 2000 until april 2006 and a nonexecutive 
director from may 2006 until march 2010 when along with 
some of the other members of the board he became a director 
of the company  he also provides consulting services to the 
group under a separate consulting agreement  notwithstanding 
the board considers robert to be independent
	 ● jörn rausing is not deemed independent for the purposes of  
the combined code because the apple trust of which 
he is a beneficiary is a major shareholder of the company  
notwithstanding the board considers jörn to be independent 
and
	 ● david y oung is not deemed independent for the purposes of 
the combined code because he was a nonexecutive director 
of ocado from october 2000 to march 2010 when along with 
some of the other members of the board he became a director 
of the company  notwithstanding the board considers david to 
be independent  
nonexecutive directors
the nonexecutive directors have wide and varied skills and 
commercial experience which they bring to the deliberations of the 
board and the committees as well as their independent judgment on 
group strategy risk and performance  the board considers that its 
size and composition and that its balance of skills and experience is 
appropriate for the requirements of the business  
the chairman seeks to ensure the effective contribution of the 
nonexecutive directors and constructive relations between non
executive directors and executive directors particularly during 
discussions at board meetings  
each nonexecutive director’s letter of appointment to the board 
sets out clearly the expected time commitment from them to 
the company and at the time of appointment the relevant non
executive director confirmed that that he or she is able to devote 
sufficient time as is necessary to the performance of his or her duties  
the board is satisfied that each of the nonexecutive directors has 
sufficient time available to devote to the company  
the terms and conditions of appointment of the nonexecutive 
directors are available for inspection at the company’s registered 
office during normal business hours and at the company’s agm  
conflicts of interests
the companies act provides that directors must avoid a situation 
where they have or can have a direct or indirect interest that 
conflicts or possibly may conflict with a company’s interests  
directors of public companies may authorise conflicts and potential 
conflicts where appropriate if a company’s articles of association 
permit  
each nonexecutive director’s letter of appointment sets out 
the requirement for disclosing conflicts to the chairman and the 
company secretary  as part of the company’s preparation for 
admission each director completed a questionnaire which required 
them to disclose any conflicts of interests  other than patrick lewis 
noted above no director has any actual or potential conflicts of 
interest between any of his duties to the company and his private 
interests andor other duties  
whenever a director takes on additional external responsibilities the 
board considers any potential conflicts that may arise  the board will 
continue to monitor and review potential conflicts of interest on a 
regular basis  
the board’s role
the board has a number of key responsibilities and formally reserved 
powers  the board has responsibility for the overall management 
of the group and for setting and reviewing the group’s longterm 
objectives and commercial strategy including determination of the 
nature and extent of the significant risks that the board is willing 
to take to implement its commercial strategy  the board has set 
out a clear schedule of matters reserved for board decisions such 
schedule was approved by the board prior to the company’s 
admission  other reserved matters include approval of the annual 
report and halfyearly report the group’s budgets the authority 
levels for capital expenditure the treasury policy and any governance 
policies  
the board delegates to management the detailed implementation 
of matters approved by the board and the daytoday operational 
aspects of the business  the executive directors and the management 
committee meet twice weekly to review operational performance 
and to monitor implementation of certain projects  management has 
authority to undertake capital expenditure without board approval up 
to certain preapproved expenditure thresholds and above which the 
expenditure must be elevated to the board for approval
statement of corporate governance continued 35
chairman’s statement
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chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado our responsibilities
the board delegates certain responsibilities to its principal 
committees namely the audit committee the remuneration 
committee and the nomination committee  the committees keep 
the full board apprised of their work and refer matters requiring 
resolution to the full board for approval as appropriate  the 
audit committee monitors the integrity of financial information 
and reviews the effectiveness of the financial controls and the 
internal control and risk management systems  the remuneration 
committee sets the remuneration policy for executive directors 
and determines their individual remuneration arrangements  the 
nomination committee recommends the appointment of directors 
and has responsibility for evaluating the balance of the board and for 
succession planning at board level  further details concerning the 
committees of the board are set out below  the company expects 
to establish other committees in certain areas including corporate 
social responsibility  the purpose of the corporate social responsibility 
committee would be to review and update the company’s existing 
corporate social responsibility policies and monitor the company’s 
formal corporate social responsibility objectives and plan  
during the period the board’s key activity was overseeing the 
preparation of the company for admission  in addition the board 
approved the entry into a new 10year branding and sourcing 
arrangement with john lewis and waitrose  
attendance
the table below shows the attendance of directors at scheduled 
board and committee meetings during the period  the board 
had scheduled 10 meetings during the year and additional ad hoc 
meetings and conference calls were also convened to deal with 
specific matters including the company’s admission which often 
required attention between scheduled meetings  directors leave a 
meeting where the matters being discussed relate to them or which 
may constitute a conflict of interest to them  from 9 march 2010 
onwards the main board and committees were constituted with the 
company and not ocado when the directors were appointed to 
the company board as noted above  the composition of each of 
the committees changed during the period as described in the board 
committees description set out below  
 board of directors audit committee remuneration committee nomination committee
  actual possible actual possible actual possible actual possible
executive directors
tim steiner 21 21 – – – – – –
neill abrams 23 23 – – – – – –
andrew bracey 23 23 – – – – – –
jason gissing 21 21 – – – – – –
nonexecutive directors
lord grade chairman 21 21 – – 1 1 1 1
ruth anderson 18 19 4 4 1 1 1 1
robert gorrie 20 21 5 5 – 1 1 1
david grigson 17 19 3 3 – – 1 1
jörn rausing 21 21 – – 2 2 1 1
david young 17 21 5 5 2 2 – 1
former directors
patrick lewis† 14 21 – – – – – –
michael robarts† 14 17 – – – – – –
jeremy frampton 2 3 – – – – – –
jonathan faiman 2 3 – – – – – –
tom clayton 2 3 – – – – – –
† patrick lewis and michael robarts did not attend meetings on 25 may 2010 and 28 june 2010 because the sole subject matter of each of 
those meetings concerned the negotiations for the new branding and sourcing agreement between the company and waitrose and the john 
lewis pension fund director appointment rights  both patrick and michael were appointed to the board by the john lewis pension fund which 
was a major shareholder in the company during the period   
 jeremy frampton jonathan faiman and t om clayton resigned from the ocado limited board on 9 march 2010  michael robarts resigned 
from the board of the company on 26 july 2010  patrick lewis resigned from the board of the company on 15 february 2011
information and professional development 
the chairman is responsible for ensuring that all directors are 
properly briefed on issues arising at board meetings and that they 
have full and timely access to relevant information  the quality and 
supply of information provided to the board will be reviewed as part 
of the board evaluation exercise
directors appointed to the board during the period participated 
in an induction programme including a cfc visit and meetings with 
members of senior management and certain key employees for 
example in the finance department  the company intends to expand 
this induction program in future taking account of feedback from new 
directors  the board intends that in future the board programme will 
include regular presentations from management to help maintain the 
nonexecutive directors’ understanding of the business and the sector 36
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ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
the need for director training is assessed by the board from 
timetotime  in conjunction with the company’s admission the 
company secretary neill abrams arranged for the directors to 
receive information and a presentation on the duties and obligations 
of a listed company director  training for directors is available on an 
ongoing basis to meet any particular needs
the committees have access to sufficient resources to discharge 
their duties as required by the combined code  in this regard 
remuneration consultants had advised the remuneration committee 
on executive remuneration during the period  the audit committee 
received updates from the group’s auditors on technical accounting 
issues or developments when required  the company retained the 
services of professional services consultants for the recruitment of 
new nonexecutive directors  
the board is assisted by the company secretary neill abrams who 
reports to the chairman in respect of his core duties to the board  
all directors have access to the advice and services of the company 
secretary  he has responsibility for ensuring that board procedures 
are followed and for governance matters  the company secretary 
under the direction of the chairman was responsible for ensuring 
good information flows within the board and its committees as 
required under the combined code  the appointment and removal 
of the company secretary is one of the matters reserved for the 
board  
members of the board may take independent professional advice at 
the company’s expense in the furtherance of their duties  
director insurance and indemnities
the company maintains directors’ and officers’ liability insurance 
cover for its directors and officers as permitted under the 
company’s articles and the companies act  such insurance policies 
were renewed during the period and remain in force  the company 
also indemnifies the directors under an indemnity deed with each 
director which contain provisions that are permitted by the director 
liability provisions of the companies act and the company’s articles  
the indemnity deeds were entered into by each director at the time 
of company’s admission  qualifying third party indemnity provisions 
as defined by section 234 of the companies act were in force 
during the period and remain in force for the benefit of the directors 
and any officer of the company or of any associated company  
board performance evaluation
the performance of the board is important to the success of the  
group and accordingly the board considers that reviewing its 
performance is helpful  during the period each of the executive 
directors was subject to a full performance evaluation from each 
other and the management committee  this process will be repeated 
annually  the nomination committee recommended to the 
board that the board should be subject to an annual performance 
evaluation in 2011 as required by the 2010 code  in due course the 
nomination committee will agree who will conduct the evaluation 
exercise the key objectives of the appraisal a process for conducting 
the evaluation and a means of comparing the results with evaluations 
in future years  the nomination committee expects that the 
performance evaluation will cover the performance of the board 
each of the board committees and the individual directors
in conjunction with the implementation of this board evaluation 
process the nomination committee recommended that in due 
course the chairman separately review the contribution of each of 
the directors with them
subsequent to the period end the chairman and the nonexecutive 
directors met without the executive directors being present as 
required by the combined code  the senior independent director 
and the nonexecutive directors also met without the executive 
directors or the chairman being present as required by the combined 
code and subsequently met with the chairman to provide feedback
the explanatory notes set out in the notice of meeting for the agm 
state the reasons that the board believes each director proposed for 
reelection at the agm should be reappointed  
board committees
as envisaged by the combined code the board has established 
three committees a nomination committee a remuneration 
committee and an audit committee  the chairman of each 
committee provides a report or update of each meeting of the 
respective committee to the board at the following board meeting
nomination committee
the nomination committee’s principal responsibility is to keep 
the composition and balance of the board under review consider 
succession planning lead the process for board appointments and 
make recommendations to the board on all new appointments 
and reappointments of nonexecutive directors  the nomination 
committee also makes recommendations for the membership of the 
audit and remuneration committees
meetings  the nomination committee meets when necessary and 
will normally meet no fewer than two times a year  the nomination 
committee met once since it was constituted around the time of the 
company’s admission it met primarily to discuss the composition of 
the board and the recruitment of new nonexecutive directors  
members  the nomination committee is chaired by david grigson 
and all of the other nonexecutive directors including the 
chairman are members  
independence  the combined code requires a majority of the 
members of the nomination committee to be independent non
executive directors  as explained above while the board considers 
its nonexecutive directors on the nomination committee to be 
independent from the perspective of the combined code only three 
of the members of the nomination committee david grigson 
lord grade and ruth anderson are independent  therefore the 
company does not comply with the combined code in this respect
prior to the company’s admission the company recruited two new 
independent nonexecutive directors to supplement the existing 
nonexecutive directors  this process was led by the chairman as 
prior to the company’s admission the nomination committee had 
not been constituted  professional services consultants the zygos 
partnership was instructed by the chairman in connection with this 
process  following an extensive search the chairman recommended 
to the board that david grigson and ruth anderson be appointed as 
independent nonexecutive directors  both were appointed to the 
company board in march 2010  
statement of corporate governance continued 37
chairman’s statement
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chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado our responsibilities
the company had previously stated its objective to rebalance the 
board in favour of nonexecutive directors who are considered 
independent under the 2010 code  during the period the 
nomination committee recommended that one new independent 
nonexecutive director be sought and since the end of the period 
the recruitment of such new director to the board was led by the 
chairman of the nomination committee  professional services 
consultants lygon group were instructed by the chairman of the 
nomination committee in connection with this process  here the 
nomination committee considered the skills knowledge background 
and experience required for the role and prepared a job specification 
for the role  a number of directors including the chairman of the 
nomination committee the chairman the chief executive officer 
and other directors interviewed candidates for the role of non
executive director  the nomination committee also specified 
the time commitment expected of the role and confirmed with 
candidates that each had sufficient time available to devote to 
the role 
the company will continue to actively seek to recruit new non
executive directors so that the board  meets the independence 
requirements of the 2010 code  the nomination committee 
will continue to meet regularly to consider the board size and 
composition and to ensure that plans are in place for the orderly 
succession of appointments to the board as required by the 
2010 code   
the nomination committee’s terms of reference are available on the 
website wwwocadogroupcomcorporateresponsibilitycorporate
governanceaspx and set out the nomination committee’s 
responsibilities  
remuneration committee
role  the role of the remuneration committee is to determine and 
recommend to the board the remuneration policy for the chairman 
of the board and the executive directors  this includes base 
salary annual and longterm incentive entitlements and awards and 
pension arrangements  in determining the remuneration policy the 
remuneration committee takes into account many factors including 
the need for a significant proportion of the executive directors’ 
remuneration to be structured so as to link rewards to business and 
individual performance as required by the combined code  
members  the remuneration committee is chaired by david y oung 
and its other members are ruth anderson robert gorrie and jörn 
rausing during the period the composition of the remuneration 
committee changed  prior to admission of the company the 
remuneration committee comprised david y oung as chairman 
lord grade and jörn rausing 
independence  the combined code requires a board to establish 
a remuneration committee of at least three independent non
executive directors  as explained above while the board considers 
each of its nonexecutive directors on the remuneration 
committee to be independent from the perspective of the 
combined code the only member of the remuneration committee 
who is independent is ruth anderson  therefore the company does 
not comply with the combined code in this respect   
meetings  the remuneration committee will normally meet no 
fewer than two times a year  during the period the remuneration 
committee met on two occasions  
duties  the remuneration committee’s key duties are as follows
	 ● approve the design of and determine targets for any 
performance related pay schemes operated by the group 
ensuring that the performance related elements of executive 
directors’ remuneration are stretching and designed to promote 
the longterm success of the company and group and annual 
payments made under such schemes  in designing such schemes 
the remuneration committee should follow the provisions in 
schedule a to the 2010 code
	 ● review the design of all new longterm schemes and significant 
changes to such schemes for approval in each case by the 
board and shareholders save in the circumstances permitted by 
the listing rules  for any such schemes determine each year 
whether awards will be made and if so the overall amount of 
such awards and the individual awards to executive directors
	 ● determine the policy for and scope of pension arrangements if 
any for each executive director
	 ● ensure that contractual terms on termination and any payments 
made are fair to the individual and the company or the relevant 
member of the group as applicable that failure is not rewarded 
and that the duty to mitigate loss is fully recognised  the 
remuneration committee should aim to avoid rewarding poor 
performance and take a robust line on reducing compensation to 
reflect departing directors’ obligation to mitigate loss
	 ● ensure that notice or contract periods should be set at one year 
or less
	 ● within the terms of the agreed policy and in consultation with 
the chairman andor chief executive officer as appropriate 
determine the total individual remuneration package of each 
executive director and the chairman including bonuses 
incentive payments share options or other share awards and any 
compensation payments giving due regard to any relevant legal 
requirements and guidance
	 ● review and note annually the remuneration trends across the 
group
	 ● oversee any major changes in employee benefits structures 
throughout the group
	 ● review the policy for authorising claims for expenses from the 
chief executive officer and chairman
	 ● ensure that all provisions regarding disclosure of remuneration 
including pensions are fulfilled 38
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ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
	 ● be responsible for establishing the selection criteria selecting 
appointing and setting the terms of reference for any 
remuneration consultants who advise the remuneration 
committee and
	 ● obtain reliable uptodate information about remuneration 
in other companies with a view to judging where to position 
the company relative to other companies  the remuneration 
committee shall have full authority to commission any reports or 
surveys which it deems necessary to help it fulfil its obligations
the remuneration committee has produced the directors’ 
remuneration report see page 41 and will put it to the company’s 
shareholders for approval at the agm on 11 may 2011  
the remuneration committee was advised by remuneration 
consultants t owers perrin now t owers watson on certain 
remuneration issues t owers watson was appointed by the 
remuneration committee  the remuneration committee is satisfied 
that there is no connection between the company and t owers 
watson in addition the remuneration committee received advice 
from pricewaterhousecoopers llp  slaughter and may and appleby 
trust jersey limited in connection with the implementation of the 
group’s jsos 
the board considers that the remuneration for nonexecutive 
directors reflects the time commitment and responsibilities of the role  
the remuneration arrangements for nonexecutive directors do not 
include share options  however the nonexecutive director robert 
gorrie holds share options in the company which were granted to 
him while he held the position of executive director of the company 
the board determines the remuneration of the nonexecutive 
directors within the limits set in the company’s articles  
the remuneration committee will in due course undertake an 
annual review of its own performance and terms of reference to 
ensure it is operating effectively and recommend any changes it 
considers necessary to the board for approval
the remuneration committee’s terms of reference are available 
on the website wwwocadogroupcomcorporateresponsibility
corporategovernanceaspx and set out the remuneration 
committee’s responsibilities  
audit committee 
role  the audit committee’s principal roles are to monitor the 
financial reporting process and the integrity of the financial statements 
of the group and review the effectiveness of the company’s internal 
controls risk management and audit  its review of audit includes 
monitoring the effectiveness and independence of the auditors 
including the provision of additional services by the auditors to 
the group 
meetings  the audit committee will normally meet no fewer than 
three times a year and during the period it met on five occasions to 
coincide with the company’s reporting timetable and its admission
members  the audit committee is chaired by ruth anderson and 
its other members are david grigson david y oung and robert 
gorrie  as required by the combined code at least one member 
of the audit committee is considered by the board to have 
recent and relevant financial experience   the biography of each 
member of the audit committee is set out on pages 16 and 17  
the chief financial officer andrew bracey and senior members 
of the finance department and the auditors regularly attended the 
audit committee meetings  during the period the composition 
of the audit committee changed  prior to march 2010 the audit 
committee members comprised david y oung and robert gorrie
committee independence  the combined code requires a board to 
establish an audit committee of at least three independent non
executive directors  as explained above while the board considers 
each of its nonexecutive directors on the audit committee to be 
independent from the perspective of the combined code only two of 
the four members of the audit committee ruth anderson and david 
grigson are independent  therefore the company does not comply 
with the combined code in this respect
the auditors had direct access to the chairman of the audit 
committee and had meetings with her without the group’s finance 
executives present  since the period end the audit committee met 
with the group’s finance executives without the auditors present  it 
is intended that the audit committee will also meet solely with the  
auditors  
auditors independence  the combined code requires that the 
board establish formal arrangements for maintaining an appropriate 
relationship with its auditors and explain how auditor objectivity and 
independence is maintained  following the end of the period the 
audit committee developed and implemented the company’s policy 
which restricts the engagement of its auditors in relation to nonaudit 
services to help ensure that provision of nonaudit services by the 
auditors do not have an impact on the independence and objectivity 
of the company’s auditors  the policy applies the guidance set out in 
the guidance on audit committees issued by the financial reporting 
council in december 2010 
the majority of the nonaudit work undertaken by 
pricewaterhousecoopers llp during the period related to the 
company’s admission  the total of nonaudit fees paid to 
pricewaterhousecoopers llp during the period is set out in the notes 
to the financial statements  since the end of the period the audit 
committee has received a regular update from management on any 
nonaudit services being provided by pricewaterhousecoopers llp 
and the cumulative total of any nonaudit fees
pricewaterhousecoopers llp also follows its own ethical guidelines 
and the auditing practices board’s ethical standard 5 – nonaudit 
services provided to audited entities and continually reviews its audit 
team to ensure its independence is not compromised
auditors reappointment in relation to the auditors the audit 
committee reviewed the effectiveness and performance of the 
audit team and received assurances from the auditors regarding 
their independence  on the basis of this review the audit 
committee recommended to the board the reappointment of 
pricewaterhousecoopers llp as auditors to the company  the 
board accepted this recommendation and this will be put to the 
shareholders at the agm on 11 may 2011
statement of corporate governance continued 39
chairman’s statement
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chairman’s statement
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getting to know ocado getting to know ocado our responsibilities
principal activities of the audit committee the audit committee 
discharged its responsibilities in a number of ways as described below 
internal controls  the audit committee received and considered 
reports during the period on the work undertaken by its auditors 
in reviewing and auditing the control environment and reviewing 
the financial reporting procedures which the audit committee took 
into account in assessing the quality and effectiveness of the group’s 
systems of internal control  
financial reporting  the audit committee reviewed the group’s 
financial statements including prior to the period end a review of 
the significant financial reporting issues and judgements  it reviewed 
the basis for preparing the group consolidated financial statements 
on a going concern basis and disclosures in the financial statements  
in addition the audit committee reviewed the two interim 
management statements made by the company prior to publication
external auditors the audit committee agreed the approach and 
scope of the audit work to be undertaken by the auditors  it reviewed 
the group’s processes for disclosing information to the auditors  the 
audit committee reviewed with the auditors the findings of their 
work and agreed the fees payable in relation to the audit for the 
period  as noted above it also agreed and implemented a policy in 
relation to the provision of nonaudit services by the auditors
internal audit  the group does not have a dedicated internal audit 
function although internal reviews of the group’s operations are 
undertaken periodically by senior financial staff  the audit committee 
and the board have considered the need for an internal audit 
function and concluded that given the group’s size and structure it 
is not necessary at this time  the need for an internal audit function 
will be monitored and developed as the size and complexity of the 
group increases 
treasury committee  the audit committee approved the terms of 
reference of the treasury committee which was established in june 
2010  it reports periodically to the audit committee and must 
obtain the audit committee’s approval if it wishes to carry out 
actions that go beyond the scope of its remit set out in the treasury 
policy  the treasury committee’s role is to oversee the company’s 
treasury framework and working capital management as set out in 
the treasury policy and review compliance with the treasury policy 
review and risk  since the period end the audit committee has 
received a report on key risks prepared by management and this 
together with plans to mitigate such risks will be reviewed regularly  
in future it is intended that the audit committee will receive 
individual reports in key areas such as it security and controls risk 
management fraud and bribery  
whistle blowing  the audit committee receives an update at each 
of its meeting on frauds and improprieties raised through the 
company’s whistle blowing procedures  the company’s whistle 
blowing procedure which allows the company’s employees to report 
concerns anonymously is set out in the employee handbook
bribery act  t owards the end of the period the company introduced 
a gifts policy  the company proposes to update this policy in light of 
the bribery act 2010 due to come into force in 2011
tax controls  t owards the end of the period the company appointed 
its group treasurer as the “senior accounting officer” for the 
purposes of schedule 46 of finance act 2009  the company’s senior 
accounting officer is responsible for ensuring and certifying that 
appropriate tax accounting arrangements have been established and 
are maintained by the company  the company plans to carry out an 
assessment of its tax accounting arrangements systems and processes 
for corporation tax vat and payroll tax  
gscop  the grocery supply code of practice “gscop” which 
became effective in 2010 does not apply to the company so it is 
not obliged to implement any measures to accommodate this code  
nevertheless the company is taking steps to prepare for the likely 
application of gscop in future including documenting written 
terms of supply with all suppliers  the audit committee will monitor 
this code and consider any preparations for implementation of the 
gscop code’s requirements if the need arises in future
terms of reference  the audit committee’s terms of reference which 
are available on the website wwwocadogroupcomcorporate
responsibilitycorporategovernanceaspx set out the audit 
committee’s responsibilities
internal control
the board has oversight of the system of internal controls for the 
company and for reviewing the effectiveness of such a system  
certain of these responsibilities have been delegated to the audit 
committee which reports to the board  management is responsible 
for implementing and maintaining the necessary internal control 
systems and processes
the audit committee has in the period reviewed the effectiveness 
of the company’s system of internal controls including financial 
operational and compliance controls and risk management systems  
as noted above its review had included consideration of reports 
prepared during the period by the company’s auditors  
a system of internal controls has been in place during the period 
up to the date of approval of the annual report and accounts  
the company has made significant improvements to the group’s 
system of internal controls to address issues raised in the reviews in 
connection with the continuing expansion of the group’s business 
and to recognise the more robust and formal control measures 
needed after the company’s admission 
the audit committee is satisfied that the controls in place are 
appropriate however it is mindful that the internal control system is 
designed to manage rather than eliminate risk in order to achieve the 
company’s strategy and business objectives and so can only provide 
reasonable and not absolute assurance against loss
the main features of the company’s internal control and risk 
management systems in relation to the financial reporting process as 
required under the disclosure and transparency rules are
	 ● an organisational structure with clear segregation of duties 
control and authority
	 ● comprehensive management information systems for providing 
management with financial and operational performance 
measurement indicators each week  this information is 
summarised monthly and reviewed by the board 40
chairman’s statement
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
	 ● formal budgeting and reforecasting processes  variances from 
budget and forecasts are monitored and explained to the board 
by management
	 ● a capital approval policy that controls the group’s capital 
expenditure that can be undertaken without executive director 
or board approval 
	 ● monitoring the progress of major projects including the second 
cfc project by management and the executive directors and by 
the board
	 ● a review of key accounting policies by the audit committee each 
year and
	 ● a review of reports on any whistle blowing and fraudulent 
activity by employees or suppliers is undertaken by the audit 
committee
risk management
the board accepts that risk is an inherent part of the business  the 
company’s formal risk management system was put in place in 
conjunction with the company’s admission  the company’s risk 
management system is designed to identify key risks and provide 
assurance that these risks are fully understood and managed  
the company’s risk management department undertook a business
wide risk and controls assessment in 2010 identifying any actions to 
mitigate risk and implement new control procedures where necessary  
the risk management assessment undertaken in 2010 consisted of 
formal identification by each department of the key risks to achieve 
their business objectives and the controls in place to manage them  
this exercise was facilitated by the head of risk management  
the risk management department maintains a risk register which was 
compiled as a result of this risk assessment  the risk register lists all 
of the key risks that face the company in achieving its objectives  it 
identifies the potential impact and likelihood of each risk both before 
taking into account any mitigating controls and after any mitigating 
factors are taken into account  some actions necessary to mitigate 
some of these risks have been identified and discussed by the risk 
management department and the heads of each relevant department  
subsequent to the period end the risk management department 
provided a report to the audit committee to allow it to review 
the risk assessment it is expected that in due course the audit 
committee will make some recommendations for taking actions to 
mitigate risks and agreeing specific timelines for taking such actions  
these agreed actions will then be monitored by the risk management 
department until they are implemented
the effectiveness of the risk management process will be reviewed 
by the audit committee which then reports to the board  the 
company intends that the risk management department will report 
to the audit committee summarising the risk management process 
and the risk assessment  the audit committee will report to the 
board thereafter
as part of the board’s oversight of risk it receives an update at each 
board meeting on health and safety issues  any specific issues which 
might affect the company’s reputation are reported to the board as 
they occur
the audit committee is also concerned with financial risk 
management  the treasury committee reports to it on financial risk 
management issues such as hedging the company’s exposure to 
movements in interest rates and currency as noted above
investor relations
the company is committed to maintaining constructive 
communications with its shareholders  normal shareholder contact is 
the responsibility of the chief executive officer tim steiner the chief 
financial officer andrew bracey and the head of investor relations  
the chairman and the senior independent director are available to 
the companys shareholders to discuss any of their concerns
the company regularly meets with its large investors and institutional 
shareholders who along with analysts are invited to presentations by 
the company immediately after the announcement of the company’s 
results   the chairman will occasionally attend these presentations 
by the company to investors  the board regularly receives feedback 
from the executive directors on the views of major shareholders and 
the investor relations programme and also receives regular reports 
on the main changes to the composition of the company’s share 
register  one of the companys largest shareholders the apple trust 
has a representative director on the board  
all shareholders can access the annual report trading statements 
investor presentations and regular announcements on the company’s 
corporate website wwwocadogroupcom  all shareholders can 
choose to receive an annual report either in paper or electronic form  
the company’s agm
shareholders will have the opportunity to meet and question the 
board at the agm  the agm of ocado group plc will be held at  
2 pm on 11 may 2011 at one bunhill row london ec1y 8yy   
a detailed explanation of each item of business to be considered 
at the agm is included with the notice of meeting which will be 
sent to shareholders before the agm  t o allow for maximum 
shareholder input the company offers electronic proxy voting and 
voting through the crest electronic proxy appointment service  
the broad proposes that all resolutions proposed at the agm will be 
taken on a poll vote  this follows best practice guidelines and enables 
the company to count all votes not just those of shareholders 
who attend the meeting  the company expects that the chairman 
will announce the provisional voting results at the meeting  the 
final voting results will be announced by the company immediately 
following the agm via the regulatory news service and will also be 
available on the company’s corporate website wwwocadogroup
com  
share capital voting rights and significant shareholders
details concerning the company’s share capital significant 
shareholders special rights voting rights and other matters as 
required by the disclosure and transparency rule 72 are set out in 
the directors’ report
statement of corporate governance continued 41
chairman’s statement
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chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado our responsibilities
directors’ remuneration report
this directors’ remuneration report prepared by the remuneration 
committee on behalf of the board has been drawn up in accordance 
with the combined code schedule 8 of the large and mediumsized 
companies and groups accounts and reports regulations 2008 the 
listing rules and the disclosure and transparency rules
this directors’ remuneration report has been approved by both the 
remuneration committee and by the board and a resolution to 
approve the report will be proposed at the agm of the company on 
11 may 2011
part a unaudited information
a remuneration committee
role
the remuneration committee’s role and duties are described in the 
corporate governance statement together with other information 
regarding the operation of the remuneration committee and is 
incorporated into this directors’ remuneration report by reference
b remuneration policy
the remuneration policy of the remuneration committee and of the 
board is to provide remuneration packages for executive directors and 
other senior executive managers in the group which
	 ● align management’s interests with those of shareholders by 
incentivising management to deliver the group’s longterm strategy 
and enhance shareholder value
	 ● provide management with the opportunity to earn competitive 
remuneration through variable based pay
	 ● provide rewards comparable with those of other relatively similar 
companies to the group and
	 ● enable the group to attract and retain management of the calibre 
required to run the business and drive shareholder value creation
like the board the remuneration committee is able to take into 
account various environmental social and other factors in making its 
decisions about executive director remuneration
any director who is appointed to any executive office shall be entitled 
to receive such remuneration whether by way of salary commission 
participation in profits or otherwise as the board or any committee 
authorised by the board may decide either in addition to or in lieu 
of their remuneration as a director  in addition any director who 
performs services which in the opinion of the board or any committee 
authorised by the board go beyond the ordinary duties of a director 
may be paid such extra remuneration as the board or any committee 
authorised by the board may determine  each director may be paid 
their reasonable travelling hotel and incidental expenses of attending 
and returning from meetings of the board or committees of the board 
or of the company or any other meeting which as a director they 
are entitled to attend and shall be paid all other costs and expenses 
properly and reasonably incurred by them in the conduct of the 
company’s business or in the discharge of their duties as a director  
the company may also fund a director’s or former director’s 
expenditure and that of a director or former director of any holding 
company of the company for the purposes permitted under the 
companies act and may do anything to enable a director or former 
director or a director or former director of any holding company of
the company to avoid incurring such expenditure as provided in the 
companies act
the board or any committee authorised by the board may exercise 
the powers of the company to provide benefits by the payment of 
gratuities or pensions or by insurance or in any other manner for 
any director or former director or their relations dependants or 
persons connected to him but no benefits except those provided 
for by the articles may be granted to or in respect of a director or 
former director who has not been employed by or held an executive 
office under the company or any of its subsidiary undertakings or 
their respective predecessors in business without the approval of an 
ordinary resolution of the company
the remuneration consists of the elements outlined below
performancerelated versus fixed remuneration
it is the company’s policy that a substantial proportion of the executive 
directors’ remuneration should be variable and performance related 
in order to encourage and reward superior business performance and 
shareholder returns and that remuneration should be linked to both 
individual and company performance
base pay
basic salary for executive directors takes into account the individual’s 
experience roles responsibilities and performance  this is normally 
reviewed annually unless their responsibilities change  for an executive 
director the remuneration committee considers base salary and 
increases based on the median level paid for comparable roles within 
the market and the ftse 250 
one of the remuneration committee’s duties is to review and note 
annually remuneration trends across the group  following the end 
of the period the remuneration committee received an update 
from management on the reviews being undertaken by management 
on pay share schemes and other employee benefits for the group 
generally  although the pay of employees of the group was not 
specifically considered by the remuneration committee in making its 
recommendations on director remuneration during the period the 
remuneration committee expects that it will receive further reports 
from management on pay trends and reviews being undertaken by the 
group in order for this to be taken into account by the remuneration 
committee in future director remuneration reviews
each of the directors shall be paid a fee at such rate as may from time 
to time be determined by the board but the aggregate of all such fees 
so paid to the directors shall not exceed £1 million per annum or 
such higher amount as may from time to time be decided by ordinary 
resolution of the company  the executive directors are not currently 
paid any fees on account of holding an office 
annual bonus
the remuneration committee takes into account the performance 
of the group and the performance of the individual executive 
directors to determine the amount to be awarded each year  the 
remuneration committee also takes into account median levels of 
remuneration compared to the group’s retail peers
on the recommendation of the remuneration committee the board 
approved bonus payments to the company’s four executive directors 
totalling £640000 for the period consistent with the company’s  42
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
practice for awarding executive director bonuses in previous periods 
including before the company’s admission  the individual amounts are 
detailed in the directors’ remuneration table on page 45
these bonuses reflected the executive directors’ achievement in 
growing the group’s sales in line with internal targets and moving the 
business into profitability in the final quarter of the period  they also 
recognised the achievement of the company’s strategic objectives 
which in the period included the ipo of the company and in the 
process raising funds to enable continued rapid expansion of the 
business  the board was also mindful of the fact that after these 
payments executive director pay plus bonuses for the period was 
essentially unchanged from the previous year except in the case of 
andrew bracey who joined the group in november 2009  
applicable to the company’s first full period postadmission the board 
has put in place a structured annual incentive scheme for the executive 
directors  for the 2011 period potential cash bonus payments will 
be calculated from performance measures related to sales growth 
profitability and strategic objectives  the selection of these measures 
reflects the strategic priorities for the business at this stage of its 
development
pension
ocado contributes to the personal pension plans of its staff through 
a defined contribution group personal pension scheme which is 
administered by standard life  employer contributions to the scheme 
are a percentage of salary based on length of scheme membership  
the group’s contributions on behalf of executive directors are on 
the same terms as for other employees  all the executive directors 
participate in the group’s pension plan with the exception of 
andrew bracey
c share plans
the group currently operates three employee share incentive 
schemes described below further information on the group’s 
share schemes can be found in note 24 to the consolidated financial 
statements
executive share ownership scheme the “esos”
the esos is the group’s share option scheme approved by hmrc 
and was established by ocado in 2001  options may also be granted 
under the terms of a schedule which is not so approved
the employees who are eligible to participate in the esos are all 
ocado’s executive directors and employees including the employees 
of ocado’s subsidiaries  directors and employees may not participate 
if in the period of 12 months before grant of the option they had a 
material interest broadly owning or controlling 25 per cent of its share 
capital in ocado or a company which owns or controls ocado and 
that company was a close company
subsequent to the last set of share options under the esos having 
been granted to a director in november 2009 the board has resolved 
that options will not be granted to directors under the esos without 
first setting appropriate performance targets for example achieving a 
target contribution per order or the group achieving ebitda targets  
the number and exercise price for any options granted to directors 
is set by the remuneration committee  all executive directors 
participate in the esos
jsos
the set up of the jsos was approved by a resolution of the board on 
13 january 2010 following recommendations made by the 
remuneration committee that a new executive incentive scheme be 
established to incentivise and retain its four executive directors and 
select members of senior management of the group  the scheme was 
approved by shareholders by written resolution in january 2010  the 
terms of the jsos were approved by the remuneration committee 
who oversee the operation of the scheme
the jsos is a share ownership scheme under which its participants 
and appleby trust jersey limited ebt trustee acquired separate 
beneficial interests in 32476700 ordinary shares which represented 
at the time of issue 75 per cent of the then issued share capital of 
the company  these ordinary shares were divided into four tranches 
vesting over four years
the employees eligible to participate in the jsos are all bona fide 
employees of the company or its subsidiaries including executive 
directors
the remuneration committee is responsible for deciding the identity 
of the participants and the number of ordinary shares that may be 
acquired  all executive directors participate in the jsos
sharesave scheme
the sharesave scheme was approved by a written resolution of the 
shareholders passed on 23 june 2010 and launched on 30 september 
2010  it is a savingsrelated share option plan and is approved by 
hmrc  under this scheme the company or the trustees of an 
employee trust may grant options over shares in the company to 
eligible employees including executive directors of the company or 
its subsidiaries  t o obtain an option an eligible individual must agree to 
save a fixed monthly amount for three years  the amount saved will 
determine the number of shares over which the option is granted  all 
executive directors participate in the sharesave scheme
nonemployee share options
in addition to the options granted under the esos outlined above 
ocado had granted to certain nonemployees options to subscribe 
for either ordinary shares or convertible preference shares in 
ocado limited and following the reorganisation that resulted in 
the company becoming the holding company of the group in the 
company  options over shares in ocado limited were granted 
to andrew bracey before he became a director  following the 
reorganisation that resulted in the company becoming the holding 
company of the group such options are now options over ordinary 
shares in the company  
performance conditions in share schemes
under the jsos a tranche vests in each of the four years as set out 
in the table in part b below if the participant in the jsos remains 
employed by the company  as described in detail in the company’s 
prospectus if a participant leaves during the currency of the scheme 
he may lose all or part of his beneficial interest depending on the 
circumstances in which he leaves that is whether he is a “good leaver” 
“bad leaver” or “very bad leaver”  apart from these leaver provisions 
there are no performance conditions attaching to the shares in 
the jsos
directors’ remuneration report continued 43
chairman’s statement
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chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado our responsibilities
the terms of these contracts together with the dates on which each executive director was appointed by ocado limited and the company respectively  
are set out below
  date  date
  of appointment of appointment  notice period notice period
  by ocado by ocado unexpired term by company by director 
director  limited group plc months months months current age
jason gissing  02022000 09032010  continuous employment until  12 6 40
    terminated by either party 
tim steiner  13042000 09032010  continuous employment until  12 6 41
    terminated by either party 
neill abrams  08092000 10122009  continuous employment until  12 6 46
    terminated by either party 
andrew bracey  03112009 10122009  continuous employment until  12 6 44
    terminated by either party
nonexecutive directors’ letters of appointment
the chairman and the nonexecutive directors do not have service contracts and were appointed by letter of appointment the details of which 
are set out below
    date  date
    of appointment of appointment 
    by ocado by ocado  
director     limited group plc current term notice period current age
robert gorrie     01042000 09032010  3 years   1 month  51
david y oung    13102000 09032010  3 years   1 month  69
jörn rausing    13032003 09032010  3 years   1 month  51
lord grade    15092006 09032010  3 years   6 months  68
patrick lewis    21102009 09032010  3 years   1 month  45
michael robarts    19012010 09032010  3 years   1 month  66
david grigson    03022010 09032010  3 years   1 month  56
ruth anderson    —  09032010  3 years   1 month  57
t om clayton jonathan faiman and jeremy frampton resigned from the board of ocado limited on 9 march 2010  michael robarts resigned from 
the board of the company on 26 july 2010  patrick lewis resigned from the board of the company on 15 february 2011
performance graph
the following graph shows the tsr performance of an investment of 
£100 in the company’s shares from its admission on 26 july 2010 
to the end of the period compared with an equivalent investment in 
the ftse 250 index which was chosen because it represents a broad 
equity market index of which the company is a constituent  tsr 
was calculated by reference to the movements in share price
120
100
80
60
jul 2010
aug 2010 sep 2010
ftse 250
ocado group plc
oct 2010 nov 2010
d service contracts
executive directors’ service contracts
ocado limited has entered into service contracts with each of the 
executive directors for the provision of services to the group  each 
of the contracts was entered into on 22 june 2010
if their service contracts are terminated without cause ocado 
limited can request that they work their notice period take a period 
of garden leave or can pay an amount in lieu of notice equal to one 
times their basic salary for the remainder of their notice period  
these payments would be subject to deductions for tax and national 
insurance  the contracts contain restrictive covenants which continue 
for 12 months after termination  the contracts do not contain any 
specific provisions relating to a change of control of the business 44
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
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44
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
directors’ remuneration report continued
e directors’ interests in ordinary shares
the interests at the end of the period of the directors of the company serving at the end of the period were
       ordinary shares  ordinary shares
       of 2 pence each of 1 pence each
          28 november  29 november
director       2010 2009
tim steiner       14396400  143964
jason gissing       9657600  96576
andrew bracey       812555  7500
robert gorrie       627900  13529
neill abrams       360600  4356
lord grade       189110  780
ruth anderson       26666  —
david grigson       15000  —
david young          13400  —
patrick lewis          —  —
jörn rausing          — —
on 9 february 2010 the ordinary shares in ocado limited were exchanged for ordinary shares in the company on a 1100 basis with a 
nominal value of  2 pence per ordinary share
there have been no changes in the directors’ interests in the shares issued or options granted by the company and its subsidiaries between 
the end of the period and 18 march 2011 except the sale of 2 million shares by the steiner 2008 millennium trust of which tim steiner is one 
of a number of discretionary beneficiaries announced by the company on 18 february 2011  
except for the directors’ interests in ocado limited at the beginning of the period no director had an interest in any of the company’s 
subsidiaries at the beginning or end of the period
in addition to the above holdings certain of the directors are discretionary beneficiaries under trusts holding ordinary shares of the company  the 
interests of these discretionary beneficiaries under their respective trusts are as follows
       ordinary shares  ordinary shares
       of 2 pence each of 1 pence each
          28 november  29 november
director       2010 2009
tim steiner       15291200  152912
neill abrams       1100800  12008
jason gissing       7659300  95834
jörn rausing          59080100  262077
in addition to the above holdings caryn abrams wife of neill abrams holds 75000 ordinary shares and is a discretionary beneficiary of a trust 
holding 133100 2009 741 ordinary shares of the company
past directors who still hold an interest in the ordinary shares of the company are jeremy frampton who held 257200 ordinary shares jonathan 
faiman and a connected entity of his holding 850000 and 24437400 ordinary shares respectively and t om clayton holding 65821 ordinary 
shares at period end 45
chairman’s statement
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chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado our responsibilities
part b  audited information
a directors’ remuneration
the following section provides details of the remuneration pension and share interests of the directors for the 52 weeks to 28 november 2010 
and has been audited
   salaries  benefits annual pension
   and fees in kind
†
 bonus contributions t otal total
   2010 2010 2010 2010 2010 2009
    £’000 £’000 £’000 £’000 £’000 £’000
executive directors
tim steiner    394   4   220   28   646   651
jason gissing    281   3   150   20   454   487
andrew bracey    281   3   150  —  434   23
neill abrams    224   2   120   16   362   346
nonexecutive directors
lord grade    113  —  100  —  213   112
david grigson    41  — — —  41   —
david y oung    40  — — —  40   28
ruth anderson    33  — — —  33   —
robert gorrie    22  — — —  22   34
patrick lewis    16  — — —  16  —
tom clayton   — — — — —  14
brian lynas   — — — — —  20 
jonathan faiman   — — — — —  — 
jeremy frampton   — — — — —  — 
michael robarts   — — — — —  — 
jörn rausing   — — — — —  —
t otal    1445   12   740   64   2261   1715
† benefits in kind comprise of private medical insurance
 in addition to his role as a nonexecutive director robert gorrie provides consultancy services to the group and chairs the meetings of 
the ocado employee council  he provides these services through robert gorrie limited of which he is the sole shareholder and is paid 
a per diem fee for these services  these fees are included in related party transactions with key management personnel in note 31 to the 
consolidated financial statements
 
lord grade was entitled to a single bonus of £100000 payable on the company’s admission which he elected to receive in ordinary shares in 
accordance with the terms of his letter of appointment
b directors’ interests in share option and share ownership schemes
esos
the directors have the following options over ordinary shares as at 28 november 2010 in the company and as at 29 november 2009 in ocado 
limited under the group’s esos
   date of 28 november exercise 29 november exercise 
director   issue 2010 price £  2009 price £  exercise period
tim steiner   may05  200000   115   2000   115  160508–150515
neill abrams   may02  175000   100   1750   100  070205–060212
   may02  175000   150   1750   150  070205–060212
   nov03  100000   090   1000   90  301106–291113
   may05  100000   115   1000   115  160508–150515
andrew bracey   nov09  46296   135   463   135  161112–151119
jason gissing   may05  200000   115   2000   115  160508–150515
robert gorrie   may02  175000   150   1750   150  070205–060212
   may02 —  —  1750   100  070205–060212
   nov03 — —  1000   90  301106–291113
jonathan faiman   may05 — —  2000   115  160508–150515
there were no share options issued under the group’s esos to the directors during the period 2009 463
robert gorrie exercised 2750 share options during the period 2009 nil  the exercise price of these options ranged between £90 and £100 as 
these options were exercised before the reorganisation of the group  t otal gains realised upon exercise of these options were £106000
his options were granted to him before the commencement of his role as a nonexecutive director  the company does not include options in 
remuneration paid to nonexecutive directors 46
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
the only lapse of directors’ share options during the period was jonathan faiman’s options which lapsed when he retired from the board 2009 nil
nonemployee share options
in addition to the options over ordinary shares pursuant to the group’s esos detailed above andrew bracey has the following options as at  
29 november 2010 over ordinary shares in the company and options as at 29 november 2009 over shares in ocado limited
   date of 28 november exercise 29 november exercise 
   issue 2010 price £  2009 price £  exercise period
andrew bracey   feb02  886700   090   8867   90  040202–040217
   jan04  435300   103   4353   103  030104–030118
in february 2002 t om clayton was issued 943 options over ordinary shares of ocado limited at an exercise price of £53 outside of the group’s 
esos  these were converted into 94300 options over ordinary shares in the company on 9 february 2010 on a 1100 basis and all these 
options were exercised during the current period
there are no performance criteria attached to these nonemployee share options
jsos
at the end of the period the executive directors’ interest in ordinary shares in the company pursuant to the group’s jsos were as follows
      date  28 november hurdle
director     of issue 2010 price £  vesting period
tim steiner     feb10  2513100   173  010111–010119
     feb10  2513100   191  010112–010119
     feb10  2513100   208  010113–010119
     feb10  2513000   228  010114–010119
neill abrams     feb10  1017200   173  010111–010119
     feb10  1017200   191  010112–010119
     feb10  1017200   208  010113–010119
     feb10  1017100   228  010114–010119
andrew bracey     feb10  1675400   173  010111–010119
     feb10  1675400   191  010112–010119
     feb10  1675400   208  010113–010119
     feb10  1675300   228  010114–010119
jason gissing     feb10  1675400   173  010111–010119
     feb10  1675400   191  010112–010119
     feb10  1675400   208  010113–010119
     feb10  1675300   228  010114–010119
for further information relating to the set up of the group’s jsos see note 24b to the consolidated financial statements
sharesave scheme
at the end of the period the executive directors’ interests in the sharesave scheme were as follows
     date  28 november exercise
director     of issue 2010 price £  exercise period
tim steiner     oct10  7745   116  011113–010514
neill abrams     oct10  7745   116  011113–010514
andrew bracey     oct10  7745   116  011113–010514
jason gissing     oct10  7745   116  011113–010514
the market price of the company’s shares at 28 november 2010 was 151 pence per share and the range during the period was 1235 pence to 167 pence
for further information relating to the sharesave scheme see note 24d to the consolidated financial statements
no other directors have options over shares of the company outside one of the company’s recognised share schemes except for andrew 
braceys nonemployee share options noted above
approved by the board
da vid y oung
chairman of the remuneration committee 
ocado group plc 
23 march 2011
directors’ remuneration report continued 47
chairman’s statement
stock code ocdo wwwocadogroupcom
2017704  22032011 proof 12
47
chairman’s statement
stock code ocdo wwwocadogroupcom
our financials
independent auditors’ report
to the members of ocado group plc
we have audited the group financial statements of ocado group 
plc for the year ended 28 november 2010 which comprise 
the consolidated income statement consolidated statement 
of comprehensive income the consolidated balance sheet the 
consolidated statement of cash flows the consolidated statement 
of changes in equity 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
respective responsibilities of directors and auditors
as explained more fully in the directors’ responsibilities statement 
set out on pages 24 and 25 the directors are responsible for the 
preparation of the consolidated financial statements and for being 
satisfied that they give a true and fair view  our responsibility is 
to audit the consolidated 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 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 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
opinion on financial statements
in our opinion the consolidated financial statements
	 ● give a true and fair view of the state of the group’s affairs as at 
28 november 2010 and of its loss and cash flows for the year 
then ended
	 ● have been properly prepared in accordance with ifrss as 
adopted by the european union and
	 ● have been prepared in accordance with the requirements of the 
companies act 2006 and article 4 of the las regulation
opinion on other matters prescribed by the companies act 2006
in our opinion
	 ● the information given in the directors’ report for the financial 
year for which the consolidated financial statements are prepared 
is consistent with the consolidated financial statements and
	 ● the information given in the statement of corporate governance 
set out on pages 33 to 40 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 
	 ● certain disclosures of directors’ remuneration specified by law 
are not made or
	 ● we have not received all the information and explanations we 
require for our audit
under the listing rules we are required to review
	 ● the directors’ report set out on pages 19 to 25 in relation to 
going concern and
	 ● the part of the statement of corporate governance relating to 
the company’s compliance with the nine provisions of june 2008 
combined code specified for our review
other matter
we have reported separately on the parent company financial 
statements of ocado group plc for the year ended 28 november 
2010 and on the information in the directors’ remuneration report 
that is described as having been audited
clive hinds senior statutory auditor
for and on behalf of pricewaterhousecoopers llp 
chartered accountants and statutory auditors
st albans
23 march 2011 48
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
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48
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
consolidated income statement
for the 52 weeks ended 28 november 2010
         52 weeks  52 weeks
         ended ended
         28 november 29 november
         2010 2009
        notes £’000 £’000
revenue      5 515688  401997 
cost of sales       354043 279168
gross profit       161645  122829 
other income       6245  2641 
distribution costs       132809 110331
operating profit before administrative expenses and exceptional item    35081  15139 
administrative expenses       36895 29542
exceptional item — ipo costs      23 3542 — 
operating loss      6 5356 14403
finance income      8 1502  12 
finance costs      8 8357 11118
loss before tax       12211 25509
taxation      9 5000  2300 
loss for the period attributable to the owners of the company
†
     7211 23209
loss per share       pence pence
basic and diluted loss per share      27 163 605
†
nongaap measure earnings before interest taxation depreciation amortisation impairment and exceptional item ebitda
         52 weeks  52 weeks
         ended ended
         28 november 29 november
         2010 2009
        notes £’000 £’000
loss for the period attributable to the owners of the company     7211 23209
adjustments for
finance income      8 1502 12
finance costs      8 8357  11118 
taxation      9 5000 2300
depreciation of property plant and equipment     11 19333  17865 
amortisation expense      10 4474  4743 
impairment of property plant and equipment     11 14  1023 
exceptional item — ipo costs      23 3542  — 
earnings before interest taxation depreciation amortisation impairment and exceptional item ebitda  22007  9228 
note 
a reverse acquisition took place on 9 february 2010  the financial information for the comparative period has been presented as if ocado 
group plc had been the parent company of the group throughout see notes 2a and 2b 49
chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado getting to know ocado getting to know ocado our performance getting to know ocado our responsibilities our financials
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49
chairman’s statement
stock code ocdo wwwocadogroupcom
our financials
consolidated statement of comprehensive income
for the 52 weeks ended 28 november 2010
         52 weeks  52 weeks
         ended ended
         28 november 29 november
         2010 2009
         £’000 £’000
loss for the period attributable to the owners of the company     7211 23209
other comprehensive income
cash flow hedges — forward foreign exchange contracts
 — gains arising in the period       818  — 
 — gains transferred to property plant and equipment for the period    92 — 
other comprehensive income for the period       726  — 
t otal comprehensive expense for the period attributable to the owners of the company   6485 23209
note 
a reverse acquisition took place on 9 february 2010  the financial information for the comparative period has been presented as if ocado 
group plc had been the parent company of the group throughout see notes 2a and 2b 50
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2017704  22032011 proof 12
50
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
consolidated balance sheet
as at 28 november 2010
         28 november  29 november
         2010 2009
        notes £’000 £’000
noncurrent assets
intangible assets      10 8069  6684 
property plant and equipment      11 100031  90252 
deferred tax asset      9 7300  2300 
availableforsale financial asset      12 395  395 
         115795  99631 
current assets
inventories      13 12480  9213 
trade and other receivables      14 18569  14740 
derivative financial instruments      22 472  — 
shortterm investment      15 30000  — 
cash and cash equivalents      16 124639  13017 
         186160  36970 
t otal assets       301955  136601 
current liabilities
trade and other payables      17 55491 47237
borrowings      18 2282 12087
obligations under finance leases      18 16485 19669
provisions      21 115 — 
         74373 78993
net current assetsliabilities       111787  42023
noncurrent liabilities
borrowings      18 9774 42658
obligations under finance leases      18 45573 45651
derivative financial instruments      22 —  1083
provisions      21 446 366
         55793 89758
net assetsliabilities       171789  32150
equity
share capital       23 11068  40 
share premium      23 206094  310836 
treasury shares reserve      23 47741 — 
reverse acquisition reserve      23 116230 — 
other reserves      23 726  — 
retained earningsaccumulated deficit       117872  343026
surplusdeficit attributable to equity holders      171789  32150
the consolidated financial statements on pages 48 to 91 were authorised for issue by the board of directors and signed on its behalf by
tim steiner 
chief executive officer
andrew bracey
chief financial officer
ocado group plc 
company registration number 07098618 england and wales
23 march 2011
note 
a reverse acquisition took place on 9 february 2010  the financial information for the comparative period has been presented as if ocado 
group plc had been the parent company of the group throughout see notes 2a and 2b 51
chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado getting to know ocado getting to know ocado our performance getting to know ocado our responsibilities our financials
2017704  22032011 proof 12
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chairman’s statement
stock code ocdo wwwocadogroupcom
our financials
consolidated statement of cash flows
for the 52 weeks ended 28 november 2010
         52 weeks  52 weeks
         ended ended
         28 november 29 november
         2010 2009
        notes £’000 £’000
cash flows from operating activities
loss before income tax       12211 25509
adjustments for
— depreciation of property plant and equipment     11 19333  17865 
— amortisation expense      10 4474  4743 
— impairment of property plant and equipment     11 14  1023 
— profitloss on disposal of property plant and equipment    6 63 33 
— provision for dilapidations expense      21 80  169 
— provision for insurance claims incurred but not reported    21 115  — 
— sharebased payments charge      7 320  78 
— finance income      8 1502 12
— finance costs      8 8357  11118 
changes in working capital
— increase in inventories       3267 106
— increase in trade and other receivables      1897 2707
— increase in trade and other payables        4791  10135 
cash generated from operations       18544  16830 
interest paid       10319 12740
net cash flows from operating activities       8225  4090 
cash flows from investing activities
purchase of property plant and equipment      14681 15215
proceeds from sale of property plant and equipment      87   — 
purchase of intangible assets       5850 4389
increase in shortterm investment       30000 — 
interest received       167  12 
net cash flows from investing activities       50277 19592
cash flows from financing activities
proceeds from the issue of ordinary share capital net of transaction costs    210104  29129 
proceeds from borrowings       11374  25052 
repayment of borrowings       54063 28374
proceeds from asset based financing arrangements      1676  7135 
repayments of obligations under finance leases      15417 10280
net cash flows from financing activities       153674  22662 
net increase in cash and cash equivalents      111622  7160 
cash and cash equivalents at the beginning of the period     13017  5857 
cash and cash equivalents at the end of the period     16 124639  13017 

note 
a reverse acquisition took place on 9 february 2010  the financial information for the comparative period has been presented as if ocado 
group plc had been the parent company of the group throughout see notes 2a and 2b 52
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2017704  22032011 proof 12
52
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
consolidated statement of changes in equity
for the 52 weeks ended 28 november 2010
       accumulated deficit
     treasury reverse deficit surplus
  share share shares acquisition other retained attributable to
  capital premium reserve reserve reserves earnings equity holders
 notes £’000 £’000 £’000 £’000 £’000 £’000 £’000
balance at 1 december 2008  38 281649 — — 1139 321034 38208
loss for the period  — — — — — 23209 23209
t otal comprehensive expense for the period  — — — — — 23209 23209 
transactions with owners
— issue of ordinary shares 23 2 30072 — — — — 30074
—  transaction costs on issue of 
ordinary shares 23 — 945 — — — — 945
— issue of convertible preference shares 23 — 60 — — — — 60
—  transfer of equity on 
conversion of loan stock 23d — — — — 5 5 —
—  transfer of equity on 
repayment of loan stock 23d — — — — 1134 1134 —
— sharebased payments charge 24 — — — — — 78 78
t otal transactions with owners  2 29187 — — 1139 1217 29267
balance at 29 november 2009  40 310836 — — — 343026 32150
loss for the period  — — — — — 7211 7211
other comprehensive income 23d — — — — 726 — 726
t otal comprehensive expense for the period  — — — — 726 7211 6485 
transactions with owners
— issue of ordinary shares in ocado limited 23 3 49443 47741 — — — 1705
— cancellation of ocado limited ordinary shares 23a 43 — — — — 43 —
—  issue of ordinary and convertible preference 
shares by ocado group plc 23b 476509 — — 476509 — — —
— ocado group plc capital reduction 23b 467846 — — — — 467846 —
—  reverse acquisition of ocado limited 
by ocado group plc 23c — 360279 — 360279 — — —
— issue of ordinary shares by ocado group plc  
  on ipo 23 2380 211862 — — — — 214242
— ordinary shares issue costs 23 — 6881 — — — — 6881
— issue of ordinary shares in ocado group plc 23 25 1113 — — — — 1138
— sharebased payments charge 24 — — — — — 220 220
t otal transactions with owners  11028 104742 47741 116230 — 468109 210424
balance at 28 november 2010  11068 206094 47741 116230 726 117872 171789
note 
a reverse acquisition took place on 9 february 2010  the financial information for the comparative period has been presented as if ocado 
group plc had been the parent company of the group throughout see notes 2a and 2b 53
chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado getting to know ocado getting to know ocado our performance getting to know ocado our responsibilities our financials
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chairman’s statement
stock code ocdo wwwocadogroupcom
our financials
notes to the consolidated financial statements
1 general information
ocado group plc hereafter “the company” is incorporated and domiciled in the united kingdom  the address of its registered office is titan 
court 3 bishops square hatfield business park hatfield hertfordshire al10 9ne  the financial information comprises the results of ocado 
group plc and its subsidiaries hereafter “the group” see note 28  the financial period represents the 52 weeks ending 28 november 2010 
prior period 52 weeks ending 29 november 2009   
2 accounting policies
a basis of preparation and development of ocado group plc
the company was incorporated on 8 december 2009 and on 9 february 2010 acquired the entire share capital of ocado limited  as a 
result of this transaction the ultimate shareholders in ocado limited received shares in the company in direct proportion to their original 
shareholdings in ocado limited  
under ifrs 3 revised “business combinations” the acquisition of ocado limited by the company has been accounted for as a reverse 
acquisition and the consolidated ifrs financial information of the company is therefore a continuation of the financial information of ocado 
limited
as a result any financial information after 9 february 2010 represents consolidated financial information of the group  prior to this date the 
historical financial information represents the financial information of the company’s only operating subsidiary ocado limited see note 28
the financial statements are presented in sterling rounded to the nearest thousand £’000 unless otherwise stated  they have been prepared 
under the historical cost convention except for financial instruments that have been measured at fair value through profit and loss
the financial statements have been prepared on the going concern basis which assumes that the group will continue to be able to meet its 
liabilities as they fall due for the foreseeable future
use of assumptions and estimates
the preparation of financial statements in conformity with ifrs requires the use of judgements estimates and assumptions that affect the 
reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during 
the reporting period  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 the judgements about carrying values of assets and 
liabilities that are not readily apparent from other sources  actual results may differ from these estimates
these 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 the revision affects only that period or in the period of the revision and future periods if the revision affects 
both current and future periods  please see note 3 for further details
standards amendments and interpretations adopted by the group in 200910 or issued but are not yet effective and have not been early 
adopted by the group
all standards amendments and interpretations which became effective during the financial period were early adopted by the group in the 
prior financial period  as such no new standards amendments and interpretations were adopted by the group during the financial period  
the following ifrss ifric interpretations and amendments effective for periods beginning on or after the date shown below  have been issued 
but are not yet effective and have not been early adopted by the group 
● ● amendment to ifrs 2 “share based payments” is effective from 1 january 2010
● ● amendment to ifrs 3 “business combinations” is effective from 1 january 2011
● ● amendment to ifrs 5 “noncurrent assets held for sale and discontinued operations” is effective from 1 january 2010
● ● amendment to ifrs 7 “financial instruments disclosures” is effective from 1 january 2011
● ● ifrs 9 “financial instruments” new standard effective from 1 january 2013
● ● amendment to ias 1 “presentation of financial statements” is effective from 1 january 2011
● ● amendment to ias 12 “income t axes” is effective from 1 january 2012
● ● amendment to ias 21 “the effects of changes in foreign exchange rates” is effective from 1 july 2010
● ● amendment to ias 24 “related party disclosures” is effective from 1 january 2011 54
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2 accounting policies continued
● ● amendment to ias 32 “financial instruments presentation” is effective from 1 february 2010
● ● amendment to ias 34 “interim financial reporting” is effective from 1 january 2011
● ● amendment to ifric 13 “customer loyalty programs” is effective from 1 january 2011
the adoption of these standards interpretations and amendments is not anticipated to have a material effect on the consolidated results of the 
group
b basis of consolidation
the consolidated financial statements include the financial statements of all subsidiaries  the financial year ends of all entities in the group are 
coterminous
the financial statements of subsidiaries are included in the consolidated financial statements from the date on which control over the operating 
and financial decisions is obtained and cease to be consolidated from the date on which control is transferred out of the group  control exists 
when the company has the power directly or indirectly to govern the financial and operating policies of an entity so as to obtain economic 
benefits from its activities  
on 9 february 2010 the group previously headed by ocado limited underwent a reorganisation by virtue of which ocado limited’s 
shareholders in their entirety exchanged their shares for shares in ocado group plc a newly formed company which then became the 
ultimate parent company of the group  notwithstanding the change in the legal parent of the group this transaction has been accounted for 
as a reverse acquisition and the consolidated financial statements are prepared on the basis of the new legal parent having been acquired by 
the existing group
all intercompany balances and transactions including recognised gains arising from intergroup transactions have been eliminated in full  
unrealised losses are eliminated in the same manner as recognised gains except to the extent that they provide evidence of impairment
c foreign currency translation
functional and presentation currency
items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic 
environment in which the entity operates “the functional currency”  sterling is the company’s functional and the group’s presentation 
currency
t ransactions and balances
foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions 
or valuation where items are remeasured  foreign exchange gains or losses resulting from the settlement of such transactions and from 
the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income 
statement except when deferred in equity as qualifying cash flow hedges
foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within 
“finance income” or “finance costs”  all other foreign exchange gains and losses are presented in the income statement within “operating loss”
group companies
the results and financial position of all the group entities none of which has the currency of a hyperinflationary economy that have a 
functional currency different from the presentation currency are translated into the presentation currency as follows
a assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet
b income and expenses for each income statement are translated at average exchange rates unless 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
c all resulting exchange differences are recognised as a separate component of equity
on consolidation exchange differences arising from the translation of the net investment in foreign operations and of borrowings and other 
currency instruments designated as hedges of such investments are taken to equity  when a foreign operation is partially disposed of or sold 
exchange differences that were recorded in equity are recognised in the income statement as part of the gain or loss on sale
the accounting policies have been applied consistently by the company to all periods presented in the financial statements
notes to the consolidated financial statements continued 55
chairman’s statement
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chairman’s statement
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our financials
2 accounting policies continued
d revenue
revenue consists of income generated from online sales through the webshop and includes charges for delivery
online sales are shown net of returns relevant marketing vouchersoffers and value added taxes  relevant vouchersoffers include moneyoff 
coupons conditional spend vouchers and offers such as buy three for the price of two
revenue is recognised at the point when the significant risks and rewards of products have been passed to the buyer and can be reliably 
measured in general this is deemed to occur when customers take delivery of the goods  income from “ocado delivery pass” the discounted 
prepay delivery scheme is recognised in the period to which it relates on an accruals basis
e cost of sales
cost of sales represents the cost to the group of the product sold  it consists of all external costs incurred in procuring goods for resale and 
delivering them to the customer fulfilment centre as well any adjustments to inventories
f distribution costs
distribution costs consist of all the costs incurred excluding product costs to the point of sale usually the customers’ home  this includes the 
payrollrelated expenses for the picking dispatch and delivery of product sold to the point of sale the cost of making those deliveries including 
fuel tolls maintenance of vehicles the operating costs of the properties required for the picking dispatch and onward delivery operations and 
all associated depreciation amortisation and impairment charges
g administrative expenses
administrative expenses consist of all advertising and marketing expenditure the payrollrelated expenses of all marketing it and other head 
office functions costs of annual software maintenance contracts propertyrelated costs for the head office all fees for professional services and 
depreciation amortisation and impairment of it equipment and fixtures and fittings
h exceptional item — ipo costs
ipo costs allocated to profit and loss represent the portion of directly attributable costs relating to the secondary shares traded on admission 
and other costs attributable to the listing
i other income
other income consists of advertising revenue commission income received and income from other services to suppliers
j property plant and equipment
property plant and equipment excluding land are stated at cost less accumulated depreciation and any recognised impairment loss  cost 
includes the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended use
depreciation is provided at rates estimated to write off the cost of the relevant assets less their estimated residual values by equal annual 
amounts over their expected useful economic lives  residual values and expected useful economic lives are reviewed and adjusted if 
appropriate at the end of each reporting period
land is not depreciated  depreciation on other fixed assets is found within distribution expenses and is calculated based on the useful 
economic life indicated below
freehold buildings and leasehold properties  25 years or the lease term if shorter
fixtures and fittings 5–10 years
plant and machinery 3–20 years 97 between 5 and 10 years
motor vehicles 2–5 years
capital workinprogress is not depreciated until it is available for use
gains and losses on disposal are determined by comparing proceeds with the asset’s carrying amount and are recognised within operating 
profit  
k intangible assets — computer software
computer software is carried at cost less accumulated amortisation and any recognised impairment loss  externally acquired computer 
software and software licences are capitalised and amortised on a straightline basis over their useful economic lives of three to five years  
costs relating to the development of computer software for internal use are capitalised once all the development phase recognition criteria of 
ias 38 “intangible assets” are met  when the software is available for its intended use these costs are amortised in equal annual amounts over 
the estimated useful life of the software  amortisation and impairment of computer software or licences is charged to administration expenses 
in the period in which it arises 56
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2017704  22032011 proof 12
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2 accounting policies continued
l impairment of nonfinancial assets
the group does not have any assets that have an indefinite useful life and so are not subject to an annual amortisation or depreciation 
charge  assets that are subject to an annual amortisation or depreciation charge are reviewed for impairment whenever events or changes 
in circumstances indicate that the carrying amount exceeds its recoverable amount  the recoverable amount is the higher of an asset’s fair 
value less cost to sell and value in use  for the purpose of assessing impairment assets are grouped at the lowest level for which there are 
separately identifiable cash flows cash generating units  nonfinancial assets that suffered impairment are reviewed for possible reversal of the 
impairment at each reporting date
given the group’s current operating structure the lowest level at which cash flows can reasonably be assessed is for the group as a whole  
the group is still investing in its future growth and so has not yet reached a stage where it delivers positive post tax earnings  the group 
prepares detailed forward projections which are constantly updated and refined  based on these projections the board does not consider that 
any further impairment of assets is required
m borrowing costs
borrowing costs which are directly attributable to the acquisition or construction of qualifying assets are capitalised  they are defined as the 
borrowing costs that would have been avoided if the expenditure on the qualifying asset had not been made  all other borrowing costs are 
charged to finance costs using the effective interest rate method
n leased assets 
leases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards of ownership to the group  
all other leases are classified as operating leases  for property leases the land and building elements are treated separately to determine the 
appropriate lease classification
finance leases
assets funded through finance leases are capitalised either as property plant and equipment or intangible assets as appropriate and are 
depreciatedamortised over their estimated useful lives or the lease term whichever is shorter  the amount capitalised is the lower of the fair 
value of the asset or the present value of the minimum lease payments during the lease term at the inception of the lease  the resulting lease 
obligations are included in liabilities net of finance charges  finance costs on finance leases are charged directly to the income statement on an 
effective interest rate basis
operating leases
assets leased under operating leases are not recorded on the balance sheet  rental payments are charged directly to the income statement 
on a straight line basis
lease incentives
lease incentives primarily include upfront cash payments or rentfree periods  lease incentives are capitalised and spread over the period of 
the lease term
o inventories
inventories comprise goods held for resale fuel and other consumable goods made up principally of spares  inventories are valued at the lower 
of cost and net realisable value  goods held for resale and consumables are initially valued on a current cost basis and adjustments are made 
at the financial period end to bring this to an average cost basis  fuel stocks are valued at calculated average cost  costs include all direct 
expenditure and other appropriate attributable costs incurred in bringing inventories to their present location and condition
p t axation
the tax expense for the period comprises current and deferred tax  t ax is recognised in the income statement except to the extent that it 
relates to items recognised in other comprehensive income or directly in equity  in this case the tax is also recognised in other comprehensive 
income or directly in equity respectively
current taxation
current tax is the expected tax payable on the taxable income for the period using tax rates enacted or substantively enacted by the balance 
sheet date  management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is 
subject to interpretation  it establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities  
notes to the consolidated financial statements continued 57
chairman’s statement
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chairman’s statement
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our financials
2 accounting policies continued
deferred taxation
deferred tax is recognised using the balance sheet liability method on temporary differences arising between the tax base of assets and 
liabilities and their carrying amount in the financial statements  deferred tax is calculated at the tax rates that have been enacted or 
substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax 
liability is settled
deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the temporary 
differences can be utilised  the carrying amount of deferred tax assets is reviewed at each balance sheet date
deferred tax assets and liabilities are offset against each other when there is a legally enforceable right to setoff current taxation assets against 
current taxation liabilities and it is the intention to settle these on a net basis
deferred tax is charged or credited in the income statement except when it relates to items charged or credited directly to equity in which 
case the deferred tax is also recognised in equity
q provisions
provisions are recognised when the group has a present legal or constructive obligation as a result of 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
insurance claims
provisions for insurance claims relate to motor insurance claims that have been incurred but not reported and are based on estimates 
provided to ocado by the thirdparty manager of the ocado cell in atlas insurance pcc ltd
dilapidations
provisions for dilapidations are recognised on a lease by lease basis and are based on the group’s best estimate of the likely committed outflow 
to the group  where material these estimated outflows are discounted to net present value
r employee benefits
pensions
the group contributes to the personal pension plans of its staff through a defined contribution personal pension scheme which is 
administered by standard life  employer contributions to the scheme are calculated as a percentage of salary based on length of scheme 
membership  contributions are charged to the income statement in the period in which they arise
sharebased payments
employees including directors of the group receive remuneration in the form of sharebased payment transactions whereby employees 
render services in exchange for rights over shares “equitysettled transactions”  the cost of equity settled transactions with employees is 
measured by reference to the fair value at the date at which they are granted  fair value is measured by use of the blackscholes pricing model  
the expected life used in the model has been adjusted based on management’s best estimate for the effects of nontransferability exercise 
restrictions and behavioural considerations  in valuing equitysettled transactions no account is taken of any performance conditions
the cost of equitysettled transactions is recognised together with a corresponding increase in equity over the years in which the performance 
conditions are fulfilled ending on the date on which the relevant employees become fully entitled to the award “vesting date”  the vesting 
period is 3 years  if the options remain unexercised after a period of 10 years from the date of grant or the employee leaves the group the 
options expire subject to a limited number of exceptions
the cumulative expense recognised for equitysettled transactions at each reporting date until the vesting date reflects the extent to which 
both the vesting period has expired and the number of awards in the opinion of the directors of the group based on the best available 
estimate at that date that will ultimately vest
no expense is recognised for awards that do not ultimately vest except for awards where vesting is conditional upon a market condition 
which are treated as vesting irrespective of whether or not the market condition is satisfied provided that all other performance conditions are 
satisfied
the group has exposure in respect of cashsettled sharebased payment transactions and sharebased payment transactions with cash 
alternatives as defined by ifrs 2 “sharebased payments” only in respect of bad leaver provisions in the jsos
for details of the share options see note 24
s financial instruments
financial assets and financial liabilities are recognised on the balance sheet when the group becomes a party to the contractual provisions of 
the instrument 58
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2 accounting policies continued
the group classifies its financial instruments in the following categories 
● ● availableforsale
● ● loans and receivables 
● ● other financial liabilities at amortised cost and
● ● financial liabilities at fair value through the profit or loss
the classification depends on the purpose for which the financial assets and liabilities were acquired  management determines the classification 
of its financial instruments at initial recognition or in certain circumstances on modification
availableforsale financial assets
availableforsale financial assets are nonderivatives that are either designated in this category or not classified in any of the other categories  
they are included in noncurrent assets unless the investment matures or management intends to dispose of it within 12 months of the end of 
the reporting period  management consider that the group’s investments fall within this category as explained below
investments
investments are classified as either held for trading or availableforsale  there are currently no investments classified as held for trading
availableforsale investments are held at fair value if this can be reliably measured  if the equity instruments are not quoted in an active market 
and their fair value cannot be reliably measured the availableforsale investment is carried at cost less accumulated impairment  unless the 
valuation falls below its original cost gains and losses arising from changes in fair value of availableforsale assets are recognised directly in equity  
on disposal the cumulative net gain or loss is transferred to the statement of comprehensive income  impairments and valuations below costs 
are recognised in the income statement  dividends are recognised in the income statement when the right to receive payment is established
loans and receivables
loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in an active market  they 
are included in current assets except for maturities greater than 12 months after the end of the reporting period  these are classified as 
noncurrent assets  the group’s loans and receivables comprise “trade and other receivables” “shortterm investment” and “cash and cash 
equivalents” in the balance sheet
trade and other receivables
trade receivables are noninterest bearing and are recognised initially at fair value and subsequently at amortised cost reduced by appropriate 
allowances for estimated irrecoverable amounts
shortterm investment
shortterm investment comprises treasury deposits with a maturity of greater than three months at balance sheet date  
cash and cash equivalents
cash and cash equivalents comprise cash in hand and bank overdrafts  bank overdrafts are repayable on demand and form an integral part of 
the group’s cash management  they are therefore included as a component of cash and cash equivalents
financial liabilities and equity instruments
financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into  an equity 
instrument is any contract that gives a residual interest in the assets of the group after deducting all of its liabilities
trade and other payables
trade and other payables are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method
interestbearing borrowings
interestbearing bank loans and overdrafts are initially recorded at fair value net of attributable transaction costs  subsequent to initial 
recognition interestbearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised 
in the income statement over the period of the borrowings on an effective interest rate basis  on the balance sheet interest bearing 
borrowings have been subcategorised as borrowings and obligations under finance leases
compound instruments
compound financial instruments issued by the group comprise convertible loan stock that can be converted to convertible preference shares 
at the option of the holder  
notes to the consolidated financial statements continued 59
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2 accounting policies continued
the liability component of the compound financial instrument is recognised on the date of inception or modification at the fair value of a 
similar liability that does not have an equity conversion option  the equity element is recognised as the difference between the fair value of the 
compound financial instrument as a whole and the fair value of the liability component  any directly attributable transaction costs are allocated 
to the equity and liability components in proportion to their initial carrying amounts
subsequently the liability component of a compound financial instrument is measured at amortised cost using the effective interest rate 
method
derivative financial instruments
derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair 
value  the method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and if so 
the nature of the item being hedged  the group has designated all outstanding derivative financial instrument balances at 28 november 2010 
as cash flow hedges of highly probable forecast transactions  
the group documents at the inception of the transaction the relationship between hedging instruments and hedged items as well as its risk 
management objectives and strategy for undertaking various hedging transactions  the group also documents its assessment both at hedge 
inception and at the financial reporting period of whether the derivatives that are used in hedging transactions are highly effective in offsetting 
changes in fair values or cash flows of hedged items
the fair values of the various derivative instruments used for hedging purposes are disclosed in note 22  movements on the hedging reserve 
in shareholders’ equity are shown in the consolidated statement of comprehensive income  the full fair value of a hedging derivative is classified 
as a current asset when the remaining maturity of the hedged item is less than 12 months
cash flow hedging
the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity  
amounts accumulated in equity are recycled in the income statement in the periods when the hedged item affects profit or loss  when the 
hedged forecast transaction results in the recognition of property plant and equipment the gains or losses previously deferred in equity are 
included in the initial cost of the asset and are ultimately recognised in profit or loss through the depreciation line  
equity instruments
equity instruments issued by the group are recorded at the proceeds received net of direct issue costs
t impairment of financial assets
assets carried at amortised cost
the group assesses whether there is objective evidence that a financial asset is impaired at the end of each reporting period  a financial asset 
is impaired and an impairment loss recognised if there is objective evidence of impairment as a result of a loss event that occurred after the 
initial recognition of the asset and the loss event has an impact on the estimated future cash flows of the financial assets that can be reliably 
estimated
the criteria that the group uses to determine that there is objective evidence of an impairment loss includes but is not limited to
● ● financial difficulty indicators
● ● breach of contract such as missed payments
● ● fraud
● ● bankruptcy and
● ● disappearance of an active market
the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash 
flows discounted at the financial asset’s original effective interest rate  the asset’s carrying value is reduced and the loss recognised in the 
income statement
if in a subsequent period the impairment loss decreases and the decrease can be related objectively to an event occurring after the 
impairment was recognised the reversal of the previously recognised impairment loss is recognised in the income statement
availableforsale financial assets
equity investments classified as availableforsale and held at cost are reviewed annually to identify if an impairment loss has occurred  the 
amount of the impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of 
estimated future cash flows discounted at the current market rate of return for a similar financial asset  impairment losses recognised in the 
income statement on equity investments are not reversed   60
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
3 critical accounting estimates and assumptions
estimates and judgments 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 period are addressed below
a intangible assets — capitalised software
cost capitalisation
amounts capitalised include the total cost of any external products or services and labour costs directly attributable to development  
management judgement is involved in determining the appropriate internal costs to capitalise and the amounts involved  
useful life
the useful life is determined by management at the time the software is acquired and brought into use and is regularly reviewed for 
appropriateness  for computer software licences the useful life represents management’s view of the expected period over which the group 
will receive benefits from the software but not exceeding the licence term  for unique software products controlled and developed by the 
group the life is based on historical experience with similar products as well as anticipation of future events which may impact their useful 
economic life such as changes in technology
b property plant and equipment
property plant and equipment represents a significant proportion of the asset base of the group being 33 in 2010 2009 66 of the 
group’s total assets  therefore the estimates and assumptions made to determine their carrying value and related depreciation are critical to 
the group’s financial position and performance
estimation of useful life
the charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected 
residual value at the end of its life  increasing an asset’s expected life or its residual value would result in a reduced depreciation charge in the 
income statement
the useful lives of the group’s assets are determined by management at the time the asset is acquired and reviewed at least annually for 
appropriateness  the lives are based on historical experience with similar assets as well as anticipation of future events which may impact their 
life such as changes in technology
c going concern basis including its effect on the impairment of assets
the group has cash reserves and maintains a mixture of longterm and shortterm debt finance that is designed to ensure the group 
has sufficient available funds for its operations and its planned expansion  the group monitors cash flow as part of its day to day control 
procedures and management consider cash flow projections on a monthly basis ensuring that appropriate facilities are available to be drawn 
upon as necessary  the group also prepares detailed forward projections for future periods which are constantly updated and refined  as 
a consequence the directors are satisfied that the group is able to maintain sufficient resources to continue in operation for the foreseeable 
future accordingly they have adopted the going concern basis in preparing the financial statements
impairment of assets based on the separation of the business into cash generating units
the group is required to undergo an assessment of the future viability of assets grouped at the lowest levels for which there are separately 
identifiable cash flows cash generating units  given the group’s current operating structure the lowest level at which cash flows can 
reasonably be assessed is for the group as a whole  the group is still investing in its future growth and so has not yet reached a stage where it 
delivers positive post tax earnings  based on the future projections referred to above the board do not consider that any further impairment 
of assets is required
there are a large number of assumptions and estimates involved in calculating these future projections including management’s expectations of
● ● increase in gross sales
● ● growth in ebitda
● ● timing and quantum of future capital expenditure and
● ● the estimation of future funding and the cost of such funding
notes to the consolidated financial statements continued 61
chairman’s statement
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chairman’s statement
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our financials
3 critical accounting estimates and assumptions continued
d leases
the group has a number of complex high value lease arrangements  the group follows the guidance of ias 17 “leases” to determine the 
classification of leases as operating leases versus finance leases  the classification of a lease as a finance lease as opposed to an operating lease 
will change ebitda as the charge made by the lessor will pass through finance charges and depreciation will be charged on the capitalised 
asset  retained earnings may also be temporarily affected depending on the relative size of the amounts apportioned to capital repayments and 
depreciation  ias 17 “leases” requires the group to consider property leases split into their component parts ie land and building elements 
separately  as only the buildings elements could be considered as a finance lease management must make a judgement based on advice from 
suitable experts as to the relative value of the land and buildings
e recognition of deferred tax assets
the group’s tax charge on ordinary activities is the sum of the total current and deferred tax charges  the calculation of the total tax charge 
necessarily involves a degree of estimation and judgement in respect of certain items  the final outcome of some of these items may give rise to 
material profit and loss andor cash flow variances  
a deferred tax asset is recognised when it has become probable that future taxable profit will allow the deferred tax asset to be recovered  
recognition therefore involves judgement regarding the prudent forecasting of future taxable profits of the business and in applying an 
appropriate risk adjustment factor
at the balance sheet date management has forecast that the group would generate future taxable profits against which existing tax losses could 
be relieved  as a result the group has recognised a deferred tax asset of £73 million with respect to available tax losses
4 segmental reporting
operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decisionmaker  the chief 
operating decisionmaker who is responsible for allocating resources and assessing performance of the operating segments has been identified as 
the executive directors
the principal activity of the group is the retailing and distribution of grocery and consumer goods within the uk  the results from the licensing 
of intellectual property for use outside of the uk to a nonuk subsidiary and the establishment in october 2010 of a captive insurance cell in 
malta see note 28 are not currently separately reported as they are not considered material and management do not believe information 
about these segments would be useful to the users of the financial statements  
the principal activity of the group is managed as one segment and does not split its activities into any further regional or product subdivisions in 
its internal management reporting as any such split would not provide the group’s management with any meaningful information  consequently 
all activities relate to this one segment
the group is domiciled in the uk  all of its revenue is from uk external customers and all noncurrent assets are located in the uk
5 gross sales 
 52 weeks 52 weeks 
 ended ended
 28 november 29 november
 2010 2009
 £’000 £’000
revenue 515688 401997
vat 27285 18788
marketing vouchers 8126 6493
gross sales 551099 427278 62
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
notes to the consolidated financial statements continued
6 operating loss
   52 weeks 52 weeks
   ended ended
   28 november 29 november
   2010 2009
  notes £’000 £’000
cost of inventories recognised as an expense   344796   271613 
employment costs  7  96739   78181 
amortisation expense  10  4474   4743 
depreciation of property plant and equipment  11  19333   17865 
impairment of property plant and equipment  11  14   1023 
profitloss on disposal of property plant and equipment    63  33 
chargescredit relating to the impairment of receivables  25b  45   30
operating lease rentals    
— land and buildings    2347   1815 
— other leases    413   191 
net foreign exchange losses    147   72 
during the period the group obtained the following services from its auditors 
   52 weeks 52 weeks
   ended ended
   28 november 29 november
   2010 2009
   £’000 £’000
audit services  
— statutory group and company audit  40   — 
— statutory audit of subsidiaries  185   90 
nonaudit services
— services pursuant to legislation and compliance 
‡
   975   7 
— other services              108  — 
 1308   97
‡
 comprises primarily services in relation to the preparation for the listing of the company   63
chairman’s statement
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chairman’s statement
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our financials
7 employee information
employment costs during the financial period were as follows
   52 weeks 52 weeks
   ended ended
   28 november 29 november
   2010 2009
  notes £’000 £’000
staff costs during the period
wages and salaries   91699   74116
social security costs    8665   7015 
pension costs — defined contribution plans    1197   1067
sharebased payments expense    320   78
t otal employment costs    101881   82276
staff costs capitalised  11  5142  4095
t otal employment cost expense    96739   78181
average monthly number of employees including executive directors by role    
operational staff 3835  3151
support staff  417   343
 4252  3494 
the sharebased payments expense relates to the group’s equitysettled share schemes and a cashsettled sharebased payment see note 24 
for information on the group’s share option schemes
8 finance income and costs 
   52 weeks 52 weeks 
   ended ended
   28 november 29 november
   2010 2009
  notes £’000 £’000
interest on cash balances and shortterm investment   557 5
other interest   12 7
fair value movement in derivative liability  22 933 —
finance income   1502 12
interest on bank loans and overdrafts   31 41
interest on finance leases   4356 5009
interest on borrowings   3970 5717
interest on convertible loan   — 347
fair value movement in derivative liability   — 4
finance costs   8357 11118
net finance costs   6855 11106
included in interest on borrowings is an amount of £197000 relating to the accelerated amortisation of prepaid arrangement fees 64
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
9 taxation
   52 weeks 52 weeks
   ended ended
   28 november 29 november
   2010 2009
   £’000 £’000
recognised in the income statement
current tax
uk corporation tax on profits of the period  —  —
adjustments in respect of prior periods  —   —
t otal current tax  —   —
deferred tax 
origination and reversal of temporary differences  —   —
recognition of tax losses 5000 2300 
t otal deferred tax 5000  2300 
income tax credit 5000 2300 
the tax on the group’s loss before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to 
losses of the group as follows
   52 weeks 52 weeks
   ended ended
   28 november 29 november
   2010 2009
   £’000 £’000
loss before tax 12211 25509 
effective tax credit at the uk tax rate of 28 2009 28  3419  7143 
effect of
permanent differences   138    332
t ax losses for which no deferred tax asset recognised  4119  1793
t emporary differences on which no deferred tax recognised  2400   2718
income tax credit for the period  5000 2300 
a number of changes to the uk corporation tax system were announced in the june 2010 budget statement  the finance no 2 act 2010 
which was substantively enacted on 20 july 2010 includes legislation reducing the main rate of corporation tax from 28 per cent to 27 per cent 
from 1 april 2011  further reductions to the main rate are proposed to reduce the rate by 1 per cent per annum to 24 per cent by  
1 april 2014
movement in the deferred tax asset is as follows 
 t ax losses  accelerated share 
 carry capital based 
 forwards allowances payments total 
  £’000 £’000 £’000 £’000 
as at 30 november 2008  —  —  —   —
t ax losses recognised through the income statement 2300    —  2300
as at 29 november 2009  2300   —   —  2300
t ax losses recognised through the income statement 5000   —   —  5000
as at 28 november 2010 7300  —   —  7300
notes to the consolidated financial statements continued 65
chairman’s statement
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9 taxation continued
the unrecognised deferred tax asset in respect of tax losses and accelerated capital allowances available at the period end is analysed below
 t ax losses  accelerated share
 carry capital based 
 forwards allowances payments total 
  £’000 £’000 £’000 £’000 
as at 30 november 2008 75117  14609  611  90337
potential movement in the period unrecognised through   
— income statement 1793  2725   7 4511
— equity  —   —  177  177
as at 29 november 2009 76910  17334  781  95025
effect of change in uk corporation tax rate 2596 707 6 3309
potential movement in the period unrecognised through   
— income statement  4119 2459  59   1719 
— equity — — 109  109
as at 28 november 2010 70195  19086  607  89888
10 intangible assets — computer software
 28 november 29 november
 2010 2009
 £’000 £’000
cost
at the beginning of the period 28503 24114
additions 717 294
internal development costs capitalised 5142 4095
at the end of the period 34362 28503
accumulated amortisation
at the beginning of the period 21819 17076
charge for the period 4474 4743
at the end of the period 26293 21819
net book value
at the end of the period 8069 6684
the net book value of computer software held under finance leases is analysed below
 28 november  29 november 
 2010 2009
 £’000 £’000
cost 2470 2470
accumulated amortisation 2404 2113
net book value 66 357
the movement in cost includes assets of £nil 2009 £265000 reclassified from owned assets to assets held under finance lease following asset 
based financing arrangements
for the 52 weeks ended 28 november 2010 internal development costs capitalised were £5142000 2009 £4095000 and represented 
approximately 88 2009 93 of expenditure on intangible assets and 15 200918 of total capital spend including property plant and 
equipment 66
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ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
11 property plant and equipment 
  fixtures 
  fittings 
 land and plant and motor
 buildings machinery vehicles total
 £’000 £’000 £’000 £’000
cost
at 1 december 2008 30457 107983 24122 162562
additions 4944 8896 4802 18642
disposals 66 4401 6286 10753
at 29 november 2009 35335 112478 22638 170451
additions 3079 15348 10723 29150
disposals 173 1483 5936 7592
at 28 november 2010
‡
 38241 126343 27425 192009
accumulated depreciation and impairment
at 1 december 2008 8209 49170 14652 72031
charge for the period 1511 12227 4127 17865
impairment 92 931 — 1023
disposals 66 4401 6253 10720
at 29 november 2009 9746 57927 12526 80199
charge for the period 1493 13151 4689 19333
impairment — 14 — 14
disposals 149 1483 5936 7568
at 28 november 2010 11090 69609 11279 91978
net book value
at 30 november 2008 22248 58813 9470 90531
at 29 november 2009 25589 54551 10112 90252
at 28 november 2010 27151 56734 16146 100031
‡ 
cost includes capitalised interest of £147000 2009 £147000  
the net carrying value of land and buildings comprises
 28 november  29 november 
 2010 2009
  £’000 £’000
freehold 11274  9645
short leasehold — less than 50 years 15877  15944
  27151  25589
notes to the consolidated financial statements continued 67
chairman’s statement
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our financials
11 property plant and equipment continued
the net book value of fixed assets held under finance leases are analysed below
  fixtures
  fittings
 land and plant and motor
 buildings machinery vehicles total
 £’000 £’000 £’000 £’000
at 28 november 2010
cost 26509 57685 26455 110649
accumulated depreciation and impairment 10632 32200 10618 53450
net book value 15877 25485 15837 57199
at 29 november 2009
cost 25459 55869 20872 102200
accumulated depreciation and impairment 9515 26332 11247 47094
net book value 15944 29537 9625 55106
the movement in cost includes assets of £2119000 2009 £6870000 reclassified from owned assets to assets held under finance lease 
following asset based financing arrangements
the impairment charge for fixtures fittings plant and machinery in all financial periods is in respect of superseded assets written off during the 
period  the charge against land and buildings in 2009 was in respect of portacabins written off as they were no longer fit for use
included within property plant and equipment is capital workinprogress for land and buildings of £1849000 2009 £nil and capital workin
progress for fixtures fittings plant  machinery of £4152000 2009 £39000  
property plant and equipment with a net book value of £103 million 2009 £110 million has been pledged as security for the secured loans 
note 19
12 availableforsale financial asset
 28 november  29 november 
 2010 2009
  £’000 £’000
unlisted equity investment 395  395
the unlisted equity investment comprises a 25 interest in paneltex limited whose registered office is at paneltex house somerden road hull 
hu9 5pe  this stake was acquired in june 2001 at a cost of £395000  payment for the shares was partly in cash £237000 and partly in equity 
1975 convertible preference shares  the group’s 25 interest in paneltex limited has not been treated as an associated undertaking as the 
group do not have significant influence over paneltex limited  in arriving at this decision the board has reviewed the conditions set out in ias 
28 “investments in associates” and concluded that despite the size of its holding it is unable to participate in the financial and operating policy 
decisions of paneltex limited due to the position of the majority shareholder as executive managing director the insignificant size and arms length 
nature of the relationship between the group and the company  
the shares of paneltex limited are not quoted in an active market and their fair value cannot be reliably measured  as such the investment in 
paneltex limited is measured at cost less accumulated impairment  
the group does not intend to dispose of this investment in the foreseeable future  if the group did intend to dispose of this investment then 
the anticipated exit route would be the sale of shares to the existing shareholder or another connected party of paneltex limited  
further details of the relationship with paneltex limited are included in note 31   68
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
13 inventories
 28 november  29 november 
 2010 2009
  £’000 £’000
goods for resale  11113   8270
consumables  1367  943
      12480  9213 
no security has been granted over inventories  
14 t rade and other receivables 
 28 november  29 november 
 2010 2009
  £’000 £’000
trade receivables 7190   5896
less provision for impairment of trade receivables    234   189
net trade receivables    6956   5707
other receivables    7260   4072
prepayments    3634   4411
accrued income     719   550
      18569   14740 
no security has been granted over trade and other receivables  
included in other receivables is £5431000 2009 £3058000 due from suppliers in relation to supplier funded promotional activity
a reconciliation of the movement in the provision for impairment of trade and other receivables excl  prepayments is shown below
 28 november 2010 29 november 2009
   gross  impairment gross impairment
   £’000   £’000  £’000 £’000
not past due   13222   —   7807   — 
past due 03 months   1681   96  2395   47
past due 36 months   192   86  115   26
past due over 6 months   74   52  201   116
     15169   234  10518   189
the provisions account for trade receivables is used to record impairment losses unless the group is satisfied that no recovery of the amount 
owing is possible at that point the amounts considered irrecoverable are written off against trade receivables directly  impairment losses are 
included within administrative expenses in the income statement
notes to the consolidated financial statements continued 69
chairman’s statement
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chairman’s statement
stock code ocdo wwwocadogroupcom
our financials
14 t rade and other receivables continued
trade receivables that were past due but not impaired amounted to £1713000 2009 £2522000 and relate to a number of suppliers for 
whom there is no recent history of default  the ageing analysis of these trade receivables is as follows 
 28 november  29 november 
 2010 2009
  £’000 £’000
past due 03 months        1585   2348 
past due 36 months        106   89 
past due over 6 months  22   85 
  1713   2522 
15  shortterm investment
 28 november  29 november 
 2010 2009
  £’000 £’000
treasury deposit   30000   — 
the shortterm investment relates to a £30 million treasury deposit which matures on 26 july 2011
16 cash and cash equivalents
 28 november  29 november 
 2010 2009
  £’000 £’000
cash at bank and in hand  124780   13157
bank overdraft   141  140
   124639   13017
the bank overdraft is repayable on demand and forms an integral part of the group’s cash management so is included as a component of cash 
and cash equivalents
the group renewed its bank overdraft facility of £5 million with barclays bank plc in january 2010  this facility was cancelled in january 2011  
see note 33  
the cash and cash equivalents balance does not include a £30 million treasury deposit held by the group which has been classified within  
shortterm investment see note 15  
£600000 of the group’s cash and cash equivalents are held by the group’s captive insurance company to maintain solvency requirements  
therefore these funds are deemed to be restricted and are not circulated within the group on demand   70
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2017704  22032011 proof 12
70
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
17 t rade and other payables 
 28 november  29 november 
 2010 2009
  £’000 £’000
trade payables  34645   33839
t axation and social security  3851   3130
accruals 14801   9519
deferred income  2194   749
    55491   47237 
deferred income represents the value of delivery income received under the ”ocado delivery pass” scheme allocated to future periods  
18 borrowings and finance leases
 28 november  29 november 
 2010 2009
 notes £’000 £’000
current liabilities
borrowings 19 2282 12087
obligations under finance leases  20 16485 19669
   18767 31756
noncurrent liabilities
borrowings  19 9774 42658
obligations under finance leases  20 45573 45651
   55347 88309
t otal borrowings and finance leases   74114 120065
19 borrowings
   between between
   one year two years
  less than and two and five over five
 total one year years years years
 £’000 £’000 £’000 £’000 £’000
as at 28 november 2010
secured loans 11919 2145 3718 6056 —
unsecured loans 137 137 — — —
t otal borrowings 12056 2282 3718 6056 —
as at 29 november 2009
secured loans 41350 5998 17463 17489 400
unsecured loans 13395 6089 4579 2727 —
total borrowings 54745 12087 22042 20216 400
notes to the consolidated financial statements continued 71
chairman’s statement
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chairman’s statement
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our financials
19 borrowings continued
secured loans 
the group entered into a loan of £80 million in may 2007 which is secured over certain warehouse assets  interest was charged at the clearing 
bank’s base rate plus 25 and was repayable in equal quarterly instalments commencing in may 2009 and ending in may 2014  in may 2009 
after the first capital instalment was paid the remaining capital instalments were deferred  repayments recommenced in august 2010 with equal 
instalments paid quarterly ending february 2015  the interest rate was reset to the clearing bank’s base rate plus 30  the carrying amount of 
the loan at 28 november 2010 is £71 million 2009 £75 million  
the group entered into a loan of £15 million in december 2006 which is secured on a freehold property  interest is charged at the clearing 
bank’s base rate plus 15  the loan is repayable in fixed quarterly instalments from march 2007 with a final payment in december 2011  the 
carrying amount of the loan at 28 november 2010 is £10 million 2009 £11 million  
the group entered into a loan of £15 million in february 2009 which is secured on a freehold property  interest is charged at libor plus 23  
it is repayable in fixed quarterly instalments from may 2009 with a final payment in february 2012  the carrying amount of the loan at  
28 november 2010 is £12 million 2009 £14 million  
the group entered into a loan of £29 million in december 2009 which is secured on a freehold property  interest is charged at libor plus 
35  it is repayable in fixed quarterly instalments from april 2010 with a final bullet payment in december 2012  the carrying amount of the 
loan at 28 november 2010 is £26 million 2009 £nil  
the group entered into a loan of £200 million in december 2004 which was extended by a further £150 million in february 2007  interest 
was charged at libor plus 60 of which 20 was due biannually and 40 was capitalised into the loan and is payable at the end of the loan 
term  a repayment of £100 million was made in november 2008 and the outstanding capital balance of £275 million 2009 £264 million was 
repaid in august 2010  the loan was secured over certain warehouse assets software and intellectual property  
the group entered into a loan of £50 million in september 2008 secured over certain warehouse assets software and intellectual property 
initially repayable in instalments or in full on or before september 2009  the loan was extended in september 2009 until january 2010 on the 
same terms and thereafter on a month by month basis  the outstanding capital balance of £50 million 2009 £50 million was repaid in may 
2010  interest was charged at libor plus 28  
unsecured loans 
the group entered into an agreement in october 2009 to defer the payment of its insurance premium over ten fixed monthly instalments  
interest was charged at 72 with the final payment made in july 2010  the group entered into a new agreement in october 2010 to defer the 
payment of its insurance premium of over ten fixed monthly instalments  interest is charged at 65 with the final payment due in september 
2011  the carrying amount of the loan at 28 november 2010 is £01 million 2009 £19 million  
the group entered into a loan of £68 million in april 2002 with the then landlord of the cfc  it was repayable in fixed quarterly instalments 
with a final payment in march 2012  interest was charged at 142 and the group had a right to repay the loan without penalty at any time on 
six months notice  the outstanding capital balance of £16 million 2009 £22 million was repaid in september 2010  
the group entered into a murabaha facility agreement in july 2009 to raise funds of £100 million  it was repayable in quarterly instalments 
from october 2009 to july 2012 totalling £113 million  it had been estimated that this would supply the bank with an overall yield of 80  the 
outstanding capital balance of £69 million 2009 £93 million was repaid in october 2010   72
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2017704  22032011 proof 12
72
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
20 obligations under finance leases
 28 november  29 november 
 2010 2009
 £’000 £’000
obligations under finance leases due
within one year 16485 19669
between one and two years 16121 16392
between two and five years 21947 20698
after five years 7505 8561
t otal obligations under finance leases 62058 65320
 28 november  29 november 
 2010 2009
 notes £’000 £’000
minimum lease payments due
within one year  20087 23705
between one and two years  18576 19180
between two and five years  24546 23779
after five years 9459 10773
  72668 77437
less future finance charges 10610 12117
present value of finance lease liabilities 62058 65320
disclosed as
current 18 16485 19669
noncurrent  18 45573 45651
 62058 65320
the existing finance lease arrangements entered into by the group contain no restrictions concerning dividends additional debt and further 
leasing furthermore no material leasing arrangements exist relating to contingent rent payable renewal or purchase options and escalation 
clauses
notes to the consolidated financial statements continued 73
chairman’s statement
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chairman’s statement
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our financials
21 provisions
  insurance claims dilapidations t otal
   £’000 £’000 £’000
as at 30 november 2008   —   197   197
chargedcredited to the income statement
— additional provision   —   212   212
— unused amounts reversed   —   3  3
— used during the period   —   40  40
as at 29 november 2009   —   366   366
chargedcredited to the income statement
— additional provision   115   203   318
— unused amounts reversed   —   1  1
— used during the period   —   122  122
as at 28 november 2010   115   446   561
analysis of total provisions as at 28 november 2010     
  insurance claims dilapidations t otal
   £’000 £’000 £’000
current   115   —   115
noncurrent   —   446   446
    115   446   561
analysis of total provisions as at 29 november 2009     
  insurance claims dilapidations t otal
   £’000 £’000 £’000
current   —   —   —
noncurrent   —   366   366
    —   366   366
the insurance claims provision is held within the group’s captive insurance cell and relates to motor insurance claims incurred but not reported  
the dilapidations provision is based on the future expected repair costs required to restore the cfc and the leased vans to their fair condition  
at the end of their respective lease terms  the cfc lease expires in 2032  leases for vans run for five years
22 derivative financial instruments
 28 november  29 november 
 2010 2009
  £’000 £’000
derivative asset
derivative asset designated as at fair value through profit or loss
— forward foreign exchange contracts cash flow hedges 472  —
derivative liability
derivative liability designated as at fair value through profit or loss
— warrant agreements  —   1083 74
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2017704  22032011 proof 12
74
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
22 derivative financial instruments continued
forward foreign exchange contracts
the notional principal amounts of the outstanding forward foreign exchange contracts at 28 november 2010 were eur 176 million  
2009 eur nil
the hedged highly probable forecast transactions denominated in foreign currency are expected to occur at various dates during the next  
12 months  gains and losses recognised in the hedging reserve within other comprehensive income were £818000 2009 £ nil  these gains 
are recognised in the income statement in periods during which the hedged forecast transaction affects the income statement which for the 
purchase of property plant and equipment is over the useful life of the asset three to 25 years  
warrant agreements
in 2004 the group issued to ranelagh nominees an affiliate of lloyds bank plc and to lloyds tsb bank plc warrants to subscribe for up to 
5611200 ordinary shares at £180 per share  lloyds tsb bank plc subsequently transferred its warrants to ranelagh nominees limited  the 
warrants provided ranelagh nominees with the opportunity to benefit in the equity upside of the company  on ipo the warrants were fair 
valued at £150000 down £933000 from that previously recognised  this decrease in fair value was due to the market price being lower on  
the ipo than the expected market price per the initial valuation  the outstanding derivative liability of £150000 was settled in cash
23 share capital and reserves
 28 november 2010 29 november 2009
 number of  number of 
 shares £’000 shares £’000
authorised
ordinary shares of 2 pence each 2009 1 pence each 600000000 12000 3000000 30
convertible preference shares of 1 pence each — —  3000000 30 
 600000000 12000 6000000 60
allotted called up and fully paid
ordinary shares of 2 pence each 2009 1 pence each 553428201 11068 1525757 15
convertible preference shares of 1 pence each — —  2474749 25 
 553428201 11068 4000506 40
included in the total number of ordinary shares outstanding above is 32476700 2009 nil ordinary shares held by the group’s employee  
benefit trust see note 23a
notes to the consolidated financial statements continued 75
chairman’s statement
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chairman’s statement
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our financials
23 share capital and reserves continued
the movements in the called up share capital and share premium accounts are set out below 
  
   convertible  convertible 
  ordinary preference ordinary preference share
  shares shares shares shares premium
 notes number number £’000 £’000 £’000
at 1 december 2008  1302690 2474220 13 25 281649
issue of ordinary shares  222281  —  2  —  30005 
ordinary shares issue costs  —  —  —  —  945
allotted in respect of executive share ownership 
scheme 24a 786  —  —  —  67
issue of convertible preference shares   —  529  —  —  60 
at 29 november 2009  1525757  2474749  15  25  310836 
allotted in respect of executive share ownership  
scheme of ocado limited 24a 6635  —  —  —  731 
allotted in respect of joint share ownership  
scheme of ocado limited 23a 324767  —  3  —  48712 
cancellation of ocado limited ordinary and  
convertible preference shares 23b 1857159 2474749 18 25 — 
issue of ordinary and convertible preference  
shares by ocado group plc 23b 185715900  247474900  204287  272222  — 
ocado group plc capital reduction 23b —  —  200573 267273 — 
reverse acquisition of ocado limited by 
ocado group plc 23c —  —  —  —  360279
issue of ordinary shares by ocado group plc on ipo  118968225  —  2379  —  211763 
issue of ordinary shares to the chairman on ipo  55555  —  1  —  99 
share issue costs  —  —  —  —  6881
conversion of preference shares to ordinary shares 
on ipo  247474900  247474900 4949  4949 — 
allotted in respect of the executive share ownership  
scheme of ocado group plc 24a 1032921  —  21  —  978 
allotted in respect of nonemployee share  
options issued by ocado group plc 24c 180700  —  4  —  135 
at 28 november 2010  553428201 — 11068 — 206094
convertible preference shares were convertible into the same number of ordinary shares either at the option of the holder or on the 
occurrence of certain trigger events including a public listing  the convertible preference shares ranked pari passu with ordinary shares with 
the exception that on return of assets on a liquidation reduction of capital or otherwise the holders of the convertible preference shares shall 
be entitled in respect of their preference shares in proportion to the number of such shares held by each of them in priority to all other 
shareholders to the surplus assets of the company remaining after payment of its liabilities the subscription price for their preference shares 
together with a sum equal to any arrears of dividends declared calculated down to the date of the return of assets  
on 9 february 2010 the company acquired the entire share capital of ocado limited  as a result of this transaction the shareholders in ocado 
limited received shares in the company in direct proportion to their original shareholdings in ocado limited  shareholders were issued 100  
shares in the company for every 1 share in ocado limited  the shares in the company have a nominal value of 2 pence each  therefore as at  
28 november 2010 share capital represents that of the company  the prior period presented represents that of ocado limited  
on 26 july 2010 the company’s shares were admitted to the premium listing segment of the official list of the uk listing authority and to 
trading on the main market of the london stock exchange the “listing”  in conjunction the company made an initial public offering “ipo” 
of 118968225 new 2 pence ordinary shares at a price of 180 pence per share  also in conjunction 247474900 convertible preference shares 
converted to ordinary shares   76
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2017704  22032011 proof 12
76
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
23 share capital and reserves continued
costs related directly to the new issue of shares in the amount of £69 million have been deducted from the share premium account  
attributable ipo costs are allocated between the share premium account and profit and loss account in proportion to the number of primary 
and secondary shares traded on admission  other costs attributable to the listing have been expensed  
costs expensed in the amount of £35 million in relation to the ipo relate primarily to legal and professional fees  
the ordinary shares held by the trustee of the group’s employee benefit trust pursuant to the jsos are treated as treasury shares in the group’s 
consolidated balance sheet in accordance with ias 32 ‘‘financial instruments presentation’’  these ordinary shares have voting rights but these 
have been waived by the trustee  the number of allotted called up and fully paid shares excluding treasury shares at the end of each period 
differs from that used in the loss per share calculation in note 27 as loss per share is calculated using the weighted average number of ordinary 
shares and convertible preference shares in issue during the period excluding treasury shares  
the movements in reserves other than share premium are set out below
  treasury reverse
  shares acquisition other
  reserve reserve reserves
 notes £’000 £’000 £’000
at 29 november 2009  — — —
allotted in respect of joint share ownership scheme of ocado limited 23a 47741 — —
issue of ordinary and convertible preference shares by ocado group plc 23b — 476509 —
reverse acquisition of ocado limited by ocado group plc 23c — 360279 —
fair value movement on derivative financial instrument 23d — — 726
at 28 november 2010  47741 116230 726
a t reasury shares reserve 
this reserve arose when the group issued equity share capital under its jsos which is held in trust by the trustee of the group’s employee 
benefit trust  the consideration paid is deducted from total shareholders’ equity and classified as treasury shares on consolidation  
b scheme of arrangement and capital reduction 
on 9 february 2010 pursuant to a scheme of arrangement all of ocado limited’s ordinary and convertible preference shares were cancelled  
immediately thereafter ocado limited issued 100 ordinary shares to the company for £1 and in consideration of that and of the cancellation 
of ocado limited’s ordinary and convertible preference shares the company issued 185715900 ordinary shares and 247474900 convertible 
preference shares on the basis of 100 ordinary andor convertible preference shares for each ocado limited ordinary share andor convertible 
preference share held  the effect of the scheme of arrangement was to replicate the shareholders’ register of ocado limited at the company 
level  
on 16 february 2010 pursuant to an order of the court confirming the reduction of capital of the company the company’s share capital was 
reduced by decreasing the nominal value of each ordinary and convertible preference share issued pursuant to the scheme of arrangement  
from 110 pence to 2 pence  this created distributable reserves of £4678 million
c reverse acquisition reserve 
the acquisition by the company of the entire issued share capital of ocado limited has been accounted for as a reverse acquisition under ifrs 
3 revised  consequently the previously recognised book values and assets and liabilities have been retained and the consolidated financial 
information for the period to 28 november 2010 has been presented as if the company had always been the parent company of the group   
the share capital for the period covered by these consolidated financial statements and the comparative periods is stated at the nominal value  
of the shares issued pursuant to the above share arrangement  any differences between the nominal value of these shares and previously 
reported nominal values of shares and applicable share premium issued by ocado limited have been transferred to the reverse acquisition 
reserve  
notes to the consolidated financial statements continued 77
chairman’s statement
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chairman’s statement
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our financials
23 share capital and reserves continued
d other reserves 
other reserves consist of the foreign currency translation reserve the fair value reserve and the convertible loan interest reserve   
the foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of the 
company’s foreign subsidiary ocado information t echnology limited which is incorporated in ireland and whose functional currency is euro   
the fair value reserve comprises gains and losses on the spot movement of the group’s cash flow hedges   
the convertible loan interest reserve existing on 1 december 2008 arose from the issuing of convertible loan stock in 2004 which in  
accordance with the principles of ias 32 was bifurcated into its liability and equity components  in march 2009 on the expiry of the stock 
holders’ convertible loan stock £11 million previously recognised in the convertible loan interest reserve in respect of this convertible loan stock 
was transferred to the accumulated deficit reserve  
24 share options and other equity instruments
the group currently operates three employee share incentive schemes namely the esos the jsos and the sharesave scheme
a esos
the group’s esos is an equitysettled share option scheme approved by hmrc  options may also be granted under the terms of a schedule 
which is not so approved  the esos was established by ocado in 2001
under the esos ocado or the trustees of an employee trust may grant options over shares in the company to eligible employees  the eligible 
employees to whom options are granted and the terms of such options will be determined by the directors of ocado or the trustees  the 
employees who are eligible to participate in the esos are all ocado’s executive directors and all employees including the employees of ocado’s 
subsidiaries  options are not transferable
the exercise price of options may not be less than the market value of the company’s shares on the date of grant  if the trustees or the 
directors have determined that the exercise of an option will be satisfied by the issue of ordinary shares the exercise price may also not be less 
than the nominal value of ordinary shares
the directors of ocado or trustees may impose a performance target and any further condition determined to be appropriate on the exercise 
of an option  any performance target must generally be measured over a period of at least three years  there are currently no options granted 
which are subject to performance targets that have not yet been met
the vesting period for the esos is three years  if the options remain unexercised after a period of 10 years from the date of grant or the 
employee leaves the company the options expire subject to a limited number of exceptions
on 9 february 2010 the ordinary shares and convertible preference shares in ocado limited were converted into ordinary shares and 
convertible preference shares in ocado group plc on a 1100 basis with a nominal value of 2 pence per share  current period opening balance 
movements during the period and options outstanding at the end of the period have been disclosed as if the conversion occurred at the 
beginning of the period 78
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2017704  22032011 proof 12
78
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
24 share options and other equity instruments continued
a esos continued
at each respective balance sheet date the outstanding options were as follows
 y ear of  28 november  exercise 29 november exercise exercise
 issue 2010 price £  2009 price £  period
approved 2001  593725   080   13940   80  010403 – 291111 
 2001  17744   090   268   90  301104 – 291111 
 2002  128181   090   4104   90  310505 – 291112 
 2003  120053   090   2127   90  310506 – 291113 
 2004  183426   090   3147   90  310507 – 291114 
 2005  367789   100   6599   100  310508 – 291115 
 2005  70170   115   944   115  310508 – 300515 
 2006  138890   140   1918   140  310509 – 300516 
 2006  115028   150   1627   150  301109 – 291116 
 2007  587939   150   6768   150  310510 – 291117 
 2008  225578   135   2721   135  301111 – 291118 
 2008  445751   120   5661   120  310511 – 300518 
 2009  240554   120   3519   120  310512 – 300519 
 2009  1354121   135   18100   135  021112 – 291119  
  2010  1151593   165   —   —  300613 – 290620 
t otal approved options    5740542     71443     
 y ear of  28 november  exercise 29 november exercise exercise
 issue 2010 price £  2009 price £  period
nonapproved 2001  46563   080   1094   80  210803 – 291111 
 2001  35856   090   777   90  301104 – 291111 
 2002  56787   090   1243   90  310505 – 291112 
 2002  175000   100   3500   100  070205 – 300512 
 2002  350000   150   3500   150  070205 – 300512 
 2003  100000   090   2000   90  301106 – 291113 
 2005  754   100   19   100  301108 – 291115 
 2005  808236   115   12242   115  160508 – 291115 
 2007  50833   150   508   150  310510 – 300517 
 2009  267500   120   9369   120  310512 – 300519  
 2009  24074   135   241   135  161112 – 151119 
t otal unapproved    1915603     34493     
t otal employee options    7656145     105936     
of the total employee share options above the following options were subject to performance criteria in relation to the average contribution by 
basket and ebitda
 y ear of  28 november  exercise 29 november exercise exercise
 issue 2010 price £  2009 price £  period
 2005  170670   115   2913  115 310508 – 300515 
  2009  254000   120   9550  120 310512 – 300519 
t otal options subject to  
performance criteria   424670     12463     
notes to the consolidated financial statements continued 79
chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado getting to know ocado getting to know ocado our performance getting to know ocado our responsibilities our financials
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chairman’s statement
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our financials
24 share options and other equity instruments continued
a esos continued
details of the movement in the number of share options outstanding during each financial period are as follows
 28 november 2010 29 november 2009
  weighted  weighted
  number of average number of average
 share options price £ share options price £
outstanding at the beginning of the period  10593611   115   79922   110 
granted during the period  1313929   165   33164   129 
forfeited during the period   2554974  112   6364  126 
exercised during the period  1696421  102   786  85 
outstanding at the end of the period  7656145  127  105936   115 
exercisable at the end of the period  3662300  111  57422   100 
the market value of the company’s shares was derived based on the market value of similar companies and by taking into account transactions 
with shareholders during the period  the share valuation office of the inland revenue has confirmed in correspondence that in respect of 
options granted the exercise price per share was not less than the market value of the company’s shares at each option grant date since the 
company’s admission the closing midmarket price of the shares on the day prior to issuance will be used for all future share option grants 
in determining the fair value of the share options the black–scholes option pricing model was used with the following inputs
 28 november  29 november 
  2010 2009
weighted average share price £147 £12660
weighted average exercise price £127 £11478
expected volatility  025   050 
weighted expected life  300   419 
riskfree interest rate 35 50
expected dividend yield  00 00
expected volatility was determined by comparing the company to others of a similar size or which operate in similar  the expected life used in 
the model has been adjusted based on management’s best estimate for the effects of nontransferability exercise restrictions and behavioural 
considerations  all share awards are equity settled  the charge to the income statement is detailed in note 7  
the weighted average remaining contractual lives for outstanding share options under the esos are as follows
 28 november 2010 29 november 2009
     weighted   weighted
      average   average
      remaining   remaining
  exercise  number of  contractual exercise  number of contractual
  price £ share options life years price £ share options  life years
   080   640288  10   80  15034   20 
   090   642047   30   90   13666   38 
   100   543543   38   100   10118   46 
   115   878406   45   115   13186   55 
   120   953805   84   120   18549   95 
   135   1603773   89   135   21062   99 
   140   138890   55   140   1918   65 
   150   1103800   51   150   12403   62 
   165   1151593   96   —   —   — 
 outstanding at the end of the period     7656145        105936   80
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2017704  22032011 proof 12
80
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
24 share options and other equity instruments continued
b jsos
the set up of the group’s the group’s jsos was approved by a resolution of the board of directors on 13 january 2010 following 
recommendations made by the company’s remuneration committee that a new executive incentive scheme be established to incentivise and 
retain its four executive directors and select members of senior management of the group the “participants”  the scheme was approved by 
the shareholders by written resolution in january 2010  the terms of the jsos have been approved by the company’s remuneration committee 
who oversee the operation of the scheme  
participants
following consultation with the company’s lawyers financial advisers and independent executive remuneration consultants and the board of 
directors’ approval awards were granted to the executive board and a select group of senior management  in total they acquired interests in 
325 million ordinary shares with an issue price of £150 per share historically the maximum share price recorded for the company’s shares  
nature of interests
interests will take the form of a restricted interest in ordinary shares in the company “interest”  an interest permits a participant to benefit 
from the increase if any in the value of a number of ordinary shares in the company “shares” over which the interest is acquired  in order 
to acquire an interest a participant must enter into a joint share ownership agreement with the trustees of an employee benefit trust under 
which the participant and the trustee jointly acquire the shares and agree that when the shares are sold the participant has a right to receive 
a proportion of the sale proceeds in so far as the value of the shares exceeds a threshold amount  for the initial interests acquired by the 
participants there are four tranches each with their own threshold or hurdle value as follows
tranche    vesting   hurdle    above 
  date value issue price
1 2011   01012011 £17250  15
2 2012   01012012 £19075  27
3 2013   01012013 £20829  39
4 2014   01012014 £22813  52
a participant is required to provide up front funding to the employee benefit trust equal to 2 of the issue price on the acquisition of their 
interests amounting to £003 per share the “entry price”  
when an interest vests the trustees will transfer shares to the participant of equal value to the participant’s interest or the shares will be  
sold and the trustee will account to the participant for the balance ie the difference between the sale proceeds less expenses and the  
hurdle value  
vesting conditions
the vesting of the interests granted to participants are subject to a time vesting condition with onequarter of the interest in the shares  
vesting on the first anniversary of their acquisition onequarter on the second anniversary onequarter on the third anniversary and the final  
onequarter on the fourth anniversary  
the fair value of the interests awarded under the jsos was determined using the black–scholes option pricing model  as per ifrs 2 
‘sharebased payments’ market based vesting conditions and the share price target conditions in the jsos have been taken in to account in 
establishing the fair value of the equity instruments granted  other nonmarket or performance related conditions were not taken into account 
in establishing the fair value of equity instruments granted instead these nonmarket vesting conditions are taken into account by adjusting the 
number of equity instruments included in the measurement of the transaction amount so that ultimately the amount recognised for services 
received as consideration for the equity instruments granted is based on the number of equity instruments that will eventually vest  the  
following inputs were used in the black–scholes option pricing model
   tranche 1 tranche 2 tranche 3 tranche 4
weighted average share price £135 £135 £135 £135
weighted average exercise price £173 £190 £208 £228
expected volatility 025 025 025 025
weighted expected life 091 191 291 391
riskfree interest rate 35 35 35 35
expected dividend yield  00 00 00 00
expected volatility was determined by comparing the company to others of a similar size or which operate in a similar industry  
notes to the consolidated financial statement continued 81
chairman’s statement
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24 share options and other equity instruments continued
c nonemployee share options
options to subscribe for ordinary shares and convertible preference shares have been granted by ocado limited to nonemployees  these 
options are equitysettled and do not have any vesting criteria
on 9 february 2010 the ordinary shares and convertible preference shares in ocado limited were converted into ordinary shares and 
convertible preference shares in ocado group plc on a 1100 basis with a nominal value of 2 pence per share
at each respective balance sheet date the options granted to nonemployees at the date of their grant were as follows
 date of  28 november  exercise 29 november exercise exercise
 issue 2010 price £  2009 price £  period
nonemployee share options feb02  —   —   943   53  070202 – 060212
 feb02  7400   090   74   90  040204 – 030214
 feb02  886700   090   8867   90  040202 – 040217
 jan04  435300   103   4353   103  030104 – 030118
  apr04  —   —   477   103  300404 – 290514
     1329400     14714     
 28 november 2010 29 november 2009
  weighted  weighted
 number of average number of average
 share options price £ share options price £
outstanding at the beginning of the period  1471400   092   14714   92 
granted during the period  —   —  —  —
forfeited during the period   —  —  —  —
exercised during the period  142000  070   —  —
outstanding at the end of the period  1329400   095   14714   92 
exercisable at the end of the period  1329400   095  14714   92 
the company documented an option to hawkeye capital partners limited on 21 june 2010 to subscribe for 38700 ordinary shares at a price 
of £103 per share  this option was granted to hawkeye capital partners limited for investor introduction services performed by it in 2003  
these options were exercised  on ipo at a weighted average price of £103
the weighted average remaining contractual lives for the outstanding nonemployee share options are as follows
 28 november 2010 28 november 2009
     weighted   weighted
      average   average
      remaining   remaining
  exercise  number of  contractual exercise  number of contractual
  price £ share options life years price £ share options  life years
   090  894100   62   53   943   22 
   103   435300   79   90   8941  72 
   —   —  —  103   4830   81 
 outstanding at the end of the period     1329400        14714   82
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2017704  22032011 proof 12
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
notes to the consolidated financial statements continued
24 share options and other equity instruments continued
d sharesave scheme
on 30 september 2010 the group launched the ocado sharesave scheme  this is an hmrc approved scheme and is open to any person  
that was an employee or officer of the group at the launch date  under the scheme members save a fixed amount each month for three  
years  at the end of the three year period they are entitled to use these savings to buy shares in ocado group plc at a price equal to 85 of  
the market value of the shares at the launch date  
at 28 november 2010 employees held 819 contracts in respect of options over 2724513 shares  a reconciliation of the ocado sharesave 
scheme option movements is shown below
 52 weeks ended
 28 november 2010
 number  weighted
 of share average
 options price £
outstanding at the beginning of the period —  — 
granted during the period  2728850   1162 
forfeited during the period   4337  1162 
outstanding at the end of the period  2724513  1162 
exercisable at the end of the period —  — 
in determining the fair value of the share options the blackscholes option pricing model was used with the following inputs
  28 november 
  2010
weighted average share price  £137
weighted average exercise price  £116
expected volatility   025 
weighted expected life   300 
riskfree interest rate  35
expected dividend yield   00
expected volatility was determined by comparing the company to others of a similar size or which operate in a similar industry
25 financial instruments
a fair value of financial instruments
the fair values of financial instruments are measured by using the following fair value hierarchy
● ● quoted priced unadjusted in active markets for identical assets or liabilities level 1
● ● inputs other than quoted prices included within level 1 that are observable for the asset and liability either directly or indirectly level 2
● ● inputs for the assets or liability that are not based on observable market data that is unobservable inputs level 3 
the fair values of shortterm deposits receivables overdrafts payables and loans of a maturity of less than one financial period are assumed to 
approximate to their carrying values but for completeness are included in this analysis  
the derivative asset at the end of the current period relates to forward foreign exchange contracts the fair value of which was determined  
with reference to the forward rate to the date of maturity for all outstanding forward foreign exchange contracts at period end  this derivative 
asset is categorised as level 2  
in the prior period the group recognised a derivative liability in respect of warrants issued  the fair value was determined using the  
blackscholes option pricing model and it was categorised as level 3
the group’s only availableforsale financial asset consists of an unlisted equity investment of which the fair value cannot be reliably determined  
this investment has been categorised as level 3  there has been no movement in this investment during the period 83
chairman’s statement
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chairman’s statement
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25 financial instruments continued
a fair value of financial instruments continued
the interest rate used to discount borrowings is based on a libor plus margin measure blended for the type of security offered and was 
calculated as 50 2009 64 and is classified as level 2
the fair values of all other financial assets and liabilities have been calculated by discounting the expected future cash flows at prevailing market 
interest rates and are classified as level 2  
set out below is a comparison by category of carrying amounts and fair values of all financial instruments that are included in the financial 
statements
 28 november 2010 29 november 2009
  carrying   carrying 
  value fair value value fair value
  notes £’000 £’000 £’000 £’000
financial assets
cash and cash equivalents 16  124639   124639   13017   13017 
shortterm investment 15  30000   30000   —  —
trade receivables 14  6956   6956   5707   5707 
other receivables incl  accrued income excl  prepayments 14  7979   7979   4622   4622 
derivative asset 22  472   472   —  —
availableforsale financial asset 12  395   395   395   395 
t otal financial assets    170441   170441   23741   23741 
financial liabilities
trade payables 17  34645  34645  33839  33839
accruals 17  14801  14801  9519  9519
borrowings 19  12056  11739  54745  55075
finance lease obligations 20  62058  62058  65320  65320
derivative liability 22  —  —  1083  1083
t otal financial liabilities    123560  123243  164506  164836
b credit risk
the group’s exposures to credit risk arise from holdings of cash and cash equivalents a shortterm investment and trade and other receivables 
excluding prepayments
 
exposure to credit risk
the carrying amount of financial assets represents the maximum credit exposure
cash and cash equivalents and shortterm investment
the group’s exposure to credit risk on cash and cash equivalents and shortterm investment is managed by only opening and maintaining 
transactional bank accounts and term deposits with banks and financial institutions which carry a moody’s rating of aa3p1 for longterm and 
shortterm deposits and limiting the amounts that can be deposited with any one such bank or financial institution
 
t rade and other receivables
trade and other receivables at the period end comprise mainly monies due from suppliers which is considered of a good credit quality  the 
group provides for doubtful receivables in respect of monies due from suppliers
the group has very low retail credit risk due to transactions being principally of a high volume low value and short maturity and the group’s 
effective controls over this area  the group has provided for doubtful receivables in respect of consumer sales by reviewing the ageing profile 
and based on prior experience assessing the recoverability of overdue balances 84
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
25 financial instruments continued
movements in the provision for the impairment of trade and other receivables are as follows
   28 november  29 november
   2010 2009
   notes £’000 £’000
at the beginning of the period    189  219
provision for receivables impairment    304  115
uncollectible amounts written off    217   114 
recovery of amounts previously provided    42   31 
at the end of the period  14  234  189
the provisions account for trade receivables is used to record impairment losses unless the group is satisfied that no recovery of the amount 
owing is possible at that point the amounts considered irrecoverable are written off against trade receivables directly
c liquidity risk
t o manage the working capital needs of the business the group is reliant on being able to negotiate sufficient financing arrangements  t o  
achieve this the group maintains a mixture of short and mediumterm debt and lease finance arrangements that are designed to ensure it has 
sufficient available funds to finance its operations  in addition during the period the group maintained a committed standby bank overdraft  
facility of £5 million 2009 £5 million  after the period end this overdraft facility was cancelled and replaced with a group composite account 
facility with the requirement that the aggregate of favourable cash balances offset adverse cash balances with a limit of £5 million adverse  
balance on any one account within the group  
the group monitors rolling forecasts of the group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while 
maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the group does not breach borrowing limits  
or covenants where applicable on any of its borrowing facilities  for further details see note 26
the table below analyses the group’s nonderivative financial liabilities into relevant maturity groupings based on the remaining period at the 
balance sheet date to the contractual maturity date  the amounts disclosed in the table are the carrying values and undiscounted contractual 
cash flows  
  carrying contractual 1 year 1–2 2–5 more than
  value cash flows or less years years 5 years
  notes £’000 £’000 £’000 £’000 £’000 £’000
nonderivative financial liabilities      
trade payables 17  34645  34645  34645  —   —   — 
accruals 17  14801  14801  14801  —   —   — 
secured loans 19  11919  12891  2580  4033  6278  — 
unsecured loans 19  137  141  141  —   —   — 
obligations under finance leases 20  62058  72668  20087  18576  24546  9459
28 november 2010  123560  135146  72254  22609  30824  9459
  carrying contractual 1 year 1–2 2–5 more than
  value cash flows or less years years 5 years
  notes £’000 £’000 £’000 £’000 £’000 £’000
nonderivative financial liabilities
trade payables 17  33839  33839  33839  —   —   — 
accruals 17  9519  9519  9519  —   —   — 
secured loans 19  41350  45185  7517  19428  17837  403
unsecured loans 19  13395  14959  7047  5075  2837  — 
obligations under finance leases 20  65320  77437  23705  19180  23779  10773
29 november 2009    163423  180939  81627  43683  44453  11176
at the end of the prior period the group had a derivative liability in the form of warrants to subscribe for ordinary shares in ocado limited  
with a fair value of £1083000 outstanding see note 22  the nature of these warrants does not allow for a maturity profile to be calculated 
due to the uncertain timing of it being exercised  these warrants were revalued and eventually settled during the current period
notes to the consolidated financial statements continued 85
chairman’s statement
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25 financial instruments continued
d market risk
currency risk
the group has foreign currency exposure in relation to its trade payables a portion of its cash and cash equivalents and derivative financial 
instruments in the form of forward foreign exchange contracts  
foreign currency trade payables arise principally on purchases of plant and equipment whilst euro bank accounts are maintained in order to 
minimise the group’s exposure to fluctuations in the euro relating to current and future purchases of plant and equipment  forward foreign 
exchange contracts are entered into in order to hedge future purchases of euro
the group’s exposure to currency risk is based on the following amounts
   28 november  29 november
   2010 2009
    £’000 £’000
cash and cash equivalents — euro  5318   — 
trade payables at period end
euro  1254   41
us dollar  —   2
derivative asset forward foreign exchange contracts — euro      472   — 
           7044   43
the table below shows the group’s sensitivity to changes in foreign exchange rates on its eurorelated financial instruments
   28 november 2010 29 november 2009
  increase increase increase increase
 decrease decrease decrease decrease
 in income   in equity   in income   in equity 
 £’000   £’000  £’000 £’000
10 appreciation of the euro  760   1453   5   —
10 depreciation of the euro  734  1324  5  — 
a strengthening of the euro as indicated against sterling at 28 november 2010 would have increaseddecreased equity and profit or loss by  
the amounts detailed above  this analysis is based on foreign currency exchange rate variances that the group considered to be reasonably 
possible at the end of the period  the analysis assumes that all other variables remain constant
interest rate risk
the group is exposed to interest rate risk on its interest bearing borrowings and floating rate cash and cash equivalents  the group’s interest 
rate risk policy seeks to minimise finance charges and volatility by structuring the interest rate profile into a diversified portfolio of fixed rate and 
floating rate financial assets and liabilities
at the balance sheet date the interest rate profile of the group’s interest bearing financial instruments was
   28 november  29 november
   2010 2009
    £’000 £’000
fixed rate instruments  
financial assets    79628  7779
financial liabilities    62195  78715
variable rate instruments  
financial assets    75011   5238
financial liabilities    11919  41350 86
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2017704  22032011 proof 12
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
notes to the consolidated financial statements continued
25 financial instruments continued
sensitivity analysis
an increase of 100 basis points 10 in interest rates at the balance sheet date will increase equity and profit or loss by the amounts shown 
below  100 basis points was deemed an appropriate rate considering the current shortterm interest rate outlook  this calculation assumes  
that the change occurred at the balance sheet date and had been applied to risk exposures existing at that date  this analysis assumes that all 
other variables remain constant and considers the effect on financial instruments with variable interest rates
   28 november  29 november
   2010 2009
    £’000 £’000
equity  
gainloss  600   492
income  
gainloss   600   492
e financial instruments by category
the group has categorised its financial instruments as follows
      financial 
     financial liabilities 
     liabilities at fair value 
   available loans and at amortised through profit 
   forsale receivables cost and loss t otal
     notes £’000 £’000 £’000 £’000 £’000
as at 28 november 2010      
financial assets as per the balance sheet     
cash and cash equivalents  16  —   124639   —   —   124639 
trade and other receivables excluding prepayments 14  —   44935   —   —   44935 
availableforsale financial asset  12  395   —   —   —   395 
derivative asset  22  —   —   —   472   472 
t otal    395   169574   —   472   170441 
financial liabilities as per the balance sheet     
trade payables  17  —   —   34645   —   34645 
accruals  17  —   —   14801   —   14801 
borrowings  19  —   —   12056   —   12056 
obligations under finance leases  20  —   —   62058   —   62058 
t otal      —   —  123560   —   123560 
      financial 
     financial liabilities 
     liabilities at fair value 
   available loans and at amortised through profit 
   forsale receivables cost and loss t otal
     notes £’000 £’000 £’000 £’000 £’000
as at 29 november 2009      
financial assets as per the balance sheet     
cash and cash equivalents  16  —   13017   —   —   13017 
trade and other receivables excluding prepayments 14  —   10329   —   —   10329 
availableforsale financial asset  12  395   —   —   —   395 
t otal    395  23346   —   —  23741 
financial liabilities as per the balance sheet     
trade payables  17  —   —   33839   —   33839 
accruals  17  —   —   9519   —   9519 
borrowings  19  —   —   54745   —   54745 
obligations under finance leases  20  —   —   65320   —   65320 
derivative liability  22  —   —   —   1083   1083 
t otal    —   —   163423   1083   164506  87
chairman’s statement
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chairman’s statement
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our financials
26 capital management
the board’s objective is to ensure the group’s ability to continue as a going concern and sustain future development of the business providing 
returns to shareholders and benefits to other stakeholders through an appropriate balance of debt and equity financing  
the board’s policy is to keep borrowings within existing facilities and to negotiate and obtain additional resources required to fund the group’s 
working capital requirements for the foreseeable future
the board closely manages its trading capital which it defines as its net assets plus net debt  net debt is calculated as total debt borrowings  
and finance leases as shown in the balance sheet less shortterm investments and cash and cash equivalents  the group has performance  
based loan covenants in place over certain facilities  management monitors the performance targets on a period basis considering actual and 
forecast results and they maintain constant communication with all of the group’s lenders  throughout the year the group has complied with  
all covenants imposed by those lenders  the main areas of capital management revolve around the management of the components of  
working capital including monitoring stock turn age of stock age of debtors debtor days creditor days balance sheet reforecasting period 
projected loss weekly cash flow forecasts and daily cash balances  major investment decisions are based on reviewing the expected future cash 
flows and all major capital expenditure requires approval from the board  there were no major changes in the group’s approach to capital 
management during the period
at the balance sheet date the group’s performance in remaining within its borrowing facilities including standby overdraft facilities as measured 
by the headroom available was as follows
   28 november  29 november
   2010 2009
   notes £’000 £’000
t otal facilities available     191373   137775 
facilities drawn down  18  74114 120065
undrawn facilities at end of period    117259   17710 
shortterm investment  15 30000 —
cash and cash equivalents gross of drawn overdraft facility  16  124780   13157 
t otal undrawn facilities shortterm investment and cash available at the end of the period    272039   30867 
27 loss per share
basic loss per share is calculated by dividing the loss attributable to equity holders by the weighted average number of ordinary shares and 
convertible preference shares in issue during the period excluding ordinary shares held pursuant to the group’s jsos and accounted for as 
treasury shares adjusted to reflect the conversion of the ordinary shares and preference shares from ocado limited to ocado group plc on  
a 1100 basis on 9 february 2010  the loss for the period is equally attributable to the shareholders of ordinary shares and convertible 
preference shares  for more information see note 23
diluted loss per share is calculated by adjusting the weighted average number of ordinary shares and convertible preference shares outstanding 
to assume conversion of all dilutive potential shares adjusted to reflect the conversion of the ordinary shares and the convertible preference 
shares from ocado limited to ocado group plc as mentioned above  the company has two categories of potentially dilutive shares namely 
share options and shares held pursuant to the group’s jsos
there was no difference in the weighted average number of shares used for the calculation of basic and diluted loss per share as the effect of  
all potentially dilutive shares outstanding was antidilutive 88
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2017704  22032011 proof 12
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
27 loss per share continued
basic and diluted loss per share has been calculated on the following basis
 52 weeks 52 weeks 
 ended 28 ended 29
 november  november
 2010 2009
 ’000 ’000
issued ordinary shares and convertible preference shares at beginning of the period 400051 377691
effect of share options exercised in the period 927 47
effect of shares issued in the period 41237 5619 
weighted average number of shares at the end of the period 442215 383357
 £’000 £’000
loss attributable to the owners of the company 7211 23209
 pence pence
basic and diluted loss per share 163 605
the only transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of these financial  
statements were the exercise of 525000 share options
28 subsidiaries 
as at 28 november 2010 the company’s principal subsidiary undertakings were as follows
  proportion of share country of
 principal activity capital held incorporation 
ocado holdings limited holding company 100 england and wales
ocado limited retail and distribution 100 england and wales
ocado information t echnology limited intellectual property 100 republic of ireland
jalapeno partners limited dormant company 100 england and wales
ocado cell in atlas insurance pcc limited insurance company 100 malta
ocado holdings limited is a 100 owned subsidiary of ocado group plc and the only directly held subsidiary  it was incorporated in the uk  
on 5 february 2010 with registration number 07148670
ocado limited is a 100 owned subsidiary of ocado holdings limited  it is incorporated in the uk with registration number 3875000
ocado information t echnology limited is a 100 owned subsidiary of ocado holdings limited  it was incorporated in ireland on 19 january 
2010 with registration number 479792  on 21 january 2010 ocado limited granted ocado information t echnology limited a licence to use 
ocado limited’s intellectual property outside of the uk and in consideration ocado information t echnology limited issued a promissory note 
which was settled by the issue of 5075840 ordinary shares of 1 euro each  on 17 june 2010 ocado holdings limited acquired the entire 
ordinary share capital of ocado information t echnology limited from ocado limited
jalapeno partners limited is a 100 owned subsidiary of ocado limited  it is incorporated in the uk with registration number 04204963 it is a 
dormant company as defined by section 1169 of the companies act  the only balances in the accounts of jalapeno partners limited are share 
capital of £1 and an intercompany debtor of £1
on 9 february 2010 the group previously headed by ocado limited underwent a reorganisation by virtue of which ocado limited’s 
shareholders in their entirety exchanged their shares for shares in ocado group plc a newly formed company which then became the ultimate 
parent company of the group  notwithstanding the change in the legal parent of the group this transaction has been accounted for as a  
reverse acquisition under ifrs 3 revised “business combinations” and the consolidated financial statements are prepared on the basis of the 
new legal parent having been acquired by the existing group
notes to the consolidated financial statements continued 89
chairman’s statement
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chairman’s statement
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our financials
28 subsidiaries continued
on 15 october 2010 a dedicated cell the “ocado cell” was established in atlas insurance pcc limited the “cell company” by the issue 
of nonparticipating redeemable preference shares to ocado holdings limited  the cell company is incorporated in the republic of malta 
with registration number c 5601 and is authorised under malta’s insurance business act 1998 to carry on general insurance business and is 
constituted as a protected cell company under the maltese companies act cell companies carrying on business of insurance regulations 
2004  on 20 october 2010 the cell company entered into an agreement with ocado holdings limited to provide the group with insurance 
facilities conducted through the ocado cell  the group has effective control over the financial and operating activities of the ocado cell and 
therefore consolidates the ocado cell in its financial statements in accordance with sic 12 “consolidation – special purpose entities”  the 
group uses the ocado cell to provide selfinsurance for its vehicle fleet and public and product liability claims  this strategy of selfinsurance for 
elements of business risk is used by many large companies in order to reduce costs and exercise greater control of their insurance needs  the 
risk of selfinsuring is managed within the group through stoploss insurance being taken out with a third party to cover claims over £100000 
each and £3 million in aggregate  the provisions as at 28 november 2010 include a provision for insurance claims incurred but not reported of 
£115000 2009 £nil
29 commitments
capital commitments
contracts placed for future capital expenditure not provided in the financial statements are as follows
   28 november  29 november
   2010 2009
    £’000 £’000
land and buildings    21392   — 
property plant and equipment  13661   5636 
t otal capital expenditure committed at the end of the period     35053    5636
the land and buildings commitment relates to the purchase of the land on which cfc2 will be built this purchase was completed in march 2011 
see note 33
operating lease commitments
the group leases a number of offices facilities and equipment under noncancellable operating leases  the leases have varying terms escalation 
clauses and renewal rights
at 28 november 2010 the future aggregate minimum lease payments under noncancellable operating leases are as follows
   28 november  29 november
   2010 2009
    £’000 £’000
within one year  2480   2535
greater than one year but less than five years  8434   8399
after five years  35024   36392
t otal commitment  45938   47326 
30 contingent liabilities
the group has contingent liabilities in respect of legal claims arising in the ordinary course of business all of which the group expects to be 
covered by its professional indemnity insurance  these legal claims are not material to these financial statements 90
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
31 related party transactions
key management personnel
only the executive and nonexecutive directors are deemed to be key management personnel  it is the directors who have responsibility for 
planning directing and controlling the activities of the group  remuneration of directors is disclosed in the directors’ remuneration report on 
pages 41 to 46  
other related party transactions with key management personnel made during the period are as follows
   28 november  29 november
   2010 2009
    £’000 £’000
purchase of goods
— company of a close family member of an executive director 42  116
purchase of professional services
— nonexecutive directors 30  48
  72  164 
all transactions are on an arms length basis and no period end balances have arisen as a result of these transactions  
at the end of the period key management did not owe the group any amounts 2009 £4000 in respect of personal expenses incurred on  
the group credit card that were reimbursed in the normal course of business  the prior period balances were repaid in the current period  
there were no other material transactions or balances between the group and its key management personnel or members of their close family
investment
the group holds a 25 interest in paneltex limited whose registered office is at paneltex house somerden road hull hu9 5pe  the  
group’s interest in paneltex limited has not been accounted for as an associated undertaking as it does not have significant influence over 
paneltex limited
the following transactions were carried out with paneltex limited
   28 november  29 november
   2010 2009
    £’000 £’000
sale of goods
— plant and machinery   94  —
t otal sale of goods   94  — 
purchase of goods
— plant and machinery   220  289
— consumables   143  160
t otal purchase of goods   363  449
amounts receivable  payable at the end of the period   93 19 
notes to the consolidated financial statements continued 91
chairman’s statement
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chairman’s statement
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our financials
32 analysis of net cashdebt
a net cashdebt
   28 november  29 november
   2010 2009
   notes £’000 £’000
current assets
cash and cash equivalents  16 124639  13017
shortterm investment  15 30000   —
   154639  13017
current liabilities
borrowings  19 2282 12087
obligations under finance leases   20 16485 19669
   18767  31756
noncurrent liabilities
borrowings  19 9774 42658
obligations under finance leases  20 45573 45651
     55347  88309
t otal net cashdebt    80525  107048
b reconciliation of net cash flow to movement in net cashdebt
   28 november  29 november
   2010 2009
    £’000 £’000
net increase in cash and cash equivalents   111622  7160
net cash outflow from debt and lease financing   56430  6467
increase in shortterm investment   30000  —
noncash movements
— exercise of convertible loan notes to equity   —  60
— fair value movements on convertible loan notes   —  176
— assets acquired under finance lease   10479 4826
decrease in net debt in the period   187573  8685 
opening net debt   107048 115733
closing net cashdebt    80525   107048
33 post balance sheet events
in january 2011 the group cancelled the bank overdraft facility of ocado limited and replaced it with a group composite account facility with  
a gross limit of £5 million and net limit of £nil
in january 2011 the company agreed an extension of £42 million to a credit facility with an existing lender for vehicle financing
in february 2011 the group completed the purchase of land in wimbledon london which will serve as the site for a new spoke servicing 
southwest london
in march 2011 the group completed the purchase of the land in dordon warwickshire on which cfc2 will be built  92
chairman’s statement
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
independent auditors’ report
to the members of ocado group plc
we have audited the parent company financial statements of ocado 
group plc for the year ended 28 november 2010 which comprise 
the company balance sheet the company statement of cash flows 
the company statement of changes in equity 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 applied 
in accordance with the provisions of the companies act 2006
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 
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
 opinion on financial statements 
in our opinion the parent company financial statements 
● ● give a true and fair view of the state of the company’s affairs as 
at 28 november 2010 and of its cash flows for the year then 
ended
● ● 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
● ● have been prepared in accordance with the requirements of the 
companies act 2006  
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 and 
● ● the information given in the directors’ report for the financial 
year for which the parent company financial statements are 
prepared is consistent with the parent company financial 
statements  
matters on which we are required to report by exception 
we have nothing to report in respect of the following matters where 
the companies act 2006 requires us 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  
other matter 
we have reported separately on the group financial statements of 
ocado group plc for the year ended 28 november 2010 
clive hinds senior statutory auditor
for and on behalf of pricewaterhousecoopers llp 
chartered accountants and statutory auditors 
st albans
23 march 2011 93
chairman’s statement
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chairman’s statement
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our financials
company balance sheet
as at 28 november 2010
          28 november
          2010
   notes £’000
noncurrent assets
investments 5 477840
    477840
current assets
other receivables 6 61250
shortterm investment 7 30000
cash and cash equivalents 8 114361
    205611
t otal assets  683451
current liabilities
trade and other payables 9 323
    323
net current assets  205288
net assets  683128
equity
share capital 10 11068
share premium 10 206094
retained earnings  465966
surplus attributable to equity holders  683128
the company financial statements on pages 93 to 105 were authorised for issue by the board of directors and signed on its behalf by
tim steiner 
chief executive officer
andrew bracey
chief financial officer
ocado group plc
company registration no 07098618 england and wales
23 march 2011 94
chairman’s statement
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
company statement of cash flows
for the 51 weeks ended 28 november 2010
          51 weeks
          ended
          28 november
          2010
   notes £’000
cash flows from operating activities
loss before income tax  2084
adjustments for
— finance income  1529
— finance costs  5
changes in working capital
— increase in other receivables  61250
— increase in trade and other payables  323
cash used by operations  64535
interest paid  156
net cash flows from operating activities  64691
cash flow from investing activities
interest received  553
increase in shortterm investment  30000
net cash flows from investing activities  29447
cash flow from financing activities
proceeds from issue of ordinary share capital net of transaction costs  208499
net cash flows from financing activities  208499
net increase in cash and cash equivalents  114361
cash and cash equivalents at beginning of the period  —
cash and cash equivalents at the end of the period 8 114361 95
chairman’s statement
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chairman’s statement
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our financials
company statement of changes in equity
for the 51 weeks ended 28 november 2010
       share share retained total
       capital premium earnings equity
      notes £’000 £’000 £’000 £’000
loss for the period     — — 2084 2084
t otal comprehensive expense for the period    — — 2084 2084
transactions with owners
 — issue of ordinary and convertible preference shares  10 476509 — — 476509
 — capital reduction    10 467846 — 467846 —
 — issue of ordinary shares on ipo    10 2380 211862 — 214242
 — ordinary shares issue costs    10 — 6881 — 6881
 — issue of ordinary shares     25 1113 — 1138
 — sharebased payments charge     — — 204 204
t otal transactions with owners     11068 206094 468050 685212
balance at 28 november 2010     11068 206094 465966 683128 96
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
1 general information
ocado group plc is incorporated and domiciled in the united kingdom  the address of its registered office is titan court 3 bishops square 
hatfield business park hatfield hertfordshire al10 9ne
the period represents the 51 weeks ending 28 november 2010  there are no comparative figures as the company was incorporated during 
the period on 8 december 2009
2 accounting policies
a basis of preparation
the financial statements have been prepared in accordance with international financial reporting standards ifrs and international financial 
reporting interpretation committee ifric interpretations as endorsed by the european union and those parts of the companies act 
applicable to companies reporting under ifrs
the financial statements are presented in sterling rounded to the nearest thousand £’000 unless otherwise stated  it has been prepared 
under the historical cost convention
the financial statements have been prepared on the going concern basis which assumes that the company will continue to be able to meet its 
liabilities as they fall due for the foreseeable future
exemptions
the directors have taken advantage of the exemption available under section 408 of the companies act and not presented an income 
statement or a statement of comprehensive income for the company alone  the loss for the period has been disclosed in the statement of 
changes in equity
b use of assumptions and estimates
the preparation of financial statements in conformity with ifrs requires the use of judgements estimates and assumptions that affect the 
reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during 
the reporting period  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 the judgements about carrying values of assets and 
liabilities that are not readily apparent from other sources  actual results may differ from these estimates
these 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 the revision affects only that period or in the period of the revision and future periods if the revision affects 
both current and future periods
c standards amendments and interpretations adopted by the company in 200910 or issued but are not yet effective and have not been 
early adopted by the company
all accounting policies which are applicable to the group and which have been adopted by the group in prior periods were adopted by the 
company on incorporation  no new accounting standards amendments and interpretations have become effective during the period since 
the incorporation of the company  
the following ifrss ifric interpretations and amendments effective for periods beginning on or after the date shown below  have been issued 
but are not yet effective and have not been early adopted by the company 
● ● amendment to ifrs 2 “share based payments” is effective from 1 january 2010
● ● amendment to ifrs 3 “business combinations” is effective from 1 january 2011
● ● amendment to ifrs 5 “noncurrent assets held for sale and discontinued operations” is effective from 1 january 2010
● ● amendment to ifrs 7 “financial instruments disclosures” is effective from 1 january 2011
● ● ifrs 9 “financial instruments” new standard effective from 1 january 2013
● ● amendment to ias 1 “presentation of financial statements” is effective from 1 january 2011
● ● amendment to ias 12 “income t axes” is effective from 1 january 2012
● ● amendment to ias 21 “the effects of changes in foreign exchange rates” is effective from 1 july 2010
● ● amendment to ias 24 “related party disclosures” is effective from 1 january 2011
● ● amendment to ias 32 “financial instruments presentation” is effective from 1 february 2010
● ● amendment to ias 34 “interim financial reporting” is effective from 1 january 2011
● ● amendment to ifric 13 “customer loyalty programs” is effective from 1 january 2011
notes to the company financial statements 97
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chairman’s statement
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our financials
2 accounting policies continued
c  standards amendments and interpretations adopted by the company in 200910 or issued but are not yet effective and have not been 
early adopted by the company continued
the adoption of these standards interpretations and amendments is not anticipated to have a material effect on the results of the company
d  foreign currency translation
t ransactions and balances
foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions 
or valuation where items are remeasured  foreign exchange gains or losses resulting from the settlement of such transactions and from 
the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income 
statement  
e  administrative expenses
administrative expenses consist of fees for professional services bank charges and any other costs of an administrative nature
f taxation
current taxation
current tax is accounted for on the basis of tax laws enacted or substantively enacted at the balance sheet date  current tax is charged or 
credited to the income statement except when it relates to items charged to equity in which case the current tax is also dealt with in equity
deferred taxation
deferred tax is recognised using the balance sheet liability method on temporary differences arising between the tax base of assets and 
liabilities and their carrying amount in the financial statements  deferred tax is calculated at the tax rates that have been enacted or 
substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax 
liability is settled
deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the temporary 
differences can be utilised
deferred tax assets and liabilities are offset against each other when there is a legally enforceable right to setoff current taxation assets against 
current taxation liabilities and it is the intention to settle these on a net basis
deferred tax is charged or credited in the income statement except when it relates to items charged or credited directly to equity in which 
case the deferred tax is also recognised in equity
g employee benefits
sharebased payments
employees including directors of the company’s subsidiaries receive remuneration in the form of sharebased payment transactions whereby 
employees render services in exchange for rights over shares “equitysettled transactions”  the cost of equity settled transactions with 
employees is measured by reference to the fair value at the date at which they are granted
subsidiaries are recharged for the amount recognised as sharebased payments relating to awards to their employees  these recharges are 
recognised as an increase in the investment in the relevant subsidiaries in accordance with ifrs 2
for details of group share schemes see note 24 in the consolidated financial statements
h financial instruments
financial assets and financial liabilities are recognised on the balance sheet when the company becomes a party to the contractual provisions 
of the instrument
the company classifies its financial instruments in the following categories
● ● availableforsale
● ● loans and receivables and
● ● other financial liabilities at amortised cost
the classification depends on the purpose for which the financial assets and liabilities were acquired  management determines the classification 
of its financial instruments at initial recognition or in certain circumstances on modification 98
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ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
notes to the company financial statements continued
2 accounting policies continued
availableforsale financial assets
availableforsale financial assets are nonderivatives that are either designated in this category or not classified in any of the other categories  
they are included in noncurrent assets unless the investment matures or management intends to dispose of it within 12 months of the end of 
the reporting period  management consider that the group’s investments fall within this category as explained below
investments
investments are classified as either held for trading or availableforsale  there are currently no investments classified as held for trading
availableforsale investments are held at fair value if this can be reliably measured  if the equity instruments are not quoted in an active market 
and their fair value cannot be reliably measured the availableforsale investment is carried at cost less accumulated impairment  unless the 
valuation falls below its original cost gains and losses arising from changes in fair value of availableforsale assets are recognised directly in equity  
on disposal the cumulative net gain or loss is transferred to the statement of comprehensive income  impairments and valuations below costs 
are recognised in the income statement  dividends are recognised in the income statement when the right to receive payment is established
loans and receivables
loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in an active market  they  
are included in current assets except for maturities greater than 12 months after the end of the reporting period  these are classified as non
current assets  the company’s loans and receivables comprise “other receivables” “shortterm investment” and “cash and cash equivalents” in 
the balance sheet
other receivables
other receivables are noninterest bearing and are recognised initially at fair value and subsequently at amortised cost reduced by appropriate 
allowances for estimated irrecoverable amounts
shortterm investment
shortterm investment comprises treasury deposits with a maturity of greater than three months at period end
cash and cash equivalents
cash and cash equivalents consist of cash at bank and in hand demand deposits with banks and shortterm deposits with a maturity of three 
months or less at the balance sheet date
other financial liabilities at amortised cost
financial liabilities are classified according to the substance of the contractual arrangements entered into  
trade and other payables
trade and other payables are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method
i investments
investments in group undertakings are valued at cost less accumulated impairment
3 operating loss
during the period the company obtained the following services from its auditors pricewaterhousecoopers llp
  51 weeks
  ended
   28 november
   2010
  £’000
audit services
— statutory company audit 40
nonaudit services
— services pursuant to legislation and compliance
†
 975
— other services 108
 1123
†
 comprises primarily of services in relation to the preparation for the listing of the company 99
chairman’s statement
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chairman’s statement
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our financials
4 employee information
the company does not incur any direct staff costs as the group’s employees are employed by a subsidiary company  the only charge to the 
income statement in this respect was the sharebased payment expense as part of the ipo see note 10
analysis and disclosures in relation to sharebased payments are given in the consolidated financial statements in note 24
5 investments
   28 november
   2010
  £’000
cost  476510
contributions to subsidiaries
— novation of derivative liability in respect of warrants issued by ocado limited  1126
— group equity settled sharebased payments  204
carrying value at end of period  477840
investments represent investments in group companies ocado holdings limited and ocado limited which is indirectly held  for more 
information regarding the company’s investments see note 14
6 other receivables
   28 november
   2010
  £’000
other receivables  174
prepayments  6
accrued income  402
amounts due from subsidiary undertakings  60668
  61250
no security has been granted over other receivables
7  shortterm investment
   28 november
   2010
  £’000
treasury deposit    30000 
the shortterm investment relates to a £30 million treasury deposit which matures on 26 july 2011
8 cash and cash equivalents
   28 november
   2010
  £’000
cash at bank and in hand  114361
the cash and cash equivalents balance does not include a £30 million treasury deposit held by the company which has been classified as a short
term investment see note 7 100
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
9 t rade and other payables
   28 november
   2010
  £’000
trade payables  98
accruals  225
  323
10 share capital and premium
the company has authorised share capital of 600 million ordinary shares of 2 pence each at 28 november 2010
the movements in the number of allotted called up and fully paid ordinary and convertible preference shares and called up share capital and 
share premium are set out below
       convertible  convertible
      ordinary preference ordinary preference share
      shares shares shares shares premium
      number number £’000 £’000 £’000
issue of ordinary and convertible preference shares   185715900 247474900 204287 272222 —
capital reduction    — — 200573 267273 —
conversion of preference shares to ordinary shares on ipo  247474900 247474900 4949 4949 —
issue of ordinary shares on ipo    118968225 — 2379 — 211763
issue of ordinary shares to the chairman on ipo   55555 — 1 — 99
share issue costs    — — — — 6881
allotted in respect of the executive share ownership scheme  1032921 — 21 — 978
allotted in respect of nonemployee share options   180700 — 4 — 135
at 28 november 2010    553428201 — 11068 — 206094
convertible preference shares were convertible into the same number of ordinary shares either at the option of the holder or on the 
occurrence of certain trigger events including a public listing  the convertible preference shares ranked pari passu with ordinary shares with 
the exception that on return of assets on a liquidation reduction of capital or otherwise the holders of the convertible preference shares shall 
be entitled in respect of their preference shares in proportion to the number of such shares held by each of them in priority to all other 
shareholders to the surplus assets of the company remaining after payment of its liabilities the subscription price for their preference shares 
together with a sum equal to any arrears of dividends declared calculated down to the date of the return of assets
on 9 february 2010 the company acquired the entire share capital of ocado limited  as a result of this transaction the ultimate shareholders 
in ocado limited received shares in the company in direct proportion to their original shareholdings in ocado limited  shareholders were 
issued 185715900 ordinary shares and 247474900 preference shares on the basis of 1100 ordinary and preference shares for each ocado 
limited share held
on 16 february 2010 pursuant to an order of the court confirming the reduction of capital of the company the company’s share capital  
was reduced by decreasing the nominal value of each ordinary and preference share issued pursuant to the scheme of arrangement from  
110 pence to 2 pence  this created distributable reserves of £4678 million
on 26 july 2010 the company’s shares were admitted to the premium listing segment of the official list of the uk listing authority and to 
trading on the main market of the london stock exchange the “listing”  in conjunction the company made an initial public offering “ipo” 
of 118968225 new 2 pence ordinary shares at a price of 180 pence per share  also in conjunction 247474900 convertible preference shares 
converted to ordinary shares  
costs related directly to the new issue of shares in the amount of £69 million have been deducted from the share premium account  
attributable ipo costs are allocated between the share premium account and profit and loss account in proportion to the number of primary 
and secondary shares traded on admission  other costs attributable to the listing have been expensed  
notes to the company financial statements continued 101
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our financials
11 financial instruments
a fair value of financial instruments
the fair values of financial instruments are measured by using the following fair value hierarchy
● ● quoted priced unadjusted in active markets for identical assets or liabilities level 1
● ● inputs other than quoted prices included within level 1 that are observable for the asset and liability either directly or indirectly level 2
● ● inputs for the assets or liability that are not based on observable market data that is unobservable inputs level 3
set out below is a comparison by category of carrying amounts and fair values of all financial instruments that are carried in the financial 
statements  the fair values of financial assets and liabilities are based on prices available from the market on which the instruments are traded 
where available  the fair values of shortterm deposits receivables and payables are assumed to approximate to their carrying values but for 
completeness are included in the analysis below  
    28 november 2010
         carrying value fair value
        notes £’000 £’000
financial assets
investment      5 476510 476510
cash and cash equivalents      8 114361 114361
shortterm investment      7 30000 30000
other receivables      6 61244 61244
total financial assets       682115 682115
financial liabilities
trade payables      9 98 98
accruals      9 225 225
total financial liabilities       323 323
b credit risk
the company’s exposure to credit risk arise from holdings of cash and cash equivalents other receivables excluding prepayments and a  
shortterm investment
exposure to credit risk
the carrying amount of financial assets represents the maximum credit exposure  this is shown in the table in note 11a above
cash and cash equivalents and treasury deposit
the company’s exposure to credit risk on cash and cash equivalents is managed by cash deposits only being placed with banks and financial 
institutions which carry moody’s ratings of aa3p1 for longterm and shortterm deposits
other receivables
other receivables at the period end consist primarily of amounts due from subsidiary undertakings  management provide for irrecoverable  
debts when there are indicators that a balance may not be recoverable
the ageing of other receivables excluding prepayments and the shortterm investment at the balance sheet date was
    28 november 2010
         gross impairment
        notes £’000 £’000
not past due       91244 —
past due 03 months       — —
past due 36 months       — —
past due over 6 months       — —
        6 91244 —
there were no unimpaired balances at the period end where the company had renegotiated the terms of the other receivables  management 
has not provided for irrecoverable debts against any of its other receivable balances 102
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ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
11 financial instruments continued
c liquidity risk
t o manage the working capital needs of the business the company is reliant on being able to negotiate sufficient financing arrangements  the 
company monitors cash flow as part of its day to day control procedures and the board considers cash flow projections on a monthly basis   
for further details on the group’s cash management strategy see note 26 in the consolidated financial statements
the table below analyses the company’s financial liabilities into their relevant maturity groups based on the remaining period at the period end 
date to the contractual maturity date  the amounts disclosed in the table are the carrying value and undiscounted contractual cash flows
     carrying contractual 1 year 12 25 more than
     value cash flows or less years years 5 years
    notes £’000 £’000 £’000 £’000 £’000 £’000
financial liabilities
trade payables  9 98 98 98 — — —
accruals  9 225 225 225 — — —
28 november 2010   323 323 323 — — —
d market risk
currency risk
the company engages in foreign currency transactions to a very limited extent  no financial assets are held in foreign currencies  due to the 
company’s lack of exposure to currency risk no sensitivity analysis has been performed
interest rate risk
the company has no interest bearing financial liabilities and its interest bearing financial assets consists of only cash and cash equivalents and a 
shortterm investment  these financial assets are exposed to interest rate risk as the company holds money market deposits at floating interest 
rates  the risk is managed by investing cash in a range of cash deposit accounts with uk banks split between fixed term deposits notice accounts 
and money market funds
at the balance sheet date the interest rate profile of the company’s interest bearing financial instruments was
  28 november
   2010
  £’000
fixed rate instruments
financial assets  70000
variable rate instruments
financial assets  74361
sensitivity analysis
an increase of 100 basis points 10 in interest rates at the balance sheet date will increase equity and profit or loss by the amounts shown 
below  100 basis points was deemed an appropriate rate considering the current shortterm interest rate outlook  this calculation assumes  
that the change occurred at the balance sheet date and had been applied to risk exposures existing at that date  this analysis assumes that all 
other variables remain constant and considers the effect on financial instruments with variable interest rates
  28 november
   2010
          £’000
equity
gainloss  744
income
gainloss  744
notes to the company financial statements continued 103
chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado getting to know ocado getting to know ocado our performance getting to know ocado our responsibilities our financials
2017704  22032011 proof 12
103
chairman’s statement
stock code ocdo wwwocadogroupcom
our financials
11 financial instruments continued
e financial instruments by category
the company has categorised its financial instruments as follows
         other
         financial
       available loans and liabilities at
       forsale receivables amortised cost total
      notes £’000 £’000 £’000 £’000
as at 28 november 2010
assets as per balance sheet
investment    5 476510 — — 476510
cash and cash equivalents    8 — 114361 — 114361
shortterm investment    7 — 30000 — 30000
other receivables    6 — 61244 — 61244
t otal      476510 205605 — 682115
liabilities as per balance sheet
trade payables    9 — — 98 98
accruals    9 — — 225 225
t otal      — — 323 323
12 capital management
the board’s objectives and policies for the company are consistent with those of the group  full details are provided in note 26 to the 
consolidated financial statements
13 loss per share
basic loss per share is calculated by dividing the loss attributable to equity holders by the weighted average number of ordinary shares and 
convertible preference shares in issue during the period adjusted to reflect the conversion of the ordinary shares and preference shares from 
ocado limited to ocado group plc on a 1100 basis on 9 february 2010  the loss for the period is equally attributable to the shareholders of 
ordinary shares and convertible preference shares  for more information see note 10
diluted loss per share is calculated by adjusting the weighted average number of ordinary shares and convertible preference shares outstanding 
to assume conversion of all dilutive potential shares adjusted to reflect the conversion of the ordinary shares and the convertible preference 
shares from ocado  limited to ocado group plc as mentioned above  the company has two categories of potentially dilutive shares namely 
share options and shares held pursuant to the group’s jsos
there was no difference in the weighted average number of shares used for the calculation of basic and diluted loss per share as the effect of all 
potentially dilutive shares outstanding was antidilutive
basic and diluted loss per share has been calculated on the following basis
  51 weeks ended
  28 november
   2010
  000’s
issued ordinary shares and convertible preference shares at the beginning of the period  —
effect of shares issued in the period  374461
effect of share options exercised in the period  414
weighted average number of shares in issue during the period  374875
   
  £’000
loss attributable to owners of the company  2084
   
  pence
basic and diluted loss per share  056
the only transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of these financial  
statements were the exercise of 525000 share options 104
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2017704  22032011 proof 12
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chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
14 subsidiaries
at 28 november 2010 the company’s principal subsidiary undertakings were as follows
     share of issued country of incorporation
    principal  ordinary share capital and principal country
    activity and voting rights  of operation
ocado holdings limited  holding company 100 england and wales
ocado limited 
†
  retail and distribution 100 england and wales
ocado information t echnology limited 
†
 intellectual property 100 ireland
jalapeno partners limited 
†
  dormant company 100 england and wales
ocado cell in atlas insurance pcc limited 
†
 insurance company 100 malta
†
 wholly owned held indirectly through subsidiary undertakings
ocado holdings limited is a 100 owned subsidiary of ocado group plc and the only directly held subsidiary  it was incorporated in the uk  
on 5 february 2010 with registration number  07148670
ocado limited is a 100 owned subsidiary of ocado holdings limited  it is incorporated in the uk with registration number  3875000
ocado information t echnology limited is a 100 owned subsidiary of ocado holdings limited  it was incorporated in ireland on 19 january 
2010 with registration number 479792  on 21 january 2010 ocado limited granted ocado information t echnology limited a licence to use 
ocado limited’s intellectual property outside of the uk and in consideration ocado information t echnology limited issued a promissory note 
which was settled by the issue of 5075840 ordinary shares of 1 euro each  on 17 june 2010 ocado holdings limited acquired the entire 
ordinary share capital of ocado information t echnology limited from ocado limited
jalapeno partners limited is a 100 owned subsidiary of ocado limited  it is incorporated in the uk with registration number 04204963  it is a 
dormant company as defined by section 1169 of the companies act  the only balances in the accounts of jalapeno partners limited are share 
capital of £1 and an intercompany debtor of £1
on 9 february 2010 the group previously headed by ocado limited underwent a reorganisation by virtue of which ocado limited’s 
shareholders in their entirety exchanged their shares for shares in ocado group plc a newly formed company which then became the ultimate 
parent company of the group  notwithstanding the change in the legal parent of the group this transaction has been accounted for as a  
reverse acquisition under ifrs 3 revised “business combinations” and the consolidated financial statements are prepared on the basis of the 
new legal parent having been acquired by the existing group
on 15 october 2010 a dedicated cell the “ocado cell” was established in atlas insurance pcc limited the “cell company” by the issue 
of nonparticipating redeemable preference shares to ocado holdings limited  the cell company is incorporated in the republic of malta 
with registration number  c 5601 and is authorised under malta’s insurance business act 1998 to carry on general insurance business and is 
constituted as a protected cell company under the maltese companies act cell companies carrying on business of insurance regulations 
2004  on 20 october 2010 the cell company entered into an agreement with ocado holdings limited to provide the group with  
insurance facilities conducted through the ocado cell  the group has effective control over the financial and operating activities of the ocado 
cell and therefore consolidates the ocado cell in its financial statements in accordance with sic 12 “consolidation – special purpose entities”  
the group uses the ocado cell to provide selfinsurance for its vehicle fleet and public and product liability claims  this strategy of self 
insurance for elements of business risk is used by many large companies in order to reduce costs and exercise greater control of their insurance 
needs  the risk of selfinsuring is managed within the group through stoploss insurance being taken out with a third party to cover claims  
over £100000 each and £3 million in the aggregate  the provisions as at 28 november 2010 include a provision for insurance claims incurred 
but not reported of £115000 2009 £nil
notes to the company financial statements continued 105
chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado getting to know ocado getting to know ocado our performance getting to know ocado our responsibilities our financials
2017704  22032011 proof 12
105
chairman’s statement
stock code ocdo wwwocadogroupcom
our financials
15 related party transactions
key management personnel
only the executive and nonexecutive directors are deemed to be key management personnel  it is the board who has responsibility for 
planning directing and controlling the activities of the company  executive and nonexecutive directors did not receive any remuneration for 
their services to the company except for a sharebased payment made to the chairman on ipo see note 10
there were no material transactions or balances between the company and its key management personnel or members of their close family   
at the end of the period key management personnel did not owe the company any amounts
subsidiaries
the company enters into loans with its subsidiaries  interest was neither incurred nor earned on these loans during the period
t ransactions with subsidiaries        £’000
dividends received from subsidiary undertakings       —
equity settled sharebased payments        204
increase in loans made to subsidiary undertakings       60668
y earend balances arising from transactions with subsidiaries      £’000
receivables     
loans and receivables due from subsidiaries       60668
payables     
loans and receivables due to subsidiaries       —
16 post balance sheet events
in january 2011 the group cancelled the bank overdraft facility of ocado limited and replaced it with a group composite account facility with  
a gross limit of £5 million and a net limit of £nil  certain of the company’s bank accounts form part of this facility 106
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
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106
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
glossary
1010 – means the private sector initiative campaign to commit to 
cutting carbon emissions by 10 in 2010
2010 code – means the uk corporate governance code published 
by the financial reporting council june 2010 as in force from time 
to time
active customers – means customers who have shopped in the 
previous 12 weeks 
administrative expenses – means all it costs advertising and 
marketing expenditure employment costs of all head office 
functions which include legal finance human resources marketing 
and procurement rent and other propertyrelated costs for the 
head office all fees for professional services and the depreciation 
amortisation and impairment associated with head office it 
equipment software fixtures and fittings and expenses relating to the 
esos and the jsos
admission – means the admission of the ordinary shares of the 
company to the premium listing segment of the official list and 
to trading on the london stock exchange’s main market for listed 
securities which occurred on 26 july 2010
agm – means the annual general meeting of the company which 
will be held on 11 may 2011 at 200pm at one bunhill row london 
ec1y 8yy 
articles – means the articles of association of the company
board – means the board of directors of the company or of ocado 
limited from time to time as the context may require
cfc – see customer fulfilment centre
combined code – means the combined code on corporate 
governance june 2008 issued by the financial reporting council
companies act – means the companies act 2006
company – means ocado group plc a company incorporated 
in england and wales with registered number 07098618 whose 
registered office is at titan court 3 bishops square hatfield business 
park hatfield hertfordshire al10 9ne
corporate website – means wwwocadogroupcom
cost of sales – means the cost of groceries and other products 
the group sells any associated licence fees which are linked to the 
volume of sales of specific products or product groups including 
the branding and sourcing fees payable to waitrose adjustments to 
inventory and charges for transportation of goods from a supplier to 
the cfc
convertible preference shares – means all convertible preference 
shares convertible into the same number of ordinary shares either at 
the option of the holder or on the occurrence of certain trigger events 
including a public listing  the convertible preference shares rank pari 
passu with ordinary shares with the exception that on return of assets 
they have priority to all other shareholders  
cstm – means customer service t eam member  the title given to 
our customer facing delivery driver
customer fulfilment centre – means a dedicated highly automated 
warehouse used for the operation of the business
distribution costs – means all costs to the point of sale which is 
usually the customer’s home and include costs relating to the call 
centre and payment processing
directors – means the directors of the company whose names are 
set out on pages 16 and 17 or the directors of ocado limited from 
time to time as the context may require
disclosure and t ransparency rules – means the disclosure rules and 
transparency rules made by the fsa under part vi of fsma
dpvwk – means the total drops per van per week
each – means a measure of an individual retail product
ebit – means operating profitloss before interest including interest 
on finance leases and taxation
ebitda – means operating profitloss before interest including 
interest on finance leases taxation depreciation amortisation 
impairment loss transaction and reorganisation costs
ebitda margin – means ebitda as a percentage of gross sales
ebt – means earnings before tax
ebt t rustee – means the trustee from time to time of the employee 
benefit trust established for the purposes of the jsos currently 
appleby trust jersey limited
esos – means the ocado 2001 executive share ownership scheme
executive directors – means tim steiner jason gissing neill abrams 
and andrew bracey
financial period – means the 52 week period ending the closest 
sunday to 30 november
financial year – see financial period
frc – means the financial reporting council
fy – see financial period
gross sales – means sales net of returns including charges for 
delivery before deducting relevant voucheroffers and value added 
tax
hmrc – means her majesty’s revenue  customs
ifric – means international financial reporting interpretations 
committee
ifrs – means international financial reporting standards
ipo – means the initial public offering by the company in july 2010
john lewis – means john lewis plc the parent company of waitrose  
john lewis plc was incorporated in england and wales with 
registered number 233462 and its registered office is 171 victoria 
street london sw1e 5nn 107
chairman’s statement
stock code ocdo wwwocadogroupcom
getting to know ocado getting to know ocado getting to know ocado getting to know ocado our performance getting to know ocado our responsibilities our financials
2017704  22032011 proof 12
chairman’s statement
john lewis pension fund  — means john lewis partnership pensions 
trust which is the corporate trustee of the john lewis partnership 
trust for pensions  it was incorporated in england and wales with 
registered number 372106 and its registered office is 171 victoria 
street london sw1e 5nn
jsos – means the group’s joint share ownership scheme
kpi – means key performance indicators
libor – means london interbank offered rate
listing rules – means the listing rules made by the uk listing 
authority under part vi of the financial services and markets act 
2000 as amended
management committee – means senior management responsible 
for managing the daytoday affairs of the business
murabaha – means a shariah compliant financing arrangement
net finance costs – means finance income and finance costs  
finance income is comprised principally of bank interest and other 
interest  finance costs are comprised of interest on bank loans and 
overdrafts interest on finance leases and interest on other financing 
arrangements
nonexecutive directors – means the nonexecutive directors 
designated as such on pages 16 and 17
notice of meeting – means the notice of the company’s agm
ocado delivery pass – means the ocado discounted prepay 
delivery charge service available in various offerings including monthly 
quarterly and annually
ocado on the go – means the ocado application for mobile devices  
it is currently available for the iphone ipad and android devices
other income – means primarily advertising revenue for advertising 
services provided by ocado to suppliers and other third parties on 
the website commission income received and sublease payments 
received  other income is recognised in the period to which it 
relates on an accruals basis
prospectus – means the company’s prospectus dated 6 july 2010 
prepared in connection with the company’s admission 
revenue – means online sales net of returns through the website 
and mobile applications including charges for delivery but excluding 
relevant vouchersoffers and value added tax  relevant vouchers
offers include moneyoff coupons conditional spend vouchers and 
multibuy offers such as buy three for the price of two
sharesave scheme – means the ocado employee savingsrelated 
share option plan approved by hmrc
shareholder – means a holder for the time being of ordinary or 
convertible preference shares
sku – means a “stock keeping unit” that is each individual item or 
product stocked
sourcing agreement – means the various sourcing and branding 
agreements between ocado waitrose and john lewis
spoke – means the transshipment sites used for the intermediate 
delivery of customers’ orders
substitution – means the term used to refer to the alternative 
product provided in place of the original product ordered by a 
customer
tsr – means total shareholder return – the growth in value of a 
shareholding over a specified period assuming that dividends are 
reinvested to purchase additional units of the stock
uk or united kingdom – means the united kingdom of great 
britain and northern ireland
uph – means the abbreviation for units or eaches per hour
waitrose – means waitrose limited a company incorporated in 
england and wales with registered number 00099405
webshop – means the customer facing internetbased virtual shop 
accessible on the website
website – means wwwocadocom
107 stock code ocdo wwwocadogroupcom 108
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks to 28 november 2010
2017704  22032011 proof 12
shareholder notes 2017704  22032011 proof 12
company information
registered office ocado group plc
 titan court
 3 bishops square
 hatfield business park
 hatfield
 hertfordshire
 al10 9ne   
    
company number 07098618   
    
auditors pricewaterhousecoopers llp   
 chartered accountants and registered auditors   
 10 bricket road   
 st albans   
 hertfordshire   
 al1 3jx   
    
registrars capita registrars   
 the registry   
 34 beckenham road   
 beckenham   
 kent   
 br3 4tu    2017704  22032011 proof 12
ocado group plc
titan court 3 bishops square  
hatfield business park hatfield al10 9ne uk
tel 44 0 1707 227800
fax 44 0 1707 227999
wwwocadogroupcom
visit our online annual report and accounts at
results10ocadogroupcom
ocado group plc   annual report and accounts 2010
delivering growth
establishing profitability
ocado group plc
annual report and accounts 2010
stock code ocdo


Summary:
 02
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010 02
chairman’s statement
ocado group plc  annual report and accounts for the 52 weeks ended 28 november 2010
2017704  22032011 proof 12
highlights
financial highlights
● 	 gross sales up 29 to £5511m
● 	 adjusted
1
 ebitda up 138 to £220m adjusted
1
 ebitda margin 40
● 	 adjusted
1
 ebt loss £87m
● 	 profitability reached in second half 
● 	 adjusted
1
 h2 ebit profit £09m
● 	 q4 ebt profit £03m
● 	 cash including treasury deposits of £1546m at year end
statutory highlights
● 	 net revenue up 28 to £5157m
● 	 operating loss reduced by 63 to £54m including £35m of oneoff ipo costs
● 	 loss before tax reduced by 52 to £122m including £35m of oneoff ipo cost
operational highlights
● 	 average orders per week up 31 to 92916
● 	 items delivered exactly as ordered were 99 for the year
● 	 deliveries on time or early were 95 for the year
10 10
10
262k
09
220k
08 09 10
193k
active customers
262000
2009 220000
09 08 09 10
10
£551m
09 08
£341m
gr oss sales
£551m
2009 £427m
net assets
£172m
2009 £32m
£427m
£0000m
£220m
1
£92m
£22m
ebitda
2009 £92m
£220m
1
10
£172m
09
£32m
08
£38m
08 09 10
1
 adjusted to exclude oneoff ipo costs of £35m