annual report and accounts 2012
office2office “office2office plc o2o is a leading provider of office supplies and business
solutions delivering these through two key operating segments –
managed procurement and business critical services our focus is to
provide our customers with sustainable savings through outsourcing their
noncore yet essential business activities”   simon moate chief executive
contents
financial highlights 1
chairman’s statement 2 – 5
chief executive’s review 6 – 7
business and financial review 8 – 10
corporate social responsibility statement 11 – 13
board of directors 14
directors’ report 15 – 18
corporate governance statement 19 – 22
nomination committee report 23
audit committee report 23 – 24
directors’ remuneration report 25 – 29
independent auditors’ report to the 
members of office2office plc 30 – 31
consolidated income statement 32
consolidated statement of comprehensive income 33
consolidated and company balance sheets 34
consolidated statement of changes in equity 35
company statement of changes in equity 36
consolidated and company statements  of cash flows 37
significant accounting policies 38 – 44
notes to the financial statements 45 – 74
five y ear summary 75
notice of annual general meeting of office2office plc 76 – 78
explanatory notes to the notice of agm 78 – 79
shareholder information 80
company details 80 o2o plc report and accounts 2012 1
2012 2011
key financials
revenue £2273m £1935m
profit before tax £07m £43m
basic earnings per share 09p 120p
underlying profit before tax
1
£65m £84m
underlying earnings per share
2
134p 207p
operating cash flow £65m £109m
net debt £290m £277m
final dividend proposed
total dividend for the year
£13m £28m
36p per share 78p per share
£26m £41m
72p per share 114p per share
1 profit before tax nonrecurring costs of £40m 2011 £24m £05m share option charges 2011 £04m and amortisation of
intangibles of £12m 2011 £13m refer to the consolidated income statement on page 32 and note 5 on nonrecurring costscredits
2 profit after tax before the after tax effect of nonrecurring costs share option charges and amortisation of intangibles divided by the
weighted average number of ordinary shares in issue refer to note 11 to the financial statements o2o plc report and accounts 2012 2
in 2012 we grew group revenue by 17 to £2273m 2011 £1935m at the same time
• within managed procurement banner business services bbs secured market share
and outperformed contracted office products market competitors while broadly
maintaining gross profit margins 
• we fully implemented the government office supplies contract gosc thereby
expanding the number of government departments that bbs serves 
• we developed a new supply relationship with an office products wholesale chain and 
• we continued to grow business critical services  
unfortunately these positive steps did not prevent underlying profit falling to £65m
2011 £84m the principal causes of the profit reduction were confined to managed
procurement 
• reduced trading across the contracted office products industry impacted the company
as well as our competitors in bbs our relatively higher margin contracted office
products business revenue fell to £1211m 2011 £1266m and was disappointing
throughout most of the second half of the year particularly during the jubilee
celebrations the olympic and paralympic games and in the latter part of december
when demand fell away earlier and more markedly than we have seen before and
• an increase in distribution cost in line with increased revenue following implementation
of the advantia contract and a consistent change in customer demand patterns to more
frequent but lower value deliveries
there were insufficient opportunities to compensate for these issues within the year from
activity elsewhere in the group 
profit before tax fell to £07m 2011 £43m after nonrecurring costs of £40m 2011
£24m as detailed in the business and financial review and note 5 of the financial
statements
in spite of the lower profits net debt was held broadly in line with the previous year at
£290m 2011 £277m
chairman’s statement   o2o plc report and accounts 2012 3
the growth in revenue was driven by
● managed procurement where revenue grew by £199m to
£1477m 2011 £1278m reflecting the launch of the
relatively lower margin truline business with revenue of
£266m 2011 £12m and
● business critical services where revenue grew by £139m to
£796m 2011 £657m while adversely impacted to some
extent by the summer celebrations the full year benefit of
contracts won in 2011 came on top of some contribution
from new contracts secured with best buy europe carphone
warehouse friends life and hastings direct during 2012
with expected full year revenues totalling £18m 
t owards the end of 2012 we won a three year solesupply
contract with the royal bank of scotland group rbs which
is being served from our existing capabilities with only
marginal working capital investment this contract has been
fully implemented and has been trading in line with
expectations since commencement on 1 february 2013
t rading across the group in the first quarter of 2013 has been
in line with management expectation bbs sales rates have
recovered although it is too early to say whether this is a trend
or as a result of restocking after the second half of last year in
all other parts of the group activity is in line with our plans 
business strategy
background
our long term goal is to build a business which is resilient to
economic uncertainties and changes in workplace practices
in 2007 we recognised the likely long term decline in the
contracted office products market and have since followed a
diversification strategy and business change programme to
lessen our reliance on office product supply contracts by 
● acquiring and developing complementary services and
activities 
● expanding product ranges and 
● widening our customer base by extending into new market
areas 
since the start of 2007 we have invested c£55m in
business acquisition and startup through business
purchase nonrecurring charges to the profit  loss account
and working capital growth to do this we have relied only on
operational cash flow and broadly consistent net debt
levels a further £4m has been allocated to capital
expenditure and £7m has been spent restructuring the
existing business to improve business efficiency by
reducing the underlying cost base in response to changes in
economic conditions
managed procurement
the principal business in the managed procurement segment is
bbs our relatively higher margin contracted office products
business our strategy has been to combat decline in the market
by retaining our existing customers through excellent service
and winning new business at the expense of competitors while
at the same time protecting margin a major achievement was
to be appointed under commercially viable terms to gosc as
sole provider of office products and closed loop™ services to
the uk central government this followed our withdrawal from
the uneconomic supply to the mod in 2007 
using the existing managed procurement infrastructure
we established truline in 2011 to allow us to grow in the
sme office products market by providing a comprehensive
office products supply service to an established
independent office products dealer group this supply
chain service has group operations as key customers and is
a growing contributor to group revenue in 2012 truline’s
third party sales at £266m 2011 £12m accounted for
18 of managed procurement’s revenue
business critical services
the business critical services segment was formed in 2008
and comprises activities which complement our office
products business in 2012 it accounted for 35 of group
revenues and 38 of adjusted ebita see note 3 the two
component activities are
● banner managed communication bmc providing
document and print management this is the principal
business and in addition to opportunities in its traditional
market it has the potential to expand into a number of
complementary services as customers embrace e
documents and digital media generally and
david callear   o2o plc report and accounts 2011 4
overall gross margin percentage fell to 262 2011 288
largely owing to the anticipated lower margin sales from the
truline business 
underlying profit before tax fell to £65m 2011 £84m and
underlying earnings per share were 134 p 2011 207p
owing to the increase in nonrecurring items and finance costs
profit before tax was £07m 2011 £43m and profit after
tax was £03m 2011 £43m following a small tax credit
basic and fully diluted earnings per share were the same at
09p 2011 120p 
cash generated from operations and net debt
cash generated from operations reduced to £65m 2011
£109m reflecting reduced profitability and higher finance
costs following higher average levels of borrowing due to
implementation costs and net working capital investment to
support the start up of the truline activity compounded by
increased borrowing costs after renegotiation of facilities in
2011 net indebtedness increased to £290m 2011
£277m and has been generally higher throughout the year
during the year the group’s banking facilities were increased
to £505m these mature in june 2015 after staged
repayments and are based on competitive terms interest
rates and arrangement fees 
dividend
the board believes that the payment of dividends should be
closely linked to affordability and the group’s trading
prospects while we remain confident about the group’s
trading prospects albeit in a challenging market we have
decided to recommend a reduced final dividend payment to
reflect the current lack of earnings cover we are also
reviewing our forward dividend policy in order to ensure that
we strike the best balance between promoting shareholders’
short and long term interests
we recommend a final dividend of 36p per share 2011
78p when combined with the interim dividend paid on 9
november 2012 this makes a total dividend per share of
72p 2011 114p and amounts to a total distribution of
chairman’s statement  
continued
● banner document services bds providing waste
document management this includes our innovative and
patented closed loop™ service and is growing steadily
as gosc and other central government contracts are
able to transfer from their existing facilities
management arrangements 
group customer base
the shift in our trading emphasis has resulted in a shift in
the group’s customer base historically dominated by
government departments by the end of 2012 68 2011
63 of group revenue was accounted for by private sector
corporate customers
business review
in summary  this broad diversification strategy and the
consequent business development have over the last 5 years
transformed o2o from a contract stationer to a leading
provider of office supplies and business solutions furthermore
we have accomplished this whilst achieving  robust gross
margins and delivering a quality service to our customers
during the year the board with its advisors undertook a
detailed review of the business this review concluded that
whilst the uk office products market is performing badly with
many participants weakened o2o’s business is relatively robust
in a pressured environment over time some industry
consolidation seems likely and whilst the directors will continue
to monitor opportunities the currently depressed market will
influence when and how any such opportunities arise
the market in which bmc operates meanwhile is relatively
buoyant and a variety of opportunities exist to grow
organically and through acquisition
trading performance
the 2012 trading performance of the business segments and
our shorter term strategy for the coming year are discussed
in more detail in the chief executive’s review  
results
revenue increased by 17 to £2273m 2011 £1935m
whilst gross profit increased to £596m 2011 £556m the o2o plc report and accounts 2012 5
running head for the year ended 31 december 2008
£26m 2011 £41m the total dividend paid and payable for
the year is not covered by earnings 2011 11 times but is
covered by underlying earnings 25 times 2011 20 times
if approved at the annual general meeting agm the final
dividend will be paid on 11 july 2013 to shareholders on the
register at the close of business on 17 may 2013
employees
our employees have continued to work hard during another
challenging year i would like to thank our staff for keeping the
momentum going and their commitment to the group
board changes
we recently announced the appointment of hugh cawley as
group finance director with effect from 25 february 2013
hugh has held a number of senior executive and financial roles
where he has consistently played a key part in driving
performance and strategic change
mark cunningham resigned from the board on 30 january
2013 and on behalf of the board i thank mark for his
contribution to the company and wish him well for the future 
outlook
trading across the group in the first quarter of 2013 has
been in line with management expectation bbs sales rates
have recovered and in all other parts of the group activity is
in line with plan 
whilst early trading in bbs has been encouraging it is too
early to say whether this is a trend or as a result of re
stocking after the second half of last year we do not
conclude that the contracted office products market has
recovered volume decline and the change in buying patterns
have been apparent over recent years and whilst our success
to date in securing new contracts and maintaining margins
helps to mitigate these effects the market decline seems
likely to continue
however we believe there remain strong prospects in our
business
● the new rbs contract came on stream in february and has
been implemented without disruption or additional cost 
● our more recent truline business is now established in
the sme sector and is attracting interest from other
dealers and
● the business critical services segment continues to grow
and provides us with opportunities to expand in a number
of directions within the historic as well as the emerging
digital communications markets 
consequently we are pleased that against the background of
currently unfavourable contracted office products market
conditions o2o remains in a relatively strong position to
exploit opportunities as they arise
publication of half yearly financial reports
with effect from this year and in accordance with dtr 422
we will publish our half yearly financial reports on our website
following disclosure via a regulated news service rns hard
copies will be posted to shareholders only on request 
agm
the agm will be held at the company’s head office st
crispins duke street norwich on 22 may 2013 at 930 am
notice of the agm is included within the annual report and
financial statements and will be circulated together with the
proxy forms for use at the agm 
d j callear 
chairman
25 march 2013 o2o plc report and accounts 2012 6
managed procurement – revenue £1477m
2011 £1278m adjusted ebita £112m
2011 £130m see note 3 to the financial statements
banner business services 
weak market demand despite the benefit of gosc resulted
in bbs revenue slipping to £1211m 2011 £1266m  the
global office products industry has been directly affected by
the recession and customer austerity measures have brought
about tighter budgets changes in the workplace and a
generally increased awareness of costs in the uk this was
exacerbated during the year by the greater than anticipated
impact of a uk workforce working abnormally during the
jubilee and olympic celebrations in london alone for a 5
week period bbs sales volumes were down by some 28 as
a result of fewer people in the office workplace 
softer revenue volumes together with a shift from higher margin
noncore sales to lower margin core sales prompted early action
by bbs to protect gross margin  this action was successful and
gross margins were broadly held at 285 2011 288
t o mitigate the impact of the continuing decline in the
contracted office products market our strategy is to
continue to gain market share securing a multimillion pound
solesupply contract with rbs based on our open book pricing
model was a significant boost the contract is exworks and is
serviced from the group’s existing capabilities bbs’s
a great deal of progress has been made during the year having delivered a robust revenue
performance notwithstanding our reporting a reduction in underlying profit
in the first half we implemented two significant but very different managed procurement
contracts operational issues were experienced and were swiftly addressed although not
without additional costs being incurred as reported previously  by the end of may the
situation was fully resolved 
in the last quarter bbs’s success in winning a prestigious contract with rbs was a particular
highlight a dramatic drop in bbs sales volumes just before and over the christmas period
however was exacerbated by an inability to complete scheduled deliveries because of early
customer business closures whilst we have good prospects elsewhere in the business the
proximity to year end impeded any opportunity to mitigate the adverse impact of this unusual
trading period
significant experience of serving financial institutions paved
the way for a smooth implementation of the rbs contract
which went live on 1 february 2013 and is currently trading in
line with expectations
what has become apparent is that forecasting bbs sales per
working day is no longer a reliable exercise changes in the
workplace and tighter budgetary controls resulted in a higher
number of low value orders during the year leading to more
volatile and unpredictable order input patterns  we are
working to try and ensure that our customers in their own
interests and ours reduce the frequency of deliveries by
consolidating their requirements
truline 
after its start up in 2011 t ruline secured a four year contract
to provide supply chain services to the advantia dealership
network with effect from 1 january 2012 the launch of this
contract which was effectively the simultaneous
implementation of 44 individual contracts was not without
issues limited customer information initially led to our holding
the wrong stock and stock being held at the wrong locations
both of which resulted in additional operational activity to get
the right goods to the right place at the right time as individual
dealers had closed warehouses and transferred drivers from
day one it was critical that service levels were maintained and
significant additional temporary resource was employed in the
early phase of the contract resulting in oneoff implementation
chief executive’s review  o2o plc report and accounts 2012 7
costs of £19m being incurred the situation was stabilised by
the end of may and has since been operating to plan 
t ruline’s sales revenues were within expectations at £266m
2011 £12m and accounted for almost a fifth of managed
procurement’s revenue initial gross margins were disappointing
but recovered in the second half of the year after the contracted
quarterly review of product sales prices and cost recharges to
an overall gross margin for the year of 151 2011 74
with the advantia contract settled t ruline was able to focus on
an earlier decision to close a noncore transport activity owing to
its poor financial performance this activity had been subsumed
by t ruline and its closure during the second half of the year
resulted in nonrecurring costs of £07m
truline’s business model is scalable and sustainable and
provides a solid base for our further expansion into the sme
market without further capital investment interest from the
industry is high and we are selecting new dealers who will fit
with the truline model
business critical services – revenue £796m
2011 £657m adjusted ebita £70m 2011
£70m see note 3 to the financial statements
banner managed communication 
established following the acquisition of accessplus in 2008
and by the acquisition and integration of tpf in 2010 bmc is
now a key player in the growing business process outsourcing
bpo market it delivered strong revenue growth with a 19
increase to £758m 2011 £635m and now accounts for
one third of the group’s total revenue
building on this growth 2013 will benefit from a full year’s
trading from a further three significant contracts secured
during 2012 together worth £18m per annum best buy
europe carphone warehouse friends life and hastings
direct came on stream towards the end of 2012 and as
usual implementation costs temporarily suppressed in
year contribution
bmc predominantly serves private sector customers in the uk
and internationally  recognition of our success in this came in
july 2012 when bmc was included on 3 specialist lists of
‘international association of outsourcing professionals’ iaop
annual ranking of the ‘world’s best outsourcing providers’ 
we believe that bmc provides us with a number of exciting
opportunities for future growth
banner document services 
banner document services bds is our secure document
destruction service operating closed loop™ a fully auditable
recycling solution for customers closed loop™ was a key
factor in securing gosc and although initial progress has
been slower as central government departments unravel
existing document destruction services from their incumbent
arrangements it is now growing steadily revenue increased
by 72 in the year to £38m 2011 £22m
we seek to extract additional value from our closed loop™
intellectual property and have very recently concluded a
licencing arrangement with our subcontractor for operations
in northern ireland
2013 operating objectives
economic uncertainties remain and maintaining a highly
efficient operating platform is essential for stability and
future growth
while we look to maximise market opportunities we continue
to drive internal efficiencies to ensure we stay in the best
possible operational shape
the marked change in buying patterns towards a ‘little and
often’ approach is clear for the 20 increase in despatched
sales in 2012 35 more lines were picked and over 50
more deliveries were made we are working harder to achieve
proportionately less return despite record productivity
levels we constantly monitor activity and improve operational
kpi reporting to highlight issues as they arise 
current focus is on improvements to our back office functions
to identify unnecessary processes and to implement new
costeffective methods  ultimately we aim to transform the
way our back office supports our revenue generating
activities
s r moate
chief executive
25 march 2013
simon moate o2o plc report and accounts 2012 8
business and financial review
revenue and profit
t otal revenue was £2273m 2011
£1935m underlying profit before tax
was £65m 2011 £84m before non
recurring costs of £40m 2011 £24m
amortisation of intangibles relating to
acquisitions of £12m 2011 £13m
and share option charges of £05m
2011 £04m operating profit before
such costs was £86m 2011 £100m
and operating profit after such costs
was £28m 2011 £58m  profit
before tax after such costs was £07m
2011 £43m and profit after tax was
£03m 2011 £43m the underlying
profit margin was 29 2011 43
nonrecurring costs are those
significant items that by virtue of their
size or incidence are separately
disclosed to enable a better
understanding of the group’s operating
performance a significant proportion
£19m 2011 £07m relate to
exceptional logistics operations to
ensure the maintenance of customer
service levels in the early stages of the
advantia contract the remainder are
principally oneoff items to improve
efficiencies across the group and
reshape the business in line with its
diversification strategy restructuring
and business integration related
charges £15m 2011 £17m and
£06m 2011 £nil of business closure
and disposal costs of noncore
activities a full analysis of the non
recurring costs is set out in note 5 to the
financial statements
tax
a full analysis of the tax charge for the
year is set out in note 9 to the financial
statements 
the group’s effective tax rate in 2012
was 525 2011 negative 05 the
high effective rate in 2012 is primarily
attributable to expenses not deductible
for tax purposes of £141000 and the
impact of adjustments in respect of prior
year estimates of £88000  the lower
effective tax rate in the prior year
related to the utilisation of previously
unrecognised brought forward trading
losses of £522000 the recognition of a
deferred tax asset in respect of trading
losses available for offset in future
periods of £241000 where there is now
certainty that these losses can be offset
against future taxable income and the
impact of adjustments in respect of prior
year estimates of £245000  the group
has a further £452000 2011
£491000 of nontrading losses where
no tax asset is recognised as there is
currently no expectation that these non
trade losses can be offset against future
profit streams  
the amount of corporation tax paid
during the year is £03m 2011 £08m 
the effective tax rate in the near future
is anticipated to be similar to the
standard rate of uk corporation tax 
shareholders’ return
basic and diluted earnings per share
were 09p 2011 120p with
underlying earnings per share of 134p
2011 207p  the total dividend paid
and payable for the year of 72p per
share 2011 114p including the 36p
interim dividend 2011 36p paid on 9
november 2012 is not covered by
earnings 2011 11 times but is
covered by underlying earnings 25
times 2011 20 times shareholders’
equity at the end of the year was
£195m 2011 £228m
the middle market quotation of the
company’s ordinary shares at the end of
the financial year was 1240p with a
market capitalisation of £450m
including shares held by the employee
benefit trust
cash flow
as set out on page 37 the group
generated net cash from operating
activities of £42m 2011 £88m at
31 december 2012 net debt amounted
to £290m an increase of £13m from
£277m at the start of the year
the net debt of £290m is supported by
borrowing facilities of £505m
committed until june 2015 the
facilities comprise a term loan of
£175m repayable over 5 years with the
next instalment of £05m due in may
2013 a revolving credit facility of
£20m overdraft facilities of £40m
and an invoice discounting arrangement
of up to £270m financial covenants
are applied to the committed facilities
and the group has continued to comply
with these with significant headroom
key contractual arrangements
the group has always had a number of
large customers  with our major
customers our approach is to seek long
term strategic relationships based on
managed services and shared interests
the term for a typical supply
arrangement is between three and five
years and we enjoy a record of
consistent contract retention
a key aim for the group has been to
enlarge and diversify its customer base
this has been achieved both organically
and by taking advantage of suitable
acquisition opportunities as a
consequence the group’s reliance on any
one individual customer has been
reduced 
the gosc framework under which we
supply a broad range of central
government departments comprise a
number of separable contractual
relationships and we do not therefore
consider it to be with a single customer
the group has a wide range of suppliers
and it is possible that the challenging
economic conditions could impact some
however the group has limited exposure
to the failure of any single supplier as the
nature of the majority of products
purchased is such that other supply
options are normally readily available
the group maintains flexibility with its
suppliers by typically not making
contractual volume commitments
it is the group’s policy to negotiate with
each of its principal suppliers terms of
trade appropriate to the business and to
operate within those terms once agreed
given the wide range of suppliers the
terms of trade operated by the group
are diverse with no standard
characteristics prevailing
the group works in partnership with
suppliers to ensure as far as o2o plc report and accounts 2012 9
reasonably practicable that its
sourcing of products meets recognised
standards of corporate social
responsibility csr  the csr
statement on page 11 describes the
approach o2o takes in this respect
principal risks and uncertainties
the principal risks and uncertainties
facing the group are set out below
● loss of a large customer
the group has a number of large
customers and is therefore
potentially vulnerable to the loss of
any one of these contingency plans
are formulated and quantified before
any large retenders are submitted so
that the business is able to respond
rapidly with minimal disruption to a
large contract loss this coupled with a
strategy of diversifying the customer
base and widening the business
portfolio at the same time as
maintaining a high level of service
helps mitigate the exposure
● reduction in gross margins
gross margins are adversely affected
by product cost increases owing to raw
material costs foreign currency
exchange movements and customers’
reducing their demand the group has
sought to mitigate this impact by
passing cost increases on to
customers but some resistance and
lag is inevitable our experience has
shown that widening the group’s
portfolio of business products and
services and driving efficiency
improvements help reduce the risk and
a focus on customer profitability
allows for the situation to be
monitored our open book pricing
model which offers customers
transparency in their procurement and
the benefits of o2o’s purchasing scale
also reduces o2o’s exposure to
commodity price fluctuations
● interruption of operations or it
services
the business is built around a proven
service with reliance on our warehouses
and it infrastructure a severe
disruption in either of these areas could
have a significant impact on the group
in order to mitigate these risks we
maintain appropriate disaster recovery
plans and insurance cover
● competitors
the group operates in a highly
competitive market the risk exists
therefore that contracts are awarded
on the basis of lowest price our
strategy is to deliver a wide range of
first rate addedvalue services at
competitive prices recent contract
wins and retentions help demonstrate
that this approach is valued by our
customers across the group 
● economic backdrop
the group is affected by economic
slowdown with the weakening of sterling
for instance leading to cost price
pressure and the potential that lower
levels of activity lead to reduced demand
for some of the goods and services
provided by the group this was
particularly evident with the shortfall in
public sector sales volumes as a
consequence of government austerity
measures in addition economic
circumstances affect suppliers
however the group has limited exposure
to the failure of any single supplier since
for the majority of products purchased
alternative sourcing or product options
are normally available 
the group’s committed borrowing
facilities afford some protection
against increased funding
requirements should they arise in
addition the wide spread nature of our
customers and the public sector
element of our account base helps to
mitigate risks in the wider economy
● financial risk management
the group’s activities expose it to a
variety of financial risks which include
market risk comprising currency risk
commodity price risk cash flow and fair
value interest rate risk credit risk and
liquidity risk the details of which are
described in note 1 to the financial
statements 
● working capital management
the risk from limited availability of
further capital could constrain the growth
of the business the group mitigates this
risk by regular monitoring of cash flow
and funding requirements to ensure
sufficient undrawn facilities are in place
to service its operating activities  o2o plc report and accounts 2012 10
2012 2011
gross margin  262 288
gross margin percentage is gross profit expressed as a percentage of revenue it is the measure of sales
profitability after related direct purchase costs and is a measure comparable with other companies
in the managed procurement division the impact of the truline wholesaler business at lower margins
has changed the sales mix
distribution cost  98 95
the distribution cost percentage is the cost associated with distribution before £29m of
nonrecurring costs 2011 £nil expressed as a percentage of revenue  
changes in the sales mix and customer requirements have increased the distribution cost percentage
administration cost  126 141
the administration cost percentage is the cost associated with administration before £11m of
nonrecurring costs 2011 £24m amortisation £12m 2011 £13m and share option charges
£05m 2011 £04m expressed as a percentage of revenue  
efficiencies and an increase in revenue are reflected here 
underlying profit  29 43
the underlying profit percentage is the underlying profit before nonrecurring costs amortisation and
share option charges expressed as a percentage of revenue
in addition to the gross margin effect there was a £06m increase in finance costs following the
renegotiation of loan facilities in may 2011 and a full year of higher interest rates
underlying earnings per share 134p 207p
underlying earnings per share is the profit on ordinary activities after tax before the after tax effect of
nonrecurring costs amortisation and share option charges divided by the weighted average number of
ordinary shares in issue during the year
the underlying earnings per share decreased as a result of the reduction in underlying profit as
explained above  
net debt £290m £277m
net debt is calculated by subtracting cash and cash equivalents from the long and short term borrowings
net debt increased by £13m largely as a result of an increase in working capital requirements for the
startup of the truline activity 
key performance indicators kpis
overall measurement of the financial performance of the operating segments managed procurement and business
critical services is based on adjusted earnings before interest taxation and amortisation ebita details can be
found in note 3 to the financial statements
individual kpis which o2o uses to measure business performance are gross profit distribution costs administration
costs and underlying profit all expressed as a proportion of revenue underlying earnings per share and net debt
h c l cawley
group finance director
25 march 2013 o2o plc report and accounts 2012 11
corporate social responsibility statement
o2o is committed to upholding its ‘good
for you good for us good for everyone’
trading ethos csr is important to o2o
because it is important to o2o’s
customers staff and shareholders it
also makes good business sense
leading to greater efficiency lower
costs and improved competitiveness
workplace
almost 1000 people are employed
across the group and their experience
skills and commitment are critical to
o2o’s success as well as providing them
with a safe and healthy working
environment o2o promotes a positive
internal culture that both challenges its
employees and allows them to challenge
what they do openly and constructively
employees
o2o recognises the individual needs of
its employees for example it supports
working parents by operating childcare
schemes and offering flexible working
arrangements subject to the operational
needs of the business
the company ensures that its
employees are kept aware of changes in
employee related legislation and runs
groupwide awareness training
programmes when appropriate recent
examples have covered diversity
awareness in response to the equality
act 2010 and an understanding of anti
corruption measures to ensure
compliance with the bribery act 2010 
the group intranet has become an
important communication link with the
group’s employees and it continues to
grow in scope as employees become more
familiar with it o2o news is published on
the site’s home page and a wide range of
departmental and corporate policies are
available for download 
health  safety
o2o is committed to ensuring the health
and safety of its employees and a health
and safety report is delivered to the
board on a monthly basis fire manual
handling display screen equipment and
workplace taskspecific risk
assessments are conducted at each site
and all delivery drivers undertake an
internetbased road safety course
all sites now operate under an ohsas
18001 certified health and safety
management system audited by bsi no
major nonconformities were recorded
in the 2012 audits
annual workplace inspections are
undertaken by an independent
assessor with follow up visits to
ensure that all corrective actions have
been completed owing to a change of
external assessor during the year
performance ratings and industry
comparisons are no longer conducted
internal observation and legal
compliance audits are undertaken by
the o2o quality environment health 
safety qehs teams at all sites and
this has led to the development and
groupwide availability of user friendly
web pages on specific qehs aspects
our 5 main sites are enrolled with the
british safety council bsc improving
access to information and training
modules both of our guildford and
manchester sites have won international
health and safety award with merit
from bsc based on their work practices
and health and safety culture 
all our employees receive health and
safety awareness training and o2o
health and safety procedures are
available on the group intranet a health
and safety group comprising employees
from different levels and functions is in
place at every o2o location with
responsibility for conducting reviews of
current practices and taking any
corrective action necessary our senior
operations managers are trained to bsc
level 2 and all members of the head
office health and safety group have
attained bsc level 1 certificate 
community
o2o recognises that it has a
responsibility towards the wider
community and is particularly proud of
the efforts of its employees to raise
funds for charity
work experience placements are offered
to students and wherever practicable
preference is given to local businesses
when outsourcing services such as
catering cleaning and recruitment
o2o has an established charity
committee to help o2o employees
contribute to community and charitable
events by encouraging and co
ordinating fundraising across the
group it has delivered an array of
activities including office ‘dress down’
days cake sales raffles and various
sponsored events to benefit local
causes and numerous charities 
product marketplace
o2o takes seriously csr initiatives for
its products the group ensures good
practice throughout its supply chain
and helps its customers to do likewise
ethical sourcing
o2o sources products on a global basis
and encourages all of its suppliers to
operate environmental management
systems o2o will not knowingly trade
with organisations that behave in a
manner that is unethical or
irresponsible
in particular o2o takes proactive steps
to audit the ethical performance of
suppliers who manufacture the group’s
own brand products first o2o is a
member of sedex the supplier ethical
data exchange in addition o2o’s buyers
visit suppliers’ factories overseas and
use sgs an independent assessor to
ensure compliance with the ethical
trading initiative’s base code which is
founded on the conventions of the
international labour organisation and is
an internationally recognised code of
labour practice 
green optimisa™
the green optimisa™ system enables
customers to calculate the
environmental impacts of their contract
with o2o including the use of paper co
2
emissions and transport fuel
consumption this is important to many
o2o customers and the system o2o plc report and accounts 2012 12
therefore adds value commercially as
well as from a csr perspective
environmentally preferred products
o2o operates the globe  tick™
accreditation scheme which makes it
easy for customers to select
environmentally preferred products
the range of ‘green alternatives’ now
consists of over 1500 products for
every area of the workplace from office
supplies to catering technology to
promotional items globe  tick™
products constitute over 18 of the
lines contained within the o2o catalogue
for 2013 
all globe  tick™ products are audited
against independently set criteria
before they are showcased in the o2o
green guide which is published
annually the green guide also
incorporates information on other
sustainable products and services and
how customers can minimise the impact
of their day to day working practices on
the environment
o2o are certified members of both the
forest stewardship council fsc and
the programme for the endorsement
of forest certification pefc
promoting responsible and sustainable
forest management  
fairtrade is designed to give
disadvantaged farmers a guaranteed
price for products that meet
internationally agreed standards
rainforest alliance focuses on
standards covering worker protection
their environment and their
communities a range of fairtrade and
‘rainforest alliance certified’ catering
supplies are included in o2o’s catalogue
catalogues and brochures
all of o2o’s main catalogues are
printed on paper made from 100
recovered waste surplus catalogues
are always recycled and the use of
electronic catalogues is promoted
wherever possible
recycling services 
o2o offers a portfolio of recycling
services notably waste paper through
its closed loop™ service 
having supplied its customers with
copier paper the closed loop™ service
collects the waste paper securely
shreds it and a leading paper mill then
converts it back into copier paper to be
used again by the customer thereby
‘closing the loop’ 
over 28 million reams have been
produced equating to a saving of
120000 trees a reduction in co
2
emissions of 4722 tonnes a reduction
in energy consumption of 568 million
kilowatts and a reduction in water
consumption of 316 million litres
closed loop™ has won several
accolades since its inception including
a green apple award in 2010 a
bronze zero waste award in 2012 and
more recently a tomorrow’s fm award
it was also key to the business
securing the title of  ‘recycling and
waste management large business of
the y ear’ in 2012 more information
can be found on the website
wwwbannerclosedloopcouk
in addition o2o offers the safe disposal
of batteries printer cartridges
uniforms office furniture and
technology products
environment
o2o operates an environmental
management system that has been
certified to the international
standard iso 14001 2004 and has
made significant progress in reducing
the environmental impact of its
business activities  
waste management
o2o is a national distributor of
business products and aims to keep
packaging to a minimum through a
combination of improved box
utilisation larger product pack sizes
and customer education regarding the
environmental benefits of
consolidating orders towards the end
of 2012 o2o introduced its
trademarked recyclabox™ a sturdy but
easily collapsible box made from
100 recycled card recyclabox™ is
used for all deliveries and customers
are encouraged to return the folded
boxes to the drivers to be reused
again and again
where possible o2o utilises ecommerce
to reduce the amount of paper used in
the transaction process the group
trades with most of its larger customers
and suppliers electronically 
recycling
all of o2o’s distribution hubs have
procedures to recycle waste materials
a new ‘backloading’ process ensures
that waste cardboard and shrinkwrap is
taken back to o2o’s warehouses for
recycling using the same trunker vehicle
that delivers goods for onward
shipment to customers drinks cans and
plastic bottles are also recycled
in november 2012 the manchester
distribution centre achieved ‘zero
landfill’ status assisted by white
recycling limited all general waste
from this site is now 100 recycled
white recycling limited collect the
waste and further segregate items for
recycling with any residual waste going
through its waste exchange operation
transforming waste into quality
secondary fuels of varied specifications
for a variety of end users a similar
solution is being investigated for o2o’s
other distribution hubs
overall the volume of cardboard and
paper recycled in 2012 was in excess
of 420 tonnes 2011 380 tonnes and
the volume of plastic that was recycled
increased to over 60 tonnes
201150 tonnes 
energy management
the investments made by o2o in 2011
to increase the efficiency of the heating
and lighting system and improve energy
usage resulted in significant reductions
in co
2
emissions in that year which have
been maintained in 2012 the
manchester distribution centre
benefited from an air source heat pump
which converts air drawn from the
corporate social responsibility statement continued o2o plc report and accounts 2012 13
atmosphere into a source of heat for use
in radiators and in the basingstoke
warehouse a new heating system with
down fans was installed low energy
lighting was also fitted throughout these
sites during the year movement sensors
were fitted to light fittings within the
office and warehouse of our new barking
hub to help reduce energy usage
in 2012 a total of 1050 tonnes of co
2
were emitted by o2o’s largest sites
manchester basingstoke swindon and
norwich in relation to gas and
electricity usage representing a slight
increase on prior year consumption
across the same sites owing to
additional heating in what was an
unusually cold and wet spring but
upholding the improvements made since
2010 2011 1038 tonnes 2010
1245 tonnes
a project to align energy suppliers’
contracts was undertaken in 2012
suppliers now provide smartenabled
technology to give realtime
consumption information and a phased
transfer to renewable electricity source
is underway t en of our depots were
transferred during the year and the
remaining ten will be switching over in
2013  in addition all contracts were
made coterminous to facilitate
administration renewals and tendering 
carbon management
as a national distributor o2o operates
its own inhouse fleet of delivery
vehicles in addition since 2010 the
fleet has performed a large number of
palletised deliveries for the pallet
network tpn co
2
emissions
generated by the fleet were 5801
tonnes in 2012 2011 4657 tonnes
reflecting a full year of deliveries for the
gosc and advantia contracts however
o2o employs a number of initiatives to
maximise efficiency and minimise the
environmental impact of the fleet 
a four year renewal scheme means that
the most uptodate clean running and
fuel efficient vehicles are available the
hgv vehicles are euro 5 compliant
having sloping roof trailers and
aerodynamic bodies to minimise fuel
usage and utilising selective catalytic
reduction to minimise pollution almost
all of the vehicles are diesel and some
are fitted with stop start technology
which switches the engine off when the
vehicle has a prolonged stop journeys
are optimised by means of a
sophisticated fleet management
system and navman tracking double
deck trailers are used to transport
larger quantities of goods in a single
journey backloading arrangements
exist whereby delivery vehicles collect
stock on their return to the warehouse
in an otherwise empty vehicle 
the company car scheme encourages
staff to select cars from a defined range
of low emission vehicles and video and
telephone conferencing are used to
minimise the need for business travel  o2o plc report and accounts 2012 14
david callear chairman
david aged 59 is a chartered accountant and joined o2o as chairman in january 2001 his
career has been in financial and general management with both publicly quoted companies
including chief executive positions with tip europe plc europewide vehicle rental and jeyes
group plc international household products manufacture and supply and private equity
ventures during the year he held a number of nonexecutive chairman roles working with the
boards of private companies including rp  martin holdings limited
steve mckeever chief operating officer
steve aged 48 was appointed to the board in august 2010 he joined o2o in december 2007
with responsibility for the group’s it function and later assumed additional responsibility for
o2o’s integrated supply chain until recently he acted as temporary managing director of
bmc before joining o2o he was a director of johnson group management services ltd
holding both it and operations director roles
jim cohen senior nonexecutive director
jim aged 71 joined o2o in june 2004  he was a main board executive director of balfour
beatty plc until his retirement in february 2007 prior to joining balfour beatty in 1993 he
held senior management positions with gte and gec and was a senior civil servant at the
department of energy  he is currently a member of the investment committee of the
netherlands based infrastructure funds dif ii and dif iii an adviser to logikal projects
limited and a nonexecutive director of african power corporation limited
chris batterham nonexecutive director 
chris aged 57 joined o2o in june 2008 and is a chartered accountant with significant
experience in the business services sector he was finance director of unipalm plc the first
internet company to float on the london stock exchange and latterly chief financial officer
of searchspace group until 2005 he currently holds a number of nonexecutive directorships
including sdl plc iomart group plc t oumaz and chairman of eckoh plc
hugh cawley group finance director 
hugh aged 56 was appointed to the board on 25 february 2013 and is a chartered
accountant he was previously chief executive officer of dawson holdings plc overseeing
the reversal of its decline the growth of its constituent businesses and in august 2011 the
subsequent sale of the group for a significant premium prior to this he held senior financial
roles at procter  gamble imperial chemical industries plc and s daniels plc
mark cunningham
mark served as finance director throughout 2012 and resigned on 30 january 2013 
simon moate chief executive
simon aged 50 joined o2o as chief executive in july 2007 he was previously an executive
director of johnson service group plc the managed services business where as chief
executive of the facilities management and specialist supplies division he led and integrated a
number of acquisitions  prior to this he held a number of senior sales marketing and
operations roles with blue chip companies including well well well ltd aramark plc provend
group plc and coca cola
board of directors o2o plc report and accounts 2012 15
directors’ report
the directors present their report and
the audited consolidated financial
statements for the group for the year
ended 31 december 2012
principal activities
the principal activity of the parent
company the company is that of a
holding company office2office plc is
registered at companies house under
company number 04083206
the group’s principal activities are
delivering managed procurement and
business critical services 
business and financial review
the business and financial review
has been prepared in accordance with
the requirements for a business
review under the companies act
2006 the intent is to provide
information to shareholders and
should not be relied on by any other
party or for any other purposes
the group’s strategy objectives and
likely future developments in the
business are reviewed in the chairman’s
statement on pages 2 to 5 and in the
chief executive’s review on pages 6 to
7 the kpi’s are defined and the principal
risks and uncertainties including
financial risks facing the business are
described in the business and financial
review on pages 8 to 9 the board has
delegated the responsibility for
monitoring financial risk management to
the audit committee
where the annual report contains
forward looking statements these are
made by the directors in good faith
based on the information available to
them at the time of their approval of
this report consequently such
statements should be treated with
caution due to the inherent
uncertainties including both
economic and business risk factors
underlying such forward looking
statements or information
results and dividends
profit for the year was £03m
2011 £43m
an interim dividend of 36p 2011 36p
per ordinary share amounting to £13m
2011 £13m was paid on 9 november
2012 
the directors recommend a final
dividend in respect of the year ended
31 december 2012 of 36p 2011
78p per ordinary share amounting to
£13m 2011 £28m  if authorised at
the agm the dividend will be paid on
11 july 2013 to shareholders on the
share register at close of business on
17 may 2013
the aggregate dividends recognised as
distributions in the year ended 31
december 2012 amounted to £41m
2011 £41m
share capital and substantial
shareholders
the company’s issued share capital is
£36308984 divided into 36308984
ordinary shares of 1 pence each all
shares have uniform rights except for
those shares held in the employee
benefit trust ebt as referred to on
page 18  where the trustee typically
waives his right to vote
there are no restrictions on the
transfers of securities in the company
including limitations on the holdings of
securities and requirements to obtain
the approval of the company or of other
holders prior to a transfer of securities
the directors are not aware of any
agreements between holders of the
company’s securities that may result in
restrictions on the transfer of securities
or on voting rights
there are no contracts of significance in
place between the group and its
shareholders 2011 none  
the company has been notified in
accordance with disclosure and
transparency rule 512 of the financial
services authority that as at 1 march
2013 the above shareholders owned
3 or more of the issued ordinary
share capital of the company
at the last agm the directors were
given authority to allot ordinary shares
within the meaning of s551 companies
act 2006 up to a nominal amount of
£121030 and separately  a further
nominal amount of £121030 provided
they are offered by way of a rights issue
to existing shareholders in proportion to
their existing holdings in line with the
association of british insurers
guidelines in total these authorities
represent two thirds of the issued
ordinary share capital additionally  the
directors were given the power to
disapply preemption rights in respect of
the allotment of shares under s570
companies act 2006 up to an
aggregate nominal value of £18154
representing 5 of the issued ordinary
share capital and on behalf of the
company  to make market purchases of
up to 3630898 ordinary shares of the
company being 10 of the issued
ordinary share capital
these authorities are due to expire at
the end of the forthcoming agm
separate resolutions to renew these
authorities will be set out in the notice
of meeting and proposed at the agm on
22 may 2013
aberforth partners 8364597 shares 2304
axa framlington 5309455 shares 1462
miton capital partners 4358735 shares 1200
f  c asset management 2405698 shares 663
baillie gifford  co 1722359 shares 474
mark cunningham 1089549 shares 300
executive director resigned 30 january 2013 o2o plc report and accounts 2012 16
other business to be considered
at the forthcoming agm
other business to be considered at the
forthcoming agm an ordinary
resolution to revoke the provision in the
company’s articles of association the
articles setting the maximum amount
of shares that may be allotted and a
special resolution to approve a 14 day
notice period for general meetings
ordinary resolution
as mentioned above the directors will
be seeking to renew their authority to
allot ordinary shares up to a total
nominal amount of £242060 being
twothirds of the issued ordinary share
capital the company currently has
issued share capital of £36308984
and is restricted by its articles to a
maximum nominal amount of £500000
shareholder approval via ordinary
resolution will therefore be sought to
revoke this restriction in the articles
special resolution
changes made to the companies act
2006 by the shareholder rights’
regulations increase the notice period
required for general meetings of the
company to 21 days unless
shareholders approve a shorter notice
period which cannot however be less
than 14 clear days  agm’s will continue
to be held on at least 21 clear days’
notice
before the coming into force of the
shareholder rights’ regulations on 3
august 2009 the company was able to
call general meetings other than an
agm on 14 clear days’ notice without
obtaining such shareholder approval
therefore a special resolution will be
proposed in order to preserve this
ability  the shorter notice period would
not be used as a matter of routine for
such meetings but only where the
flexibility is merited by the business of
the meeting and is thought to be to the
advantage of shareholders as a whole
the approval will be effective until the
company’s next agm when it is
intended that a similar resolution will be
proposed  
directors
the following with the exception of
hugh cawley were directors during
2012 and held office throughout the
year under review up to the date of
signing the annual report and financial
statements
david callear
chairman
1
simon moate
chief executive 
hugh cawley
group finance director
appointed 25 february 2013
mark cunningham
finance director
resigned 30 january 2013
steve mckeever
chief operating officer
jim cohen
nonexecutive director
2
chris batterham
nonexecutive director
3
1
chairman of the board and of the
nomination committee member of the
remuneration committee and audit
committee
2
chairman of the remuneration
committee the risk and opportunity
committee and senior independent
director member of the audit
committee and nomination committee
3
chairman of the audit committee
member of the remuneration
committee and nomination committee
biographical details of the directors are
shown on page 14
simon moate will retire at the
forthcoming agm in accordance with
the articles and being eligible will offer
himself for reelection the board firmly
believes that he serves the company
well and has the attributes to take the
business forward accordingly the
board recommends his reelection
following mark cunningham’s
resignation on 30 january 2013 hugh
cawley was appointed group finance
director with effect from 25 february
hugh cawley will offer himself for
election at the forthcoming agm
corporate governance
details of the corporate governance
arrangements are provided on pages 19
to 22
directors’ interests
directors’ beneficial interests are
disclosed on page 28 of the directors’
remuneration report none of the
directors’ interests carries special
rights with regards to control of the
company
related party transactions
in 2012 payments totalling £367322
2011 £248948 were made to
iomart plc of which chris batterham is
a nonexecutive director iomart plc
provide managed hosting services
over the past two years o2o has
transferred its server requirements to
iomart the transactions are on normal
commercial terms
directors’ third party indemnity
provisions
a qualifying thirdparty indemnity
provision as defined in s234 of the
companies act 2006 was in force for
the benefit of each of the directors in
respect of liabilities incurred as a result
of his office to the extent permitted by
law during the financial year and also at
the date of approval of the financial
statements in respect of those
liabilities for which directors may not be
indemnified the company maintained a
directors’ and officers’ liability
insurance policy throughout the
financial year
directors’ report continued o2o plc report and accounts 2012 17
statement of directors’
responsibilities
the directors are responsible for
preparing the annual report the
directors’ remuneration report and the
financial statements in accordance with
applicable law and regulations 
company law requires the directors to
prepare financial statements for each
financial year under that law the
directors have prepared the group and
parent company financial statements in
accordance with international financial
reporting standards ifrss as adopted
by the european union eu under
company law the directors must not
approve the financial statements unless
they are satisfied that they give a true
and fair view of the state of affairs of the
group and the company and of the profit
or loss of the group for that period  in
preparing these financial statements the
directors are required to
● select suitable accounting policies
and then apply them consistently
● make judgements and accounting
estimates that are reasonable and
prudent
● state whether applicable ifrss as
adopted by the eu have been
followed subject to any material
departures disclosed and explained
in the financial statements and
● prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
company will continue in business
the directors are responsible for
keeping adequate accounting records
that are sufficient to show and explain
the company’s transactions and
disclose with reasonable accuracy at
any time the financial position of the
company and the group to enable them
to ensure that the financial statements
and the directors’ remuneration report
comply with the companies act 2006
and as regards the group financial
statements article 4 of the ias
regulation they are also responsible
for safeguarding the assets of the
company and the group and hence for
taking reasonable steps for the
prevention and detection of fraud and
other irregularities
each of the directors whose names and
functions are listed on page 14 confirms
that to the best of his knowledge
● the group financial statements
which have been prepared in
accordance with ifrss as adopted by
the eu give a true and fair view of
the assets liabilities financial
position and profit of the group 
● the directors’ report contained in
the annual report includes a fair
review of the development and
performance of the business and the
position of the group together with
a description of the principal risks
and uncertainties that it faces and
● in accordance with s418 companies
act 2006 in the case of each
director in office at the date the
directors’ report is approved that
a so far as the director is aware
there is no relevant audit
information of which the company’s
auditors are unaware and
b he has taken all the steps that he
ought to have taken as a director
in order to make himself aware of
any relevant audit information and
to establish that the company’s
auditors are aware of that
information
employee involvement
the group has a policy of providing
employees with information through
● an intranet facility which hosts
amongst other things internal
vacancies o2o news items group
policies hr forms and procedures
● corporate and divisional newsletters
and announcements
● local employee forums which bring
together a cross section of employees
to cover separately  matters such as
health and safety  site improvements
and fundraising activities
● operation of an employee suggestion
scheme which facilitates a twoway
flow of information and ideas
● supplier meetings which provide an
opportunity for relevant employees
to meet the group’s key suppliers
and get a better understanding of the
products they are selling and for the
suppliers to showcase the new
products included in the group’s
catalogues and
● group sales meetings which bring
together the different sectors of the
business to share knowledge on
products and services to promote
crossselling capabilities
a long term incentive scheme is in
operation for executive directors and
senior managers  details are included in
the directors’ remuneration report on
pages 25 to 29
the group also has save as y ou earn
sa ye schemes under which employees
are granted an option to purchase
ordinary shares in the company in
either three or five years’ time
dependent upon their entering into a
contract to make monthly contributions
to a savings account over the relevant
period these savings are used to fund
the option exercise there are currently
three live schemes a three and five year
scheme which was launched in
november 2011 and a five year 2008
scheme which is exercisable from may
2013 details of these schemes are
given in note 26 to the financial
statements details of the executive
directors’ participation are included in
the directors’ remuneration report on
pages 25 to 29
a low cost dealing service is available to
employees which provides a simple way
of buying or selling o2o shares in
addition an online share portal
available through the company’s
registrar allows individuals to view and
manage their shareholdings details of
these services are available on the
company’s website o2o plc report and accounts 2012 18
employee benefit trust ebt
as at 31 december 2012 the total
number of ordinary shares held by the
ebt was 138155 038 of the issued
ordinary share capital of the company
2011 269356 074 the
reduction in shares held was owing to
the exercise of options over shares by a
number of employees under the group’s
performance share plan whilst held in
trust the shares do not attract any
payment of dividends although the
trustee may exercise his right to vote in
respect of any shares held within the
trust from time to time this right is
typically waived
equal opportunities
the group is committed to a policy that
provides all employees irrespective of
background or disability with equality of
opportunity for employment training
career development and selection on
the basis of ability qualifications and
suitability for the job  executive
directors managers and employees are
required to promote equality of
opportunity and to take full account of
the policy in their daytoday work  the
aim is to recruit the most appropriate
and qualified staff in the industry and
the group is committed to the principle
of maximising every employee’s
potential  in selecting training and
promoting staff the group has to take
account of the physically demanding
nature of much of its work  employees
who become disabled will be retained
and retrained where possible
diversity and antidiscrimination
o2o’s diversity and antidiscrimination
policy is available to all employees via the
group intranet in response to the new
equality act 2010 a training program
was rolled out across the group to
promote awareness of diversity in the
workplace and to communicate the
potential consequences of discrimination
and how to avoid it 
bribery and anticorruption
o2o does not tolerate any form of
bribery or corruption and this is codified
in the group policy on anticorruption
available on the group intranet
employees are required to declare
details of any gift or hospitality received
in connection with their employment and
in conjunction with the business ethics
policy set out in the staff handbook
where there is any doubt of a conflict of
interest employees are asked to seek
approval in advance
health and safety
o2o is committed to maintaining the
health safety and welfare of its
employees details of the group health
and safety activities are given on page
11 of the csr statement
creditor payment policy
it is group policy to negotiate with each
of its principal suppliers terms of trade
appropriate to the business and to
operate within those terms of trade
once agreed  trade payable days based
on the year end figures are 86 2011
86 days for the group the company
has no trade payables 2011 nil
environmental policy
the group ensures that in satisfying its
customers’ requirements both the
goods and services supplied and its own
housekeeping comply with legislation
and best practice  the group
continually reviews its environmental
performance across the business
further details of group environmental
policies are provided in the csr
statement on pages 11 to 13
corporate and social
responsibility
a summary report on the group policies
and objectives in respect of csr is set
out on pages 11 to 13
requirements of the takeover
directive
the following are disclosed in
accordance with the requirements of
the t akeover directive
● details of the group employees’
share save scheme are given on
page 17
● procedures for appointment to the
board are included on the company’s
website wwwoffice2officecouk
under nomination committee 
t erms of reference
● shareholder approval by special
resolution is required before any
changes are made to the articles 
● the terms of the company’s
committed borrowing facilities
contain a change of control clause
following a takeover bid that requires
mandatory repayment of all
outstanding monies and accrued
interest the company does not have
any other significant arrangements
that contain onerous change of
control clauses and 
● there are no provisions for
compensation for loss of office or
employment in the agreements with
directors and employees
independent auditors
the audit committee has considered
and recommends the reappointment of
pricewaterhousecoopers llp pwc as
auditors  a resolution proposing their
reappointment will be put to the
forthcoming agm
by order of the board
d rodwell
company secretary
25 march 2013
directors’ report continued o2o plc report and accounts 2012 19
statement of compliance with
the uk corporate governance
code 2010 the code   
the uk corporate governance code
sets out standards of good corporate
governance and is publicly available on
the financial reporting council’s
website wwwfrcorguk it has recently
been updated for companies with
reporting periods beginning after 1
october 2012 o2o will report against
and all subsequent references in this
statement are to the 2010 version 
the directors consider that the
company has fully complied with the
principles set out in each section of the
code throughout the period and the
application of these principles with
respect to the composition and
operation of the board the
remuneration of the directors
shareholder relationships and
procedures for financial reporting and
internal control are described below 
directors and the board
the board comprises the chairman
chief executive chief operating
officer group finance director and two
nonexecutive directors 
the chairman is responsible for leading
the board and ensuring there is timely
and effective communication to and
between all board members he ensures
that board decisions are made after
taking into consideration the interests
of all stakeholders the chief executive
supported by the senior management
team is responsible for the daytoday
management of the group and once
agreed by the board as a whole the
development and implementation of
strategy  he sets the objectives to
ensure the successful delivery of
targets and allocates decisionmaking
and responsibilities accordingly the
normal segregation of responsibilities
between the chairman and the chief
executive has been set out in writing
and approved by the board the
chairman’s other main commitments are
disclosed on page 14 a statement of
directors’ responsibilities is given on
page 17 of the directors’ report the
respective responsibilities of directors
and auditors are given on page 30 of the
independent auditors’ report to the
members of office2office plc
the nonexecutive directors are free from
any business or other relationship which
could materially interfere with the
exercise of their judgement and have no
involvement with the daytoday
management of the group the board
considers both nonexecutive directors to
be independent underpinning their ability
to challenge decisions and feels that their
diverse experience and background bring
a depth of debate and alternative
viewpoint to the board jim cohen is the
senior independent nonexecutive
director the terms and conditions of the
nonexecutive directors’ appointments
are available on request from the
company’s registered office
the company secretary reports to the
board and advises individual directors
as required on board procedures
corporate governance matters and
changes in the regulatory environment
a procedure also exists for directors to
take independent professional advice at
the company’s expense 
the nomination committee has a formal
procedure for appointments to the board
and this welcomes candidates from both
sexes appointments are made on merit
against objective criteria following
recommendation by the nomination
committee newly appointed directors
are supplied with comprehensive
documentation aimed at providing
information in relation to the remit and
obligations of the role and current areas
under consideration for the board
the board operates formally through
agendadriven board meetings which
are normally held on a monthly basis
usually at the company’s head office
meetings are occasionally convened at
the group’s other locations with site
reviews conducted to provide the non
executive directors with an opportunity
to assess the operations at first hand
the monthly agenda covers both
operational and strategic matters
however separate strategy days are also
held to focus on longer term
considerations without the distraction of
the daytoday operational matters at
each meeting all directors are invited to
declare the nature and extent of their
interests in the matters for discussion
frequent informal dialogue between the
directors supplements the formal
board meetings on a number of
occasions during the year the chairman
met the nonexecutive directors
without the executive directors present
to discuss the performance of individual
executive directors and other senior
managers the nonexecutive directors
also met without the chairman being
present to discuss his performance
formal presentations by and informal
meetings with senior management
allow the board to keep abreast of
operational matters helps their
understanding of the business and
improves communications both in and
out of the boardroom 
the board is responsible to shareholders
for the management and control of the
group’s activities its strategic objectives
its system of corporate governance and
the stewardship of its resources this is
achieved by regular review of the key
activities of the group through the
monthly management accounts reports
and presentations a board pack
comprising information to be reviewed
and discussed is forwarded to all board
members in advance of the monthly
meetings to allow the directors to be
fully prepared regular detailed reports
on the company’s funding and liquidity
position are also circulated upon
release analyst and broker reports are
circulated and the board is updated on
any movements in major shareholdings
there is a formal schedule of matters
reserved for consideration and approval
by the board and specific responsibilities
have been delegated to board
committees as described below 
the board continues to balance the
longer term strategic direction with
immediate operational requirements and
delivery of acceptable financial results 
in summary the board
● 2008  facing unfolding economic
corporate governance statement o2o plc report and accounts 2012 20
uncertainties balanced the
integration of accessplus and accord
and the operational restructuring
following the withdrawal from the
ministry of defence contract in 2007  
● 2009  further streamlined the cost
base to meet the challenges of a
recession while creating a strong
position for the start of any economic
recovery and maintained an attractive
dividend yield balanced by a focus on
funding and affordability
● 2010  against a background of
political and economic uncertainty
leading up to and immediately
following a change in government
scaled the business critical services
segment by the acquisition of tpf and
undertook further restructuring and
● 2011 encouraged the strategy to
grow in the sme sector to help
mitigate the impact of declining
public sector sales volumes and
further addressed the group’s cost
base while mindful to maintain the
means to realise the long term
potential of the new advantia and
gosc contracts
in 2012 the board with its advisors
undertook a detailed review of the
business this review concluded that
whilst the uk office products market is
performing badly with many
participants weakened o2o’s business
is relatively robust in a pressured
environment over time some industry
consolidation seems likely and whilst
the directors will continue to monitor
opportunities the currently depressed
market will influence when and how any
such opportunities arise
under the companies act 2006
directors must avoid any situations in
which they have or could have a direct or
indirect interest that conflicts with
company interests the articles provide
the board with the authority to approve
any such conflict as appropriate
the directors are entitled to be
indemnified by the company to the extent
permitted by law and the articles in
respect of all losses arising out of or in
connection with the execution of their
powers duties and responsibilities the
company has provided letters of
indemnity for the benefit of each director
in respect of liabilities which may attach
to them in their capacity as directors of
the company  these indemnities were
independently assessed as being in line
with market practice the company also
maintains appropriate directors’ and
officers’ liability insurance neither the
indemnities nor the insurance provide
cover in the event that the director is
proved to have acted fraudulently 
in accordance with the articles no more
than one third of the directors are
required to retire at each agm and all
directors are required to submit
themselves for reelection at least once
every three years at the next agm
simon moate will offer himself for re
election and hugh cawley will seek
election being the first opportunity for
him to do so
board performance
the board undertakes a critical
evaluation of itself and its committees on
an annual basis the 2012 performance
evaluation questionnaire comprised a
series of statements which required a
rating between “strongly disagree” to
“strongly agree” and individual comment
was invited on each in addition a section
is included to allow the directors to
assess their personal involvement in
various board matters on a scale from
“too much involvement” to “not enough
involvement”  given the need regularly to
review and agree with each director his
training needs the purpose is to
determine whether there are any time
experience or development issues with
individual roles and to address these
the review reconfirmed that the size of
the board its composition and balance
together with its open and inclusive
culture remain appropriate for the
current business and that the
committees remain effective in addition
it was recognised that the nomination
committee kept the leadership needs of
the group under review notwithstanding
the limitations on succession planning
within a small company 
a number of recommendations were
made in respect of improving awareness
with regards to specific areas of the
business particularly as the group
diversifies and it was agreed to arrange
appropriate training
going concern     
the group has net current liabilities as
at 31 december 2012 and has traded
profitably since the balance sheet date
with the profits generated contributing
to the funding of the group’s working
capital requirements in addition the
group meets its daytoday working
capital requirements through sufficient
and appropriate credit facilities that are
committed until june 2015 the group’s
forecasts indicate that it is able to
operate within the level of its current
facilities and related covenants for the
foreseeable future accordingly the
directors having made appropriate
enquiries consider it reasonable to
assume that the group and the
company have adequate resources to
continue for the foreseeable future and
for this reason have continued to adopt
the going concern basis in preparing the
financial statements
committees of the board
specific responsibilities are delegated
to subcommittees of the board the
composition of these subcommittees
is provided below together with
reference to reports on their activities
all other decisions are taken
collectively by the board
board subcommittees are appointed to
act on behalf of the board for specific
projects or oneoff matters as and when
required  this enables matters to be
dealt with quickly and efficiently
without formal scheduled meetings and
proceedings are fully minuted for
approval by the board composition of
the subcommittees varies according to
the nature of the business covered
meetings during the year related to the
detailed review of the business and
were mainly chaired by david callear
the nomination committee is
responsible for reviewing the size
corporate governance statement continued o2o plc report and accounts 2012 21
structure and composition of the board
and making recommendations to the
board if it considers that any changes
are required it keeps succession plans
under review and has a formal procedure
for appointments to the board and
senior management team the
nomination committee includes both
independent nonexecutive directors
and is chaired by david callear a report
on its activities is given on page 23
the remuneration committee reviews
and makes recommendations on the
group’s overall remuneration policy
including individual remuneration
packages for executive directors the
chairman and senior management it is
also responsible for the review of the
company’s share schemes and senior
incentive plans the remuneration
committee which is chaired by jim
cohen comprises the independent non
executive directors and david callear
when necessary noncommittee
members are invited to attend by prior
arrangement a report on its activities is
given on page 25
the audit committee assists the board
in discharging its responsibilities
effectively for financial reporting risk
review and internal control it comprises
the independent nonexecutive directors
and david callear  all members have
financial literacy  chris batterham who
chairs the committee and david callear
are chartered accountants and have
relevant financial expertise as described
in their biographies on page 14   non
committee members and the external
auditors are invited to attend by prior
arrangement a report on its activities is
given on page 23
the risk and opportunity committee
was formed in 2010 and is chaired by
jim cohen the aim is to provide a forum
for risk and opportunities to be
regularly reviewed by board members
and senior management there is no set
membership as this will vary according
to the matters under review  further
details are provided on page 23
as board packs are issued in advance of
the board meetings all directors are
kept informed of the matters to be
discussed and have the opportunity to
make their views known to the chairman
prior to the meeting if they are unable to
attend minutes of meetings are
circulated to the respective members of
the board or committees
directors’ remuneration
the directors’ remuneration report on
pages 25 to 29 includes details of
remuneration policies and the
remuneration of directors
relationship with shareholders
and constructive use of the agm
the board led by the chairman
recognises the importance of
effective communication and
accountability to all shareholders and
is kept informed of their views through
frequent contact with the house
brokers and feedback from direct
communications with and
presentations to institutional
investors and fund managers
each shareholder receives the annual
report and financial statements
containing the full year results and has
up to now received an interim report on
the half year results for 2013 and
thereafter half yearly results will be
published on the company’s website but
will be available in hard copy form only
on request following the announcement
of results presentations are given to the
investment community in london and
edinburgh the full year and half year
reports and presentations are made
available on the company’s website
wwwoffice2officecouk
additionally  and in accordance with the
disclosure and t ransparency rules
interim management statements were
released via the rns news service in
april and november 2012
attendance at meetings
the number of full board meetings and committee meetings attended by each director in 2012 was as follows
board remuneration audit nomination
full board subcommittee committee committee committee
number of
meetings held 11 15 10 42
chairman
david callear 11 14 94 2
executive directors
simon moate 11 12 6 2 2
mark cunningham 
resigned 30 january 2013
11 11 0 4 0
steve mckeever 11 20 2 0
non–executive directors
jim cohen 11 3 10 42
chris batterham 11 38 4 2
 by invitation o2o plc report and accounts 2012 22
corporate governance statement continued
the company’s agm takes place in
norwich and formal notification
together with the annual report and
financial statements is sent to
shareholders at least 20 working days in
advance of the meeting all board
members are available formally during
the agm and informally afterwards for
questions each item of business is the
subject of a separate resolution the
collection and analysis of the proxy
votes is handled independently by the
company’s registrars the chairman
announces the results of the proxy
votes after shareholders have voted on
a show of hands these results are also
made available on the company’s
website details of the 2013 agm are
set out in the notice of the meeting
enclosed with this report
the chairman and the senior
independent director are available to
shareholders on all matters relating to
governance and strategy all members
of the board may be contacted through
the company’s website
internal control
the board has overall responsibility for
the group’s system of internal control
and delegates the annual review of
internal control processes and their
effectiveness to the audit committee
the internal control systems are
designed to meet the group’s needs and
address the risks to which it is exposed
such systems mitigate rather than
eliminate the risks faced by the
business and can only provide
reasonable and not absolute assurance
against material misstatement or loss
necessary actions are taken to remedy
any significant failings or weaknesses as
they are identified the directors have
conducted a review of the effectiveness
of the group’s system of internal control
and consider it appropriate for the
business no significant failings or
weaknesses were identified a detailed
groupwide review of risk and
opportunity is overseen by the risk and
opportunity committee see page 21
for further details 
the key elements of the group’s
procedures and internal financial
control framework are
● the close involvement of the
executive directors in all aspects of
the daytoday operations including
regular meetings with senior staff
from across the group and a review
of the monthly operational reports
compiled by senior management
● clearly defined responsibilities and
limits of authority the board has
responsibility for strategy and has
adopted a schedule of matters which
are required to be brought to it for
decision
● financial teams dedicated to each
business segment but with a
reporting line to the central finance
function this ensures that the
specific accounting needs of each
segment can be closely managed
whilst ensuring financial discipline is
maintained
● central control of key functions such
as tax treasury  payroll and insurance
rather than on a divisional basis
● a comprehensive system of financial
reporting forecasting and budgeting
detailed budgets are prepared
annually for all parts of the business
and consolidated by the central
finance team reviews occur through
the management structure culminating
in a group budget which is considered
and approved by the board
● an agreed timeplan and schedule of
responsibility for the preparation of
consolidated accounts and a
continual review process with the
board reports and statements are
prepared independently from the
financial statements to ensure
integrity of content
● group management accounts are
prepared monthly and submitted to
the board for review v ariances from
budget and prior year are closely
monitored and explanations are
provided for significant variances
detailed expense reports with
comparisons against budget are
issued monthly to cost centre
managers to assist in cost control  
● a continuous process for identifying
evaluating and managing significant
risks across the group together with
a comprehensive annual review of
risks which covers both financial and
nonfinancial areas and
● an annual review of insurance cover
for the group including a review of
disaster recovery plans for it and the
warehouses the significant risks
facing the business are considered to
be the loss of a large customer or a
major interruption of warehouse
operations or it services
this process is in accordance with the
turnbull guidance and has been in place
throughout the year under review and up
to the date of approval of the annual
report and financial statements
corporate social responsibility
csr
measures to ensure responsible
business conduct and the identification
and assessment of risks associated with
social ethical and environmental
matters are managed in conjunction
with all other business risks and
reviewed at regular meetings of the
board and senior management 
o2o maintains its csr initiative entitled
‘good for you good for us good for
everyone’ which aims to combine added
value for customers with tangible
benefits for the business and the
environment 
a summary report on the group’s
policies and objectives for csr is set
out on pages 11 to 13
d rodwell
company secretary
25 march 2013  o2o plc report and accounts 2012 23
nomination
committee
report
audit committee report
role of the nomination
committee
the nomination committee is a sub
committee of the board responsible for
all appointments to the board giving full
consideration to succession plans and
the leadership of the group it makes
recommendations to the board for any
changes to the board and its
committees that it considers necessary
and also reviews the senior
management structure the committee
has a formal procedure for
appointments to the board and senior
management team where due regard is
given to diversity including gender this
is available together with the
committee’s terms of reference on the
company’s website
wwwoffice2officecouk 
the committee meets as required and
engages with recruitment consultants
when appropriate  during 2012 the
committee met on two occasions and
since year end met on a further two
occasions in respect of the search for a
replacement finance director
composition of the nomination
committee
the nomination committee comprises
the chairman and the independent non
executive directors the company
secretary is secretary to the
committee 
d j callear
chairman of the nomination committee
25 march 2013
role of the audit committee
the audit committee is a sub
committee of the board and its
responsibilities include
● reviewing and recommending to the
board for approval the halfyear
report the annual report and
financial statements results
announcements of the group and any
other formal announcements relating
to the group’s financial performance
● reviewing the group’s systems of
internal financial control risk
management policies and
procedures
● monitoring and reviewing the
requirement for an internal audit
function
● considering the appointment of the
external auditors overseeing the
process for their selection and
making recommendations to the
board in relation to their
appointment
● monitoring and reviewing the
effectiveness and independence of
the external auditors agreeing the
nature and scope of their audit their
remuneration and considering their
reports on the group’s accounts and
systems of internal financial control
and risk management and
● monitoring the group’s whistle
blowing procedures
composition of the audit
committee
the audit committee comprises chris
batterham committee chairman jim
cohen and david callear their
biographical details are included on
page 14 and their remuneration on
pages 25 to 29  chris batterham and
david callear are chartered
accountants  noncommittee members
and the company’s external auditors
pwc are invited to attend meetings as
and when appropriate  at least once
each year representatives of pwc meet
the audit committee without any
executive directors being present  the
company secretary is secretary to the
audit committee  the committee’s
terms of reference are available on the
company’s website
wwwoffice2officecouk
main activities of the audit
committee
the audit committee met on four
occasions in 2012 with other board
members and the auditors attending as
required these meetings covered
pwc’s presentation of their audit
approach and procedures including
matters relating to scope auditor
independence and fees consideration of
changes in accounting policies and
standards discussions concerning the
external audit reports and any matters
arising and reviews of the financial
results and investor presentations at
the fullyear and halfyear prior to
recommending them to the board for
approval the group whistleblowing
policy and the banner business supplies
pension scheme accounts were also
reviewed by the committee 
risk and opportunity
management  internal audit
function
a risk and opportunity function was
established in 2010 to deliver value to
the business by ensuring risk is
managed at every level throughout the
group reducing inefficiencies through
process improvements and optimising
the opportunities that this brings
individual managers have taken
responsibility for their respective areas
and a formal reporting procedure has
been established by the risk and
opportunity manager overseeing this
function is the risk and opportunity
committee comprising audit
committee representatives the risk
and opportunity manager and those
directors and managers responsible for
key priorities it provides a forum for
discussion enables progress to be
monitored and actions prioritised 
the committee does not consider it
necessary to have a separate internal
audit function and considers the risk
and opportunity approach will help o2o plc report and accounts 2012 24
mitigate the principal risks and
uncertainties facing the group which are
set out on pages 8 to 9 of the business
and financial review
review of whistleblowing policy
o2o has a whistleblowing policy in place
which establishes a confidential channel
of communication for employees to
bring matters of concern about the
running of the business to the attention
of senior management upon being
notified of such a concern the policy
sets out a defined process for full
investigation and where necessary
corrective action to be taken the audit
committee reviews the whistleblowing
policy on an annual basis
no concerns were reported in the year
and following a review of the policy no
changes were considered necessary the
policy is available on the company’s
website wwwoffice2officecouk
independence of external
auditors
pwc have been the company’s auditors
since 2002 a new audit partner was
assigned to the group following the
2009 year end process in line with
pwc’s own partner rotation policy as
required by the auditing practices
board the audit committee is satisfied
with their effectiveness and
independence and has not considered it
necessary to require an independent
tender process the committee formally
validates this and therefore its
recommendation to the board with
regards to appointment and
reappointment by
● assessing pwc’s performance on an
annual basis through meetings with
key personnel
● monitoring their independence and
objectivity by reviewing their
relationship with the group and
ensuring group policy is followed in
relation to the provision of nonaudit
services and
● reviewing anticipated future service
requirements and assessing their
ability to meet the requirement by
seeking opportunity to challenge
question and confirm the new service
proposition
the committee meets the external
auditors to review and approve audit
scope and fees and obtain written
confirmation of their independence
following the audit the committee
meets pwc without the executive
directors being present and also
discusses the efficiency of the audit
process with the executive directors
group policy on the provision of non
audit services requires that other than
for corporate taxation services
approval is sought from the committee
in advance of any engagement  the
committee will consider taking into
account the scope of the work and level
of fees involved whether the provision
of such nonaudit services impairs the
independence and objectivity of pwc
as detailed in note 7 to the financial
statements total fees paid to pwc in
2012 were £202000 of which
£125000 related to audit fees
£10000 related to the 2012  interim
review and £25000 related to
corporate tax services in addition pwc
were engaged to perform taxation
advisory services and audit related
assurance services for fees of £17000
and £25000 respectively the
committee approved all fees prior to
the work being undertaken with
regards to tax services these were
provided by an independent team and
the committee was satisfied that the
level of fees did not prejudice pwc’s
independence
c m batterham
chairman of the audit committee
25 march 2013
audit committee report continued o2o plc report and accounts 2012 25
this report outlines the membership
and workings of the remuneration
committee together with details of
directors’ remuneration in respect of
the year ended 31 december 2012  a
resolution to approve this report will be
proposed at the forthcoming agm
remuneration committee and
its terms of reference
the remuneration committee is a sub
committee of the board membership
comprises jim cohen committee
chairman chris batterham and david
callear all of whom are independent of
management and free from any
business or other relationship which
could interfere with the exercise of their
independent judgement  when
necessary noncommittee members are
invited to attend by prior arrangement
the committee met on ten occasions in
the year
the principal function of the committee
is to make recommendations to the
board regarding the company’s policy
on the remuneration benefits and terms
of employment of the executive
directors in addition the committee
assists in the recruitment and
remuneration of new board members
and also monitors the remuneration of
senior management generally
in determining remuneration packages
and policies due regard is given to any
legal requirements the provisions of the
uk corporate governance code and the
listing rules of the financial services
authority the committee seeks
independent advice from aon hewitt
limited operating through the brand
new bridge street and macfarlanes
llp  neither aon hewitt limited nor any
other part of the aon corporation
group provided other services to the
company during the year under review
macfarlanes llp are consulted on
various other corporate and legal
matters the last independent
comparative remuneration review for
the executive and senior management
team was conducted by hyperion hr
limited in 2010 
the committee’s terms of reference are
available on the company’s website
wwwoffice2officecouk 
executive directors’
remuneration
remuneration policy in respect of
executive directors is designed to
ensure that the group achieves its
potential and increases shareholder
value  in respect of basic salary the
objective is to ensure that the group
attracts and retains high calibre
executives with the skills experience
and motivation necessary to direct and
manage the affairs of the group  annual
bonuses and long term incentive
schemes are seen as an important part
of each director’s total remuneration
and are designed to drive and reward
exceptional performance
the current remuneration package of
the executive directors consists of
basic salary annual bonus long term
incentive schemes taxable benefits
sa ye option schemes and pension
arrangements these are described in
more detail below
the executive directors’ basic salaries are
reviewed annually by the committee
taking into account the performance of
the individual changes in their
responsibilities the group’s performance
against financial objectives intended pay
increases across the group and when
deemed appropriate information from
independent remuneration consultants’
sources on levels of salary for similar jobs
the maximum 2012 bonus potential for
simon moate and steve mckeever is
100 and 60 of basic salary
respectively
each year the committee reviews the
bonus arrangements and may recommend
different targets or performance
conditions to keep the objectives aligned
with shareholder interests
as with previous years the 2012 annual
cash bonus scheme was designed to
reward growth in underlying eps and
rigorous management of net debt and
working capital a varying proportion of
the bonus was based on personal
targets tailored to each director and
objectively measurable  
no bonus is payable with regards to the
eps and net debt as the respective
targets were not achieved whilst some
bonus is payable in relation to working
capital and other operational targets
the executive directors have elected not
to take any bonus for 2012  if not for
this election bonuses of 5 and 12
of basic salaries would have been
payable to simon moate and steve
mckeever respectively 
it is intended that the 2013 cash bonus
will continue to take account of the key
kpi’s on o2o’s performance personal
targets will again be included and the
committee will reserve the right to
apply discretion
pension contributions to the executive
directors’ personal pension schemes
were made at a rate of 10 of basic
salary
the service agreements for the
executive directors are on a rolling basis
and terminable on 12 months’ notice by
either party with the right for the
company to make a payment in lieu of
salary and benefits excluding bonus for
any unexpired period of notice
mark cunningham resigned from the
board on 30 january 2013 and took leave
from his employment from 28 february
2013 in line with his contractual terms he
will continue to be paid monthly during his
12 month notice period
save as you earn share option
scheme sa ye
the group operates an hmrc approved
sa ye scheme open to all employees in
which simon moate and steve
mckeever participate details are
provided on page 29
long term incentive plans
the company currently operates a long
term incentive plan the performance
share plan psp as detailed below the
company also has a deferred share
directors’ remuneration report o2o plc report and accounts 2012 26
directors’ remuneration report continued
bonus plan dsbp which has been
inactive since inception both these
plans were approved by shareholders in
november 2005 in line with abi
guidelines awards granted under this
plan are subject to dilution limits 
performance share plan    
the psp rules allow awards over ordinary
shares subject to performance criteria as
detailed below and vesting in three years
to be made to individuals in any year of a
value of up to 100 of basic salary  in
exceptional circumstances the
remuneration committee has discretion
to increase the award to up to 200 of
basic salary  in accordance with the
scheme rules the number of ordinary
shares awarded is calculated by reference
to the three day average of the closing
midmarket quotation of the company’s
share price prior to the award date the
exercise price of options under the psp
scheme is 01p per share
from inception in 2005 to awards made
in 2010 the performance criteria were
based on i a comparative measure of
total shareholder return tsr against
companies in the ftse small cap index
and ii the company’s underlying
earnings per share ueps growth 
the last awards having joint tsr and
ueps performance criteria were made
in 2010 and will mature during 2013
without vesting 
in 2011 in recognition that the psp had
lost credibility with senior management
as only a small proportion 118 had
vested since the scheme was
implemented the committee consulted
with independent remuneration
advisors the abi and major
shareholders as a result it was decided
to keep within the remit of the existing
scheme in relation to matters such as
individual award levels and dilution
limits whilst modifying the performance
criteria to provide participants with
targets they could identify with but
which remained challenging  
for awards made since 2011 the psp
is now a two part scheme each part
allowing awards up to 100 of salary
part a is open to the executive
directors and a number of senior
management with performance
measurements split equally between
growth in both ueps and share price
the latter was chosen to replace tsr
as it is understood by all and unites the
team around a goal in common with
shareholders part a is also subject to a
judgemental underpin of performance
see below part b awards which are
only open to executive directors and
only in special circumstances rely
solely on the judgemental underpin of
performance see below exercised by
the committee in 2011 part b awards
were granted to simon moate and
steve mckeever
for part a awards the ueps component
is split into three equal tranches to be
measured annually   each tranche will
provisionally vest 50 if eps grows by
an average of 4 more than rpi in the
year with full provisional vesting if ueps
grows by an average of 8 more than
rpi in the year proportionate provisional
vesting will occur on a straightline basis
between the lower and upper level t o
the extent that targets are not met the
relevant portion of the first and second
tranches is measured with the following
year’s tranche
the share price component is measured
on 5 occasions during the period of the
award if the share price hits a sliding
scale of challenging targets for a period
of 30 days after the announcement of
full year and half year results then
provisional vesting will occur  any
unvested provisional award is carried
over to the next measurement period
but vesting will only occur if a higher
share price target is met than with
earlier testing
the provisional vesting of the awards
provides participants with a barometer
of how their award is faring within its
three year wrapper  actual vesting will
occur only at the end of the three years
following grant of the award and subject
to continued employment and
satisfaction of the same underpin
judgement by the committee as the
part b awards
the underpin is a check by the
remuneration committee to ensure
there are no irrational outcomes and
amongst other things whether the
company has been able to declare
appropriate dividends throughout the
period
for the 2011 psp awards 20 of the
share price component provisionally
vested as the average closing share
price hit 160p in the 30 day period
following the announcement of the
2011 final results
current holdings
in september 2012 simon moate
exercised his options under the tsr
element of the 2009 psp award  100
of the tsr element vested being 50
of the whole award and equating to
80303 shares no awards vested under
the ueps element further to 41968
shares being sold at 13289p to settle
the related tax obligations the
remaining 38335 shares were
transferred to simon moate
the executive directors currently hold
awards over o2o shares following grants
made in may 2010 june 2011 and
september 2012 based on an average
share price of 1555p 1335p and
1375p respectively for simon moate
and steve mckeever the june 2011
grant comprises two awards under part
a and part b of the scheme as
mentioned above equating to 200 of
salary in total
the above awards are detailed on page
29 and in note 26 to the financial
statements
in the event of a takeover all awards
granted under the psp vest or become
exercisable to the extent that the
performance targets have been
achieved as determined by the
remuneration committee in the event
of a reorganisation the awards may be
exchanged for options over shares in the
new holding company on such terms
determined by the committee o2o plc report and accounts 2012 27
chairman and nonexecutive
directors
the chairman’s and nonexecutive
directors’ service agreements are
currently for three year terms david
callear’s and jim cohen’s third three
year term ends on 28 june 2013 and
both have provisionally agreed to
continue on renewable one year terms
the other directors are satisfied that
they remain sufficiently independent
and add value to board matters under
the uk corporate governance code
david callear and jim cohen will be
subject to annual reelection at each
agm following their reappointment
chris batterham’s three year service
agreement ends on 25 june 2014 all of
these service agreements are
terminable on three months’ notice by
either the company or the relevant
director  the chairman’s and non
executive directors’ remuneration is
nonpensionable
the remuneration of the nonexecutive
directors is determined by the
chairman and the executive directors
and the remuneration of the chairman is
determined by the remuneration
committee whilst there were no
changes to their remuneration in 2011
increases were awarded during the year
to the chairman and nonexecutive
directors  david callear’s increase
reflected the additional time
commitment to manage the detailed
review of the business and to chair
related subcommittee meetings from
the beginning of 2012 jim cohen and
chris batterham received inflationary
increases on 1 april 2012
the chairman and nonexecutive
directors are not eligible to participate
in any of the company’s share option or
group bonus schemes
performance graph
the graph below shows o2o’s total
shareholder return performance tsr
compared to the ftse small cap index
of which o2o was until 17 december
2007 a constituent member the
values indicated in the graph show the
share price growth plus reinvested
dividends from a £100 hypothetical
holding of ordinary shares in o2o and
in the index from 1 january 2008 to 31
december 2012 o2o plc report and accounts 2012 28
directors’ remuneration earned in 2012  audited
the emoluments of the directors excluding pension contributions are shown below
2012 2012 2012 2012 2011
salary allowances and annual
fees benefits in kind bonus t otal t otal
£000 £000 £000 £000 £000
chairman
david callear 198 10  208 138
executive
simon moate 314 15  329 359
steve mckeever 186 15  201 239
mark cunningham 188 14  202 220
subtotal 688 44  732 818
non–executive
jim cohen 56  56 55
chris batterham 51  51 50
subtotal 107  107 105
t otal 993 54  1047 1061
 mark cunningham resigned from the board on 30 january 2013
other allowances and benefits in kind provided to executive directors comprise car benefits family private health care
permanent health insurance and life assurance at the rate of four times annual salary
no amounts have been waived in the current or prior year
directors’ remuneration report continued
directors’ pensions – audited
pension contributions reflect amounts payable to defined contribution personal pension schemes the contributions payable to
personal pension schemes in the year are shown below
pension contributions
2012 2011
£000 £000
simon moate 31 30
steve mckeever 19 18
mark cunningham resigned from the board on 30 january 2013 19 20
69 68
directors’ interests – unaudited
the beneficial interests of the directors and their immediate families in the share capital of o2o at the year end are set out below
number of ordinary shares
2012 2011
david callear 450991 450991
simon moate 196832 158497
steve mckeever 6747 6747
mark cunningham resigned from the board on 30 january 2013 1089549 1089549
jim cohen 65496 65496 
chris batterham 7516 7516
1817131 1778796
between 31 december 2012 and the date of this report simon moate and steve mckeever increased their beneficial interest by
10000 shares and 5364 shares respectively to a holding of 206832 shares and 12111 shares respectively 
no director had any material interest in any contract of significance with the group during the period under review the directors
confirm that they have not given any pledges of o2o shares o2o plc report and accounts 2012 29
long term incentive plans – audited
awards granted to directors under the psp were as follows
exercise
price per exercisable expiry
1 jan 12 granted exercised expired 31 dec 12 share from date
simon moate
2009 psp award 160606  80303 80303  01p 040312 040912
2010 psp award 189711  189711 01p 210513 211113
2011 psp award 441948  441948 01p 200614 201214
2012 psp award  232727  232727 01p 180915 180316
792265 232727 80303 80303 864386
steve mckeever
2010 psp award 112540  112540 01p 210513 211113
2011 psp award 262172  262172 01p 200614 201214
2012 psp award  138182  138182 01p 180915 180316
374712 138182  512894
mark cunningham
2010 psp award 118971  118971 01p 210513 211113
2011 psp award 147566  147566 01p 200614 201214
2012 psp award  137891  137891 01p 180915 180316
266537 137891  404428
mark cunningham resigned from the board on 30 january 2013
the awards granted during the year were made on 18 september 2012 the market price of ordinary shares at the date of grant
was 1375p 
for those awards vesting during 2012 the market price of ordinary shares on the exercise date was 13289p the notional gains
made were as follows
v alue of shares
v alue of shares transferred
on date of shares shares on date of
exercise sold to settle transferred exercise
exercised £000 tax liabilities to individual £000
simon moate 80303 107 41968 38335 51
beneficial options granted to directors under the sa ye scheme were as follows 
exercise
price per exercisable expiry
1 jan 12 granted exercised expired 31 dec 12 share from date
simon moate 14069  14069 1194p 010513 301113
steve mckeever 12842  12842 1168p 010117 300617
the closing market price of ordinary shares at 31 december 2012 was 1240p  the shares traded in the range 1185p to
16375p during the year
the details and the performance criteria in respect of the above schemes are discussed on pages 25 and 26
j l cohen
chairman of the remuneration committee
25 march 2013 o2o plc report and accounts 2012 30
independent auditors’ report to the members
of office2office plc 
we have audited the financial
statements of office2office plc for the
year ended 31 december 2012 which
comprise the consolidated income
statement the consolidated statement
of comprehensive income the
consolidated and company balance
sheets the consolidated statement of
changes in equity the company
statement of changes in equity the
consolidated and company statements
of cash flows the significant accounting
policies and information and the related
notes the financial reporting
framework that has been applied in their
preparation is applicable law and
international financial reporting
standards ifrss as adopted by the
european union and as regards the
parent company financial statements
as applied in accordance with the
provisions of the companies act 2006
respective responsibilities of
directors and auditors 
as explained more fully in the directors’
responsibilities statement set out on
page 17 the directors are responsible
for the preparation of the financial
statements and for being satisfied that
they give a true and fair view our
responsibility is to audit and express an
opinion on the financial statements in
accordance with applicable law and
international standards on auditing uk
and ireland those standards require us
to comply with the auditing practices
board’s ethical standards for auditors 
this report including the opinions has
been prepared for and only for the
company’s members as a body in
accordance with chapter 3 of part 16 of
the companies act 2006 and for no
other purpose  we do not in giving
these opinions accept or assume
responsibility for any other purpose or
to any other person to whom this report
is shown or into whose hands it may
come save where expressly agreed by
our prior consent in writing
scope of the audit of the
financial statements 
an audit involves obtaining evidence
about the amounts and disclosures in
the financial statements sufficient to
give reasonable assurance that the
financial statements are free from
material misstatement whether caused
by fraud or error this includes an
assessment of whether the accounting
policies are appropriate to the group’s
and the parent company’s
circumstances and have been
consistently applied and adequately
disclosed the reasonableness of
significant accounting estimates made
by the directors and the overall
presentation of the financial
statements in addition we read all the
financial and nonfinancial information
in the annual report to identify material
inconsistencies with the audited
financial statements if we become
aware of any apparent material
misstatements or inconsistencies we
consider the implications for our report
opinion on financial statements 
in our opinion 
● the financial statements give a true
and fair view of the state of the
group’s and of the parent company’s
affairs as at 31 december 2012  and
of the group’s profit and group’s and
parent company’s cash flows for the
year then ended
● the group financial statements have
been properly prepared in
accordance with ifrss as adopted by
the european union 
● the parent company financial
statements have been properly
prepared in accordance with ifrss
as adopted by the european union
and as applied in accordance with the
provisions of the companies act
2006 and
● the financial statements have been
prepared in accordance with the
requirements of the companies act
2006 and as regards the group
financial statements article 4 of the
las regulation 
opinion on other matters
prescribed by the companies
act 2006 
in our opinion 
● the part of the directors’
remuneration report to be audited
has been properly prepared in
accordance with the companies act
2006
● the information given in the
directors’ report for the financial
year for which the financial
statements are prepared is
consistent with the financial
statements and
● the information given in the
corporate governance statement
set out on pages 19 to 22 with
respect to internal control and risk
management systems and about
share capital structures is consistent
with the financial statements
matters on which we are
required to report by exception 
we have nothing to report in respect of
the following 
under the companies act 2006 we are
required to report to you if in our
opinion 
● adequate accounting records have
not been kept by the parent
company or returns adequate for our
audit have not been received from
branches not visited by us or 
● the parent company financial
statements and the part of the
directors’ remuneration report to be
audited are not in agreement with the
accounting records and returns or 
● certain disclosures of directors’
remuneration specified by law are
not made or 
● we have not received all the
information and explanations we
require for our audit or o2o plc report and accounts 2012 31
● a corporate governance statement
has not been prepared by the parent
company 
under the listing rules we are required
to review 
● the directors’ statement set out on
page 20 in relation to going concern
● the parts of the corporate
governance statement relating to
the company’s compliance with the
nine provisions of the uk corporate
governance code specified for our
review and
● certain elements of the report to
shareholders by the board on
directors’ remuneration
stuart newman
senior statutory auditor
for and on behalf of
pricewaterhousecoopers llp
chartered accountants and 
statutory auditors
norwich
25 march 2013 o2o plc report and accounts 2012 32
consolidated income statement
for the year ended 31 december 2012
2012 2011
note £000 £000
revenue 3 227279 193498
cost of sales 4 167683 137860
gross profit 59596 55638
distribution costs 4 25310 18375
administrative expenses 4 31457 31418
operating profit 2829 5845
finance costs 8 2138 1555
profit before income tax 691 4290
analysed as
underlying profit before income tax 6478 8412
share option expense 26 541 409
nonrecurring costs 5 4002 2398
amortisation of intangibles 12 1244 1315
profit before income tax 3 691 4290
income tax expensecredit 9 363 22
profit for the year 328 4312
earnings per ordinary share attributable to owners of the company
basic 11 09p 120p
diluted 11 09p 120p
 profit before income tax nonrecurring costs amortisation of intangibles and share option expense
the company has elected to take the exemption under s408 of the companies act 2006 not to present the company’s income
statement or statement of comprehensive income  the profit for the company was £97000 2011 £4097000 o2o plc report and accounts 2012 33
consolidated statement of comprehensive income
for the year ended 31 december 2012
2012 2011
£000 £000
profit for the year 328 4312
other comprehensive income
currency translation differences 43 75
total comprehensive income for the year 285 4237 o2o plc report and accounts 2012 34
consolidated and company balance sheets 
as at 31 december 2012
2012 2011 2012 2011
note £000 £000 £000 £000
assets
noncurrent assets
intangible assets 12 57878 58671  
property plant and equipment 13 3225 3316  
investments in subsidiaries 14   9156 8615
retirement benefit asset 24 490 105  
deferred income tax assets 15 1039 1391  
62632 63483 9156 8615
current assets
inventories 16 9045 8974  
trade and other receivables 17 37839 28965 5654 9670
current income tax asset 22 155 98  
cash and cash equivalents 18 1725 1169  
48764 39206 5654 9670
total assets 111396 102689 14810 18285
equity
capital and reserves attributable to the owners of the company
ordinary shares 25 363 363 363 363
share premium account 5009 5009 5009 5009
other reserves 41 84  
retained earnings 14127 17386 9413 12888
total equity 19540 22842 14785 18260
liabilities
noncurrent liabilities
borrowings 20 12322 17515  
deferred income tax liabilities 15 1283 1520  
provisions 23 495 470  
14100 19505  
current liabilities
trade and other payables 19 59200 48362 25 25
borrowings 20 18435 11304  
provisions 23 121 676  
77756 60342 25 25
total liabilities 91856 79847 25 25
total equity and liabilities 111396 102689 14810 18285
the financial statements comprising the consolidated income statement the consolidated statement of comprehensive income the
consolidated and company balance sheets the consolidated and company statements of changes in equity the consolidated and
company statements of cash flows the significant accounting policies and information and the notes to the financial statements were
approved for issue by the board of directors on 25 march 2013
d j callear  chairman
25 march 2013
registered number 04083206
consolidated company o2o plc report and accounts 2012 35
consolidated statement of changes in equity
for the year ended 31 december 2012
share
ordinary premium other retained total 
shares account reserves earnings equity
note £000 £000 £000 £000 £000
balance at 1 january 2012 363 5009 84 17386 22842
profit for the year   328 328
other comprehensive income  43  43
total comprehensive income for the
year ended 31 december 2012  43 328 285
employee share options
 value of employee services 26   476 476
 deferred tax on share options 9  50 50
dividends
 ordinary shares 10   4113 4113
 43 3259 3302
balance at 31 december 2012 363 5009 41 14127 19540
share
ordinary premium other retained total 
shares account reserves earnings equity
note £000 £000 £000 £000 £000
balance at 1 january 2011 363 5009 159 16770 22301
profit for the year   4312 4312
other comprehensive income  75  75
total comprehensive income for the
year ended 31 december 2011  75 4312 4237
employee share options
 value of employee services 26   342 342
 deferred tax on share options 9  6 6
sale of shares by employee benefit trust   51 51
dividends
 ordinary shares 10   4095 4095
 75 616 541
balance at 31 december 2011 363 5009 84 17386 22842
share premium account
the share premium account represents the difference between the nominal value of the shares issued and the amount received
for them this is a nondistributable reserve
other reserves
other reserves relate to foreign exchange translation differences on the net assets of overseas subsidiaries this is a
nondistributable reserve o2o plc report and accounts 2012 36
share
ordinary premium retained total 
shares account earnings equity
note £000 £000 £000 £000
balance at 1 january 2012 363 5009 12888 18260
profit for the year  97 97
total comprehensive income for the year ended 31 december 2012  97 97
credit to reserves for share based payments 26  541 541
dividends
 ordinary shares 10  4113 4113
 3475 3475
balance at 31 december 2012 363 5009 9413 14785
share
ordinary premium retained total 
shares account earnings equity
note £000 £000 £000 £000
balance at 1 january 2011 363 5009 12426 17798
profit for the year  4097 4097
total comprehensive income for the year ended 31 december 2011  4097 4097
credit to reserves for share based payments 26  409 409
sale of shares by employee benefit trust  51 51
dividends
 ordinary shares 10  4095 4095
 462 462
balance at 31 december 2011 363 5009 12888 18260
share premium account
the share premium account represents the difference between the nominal value of the shares issued and the amount received
for them this is a nondistributable reserve
other reserves
other reserves relate to foreign exchange translation differences on the net assets of overseas subsidiaries this is a
nondistributable reserve
company statement of changes in equity
for the year ended 31 december 2012 o2o plc report and accounts 2012 37
consolidated and company statements of cash flows
for the year ended 31 december 2012
2012 2011 2012 2011
note £000 £000 £000 £000
cash flows from operating activities
cash generated fromused in operations 27 6536 10870 4016 53
interest paid 2130 1251  
income tax paid 255 783  
net cash generated fromused in operating activities 4151 8836 4016 53
cash flows from investing activities
purchase of property plant and equipment 1140 960  
capitalised software 451   
proceeds from disposal of trading activities 358   
interest received   97 97
dividends received    4000
net cash used ingenerated from investing activities 1233 960 97 4097
cash flows from financing activities
finance lease principal payments 551 288  
repayment of borrowings 2500 2500  
arrangement fee on refinancing  683  
sale of shares by employee benefit trust  51  51
dividends paid to company’s shareholders 10 4113 4095 4113 4095
net cash used in financing activities 7164 7515 4113 4044
net decreaseincrease in cash cash equivalents
and bank overdrafts 4246 361  
cash cash equivalents and bank overdrafts at 1 january 18 7498 7859  
cash cash equivalents and bank overdrafts at 31 december 18 11744 7498  
net debt at 31 december comprises
2012 2011 2012 2011
£000 £000 £000 £000
cash cash equivalents and bank overdrafts 11744 7498  
finance leases 232 725  
bank loans 17056 19427  
net debt at 31 december 29032 27650   
consolidated company
consolidated company o2o plc report and accounts 2012 38
significant accounting policies for the year ended 31 december 2012
general information
office2office plc the company and its
subsidiaries the group provide managed
procurement and business critical
services the group operates in the united
kingdom and republic of ireland 
the company is a public limited
company  which is listed on the london
stock exchange and is incorporated and
domiciled in the united kingdom the
address of its registered office is
st crispins duke street norwich
nr3 1pd
basis of preparation
the principal accounting policies applied
in the preparation of these consolidated
financial statements and applied by the
company as appropriate are set out
below these policies have been
consistently applied to all the years
presented unless otherwise stated
the consolidated financial statements of
the group and the individual financial
statements of the company have been
prepared in accordance with international
financial reporting standards as adopted
by the european union ifrss as adopted
by the eu ifrsic ifrs interpretations
committee interpretations and the
companies act 2006 as applicable to
companies reporting under ifrs the
consolidated financial statements have
been prepared under the historical cost
convention
the preparation of financial statements
in conformity with ifrs requires the use
of certain critical accounting estimates
it also requires management to exercise
its judgement in the process of applying
the group’s accounting policies the
areas involving a higher degree of
judgement or complexity or areas where
assumptions and estimates are
significant to the consolidated financial
statements are disclosed in note 2
going concern
the group has net current liabilities as
at 31 december 2012 the group has
traded profitably since the balance
sheet date with the profits generated
contributing to the funding of the
group’s working capital requirements in
addition the group meets its dayto
day working capital requirements
through sufficient and appropriate
credit facilities that are committed until
june 2015 the group’s forecasts
indicate that it is able to operate within
the level of its current facilities for the
foreseeable future accordingly the
directors having made appropriate
enquiries consider it reasonable to
assume that the group and the
company have adequate resources to
continue for the foreseeable future and
for this reason have continued to adopt
the going concern basis in preparing the
financial statements
recent accounting
developments
standards amendments and
interpretations effective for the first
time in the year ended 31 december
2012
there are no ifrss or ifric
interpretations that are effective for
the first time for the financial year
beginning on or after 1 january 2012
that would be expected to have a
material impact on the group
the following amendments to existing
standards and interpretations were
also effective for the current year but
the adoption of these amendments to
existing standards and
interpretations did not have a
material impact on the group
●
amendment to ifrs 1 on
hyperinflation and fixed dates
●
amendment to ifrs 7 ‘financial
instruments disclosures
●
amendment to ias 12 ‘income 
taxes on deferred tax
standards amendments and
interpretations that are not yet
effective and have not been early
adopted
●
amendment to ias 1 ‘financial
statement presentation’ 
●
amendment to ias 19 ‘employee
benefits’ 
●
amendment to ias 32 ‘financial
instruments presentation’ 
●
ias 27 revised 2011 ‘seperate
financial statements’ 
●
ifrs 9 ‘financial instruments’ 
●
ifrs 10 ‘consolidated financial
statements’ 
●
ifrs 12 ’disclosures of interests in
other entities’ 
●
ifrs 13 ‘fair value measurement’ 
standards amendments and
interpretations that are not yet
effective and not currently relevant to
the group 
●
ias 28 revised 2011 ‘ associates
and joint ventures’ 
●
amendment to ifrs 1 ‘first time
adoption’ 
●
ifrs 11 ‘ joint arrangements’ 
basis of consolidation
subsidiaries are all entities over which
the group has the power to govern the
financial and operating policies
generally accompanying a shareholding
of more than one half of the voting
rights the existence and effect of
potential voting rights that are currently
exercisable or convertible are
considered when assessing whether the
group controls another entity
subsidiaries are fully consolidated from
the date on which control is transferred
to the group they are deconsolidated
from the date that control ceases
the subsidiary undertakings included
within these financial statements are
shown in note 14 to the financial
statements
the acquisition method of accounting is
used to account for business
combinations the cost of an acquisition
is measured as the fair value of the
assets given equity instruments issued
and liabilities incurred or assumed at the
date of exchange identifiable assets
acquired and liabilities and contingent
liabilities assumed in a business
combination are measured initially at
their fair values at the acquisition date
irrespective of the extent of any
minority interest the excess of the cost
of the acquisition over the fair value of
the group’s share of the identifiable net o2o plc report and accounts 2012 39
significant accounting policies for the year ended 31 december 2012
assets acquired is recorded as goodwill
if the cost of the acquisition is less than
the fair value of the net assets of the
subsidiary acquired the difference is
recognised directly in the income
statement directly attributable costs
associated with a business combination
are recognised in the income statement
intercompany transactions balances
and unrealised gains on transactions
between group companies are
eliminated on consolidation unrealised
losses on transactions between group
companies are also eliminated but are
considered for impairment purposes in
respect of the asset transferred
accounting policies of subsidiaries have
been aligned where necessary to ensure
consistency with the policies adopted
by the group
revenue
revenue is measured by reference to the
fair value of consideration received by the
group from goods supplied and services
provided to external customers revenue
is stated after deducting rebates returns
and other similar discounts and after
eliminating sales between group
companies and is exclusive of value added
tax revenue is recognised upon the
performance of services or when the
significant risks and rewards of ownership
are transferred to a customer which
occurs on delivery of goods or in the case
of exworks arrangements when custody
of goods is transferred to the customers’
logistics provider
supply of goods
our managed procurement segment
provides a stock and distribution
operation for the supply of stationery
and office products furniture and
technology products revenue is
recognised once the delivery to the
customer has been completed
supply of services
our business critical services segment
is a service based operation providing
print management document
management marketing services direct
marketing professional consultancy and
on and off site shredding services
the value attributed to the service is
determined through contractual prices
agreed prior to the commencement of
the work with the customer where
there are retained customer
arrangements and a range of services
are provided the revenue for each
separate service is recognised when all
the elements of that service are
complete with amounts accrued or
deferred on the balance sheet as
appropriate each separate service is
generally subject to specific pricing
segment reporting
operating segments are reported in a
manner consistent with the internal
reporting provided to the chief
operating decisionmaker  the chief
operating decisionmaker which is
responsible for allocating resources and
assessing performance of the operating
segments has been identified as the
executive board of directors
foreign currency translation
the financial information in this report is
presented in  sterling the functional and
presentational currency of the company 
rounded to the nearest thousand
transactions denominated in foreign
currencies are translated into sterling
at the rate of exchange ruling at the
date of transaction all realised foreign
exchange differences are taken to the
income statement monetary assets and
liabilities denominated in foreign
currencies are translated into sterling
at the rates of exchange ruling at the
balance sheet date and are recognised
in the income statement
the results and financial position of the
group entities that have a functional
currency different from the presentational
currency are translated into the
presentational currency as follows
●
assets and liabilities for each balance
sheet presented are translated at the
closing rate at the date of that
balance sheet
●
income and expenses for each
income statement are translated at
average exchange rates unless this
average is not a reasonable
approximation of the cumulative
effect of the rates prevailing on the
transaction dates in which case
income and expenses are translated
at the rate on the dates of the
transactions and
●
all resulting exchange differences are
recognised in the statement of
comprehensive income
nonrecurring costs
nonrecurring costs are those
significant items which are separately
disclosed by virtue of their size or
incidence to enable a full understanding
of the group’s financial performance
transactions which may give rise to non
recurring costs are principally
restructuring related and business
startup or closure costs costs in
respect of key management changes
transaction costs incurred in respect of
business combinations gains or losses
on disposal of trading activities and
costs associated with the closure of
employee pension schemes
business combinations and
goodwill
goodwill arising on consolidation
represents the excess of the cost of an
acquisition over the fair value of the
group’s share of the net assetsnet
liabilities of the acquired subsidiary at
the date of acquisition if the cost of
acquisition is less than the fair value of
the group’s share of the net assetsnet
liabilities of the acquired entity ie a
discount on acquisition then the
difference is credited to the income
statement in the period of acquisition
goodwill is allocated to cash generating
units for the purposes of impairment
testing and is tested annually for
impairment refer to impairment of
assets policy and carried at cost less
accumulated impairment losses 
at the acquisition date of a subsidiary 
goodwill acquired is recognised as an
asset and is allocated to each of the cash
generating units expected to benefit
from the business combination’s
synergies and to the lowest level at which
management monitors the goodwill  o2o plc report and accounts 2012 40
significant accounting policies for the year ended 31 december 2012
on disposal of a subsidiary the
attributable amount of goodwill is
included in the determination of the
profit or loss on disposal
goodwill acquired up to 31 december
2003 was capitalised and amortised
over its useful economic life as
permitted by ifrs 1 ‘firsttime
adoption of international financial
reporting standards’  the classification
and accounting treatment of business
combinations made prior to 1 january
2004 was not amended on transition
to ifrs  
other intangible assets
the group recognises intangible assets
as part of business combinations at fair
value at the date of acquisition the
determination of these fair values is
based upon management’s judgement
and includes assumptions on the timing
and amount of future incremental cash
flows generated by the assets acquired
and the selection of an appropriate cost
of capital the useful lives of intangible
assets are estimated and amortisation
charged on a straightline basis
customer relationships
customer relationships are recognised
as intangible assets at the fair value of
the consideration paid to acquire them
less provisions for amortisation and
impairment the fair value attributed to
the customer relationships acquired
through a business combination is
determined by discounting the expected
future cash flows to be generated from
that asset at the risk adjusted post tax
weighted average cost of capital at the
time of the acquisition for that business
combination the residual values of
customer relationships are assumed to
be £nil
amortisation is provided so as to write
off the cost of the customer
relationships over the expected
economic lives of the asset in equal
annual instalments as follows
customer relationships arising on the
acquisition of
t riplearc plc
bmc 10 years
accord office supplies limited
accord 10 years
the print factory london 1991
limited and dsr group limited
bmc 10 years
martin luck limited – newbury branch
accord 10 years
brands
brands are recognised as intangible
assets at the fair value of the
consideration paid to acquire them less
provisions for amortisation and
impairment the fair value attributed to
the brands acquired through a business
combination is determined by
discounting the expected future cash
flows that would be generated by a
royalty stream in respect of the brands
at the risk adjusted post tax weighted
average cost of capital at the time of
the acquisition for that business
combination the residual values of
brands are assumed to be £nil
amortisation is provided so as to write
off the cost of the brands over the
expected economic lives of the asset in
equal annual instalments as follows
t riplearc plc 
bmc 10 years
accord office supplies limited
accord 10 years
software
costs associated with maintaining
software are expensed as incurred
development costs controlled internally
and directly attributable to the design
and testing of identifiable software are
recognised as intangible assets when
there is an ability and intention to use or
sell the software product completion of
the software is reasonably certain and
the expenditure attributable to the
software during its development can be
reliably measured directly attributable
costs that are capitalised as part of the
software product include the software
development employee costs and an
appropriate portion of relevant
overheads
other development expenditures that
do not meet these criteria are
recognised as an expense as incurred
development costs previously
recognised as an expense are not
recognised as an asset in a subsequent
period
purchased software is recognised as an
intangible asset at the fair value of the
consideration paid to acquire it less
provisions for amortisation and
impairment
software is amortised on a straight line
basis over its useful economic life of 35
years
the amortisation charge in respect of
customer relationships brands and
software is recognised within
administrative expenses
impairment of nonfinancial
assets
assets that have an indefinite useful
life for example goodwill are not
subject to amortisation and are tested
annually for impairment assets that are
subject to amortisation or depreciation
are reviewed for impairment whenever
events or changes in circumstances
indicate that the carrying amount may
not be recoverable an impairment loss
is recognised for the amount by which
the asset’s carrying amount exceeds its
recoverable amount the recoverable
amount is the higher of an asset’s fair
value less costs to sell and value in use
for the purposes of assessing
impairment assets are grouped at the
lowest levels for which there are
separately identifiable cash flows cash
generating units
in respect of assets other than goodwill
an impairment loss is reversed if there
has been a change in the estimates used
to determine the recoverable amount
an impairment loss is reversed only to
the extent that the asset’s carrying
amount does not exceed the carrying
amount that would have been
determined net of depreciation or
amortisation if no impairment loss had
been recognised
impairment losses recognised in
respect of goodwill are not
subsequently reversed o2o plc report and accounts 2012 41
significant accounting policies for the year ended 31 december 2012
property plant and equipment
property plant and equipment is stated
at historical cost less accumulated
depreciation and any accumulated
impairment losses historical costs
include expenditure that is directly
attributable to the acquisition of the
items the assets’ residual values and
useful lives are reviewed annually and
adjusted as appropriate
subsequent costs are included in the
asset’s carrying amount or recognised
as a separate asset as appropriate only
when it is probable that future economic
benefits associated with the item will
flow to the group and the cost of the
item can be measured reliably the
carrying amount of the replaced part is
derecognised all other repairs and
maintenance are charged to the income
statement during the financial period in
which they are incurred
gains and losses on disposal are
determined by comparing the proceeds
with the carrying amount and are
recognised in the income statement
depreciation commences in the month
that the assets are fully installed and
commissioned and is provided on a
straight line basis at rates calculated to
write off the cost less estimated
residual value of each asset over its
expected useful life as follows
freehold land and buildings
– over 40 years
short leasehold land and buildings
– over the lease term
plant and machinery
– over 4 to 15 years
office equipment
– over 3 to 10 years
the depreciation charge in respect of
freehold land and buildings short
leasehold land and buildings plant and
machinery and office equipment is
recognised within distribution costs and
administrative expenses
investments
in the company’s financial statements
investments in subsidiary undertakings
are initially stated at cost being the fair
value of the consideration given
investments are reviewed where an
indication of impairment exists  an
impairment loss is recognised for the
amount by which the asset’s carrying
amount exceeds its recoverable amount
the recoverable amount is the higher of
an asset’s fair value less costs to sell
and value in use
leased assets
assets held under finance leases as
defined under ias 17 ‘leases’  are
capitalised and included as part of
property plant and equipment they are
depreciated over their useful lives or
the lease term if shorter the capital
elements of future obligations under
finance leases are included as liabilities
in the balance sheet the interest
element of the rental obligations is
charged to the income statement over
the period of the lease and represents a
constant proportion of the balance of
capital repayments outstanding
leases in which a significant proportion
of the risks and rewards of ownership
are retained by the lessor are classified
as operating leases rentals payable
under operating leases are charged to
the income statement on a straightline
basis over the term of the lease
benefits received and receivable as an
incentive to enter a lease are spread
evenly over the lease term
inventories
inventories comprise of finished goods
and goods held for resale and are stated
at the lower of cost or net realisable
value cost includes all expenditure
directly attributable to bringing each
product to its present location and
condition on a first in first out method
net realisable value is based on
estimated selling price less further
costs expected to be incurred to
completion and disposal
provision for obsolete slow moving and
defective inventories are made on a line
by line basis where necessary in order
to reduce inventory to the lower of cost
or net realisable value
cash and cash equivalents
cash and cash equivalents shown on the
balance sheet comprise cash balances
and deposits with banks that have a
maturity of three months or less from
the date of inception
bank overdrafts are shown within
borrowings in current liabilities on the
balance sheet but are included as a
component of cash and cash equivalents
for the purposes of the statement of
cash flow as they form an integral part
of the group’s cash management
bank overdrafts include cash book
overdrafts and confidential invoice
discounting arrangements whereby the
amount borrowed is limited to a
proportion of the trade receivables
provisions
the group makes provision for
liabilities when it has a legal or
constructive obligation arising from a
past event it is probable that an
outflow of resources will be required to
settle the obligation and the amount
can be reliably estimated 
provisions for property dilapidations
represent the current estimated costs
to repair leased properties which are
required to be made good before the
properties are returned at the end of
the lease term provisions are made on a
property by property basis and the
timing of the utilisation will differ for
each property
provisions for onerous leases are
recognised when the group believes
that the unavoidable costs of meeting
the lease obligations exceed the
economic benefits expected to be
received under the lease 
provisions are measured at the present
value of the expenditures expected to
be required to settle the obligation
using a pretax rate that reflects current
market assessments of the time value
of money and the risks specific to the
obligation the increase in the provision
due to passage of time is recognised as
interest expense o2o plc report and accounts 2012 42
significant accounting policies for the year ended 31 december 2012
retirement benefit costs
group companies operate both defined
benefit and defined contribution
pension plans
the group maintains a defined benefit
pension scheme for former employees
of her majesty’s stationery office
which requires contributions to be made
to a separately administered fund the
scheme currently has 162 members and
is closed to new members the scheme
closed to future accrual on 31
december 2011 the scheme is
administered by trustee directors of
banner business supplies pensions
limited which is a wholly owned
subsidiary of office2office uk plc a
subsidiary company of office2office plc
the net surplus or deficit of the defined
benefit pension scheme is calculated in
accordance with ias 19 ‘employee
benefits’  based on the fair value of the
plan assets less the present value of the
defined benefit obligation at the
balance sheet date
the defined benefit obligation is
calculated annually by independent
actuaries using the projected unit credit
method the present value of defined
benefit obligations is determined by
discounting the estimated future cash
outflows using interest rates of high
quality corporate bonds that are
determined in the currency in which the
benefits will be paid and have terms to
maturity approximating to the terms of
the related pension liability
the group has in respect of ias 19
and ifrs 1 adopted the corridor
approach to account for its pension
scheme liability as a result all
cumulative actuarial gains and losses
at the date of transition to ifrs 1
january 2004 were taken directly to
reserves in respect of actuarial gains
and losses that arise subsequent to
that date to the extent that
cumulatively they exceed 10 per cent
of the greater of the present value of
the defined benefit obligation and the
fair value of the plan assets that
portion is recognised in the income
statement over the expected average
remaining working lives of the
employees participating in the plan
from the accounting period following
the year of exceeding the corridor
otherwise the accumulated actuarial
gains and losses are not recognised
with effect from 1 january 2013
modifications to ias 19 will no longer
permit the use of the corridor
approach after which the full provision
will be required for actuarial liabilities
where the actuarial valuation of the
scheme demonstrates that the scheme
is in surplus the recognised asset is
limited to that for which the group can
benefit in future for example by
refunds or a reduction in contributions
the cost charged to administrative
expenses in the income statement
consists of current service cost
interest cost expected return on plan
assets and the impact of any
settlements or curtailments as well as
actuarial gains or losses to the extent
that they are recognised
a valuation is performed annually by an
independent actuary further details in
respect of the assumptions used in
providing the valuation are included in
note 24 to the financial statements
since 30 september 1996 all new
employees have been eligible to join the
group’s personal pension scheme which
is a defined contribution scheme
contributions to defined contribution
arrangements are charged to the income
statement in the period in which they fall
due  the assets of the scheme are held
separately from those of the group in an
independently administered fund
sharebased compensation
the group operates a number of share
based compensation schemes including
a sa ye scheme which is open to all
employees the fair value of the
employee services received in exchange
for the grant of options approximated
by reference to the fair value of the
option granted is recognised as an
expense the fair value of the option is
measured at grant date and spread over
the vesting period which is the period
over which all of the specified vesting
conditions are to be satisfied through
the income statement with a
corresponding increase in equity the
fair value of the share options and
awards are measured using an option
pricing model taking into account the
terms and conditions of the individual
schemes the fair value of options
awarded under schemes with market
based performance conditions is
estimated using a montecarlo model
the fair value of options awarded under
schemes with nonmarket based
performance conditions is estimated
using a blackscholes model
shares purchased through the employee
benefit trust ebt are held at cost and
treated as treasury shares and are
deducted from retained earnings the
right to a dividend and voting rights on
these shares has been waived 
when options are exercised the
company sells shares through the ebt
to satisfy the options
the group makes charges to the income
statement for any potential employer’s
national insurance liability on options
granted based on the directors’ best
estimate of the fair value of the options
granted at the balance sheet date and
spread over the vesting period of the
option
the fair value of the options granted
under the various schemes has been
accounted for in the group’s financial
statements the grant by the company of
options over its equity instruments to the
employees of subsidiary undertakings in
the group is treated as a capital
contribution the fair value of employee
services received measured by reference
to the grant date fair value is recognised
over the vesting period as an increase to
investment in subsidiary undertakings
with a corresponding credit to equity  
at each balance sheet date the
company revises its estimate of the
number of options that are going to
vest the group recognises the impact
of any revision to original estimates if
any in the income statement with a
corresponding adjustment to equity the
proceeds on exercise of options net of
any directly attributable transaction
costs are credited to share capital at
nominal value and share premium when
the options are exercised o2o plc report and accounts 2012 43
significant accounting policies for the year ended 31 december 2012
current and deferred
income tax
the tax charge for the period comprises
both current and deferred tax t ax is
recognised in the income statement
except to the extent that it relates to
items recognised directly in equity in
which case it is recognised in equity
current tax is the expected tax payable
on the taxable income for the period and
any adjustment to tax payable in
respect of previous periods and is
calculated on the basis of tax rates and
laws that have been substantively
enacted by the balance sheet date
deferred tax is provided in full using the
balance sheet liability method on
temporary differences between the tax
bases of assets and liabilities and their
carrying value for accounting purposes
deferred tax is determined on a non
discounted basis using tax rates and
laws that have been enacted or
substantively enacted by the balance
sheet date and which are expected to
apply when the related deferred tax
asset is realised or deferred tax liability
is settled 
where the intrinsic value of a share
option exceeds the fair value the
corresponding deferred tax on the
excess is recognised directly in equity
a deferred tax asset is recognised only
to the extent that it is probable that
sufficient taxable profit will be available
to utilise the temporary difference
financial assets and liabilities
financial assets and financial liabilities
are recognised on the group’s balance
sheet when the group becomes a party
to the contractual provisions of the
instrument
the group classifies its financial
assets and liabilities in the following
categories loans and receivables and
other financial liabilities the
classification depends on the purpose
for which the financial assets or
liabilities were acquired management
determines the classification of its
financial assets and liabilities at initial
recognition the classification of
financial liabilities is determined in
accordance with ifrs 7 taking account
of the repayment profile of the
liability  for those with fixed or
determinable payment profiles the
amounts are recognised as either
current liabilities or where amounts
are not due for more than 12 months
after the reporting period as non
current liabilities
t rade receivables
trade receivables are recognised
initially at fair value and subsequently
measured at amortised cost using the
effective interest method less
provision for impairment a provision
for impairment of trade receivables is
established when there is objective
evidence that the group will not be able
to collect all amounts due according to
the original terms of the receivables
significant financial difficulties of the
debtor probability that the debtor will
enter bankruptcy or financial
reorganisation and default or
delinquency in payments more than 60
days overdue are considered indicators
that the trade receivable is impaired
the amount of the provision is the
difference between the asset’s carrying
amount and the present value of
estimated future cash flows the
carrying amount of the asset is reduced
through the use of an allowance account
and the amount of the loss is recognised
in the income statement within cost of
sales when a trade receivable is
uncollectable it is written off against
the allowance account for trade
receivables subsequent recoveries of
amounts previously written off are
credited against cost of sales in the
income statement
borrowings
borrowings are recognised initially at
fair value net of transaction costs
borrowings are subsequently stated at
amortised cost any difference between
the proceeds net of transaction costs
and the redemption value is recognised
in the income statement over the period
of the borrowings using the effective
interest method
borrowings are classified as current
liabilities unless the group has an
unconditional right to defer settlement
of the liability for at least 12 months
after the balance sheet date
t rade payables
trade payables are not interest bearing
and are recognised initially at fair value
and subsequently measured at
amortised cost using the effective
interest method
equity instruments
equity instruments issued by the
company are recorded at the proceeds
received net of direct issue costs
where any group company purchases
the company’s equity share capital
treasury shares the consideration
paid including any directly attributable
incremental costs net of income taxes
is deducted from equity attributable to
the company’s owners until the shares
are cancelled or reissued where such
shares are subsequently reissued any
consideration received net of any
directly attributable incremental
transaction costs and the related
income tax effects is included in equity
attributable to the company’s owners 
the group assesses at each balance
sheet date whether there is objective
evidence that a financial asset or a
group of financial assets is impaired
the above financial assets and liabilities
are grouped as follows
●
cash and cash equivalents and trade
and other receivables excluding
prepayments are classified as loans
and receivables for the purpose of
ifrs 7
●
borrowings finance leases and trade
and other payables excluding
statutory liabilities are classified as
other financial liabilities at amortised
cost for the purpose of ifrs 7
dividends
distributions to owners are disclosed as
a component of the movement in the
statement of changes in shareholders’
equity a liability is recorded for a final
dividend when the dividend is approved
by the company’s shareholders interim
dividends are recognised in the period in
which they are paid o2o plc report and accounts 2012 44
significant accounting policies for the year ended 31 december 2012
underlying profit is calculated as follows
2012 2011
£000 £000
profit before income tax 691 4290
add
share option charges note 26 541 409
nonrecurring costs note 5 4002 2398
amortisation of intangibles note 12 1244 1315
underlying profit before income tax 6478 8412
use of nongaap profit
measures
the directors believe that the use of
underlying profit before income tax
provides a clearer understanding of the
performance of the group this
measure is used for internal
performance analysis underlying profit
is not defined by ifrs and therefore
may not be directly comparable with
other companies’ adjusted profit
measures it is not intended to be a
substitute for or superior to ifrs
measurements of profit o2o plc report and accounts 2012 45
notes to the financial statements for the year ended 31 december 2012
the group’s activities expose it to a variety of financial risks market risk including currency risk commodity price risk and cash
flow and fair value interest rate risk credit risk and liquidity risk the group’s overall risk management programme focuses on
the unpredictability of financial markets and seeks to minimise potential adverse effects on the group’s financial performance
a market risk
i currency risk
the group operates in the united kingdom and republic of ireland and accordingly has limited exposure to foreign exchange
risk currency risk is managed by matching where possible cash inflows and outflows denominated in euros
the group does not currently hedge any foreign currency transactions but continues to keep this policy under review
management have considered and concluded that a movement of 10 would be a reasonable benchmark over which to
determine the sensitivity of the group’s performance to foreign exchange rate risk because a movement of this magnitude is
considered to be a reasonable approximation of movements that could be expected to occur  for the year ended 31 december
2012 if the euro had weakenedstrengthened by 10 against sterling with all other variables held constant posttax profit and
the movement in net assets for the year would have been £29000 2011 £75000 lowerhigher as a result of foreign exchange
gainslosses on translation of the eurodenominated transactions and monetary assets and liabilities at fair value through profit
or loss
the calculation applied in determining the impact of a 10 movement in exchange rates is based upon adjusting the average
exchange rates by 10 on the eurodenominated transactions
ii commodity price risk
the group has exposure to changes in commodity prices such as steel oil and paper including supplier price increases as a result
of foreign exchange movements which form a constituent part of many of the products sold it is the policy of the group to pass
on these unavoidable cost price increases to customers as appropriate
the group does not currently hedge its exposure to commodity prices but continues to keep this policy under review
management have considered and concluded that a movement of 1 in gross margin percentage would be a reasonable
benchmark over which to determine the sensitivity of the group’s performance to commodity price risk because a movement of
this magnitude is considered to be a reasonable approximation of movements that could expect to be incurred by the group  for
the year ended 31 december 2012 if the gross margin percentage had weakenedstrengthened by 1 with all other variables
held constant gross profit for the year would have been £2273000 2011 £1935000 lowerhigher
iii cash flow and fair value interest rate risk
the group has interestbearing assets in the form of cash and cash equivalents  the company has interestbearing assets in the
form of loans to subsidiary companies therefore interest income is sensitive to movements in interest rates
the group’s interest rate risk predominantly arises from short and longterm borrowings borrowings issued at variable rates
expose the group to cash flow interest rate risk borrowings issued at fixed rates expose the group to fair value interest rate
risk during 2011 and 2012 the group’s borrowings other than in respect of finance leases were all at variable rates and all
borrowings were denominated in sterling
the group continues to keep its policy of not hedging its exposure to interest rate movements under review
for the year ended 31 december 2012 management have considered and concluded that a movement of 100 basis points would
be a reasonable benchmark over which to determine the sensitivity of the group’s performance to interest rate risk because a
movement of this magnitude is considered to be a reasonable approximation of movements that could be expected to occur if
interest rates on borrowings had been 100 basis points higherlower with all other variables held constant posttax profit for the
year would have been £316000 2011 £252000 lowerhigher as a result of higherlower interest expense on floating rate
borrowings
b credit risk
credit risk is managed on a group basis credit risk arises from cash and cash equivalents and deposits with banks and financial
institutions as well as credit exposure to customers including outstanding receivables and committed transactions
for banks and financial institutions only independently rated parties with a minimum rating of ‘ a ’ are accepted in normal
circumstances
1 financial risk management o2o plc report and accounts 2012 46
internally customers are rated according to financial position history of trading and other factors individual credit limits are
based on internal and external ratings in accordance with limits set by management the utilisation of credit limits is regularly
monitored concentrations of credit risk with respect to trade receivables are limited due to the group’s diverse customer base
c liquidity risk
prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount
of committed credit facilities
management monitors rolling forecasts of the group’s liquidity reserve comprising undrawn borrowing facilities and cash and
cash equivalents on the basis of expected cash flows
the table below analyses the group’s financial liabilities which will be settled on a net basis into relevant maturity groupings
based on the remaining period at the balance sheet date to the contractual maturity date 
the amounts shown are contractual including interest undiscounted cash flows
at 31 december 2012 less than between between over
1 year 1 and 2 years 2 and 5 years 5 years
£000 £000 £000 £000
borrowings excluding finance lease liabilities 18928 4281 8570 
finance leases 146 29 65 14
trade payables and accrued expenses 53977  
73051 4310 8635 14
at 31 december 2011 less than between between over
1 year 1 and 2 years 2 and 5 years 5 years
£000 £000 £000 £000
borrowings excluding finance lease liabilities 11888 4101 14583 
finance leases 327 341 97 16
trade payables and accrued expenses 45219  
57434 4442 14680 16
there have been no breaches in the contractual terms of the amounts shown above
in addition to shortterm borrowing facilities the group refinanced a £20000000 loan on 19 may 2011 the loan is repayable in
instalments between june 2012 and june 2015 with interest charged at a floating rate linked to libor a maturity analysis is
provided at note 20 to the financial statements
notes to the financial statements for the year ended 31 december 2012 o2o plc report and accounts 2012 47
notes to the financial statements for the year ended 31 december 2012
currency risk profile of financial assetsliabilities
the group did not have a material exposure to foreign exchange gains or losses on financial assets and liabilities denominated in
foreign currencies at 31 december 2012 and has not used any instruments to hedge foreign currency transactions
financial assetsliabilities relating to cash balances and overdrafts held at financial institutions are at floating rates
denominated in the currency held below
2012 2011
£000 £000
sterling  deposits 389 824
sterling  bank overdrafts 13469 8667
13080 7843
euro  deposits 1154 345
swedish krona  deposits 182 
11744 7498
there is no material currency risk relating to other financial assets or liabilities
fair values of financial instruments
see note 20 for consideration of the differences between the carrying amount and the fair value of borrowings the fair value of
other financial assets and liabilities is not materially different to their book value due to the short term maturity of the instruments
committed and uncommitted undrawn facilities
the group has the following undrawn borrowing facilities
2012 2011
£000 £000
gross undrawn committed confidential invoice discounting facility 21353 18290
revolving credit facility  3000
shortterm overdraft 1000 
cash book overdraft 2822 1957
net undrawn facilities 19531 19333
bank balances 1725 1169
available liquidity 21256 20502
as at 31 december 2012 the group had drawn £5647000 against its committed invoice discounting facility at that date the
group had a cash book overdraft of £2822000 2011 £1957000 and bank balances of £1725000 2011 £1169000 
if all payments had cleared on the day of issue the group would have had net available liquidity of £21256000 
2011 £20502000
the confidential invoice discounting facility is a committed facility subject to sufficient security from trade receivables expiring
in june 2015
the group has sufficient headroom to enable it to conform to covenants on its existing borrowings the group has sufficient
working capital and undrawn financing facilities to service its operating activities and finance further suitable acquisition
opportunities should they arise
there have been no breaches in the covenants on borrowings in the year ended 31 december 2012 and up to the date of signing
the financial statements
capital risk management
the group’s policy is to maintain a strong capital base defined as facilities plus total shareholders’ equity so as to maintain
investor creditor and market confidence and to sustain future development of the business within this overall policy the group
seeks to maintain an optimum capital structure by a mixture of debt and retained earnings funding needs are reviewed
periodically and also each time a significant acquisition is made a number of factors are considered which include the net
debtearnings before interest tax depreciation and amortisation ebitda ratio future funding needs usually potential
acquisitions and group banking arrangements including the monitoring of debt covenants over current funding arrangements o2o plc report and accounts 2012 48
notes to the financial statements for the year ended 31 december 2012
there were no changes to the group’s approach to capital management during the year the primary source of funding for the
group is bank borrowings
in order to maintain or adjust the capital structure the group may adjust the amount of dividends paid to shareholders return
capital to shareholders issue new shares or sell assets to reduce debt
consistent with others in the industry the group monitors capital on the basis of gearing ratio calculated as net debt divided by
total equity net debt is calculated as total borrowings including current and non current borrowings less cash as shown in the
balance sheet t otal equity is defined as total equity as shown in the consolidated balance sheet t otal capital is calculated as
total equity plus net debt
during 2012 the group increased its gearing ratio from 55 to 60 the gearing ratios at 31 december 2012 and 2011 were
as follows
2012 2011
£000 £000
t otal borrowings note 20 30757 28819
less cash and cash equivalents note 18 1725 1169
net debt 29032 27650
t otal equity 19540 22842
t otal capital 48572 50492
gearing ratio 60 55
2 critical accounting estimates and judgements
estimates and judgements are continually evaluated and are based on historical experience and other factors including
expectations of future events that are believed to be reasonable under the circumstances
the group makes estimates and assumptions concerning the future the resulting accounting estimates will by definition
seldom equal the related actual results the estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below
the estimates and underlying assumptions are reviewed on an ongoing basis revisions to accounting estimates are recognised
in the period in which the estimate is revised if revision affects only that period or in the period of the revision and future periods
if the revision affects both current and future periods
determination of cash flows discount rates used in business combinations and impairment reviews of goodwill and
other intangibles
discount rates are determined by management for the purpose of valuing fair values of intangible assets arising on business
combinations and to determine the net present value of cash flows in respect of annual impairment reviews of goodwill and other
intangibles when appropriate
the discount rates used for the purpose of impairment reviews are based on the appropriate cost of capital adjusted for
management’s perceived risk
the cash flows attributable to the cashgenerating unit to which goodwill and when appropriate other intangibles is allocated
are based on managements’ best estimates of future profitability and the resulting cash flows
while management believe the discount rates and cash flows used are the most appropriate rates changes in these assumptions
could result in impairment of goodwill other intangibles or in the fair value of intangibles in respect of business combinations
differing to the values recorded
income tax
the group is subject to income tax in both the united kingdom and the republic of ireland significant judgement is required in
determining the provision for income tax there are many transactions and calculations for which the ultimate tax determination
is uncertain during the ordinary course of business where the final tax outcome of these matters is different from the amounts
that were initially recorded such differences will impact the income tax and deferred tax provisions in the period in which such
determination is made o2o plc report and accounts 2012 49
impairment of inventories
where necessary provision is made for obsolete slowmoving and damaged stock this provision represents the difference
between the cost of the stock and its estimated market value based upon stock turn rates market conditions and trends in
consumer demand
allowances for doubtful receivables
allowances are made for doubtful receivables for estimated losses resulting from the subsequent inability of customers to make
required payments if the financial conditions of customers were to deteriorate resulting in an impairment of their ability to
make payments additional allowances may be required in future periods
pensions
the determination of the pension benefit obligation and expense for the defined benefit pension plan is dependent on the
selection of certain assumptions used by actuaries in calculating such amounts those assumptions are described in note 24 to
the financial statements and include among others the discount rate the expected longterm rate of increase in future
compensation levels and expected mortality rates a portion of the plan assets are invested in equity securities the equity
markets have experienced volatility which has affected the value of the pension plan assets this volatility may make it difficult
to estimate the longterm rate of return on plan assets assumptions are based on actual historical experience and external data
regarding compensation and discount rate trends while the directors believe that the assumptions are appropriate significant
differences in the actual experience or significant changes in the assumptions may materially affect the pension obligation and
the future expense
share based payments
the fair value of options awarded under schemes with market based performance conditions is estimated using a montecarlo
model the fair value of options awarded under schemes with nonmarket based performance conditions is estimated using a
blackscholes model these models require the use of estimates and forward looking projections
3 segmental information 
ifrs 8 ‘operating segments’  requires a ‘management approach’  under which segment information is presented on the same
basis as that used for internal reporting purposes  the operating segments are identified on the basis of internal reports
regularly reviewed by the executive board of directors the executive board of directors being the chief operating decision
maker in order to allocate resources to the segments and to assess their respective performance
the board considers the business from a service perspective  the group is organised into two business segments
●
managed procurement and 
●
business critical services
the business units of each reportable segment banner business services and t ruline in respect of managed procurement and
banner managed communication and banner document services in respect of business critical services do not qualify as
reportable segments as decisions about the allocation of resources and the assessment of performance are not made at this level
notes to the financial statements for the year ended 31 december 2012 o2o plc report and accounts 2012 50
notes to the financial statements for the year ended 31 december 2012
the board assesses the performance of the operating segments based on a measure of adjusted earnings before interest
taxation and amortisation ebita  this measurement basis excludes the effects of nonrecurring expenditure from the
operating segments such as restructuring costs an analysis of intangible assets and amortisation although not included in the
performance measure for the segments have been included to aid the reader other information provided to the board except as
noted below is measured in a manner consistent with that in the financial statements
business
managed critical
procurement services total
£000 £000 £000
y ear ended 31 december 2012
revenue 147660 79619 227279
gross margin  261 265 262
adjusted ebita 11215 6983 18198
y ear ended 31 december 2011
revenue 127787 65711 193498
gross margin  286 291 288
adjusted ebita 13017 7035 20052
total assets
31 december 2012 54528 56518 111046
31 december 2011 50105 52178 102283
additions to property plant and equipment
31 december 2012 633 565 1198
31 december 2011 851 109 960
depreciation
31 december 2012 736 324 1060
31 december 2011 461 334 795
additions to intangible assets
31 december 2012 134 317 451
31 december 2011  
intangible assets
31 december 2012 20389 37489 57878
31 december 2011 20475 38196 58671
amortisation
31 december 2012 218 1026 1244
31 december 2011 254 1061 1315
restated for transfer of business operations £32m revenue and £05m gross margin into appropriate segment
a reconciliation of total adjusted ebita to profit before income tax is provided as follows
2012 2011
£000 £000
adjusted ebita for reportable segments 18198 20052
central costs 9582 10085
finance costs 2138 1555
underlying profit before income tax 6478 8412
share option expense 541 409
nonrecurring costs 4002 2398
amortisation 1244 1315
profit before income tax 691 4290 o2o plc report and accounts 2012 51
notes to the financial statements for the year ended 31 december 2012
reportable segments’ assets are reconciled to total assets as follows
2012 2011
£000 £000
t otal segment assets 111046 102283
unallocated
short leasehold land and buildings  head office 350 406
total assets per balance sheet 111396 102689
revenue generated by geographical segment
2012 2011
£000 £000
united kingdom 226022 189829
republic of ireland 1257 3669
total 227279 193498
of the revenues generated in the united kingdom £222788000 2011 £188059000 are generated from customers in the
united kingdom and the total of revenues from customers from other countries is £3234000 2011 £1770000  all of the
revenues in respect of the republic of ireland are generated from customers in the republic of ireland  of the total assets in the
united kingdom and republic of ireland £61593000 2011 £62092000 and £nil 2011 £nil respectively relate to non
current assets other than deferred tax assets
expenditure on property plant and equipment of £1198000 2011 £960000 was incurred in the united kingdom
expenditure on intangible fixed assets of £451000 2011 £nil was incurred in the united kingdom no amounts in respect of
expenditure on property plant and equipment or intangible fixed assets were incurred in the republic of ireland
no single customer generates more than 10 of total revenues
4 expenses by nature
2012 2011
group £000 £000
changes in inventories of finished goods and consumption of goods held for resale 167773 138070
employee benefit expense note 6a 31000 28742
depreciation of property plant and equipment note 13 1060 795
amortisation of intangible assets note 12 1244 1315
nonrecurring costs note 5 4002 2398
foreign exchange gains 98 19
impairment to trade and other receivables 8 191
operating lease payments 4234 3249
other operating costs 15227 13294
total cost of sales distribution costs and administrative expenses 224450 187653 o2o plc report and accounts 2012 52
notes to the financial statements for the year ended 31 december 2012
5 nonrecurring costscredits
the amounts recognised as nonrecurring costscredits are as follows
2012 2011
£000 £000
compensation payments 678 1264
business closure costs 659 
gain on disposal of trading activity 75 
business review costs 881 734
net curtailment gain on cessation of defined benefit scheme  333
contract implementation and business start up costs 1859 733
4002 2398
compensation payments relate to amounts paid to exemployees of group companies business closure costs and gain on
disposal relates to the closure of noncore activities business review costs relate to costs incurred by the group in relation to
management’s commitment to improve operational efficiency contract implementation and business start up costs relate to
costs incurred with setting up the truline business the curtailment gain arises following the closure of the defined benefit
pension scheme to future accrual net of costs incurred
6a employee benefit expense
2012 2011
£000 £000
wages and salaries 26961 25508
social security costs 2771 2594
share based payments note 26 476 342
pension costs  defined benefit note 24 24 378
 defined contribution note 24 816 676
31000 28742
included within the above figures are compensation payments to exemployees of £678000 2011 £1264000
key management compensation
key management are the executive directors nonexecutive directors and the senior management teams of the trading divisions
their employment costs during the year were as follows
2012 2011
£000 £000
salaries and other short term employee benefits 2125 2026
postretirement benefits 140 146
share based payments 330 299
2595 2471
a detailed numerical analysis of directors’ remuneration and share options forms part of these financial statements this
analysis is included in the directors’ remuneration report on pages 25 to 29 and shows the highest paid director and the number
of directors accruing benefits under moneypurchase personal pension schemes 
6b average number of people employed
2012 2011
number number
average monthly number of people including executive directors employed
sales and marketing 387 388
production and distribution 467 394
administration 129 129
983 911 o2o plc report and accounts 2012 53
7 auditors’ remuneration
services provided by the company’s auditors and its associates
during the year the group including its overseas subsidiary obtained the following services from the company’s auditors and its
associates
2012 2011
group £000 £000
fees payable to company’s auditors for the audit of the company and consolidated financial statements 45 45
fees payable to the company’s auditors and its associates for other services expensed in the income statement
 audit of company’s subsidiaries 80 77
 interim review fee 10 10
 auditrelated assurance services 25 
 taxation compliance services 25 20
 taxation advisory services 17 
202 152
8 finance costs
2012 2011
group £000 £000
finance costs
 bank loans and overdrafts 1604 1102
 finance lease liabilities 38 55
 other financial charges 169 119
 customer procurement card charges 327 279
2138 1555
customer procurement card charges relate to costs incurred in processing customer payments
9 income tax expensecredit
2012 2011
group £000 £000
current tax
united kingdom corporation tax 181 792
adjustments in respect of prior years 17 816
198 24
deferred tax note 15
origination and reversal of temporary differences 129 278
impact of change in the uk tax rate 35 84
adjustments in respect of prior years 71 192
165 2
363 22
notes to the financial statements for the year ended 31 december 2012 o2o plc report and accounts 2012 54
notes to the financial statements for the year ended 31 december 2012
tax on items charged to equity
2012 2011
£000 £000
deferred tax credit on share options note 15 50 6
the standard rate of uk corporation tax changed from 26 to 24 with effect from 1 april 2012 the group tax charge for the
year differs from the standard rate of corporation tax of 245 2011 265 the differences are explained below
2012 2011
£000 £000
profit before income tax 691 4290
income tax at the standard rate of uk corporation tax of 245 2011 265 169 1137
t ax effects of
expenses not deductible for tax purposes 141 60
utilisation of previously unrecognised tax losses  127
remeasurement of deferred tax  change in the uk tax rate 35 84
adjustments in respect of prior years 88 1008
t otal tax chargecredit for the year 363 22
factors affecting future tax charges
the effective tax rate in the near future is anticipated to be similar to the standard rate of corporation tax
during the year the relevant deferred tax balances have been remeasured as a result of the change in the uk main corporation
tax rate to 24 which was substantively enacted on 26 march 2012 and was effective from 1 april 2012 and to 23 which
was substantively enacted on 3 july 2012 and will be effective from 1 april 2013 a further reduction to the uk corporation tax
rate has been announced reducing the rate to 21 by 1 april 2014 and 20 by 1 april 2015  the change had not been
substantively enacted at the balance sheet date and therefore has not been reflected in these financial statements
details with regard to the availability of unrecognised tax losses that may be offset against future taxable profits are given in
note 15
10 dividends
2012 2011
£000 £000
amounts recognised as distributions in the year in respect of
ordinary shares  interim dividend 2012 – 36p per share 1302 
ordinary shares  final dividend 2011 – 78p per share 2811 
ordinary shares  interim dividend 2011 – 36p per share  1297
ordinary shares  final dividend 2010 – 78p per share  2798
4113 4095
the directors have proposed a final dividend of 36p per ordinary share total £1302000 payable on 11 july 2013 to
shareholders on the register at the close of business on 17 may 2013 the dividend has not been included as a liability as at 31
december 2012 o2o plc report and accounts 2012 55
notes to the financial statements for the year ended 31 december 2012
11 earnings per share
a basic
basic earnings per share is calculated by dividing profit attributable to owners of the company by the weighted average number
of ordinary shares in issue during the year excluding ordinary shares held by the ebt 
2012 2011
profit attributable to owners of the company £000 328 4312
weighted average number of ordinary shares in issue ‘000 36081 35974
basic earnings per share pence 09 120
b diluted
diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares the company has one category of dilutive potential ordinary shares being
share options for share options a calculation is undertaken to determine the number of shares that could have been acquired at
fair value determined as the average annual market share price of the company’s shares based on the monetary value of the
subscription rights attached to outstanding share options the number of shares calculated as above is compared with the
number of shares that would have been issued assuming the exercise of the share options
2012 2011
profit attributable to owners of the company £000 328 4312
weighted average number of ordinary shares in issue 000 36081 35974
adjusted for share options 000 89 95
weighted average number of ordinary shares for diluted earnings per share 000 36170 36069
diluted earnings per share pence 09 120
c underlying earnings per share
underlying earnings per share is calculated by dividing profit on ordinary activities after tax before the after tax effect of non
recurring costs amortisation and share option expense by the weighted average number of ordinary shares in issue during the
year excluding ordinary shares held by the ebt  
2012 2011
profit attributable to owners of the company £000 328 4312
amortisation net of tax 939 966
share option expense 541 409
nonrecurring costs net of tax 3022 1763
underlying profit attributable to owners of the company £000 4830 7450
weighted average number of ordinary shares in issue ‘000 36081 35974
underlying earnings per share pence per share 134 207 o2o plc report and accounts 2012 56
notes to the financial statements for the year ended 31 december 2012
12 intangible assets
customer
goodwill relationships brands software total
2012 £000 £000 £000 £000 £000
cost
at 1 january 2012 50253 8503 3938 201 62895
additions   451 451
at 31 december 2012 50253 8503 3938 652 63346
accumulated amortisation and impairment
at 1 january 2012  2590 1436 198 4224
amortisation for the year  847 394 3 1244
at 31 december 2012  3437 1830 201 5468
net book amount
at 31 december 2012 50253 5066 2108 451 57878
customer
goodwill relationships brands software total
2011 £000 £000 £000 £000 £000
cost
at 1 january 2011 50253 8503 3938 201 62895
at 31 december 2011 50253 8503 3938 201 62895
accumulated amortisation and impairment
at 1 january 2011  1700 1034 175 2909
amortisation for the year  890 402 23 1315
at 31 december 2011  2590 1436 198 4224
net book amount
at 31 december 2011 50253 5913 2502 3 58671
net book amount
at 1 january 2011 50253 6803 2904 26 59986
customer relationships have 72 years 2011 82 years and brands have 55 years 2011 65 years before the assets are written down
in full  software costs are amortised over three to five years from date of purchase
d underlying diluted earnings per share
underlying diluted earnings per share is calculated by dividing profit on ordinary activities after tax before the after tax effect
of nonrecurring costs amortisation and share option expense by the weighted average number of ordinary shares in issue
during the year excluding ordinary shares held by the ebt   
2012 2011
profit attributable to owners of the company £000 328 4312
amortisation net of tax 939 966
share option expense 541 409
nonrecurring costs net of tax 3022 1763
underlying profit attributable to owners of the company £000 4830 7450
weighted average number of ordinary shares in issue ‘000 36081 35974
adjusted for share options ‘000 89 95
weighted average number of ordinary shares for diluted earnings per share ‘000 36170 36069
underlying diluted earnings per share pence 134 207 company
the company had no intangible assets 2011 none
impairment of goodwill
in accordance with ias 36 ‘impairment of assets’  the group regularly monitors the carrying value of its goodwill and reviews it
annually or more regularly if there are indications that goodwill may be impaired for the purposes of assessing impairment
assets are grouped at the lowest levels for which there are separately identifiable cash flows cashgenerating units and
goodwill is allocated to these cashgenerating units the allocation is made to those cashgenerating units or groups of cash
generating units that are expected to benefit from the business combination in which the goodwill arose
the components of goodwill by business segment which represent cashgenerating units are shown below
2012 2011
£000 £000
managed procurement 19116 19116
business critical services 31137 31137
50253 50253
a review was undertaken at 31 december 2012 to assess whether the carrying value of goodwill was impaired by reference to
value in use calculations the value in use calculations use cash flow projections based on financial budgets and forecasts as
approved by the board of directors for a five year period and then into perpetuity based on no changes to the underlying strategy of
the business cash flow projections beyond the five year period are extrapolated using the estimated growth rate referred to below
and are considered appropriate as it is expected that there will be no significant changes in the operation of these businesses
the key assumptions in the valueinuse calculation were
●
cash flow projections for the five year period are based upon recent observable performance of the group including budgeted
gross margin and expected operating cash inflows
●
the pretax weighted average cost of capital wacc for the group is 124 2011 120 the group believes that the risk
profiles relating to each business segment are not significantly different hence the same wacc is universally applied across
all cashgenerating units and
●
longterm growth rate of 25 which is not greater than the longterm growth assumption for the sector
whilst management believe the assumptions are realistic it is possible an impairment would be identified if any of the above key
assumptions were changed significantly for instance factors which could cause impairment are
●
significant underperformance relative to the forecast results
●
a further deterioration in the wider economy and
●
an increase in the group’s wacc
the valueinuse is based upon anticipated discounted future cash flows management believe the assumptions used are
appropriate but in addition have conducted sensitivity analysis to determine the changes in assumptions that would result in
an impairment
based on the results of the current period impairment review no impairment charges have been recognised by the group in the
year ended 31 december 2012 having assessed the anticipated future cash flows the directors do not consider there to be any
reasonably possible changes in assumptions that would lead to such an impairment charge in the year ended 31 december 2012
o2o plc report and accounts 2012 57
notes to the financial statements for the year ended 31 december 2012 o2o plc report and accounts 2012 58
notes to the financial statements for the year ended 31 december 2012
13 property plant and equipment
group
short
freehold leasehold
land and land and plant and office
buildings buildings machinery equipment total
2012 £000 £000 £000 £000 £000
cost
at 1 january 2012 949 2809 2519 597 6874
additions at cost  169  1029 1198
disposals  959 182 1141
at 31 december 2012 949 2978 1560 1444 6931
accumulated depreciation
at 1 january 2012 117 1391 1611 439 3558
charge for the year 28 422 417 193 1060
disposals  733 179 912
at 31 december 2012 145 1813 1295 453 3706
net book amount
at 31 december 2012 804 1165 265 991 3225
short
freehold leasehold
land and land and plant and office
buildings buildings machinery equipment total
2011 £000 £000 £000 £000 £000
cost
at 1 january 2011 944 2173 2662 615 6394
additions at cost 5 660 138 157 960
disposals  24 281 175 480
at 31 december 2011 949 2809 2519 597 6874
accumulated depreciation 
at 1 january 2011 89 1187 1475 475 3226
charge for the year 28 228 400 139 795
disposals  24 264 175 463
at 31 december 2011 117 1391 1611 439 3558
net book amount
at 31 december 2011 832 1418 908 158 3316
net book amount
at 1 january 2011 855 986 1187 140 3168
the net book value of assets held under finance leases was £181000 2011 £807000 and is within the plant and machinery
category 
the group leases various vehicles and machinery under noncancellable finance lease arrangements  the lease terms are
between one and six years and ownership of the assets lie within the group
company 
the company has no property plant and equipment 2011 none o2o plc report and accounts 2012 59
notes to the financial statements for the year ended 31 december 2012
14 investments in subsidiaries
company
2012 2011
£000 £000
at 1 january 8615 8206
options granted to employees of subsidiary undertakings 541 409
at 31 december 9156 8615
the directors consider that the carrying value of the investment is supported by the value of the underlying assets 
details of the subsidiaries are as follows
country of 
name of company nature of business incorporation company subsidiary
office2office uk plc non trading holding company england 100
olive 1 limited non trading holding company england 100
truline logistics limited managed procurement england 100
banner business services ltd managed procurement england 100
banner business supplies ireland limited managed procurement republic of ireland 100
banner document services ltd business critical services england 100
accord office supplies limited managed procurement england 100
triplearc limited business critical services republic of ireland 100
accessplus holdings limited non trading holding company england 100
access plus marketing services limited business critical services england 100
banner business supplies pensions limited non trading  trustee for pension england 100
scheme only
access plus limited non trading holding company england 100
access plus print management limited non trading england 100
access plus marketing logistics limited non trading england 100
adversion limited non trading england 100
alpha data supplies limited non trading england 100
alpha litho limited non trading england 100
alpha office limited non trading england 100
alpha stationers limited non trading england 100
banner business supplies ltd non trading england 100
banner managed communication limited non trading england 100
banner managed services plc non trading england 100
colebrook services limited non trading england 100
esp2office ltd non trading england 100
fileit limited non trading england 100
first2office ltd non trading england 100
image2office ltd non trading england 100
gl2 limited non trading england 100
godfrey lang limited non trading england 100
software stationery holdings limited non trading england 100
software stationery specialists limited non trading england 100
triplearc uk limited non trading england 100
all of the above shareholdings are in the subsidiaries’ ordinary share capital    
 non trading companies which are exempt from preparing and filing individual accounts by virtue of s394a and s448a of the
companies act 2006
 shareholding o2o plc report and accounts 2012 60
notes to the financial statements for the year ended 31 december 2012
15 deferred income tax liabilityasset
2012 2011
£000 £000
deferred income tax asset 1039 1391
deferred income tax liability 1283 1520
244 129
the net deferred income tax liability is estimated to be payable as follows
2012 2011
£000 £000
deferred income tax liabilityasset
 to be paidrecovered after more than 1 year 135 74
 to be paid within 1 year 109 203
244 129
the net deferred income tax liability recognised in the financial statements is as follows
2012 2011
£000 £000
t ax effect of timing differences
excess of qualifying depreciation over tax allowances 342 392
t ax losses  241
employee share schemes 397 318
retirement benefit obligations 113 26
provisions 300 440
intangible assets 1170 1494
244 129
group 2012 2011 2012 2011
£000 £000 £000 £000
at 1 january 1391 1801 1520 1934
chargedcredited to the income statement note 9 402 416 237 414
credited to equity note 9 50 6  
at 31 december 1039 1391 1283 1520
deferred income tax assets and liabilities are only offset where there is a legally enforceable right to offset and there is an
intention to settle the balances net
group
group
liability asset
group o2o plc report and accounts 2012 61
notes to the financial statements for the year ended 31 december 2012
the movements in deferred tax assetsliabilities during the period is shown below
group
charged
credited to
at the income credited at
1 jan 2012 statement to equity 31 dec 2012
£000 £000 £000 £000
depreciation over tax allowances 392 50  342
intangible assets 1494 324  1170
provisions 440 140  300
retirement benefit obligations 26 87  113
t ax losses 241 241 
share options 318 29 50 397
total 129 165 50 244
charged
credited to
at the income credited at
1 jan 2011 statement to equity 31 dec 2011
£000 £000 £000 £000
depreciation over tax allowances 595 203  392
intangible assets 1832 338  1494
provisions 576 136  440
retirement benefit obligations 210 236  26
t ax losses  241  241
share options 318 6 6 318
total 133 2 6 129
deferred income tax assets and liabilities are recognised for tax losses and short term timing differences to the extent that the
realisation of the related tax benefit through future taxable profits is probable
the group has not recognised a deferred tax asset relating to nontrade losses of £452000 2011 £491000 as there are no
expected changes in the operating characteristics of the subsidiary to which they relate that would permit utilisation in future
periods
company
the company had no provided or unprovided deferred tax balances in either year o2o plc report and accounts 2012 62
notes to the financial statements for the year ended 31 december 2012
16 inventories
2012 2011
group £000 £000
finished goods and goods for resale 9045 8974
the group consumed £167773000 2011 £138070000 of inventories during the year  
the provision to reflect net realisable value being less than cost decreased by £331000 2011 £278000 during the year
company
the company held no inventories 2011 £nil
17 trade and other receivables
2012 2011 2012 2011
£000 £000 £000 £000
trade receivables 31308 24208  
less provision for impairment 797 871  
trade receivables net 30511 23337  
prepayments and accrued income 7271 5573  
other receivables 57 55  
receivables from related parties note 30   5654 9670
37839 28965 5654 9670
receivables from related parties are repayable on demand included within receivables from related parties is a loan to banner
business services limited of £4300000 upon which interest is charged at a rate of 175 2011 175 per annum above
bank of england base rate interest is not charged on the other balances
credit risk in respect to trade receivables is limited due to the group’s customers being predominantly comprised of large
companies and public sector entities as a result the directors consider that no further credit risk provision is required in excess
of the normal provision for doubtful receivables
the carrying amounts of trade and other receivables are denominated in the following currencies
2012 2011 2012 2011
£000 £000 £000 £000
sterling 36394 27704 5654 9670
euro 1047 1175  
us dollar 249 86  
swedish krona 149   
37839 28965 5654 9670
group
trade receivables that are not past due amounting to £16863000 2011 £11551000 are not considered impaired as
amounts within this category generally relate to a number of independent customers for which there is no recent history of
default as of 31 december 2012 trade receivables of £13009000 2011 £11080000 were past due but not impaired the
analysis of these trade receivables by reference to due date are aged as follows
2012 2011
£000 £000
up to 1 month past due 7142 7883
over 1 month past due 5867 3197
19745 11080
group company
group company o2o plc report and accounts 2012 63
notes to the financial statements for the year ended 31 december 2012
as of 31 december 2012 trade receivables of £1436000 2011 £1577000 were impaired and partially provided for the
amount of the provision against such impaired trade receivables was £797000 as of 31 december 2012 2011 £871000
the individually impaired receivables mainly relate to issues arising from the current economic climate these receivables are
aged as follows
2012 2011
£000 £000
0 to 3 months overdue 334 498
3 to 6 months overdue 233 335
over 6 months overdue 869 744
1436 1577
movements on the group provision for impairment of trade receivables are as follows
2012 2011
£000 £000
at 1 january 871 1309
increasedecrease in provision for receivables impairment 8 191
receivables written off during the year as uncollectable 82 247
at 31 december 797 871
the creation and release of provision for impaired receivables have been included in ‘cost of sales’ in the consolidated income
statement amounts charged to the provision are written off when there is no expectation of recovering additional cash the other
classes within trade and other receivables do not contain impaired assets the maximum exposure to credit risk at the reporting
date is the carrying value of each class of receivable mentioned above the group does not hold any collateral as security 
the other classes within trade and other receivables do not contain impaired assets and management consider the credit quality
of these assets as good – preexisting customers with no defaults in the previous six months
18 cash and cash equivalents
2012 2011 2012 2011
£000 £000 £000 £000
cash at bank and in hand 1725 1169  
cash cash equivalents and bank overdrafts include the following for the purpose of the cash flow statement
2012 2011 2012 2011
£000 £000 £000 £000
cash at bank and in hand 1725 1169  
bank overdrafts note 20 13469 8667  
11744 7498  
19 trade and other payables
2012 2011 2012 2011
£000 £000 £000 £000
trade payables 39452 33336  
social security and other taxes 5223 3143  
accrued expenses and deferred income 14525 11883 24 24
payables to related parties note 30   1 1
59200 48362 25 25
group company
group company
group company o2o plc report and accounts 2012 64
notes to the financial statements for the year ended 31 december 2012
20 borrowings
2012 2011
£000 £000
noncurrent
bank borrowings 12228 17089
finance leases 94 426
12322 17515
current
bank overdrafts 13469 8667
bank borrowings 4828 2338
finance leases 138 299
18435 11304
total borrowings 30757 28819
the company does not have any borrowings 2011 £nil
bank borrowings
bank borrowings mature in 2015 and bear interest at a floating rate in the range of 200 to 325 basis points above libor bank
borrowings are secured by an all assets debenture and a cross company guarantee on all assets of the group the company forms
part of the cross guarantee structure
the bank overdraft includes invoice discounting arrangements and cash book overdrafts 
the repayment profile of bank borrowings including overdrafts is as follows 
2012 2011
£000 £000
within one year or on demand 18297 11005
between one and two years 3828 3338
between two and three years 8400 3838
between three and four years  9913
30525 28094
the borrowings are denominated in sterling
the carrying amounts and fair value of the noncurrent borrowings are as follows
2012 2011 2012 2011
£000 £000 £000 £000
bank borrowings 12228 17089 13722 19934
the fair value of the current borrowings equals their carrying amounts as the impact of discounting is not significant the fair
values of bank borrowings are based on cash flows discounted using a rate based on the market rate at 31 december 2012 of
40 included in the above are debt arrangement fees of £272000 2011 £411000
finance leases
the fair value of the group’s lease obligations is not considered to be materially different to their carrying value
group
carrying amount fair value
bank borrowings o2o plc report and accounts 2012 65
notes to the financial statements for the year ended 31 december 2012
t otal aggregate future minimum lease payments under finance leases together with the future finance charges and present
value of the net minimum lease payments are as follows
group 2012 2011
£000 £000
within one year 146 327
in more than one year but not more than five years 94 438
in more than five years 14 16
254 781
2012 2011
£000 £000
within one year 8 28
in more than one year but not more than five years 9 24
in more than five years 5 4
22 56
2012 2011
£000 £000
within one year 138 299
in more than one year but not more than five years 85 414
in more than five years 9 12
232 725
finance leases are secured upon the assets to which the lease agreement relates
21 financial instruments by category
cash and cash equivalents and trade and other receivables excluding prepayments are classified as loans and receivables for
the purpose of ifrs 7
borrowings finance leases and trade and other payables excluding statutory liabilities are classified as other financial liabilities
at amortised cost for the purpose of ifrs 7
22 current income tax asset
2012 2011 2012 2011
£000 £000 £000 £000
current income tax asset 155 98  
minimum lease payments
future finance charges
net minimum lease payments
group company o2o plc report and accounts 2012 66
notes to the financial statements for the year ended 31 december 2012
23 provisions
property onerous
dilapidations leases total
£000 £000 £000
at 1 january 2012 527 619 1146
charged to the income statement
 additional provisions  121 121
utilised during the year 32 619 651
at 31 december 2012 495 121 616
2012 2011
maturity profile of provisions £000 £000
current 121 676
noncurrent 495 470
at 31 december 616 1146
property dilapidations relate to the expected cost for making good leased properties at the end of their lease  the provision
relates to various properties with different lease end dates ranging between one and eight years
onerous leases relate to the future cost of historic lease obligations whereby the group has no future economic benefit from the
lease  these leases have varying end dates between one and five years
company
the company has no provisions 2011 £nil
24 retirement benefit asset
group
the group is the contributing employer to a defined benefit pension scheme the banner business supplies pension scheme
bbs scheme all the members of which were formerly employed by her majesty’s stationery office and were members of the
principal civil service pension scheme who first elected to transfer funds accrued to the stationery office limited scheme and
subsequently elected to transfer funds accrued to the bbs scheme 
the bbs scheme commenced on 1 august 2000 when the funds were transferred in by the stationery office pension scheme
tsops the scheme is funded by the payment of contributions to a separately administered trust fund the scheme currently
has 162 members and was closed to future accrual on 31 december 2011
the latest full actuarial valuation was carried out on 31 july 2010 and updated to 31 december 2012 by punter southall
limited a qualified independent actuary the pension costs have been determined on the basis of the results of this valuation 
the fair value of the bbs scheme assets at 31 december 2012 amounted to £13101000 2011 £11854000
group contributions in respect of the defined benefit pension scheme for the period were £361000 2011 £505000 group
contributions in 2013 are expected to be approximately £300000
the group also incurred £816000 2011 £676000 in respect of group personal pension arrangements and employees’ own
personal pension arrangements for staff recruited by the stationery office limited and group companies since 30 september
1996 at rates varying between 6 and 15 of pensionable earnings
the outstanding accrual in respect of defined contribution pension contributions at 31 december 2012 was £166000
2011 £203000 o2o plc report and accounts 2012 67
notes to the financial statements for the year ended 31 december 2012
the amounts recognised in the balance sheet in respect of the bbs scheme are determined as follows
2012 2011
£000 £000
present value of funded obligations 13878 12476
fair value of plan assets 13101 11854
777 622
unrecognised actuarial losses 1267 727
asset in the balance sheet 490 105
the amounts included in the fair value of plan assets are as follows
2012 2011 2012 2011
£000 £000
equities 60 60 9919 9116
bonds 30 30 2033 1195
property 50 50 634 979
other 03 03 515 564
13101 11854
the amounts recognised in the income statement are as follows
2012 2011
£000 £000
current service cost  219
scheme interest cost 614 735
expected return on plan assets 638 752
curtailment – removal of ill health allowance  222
curtailment – removal of salary link  394
net actuarial gains recognised in the year  36
incomeexpenses recognised in the income statement as administrative expenses 24 378
the movement in the fair value of plan assets is as follows
2012 2011
£000 £000
fair value of plan assets at 1 january 11854 11299
expected return on plan assets 638 752
actuarial gainloss 398 700
employer contribution 361 505
member contributions  75
benefits paid 150 77
fair value of plan assets at 31 december 13101 11854
the movement in the defined benefit obligation is as follows
2012 2011
£000 £000
defined benefit obligations at 1 january 12476 13010
current service cost  219
interest cost 614 735
member contributions  75
actuarial lossesgains 938 870
benefits paid 150 77
curtailment – removal of ill health allowance  222
curtailment – removal of salary link  394
present value of funded obligations at 31 december 13878 12476
expected return pa o2o plc report and accounts 2012 68
notes to the financial statements for the year ended 31 december 2012
the principal actuarial assumptions were as follows
2012 2011
pa pa
discount rate 46 50
expected rate of return on plan assets 53 53
future salary increases na na
future pension increases
 transferred from tsops 24 25
 earned in scheme 31 32
inflation  rpi 31 32
inflation  cpi 24 25
the expected return on plan assets for 2012 is based on market conditions at 31 december 2012 for returns over the entire life
of the obligation
2012 2011
£000 £000
actual return on plan assets 1036 52
the weighted average life expectancy derived from mortality tables used to determine benefit obligations were
2012 2011
y ears y ears
male member aged 65 current life expectancy 222 221
female member aged 65 current life expectancy 243 242
male member aged 45 life expectancy at age 65 236 235
female member aged 45 life expectancy at age 65 259 258
history of experience gains and losses
2012 2011 2010 2009 2008
£000 £000 £000 £000 £000
present value of funded obligations 13878 12476 13010 12762 10487
fair value of plan assets 13101 11854 11299 9181 7128
deficit in the plan 777 622 1711 3581 3359
experience adjustments arising on scheme assets 398 700 938 1172 2283
experience adjustments arising on scheme liabilities  768  199
company
the company has no retirement benefit liabilities 2011 £nil
25 ordinary shares
no £ no £
issued and fully paid
ordinary shares of 1p each 36308984 363090 36308984 363090
138155 ordinary shares are held by the ebt 2011 269356 for which the right to receive dividends has been waived  
2012 2011 o2o plc report and accounts 2012 69
notes to the financial statements for the year ended 31 december 2012
26 share options
exercise
number number number number number price per exercisable expiry
1 jan 12 granted exercised expired 31 dec 12 share from date
psp
date granted
march 2009 160606  80303 80303  01p 040312 040313
april 2009 370067  50898 319169  01p 300412 300413
may 2010 641961  43891 598070 01p 210513 210514
september 2010 58333   58333 01p 240913 240914
june 2011 1466796   1466796 01p 200614 200615
september 2012  935622  935622 01p 180915 180916
sa ye scheme
date granted
april 2008 5yr 99035  1406 97629 1194p 010513 311013
december 2011 3yr 376324  22959 353365 1168p 010115 010715
december 2011 5yr 90401  16694 73707 1168p 010117 010717
3263523 935622 131201 484422 3583522
exercise
number number number number number price per exercisable expiry
1 jan 11 granted exercised expired 31 dec 11 share from date
psp
date granted
december 2007 189566  25781 163785  01p 010411 011011
april 2008 542649  73800 468849  01p 240411 241011
march 2009 160606   160606 01p 040312 040313
april 2009 370067   370067 01p 300412 300413
may 2010 669292  27331 641961 01p 210513 210514
september 2010 58333   58333 01p 240913 240914
june 2011  1466796  1466796 01p 200614 200615
sa ye scheme
date granted
october 2005 5yr 9179  9179  2244p 011210 310511
april 2008 3yr 162677  110144 52533  1194p 010511 311011
april 2008 5yr 110289  11254 99035 1194p 010513 311013
december 2011 3yr  379406  3082 376324 1168p 010115 010715
december 2011 5yr  90401  90401 1168p 010117 010717
2272658 1936603 209725 736013 3263523
options which expired in the year to 31 december 2012 reflected employees leaving the group nonachievement of
performance conditions and the expiry of the term of exercise
at 31 december 2012 there were 16 members 2011 18 members with an average option holding of 191176 2011
149876 of the performance share plan and 135 members 2011 154 members with average holdings of 3887 2011 3674
of the saveasy ouearn sa ye scheme o2o plc report and accounts 2012 70
notes to the financial statements for the year ended 31 december 2012
the performance share plan was introduced on 21 december 2005 to incentivise senior management relative to the long term
strategy of the group financial performance conditions apply to exercise of the options based on the group’s earnings per share
growth and for awards made up to 2010 a comparative measure of total shareholder return tsr against the companies in the
ftse small cap index for awards made after 2010 the tsr measure has been replaced by growth in share price on 18
september 2012 awards were granted over 935622 shares based on a weighted average share price of the three days prior to
award of 1375p per share 131201 options were exercised during the year under review the weighted average share price as
at the date of exercise was 1389p per share the weighted average remaining contractual life is 17 years
the sa ye scheme was first introduced in october 2004 the exercise price is determined at a 20 discount to the closing mid
market price on the date of invitation the schemes have either a three or five year vesting period the weighted average
remaining contractual life is 20 years
the summary of share options by expiry date in relation to the above schemes were as follows
exercise price shares
expiry date grant per share 2012 2011
2013 2008 1194p 97629 629708
2014 2010 01p 656403 700294
2015 2011 228p 1820161 1843120
2016 2012 01p 935622 
2017 2011 1168p 73707 90401
3583522 3263523
the ifrs 2 and associated national insurance costs before tax incurred in relation to the above schemes were as follows
2012 2012 2011 2011
ifrs 2 ni ifrs 2 ni
£000 £000 £000 £000
psp
date granted
april 2008  26 
march 2009 23 12 
april 2009 2 4 80 4
may 2010 222 32 187 32
september 2010 20 3 16 4
june 2011 546 83 204 35
september 2012 82 12 
sa ye scheme
date granted
october 2005 5yr  8 
october 2008 3yr  4
october 2008 5yr 7 5
december 2011 3yr 34  
december 2011 5yr 5 
476 65 342 67 o2o plc report and accounts 2012 71
notes to the financial statements for the year ended 31 december 2012
the following valuation assumptions have been applied in respect of schemes introduced in the current year the assumptions in
respect of prior year schemes may be found in the prior year annual report and accounts
performance share plan – september 2012 option value information
fair value per option £105
option exercise price £0001
weighted average share price £1375
v aluation assumptions
expected option term 325 years
expected volatility 229
expected dividend yield 82
risk free interest rate 09
 estimated using the blackscholes option pricing models
expected volatility was determined by reference to historic share price information of similar companies
all of the above relate to equity settled sharebased payment transactions o2o plc report and accounts 2012 72
notes to the financial statements for the year ended 31 december 2012
group company
27 cash generated fromused in operations
2012 2011 2012 2011
£000 £000 £000 £000
profit before income tax 691 4290 97 4097
adjustments for
amortisation of intangible assets 1244 1315  
depreciation of property plant and equipment 1060 795  
profitloss on disposal of property plant and equipment 14 17  
finance income   97 97
finance costs 2138 1665  
income from investments    4000
share option expense 476 342  
increase in inventories 71 2981  
increasedecrease in trade and other receivables 8874 134 4016 53
increase in trade and other payables and provisions 9886 5561  
cash generated fromused in operations 6536 10870 4016 53 o2o plc report and accounts 2012 73
notes to the financial statements for the year ended 31 december 2012
28 analysis of movement in net debtcash 
at at
group 1 january cash noncash 31 december
2012 flow movements 2012
£000 £000 £000 £000
cash at bank and in hand 1169 556  1725
bank overdrafts 8667 4802  13469
7498 4246  11744
t erm loan – current 2338 2500 4990 4828
finance leases – current 299 329 168 138
t otal current net debt 10135 1417 5158 16710
t erm loan – noncurrent 17089  4861 12228
finance leases – noncurrent 426 222 110 94
t otal noncurrent debt 17515 222 4971 12322
net debt 27650 1195 187 29032
at at
1 january cash noncash 31 december
2011 flow movements 2011
£000 £000 £000 £000
cash at bank and in hand 3693 2524  1169
bank overdrafts 11552 2885  8667
7859 361  7498
t erm loan – current 2500 2500 2338 2338
finance leases – current 309 288 278 299
t otal current net debt 10668 3149 2616 10135
t erm loan – noncurrent 20000  2911 17089
finance leases – noncurrent 704  278 426
t otal noncurrent debt 20704  3189 17515
net debt 31372 3149 573 27650
noncash movements relates to the movement of finance leases and movements in the term loan between noncurrent and
current movements in bank arrangement fees and new finance lease agreements taken out during the year o2o plc report and accounts 2012 74
notes to the financial statements for the year ended 31 december 2012
29 guarantees and other financial commitments
bank guarantees
the company is a member of the group banking arrangement under which it is party to unlimited crossguarantees in respect of
the banking facilities of other group undertakings amounting to £17500000 2011 £20000000 subject to facility at 31
december 2012 the directors do not expect any material loss to the company to arise in respect of the guarantees
operating lease commitments
2012 2011 2012 2011
group £000 £000 £000 £000
amounts payable under noncancellable operating leases
no later than one year 2512 2190 2049 1518
later than one year and no later than five years 4350 4543 3671 2544
later than five years 1362 1331 201 8
8224 8064 5921 4070
company
the company has no obligations under operating leases 2011 none
30 related parties
group
directors’ and key management compensation is disclosed in note 6
company
during the year the company had the following transactions with its subsidiaries
2012 2011
£000 £000
dividends received  4000
interest received 97 97
97 4097
as at 31 december the following amounts were due tofrom the company fromto its subsidiaries
2012 2011
£000 £000
banner business services limited note 17 5654 9670
banner business supplies ireland limited note 19 1 1
5653 9669
other than disclosed above all movements in balances due to and from related parties relate to the movement of cash and other
working capital transactions between group companies
land and buildings other o2o plc report and accounts 2012 75
2012 2011 2010 2009 2008
£000 £000 £000 £000 £000
revenue 227279 193498 207631 187464 180999
operating profit  before amortisation negative goodwill
nonrecurring costs and share option expenses 8616 9967 12176 13986 13425
amortisation 1244 1315 1258 999 624
negative goodwill   188 
nonrecurring costs 4002 2398 5336 3645 1812
share option expense 541 409 138 363 23
operating profit 2829 5845 5632 8979 10966
net interest payable 2138 1555 1000 856 1359
profit before tax 691 4290 4632 8123 9607
capital employed
shareholder funds 19540 22842 22301 22591 20160
statistics
basic underlying earnings per ordinary share 134p 207p 251p 271p 241p
basic earnings per ordinary share 09p 120p 120p 172p 185p
diluted earnings per ordinary share 09p 120p 120p 171p 185p
dividends per share 72p 114p 114p 114p 110p
share price period end 1240p 1395p 1245p 1455p 655p
 basic underlying earnings per ordinary share before the after tax effect of nonrecurring costs amortisation and share option
expense has been disclosed to give a clearer understanding of the group’s underlying trading performance
five y ear summary o2o plc report and accounts 2012 76
notice of annual general meeting of office2office plc
ordinary business
1 t o receive and adopt the annual report and accounts of
the company for the year ended 31 december 2012 the
accounts
2 t o approve the directors’ remuneration report as set
out in the accounts
3 t o approve a final dividend of 36 pence per ordinary
share of 1 pence each in the capital of the company for
the year ended 31 december 2012 payable on 11 july
2013 to shareholders on the share register at the close
of business on 17 may 2013
4 t o reappoint pricewaterhousecoopers llp as auditors
of the company and to authorise the directors of the
company the directors to fix their remuneration 
5 t o reelect simon moate as a director of the company
who retires by rotation in accordance with the company’s
articles of association the articles
6 t o elect hugh cawley as a director of the company in
accordance with the articles
7 that in place of all existing authorities but for the
avoidance of doubt without prejudice to any existing
offer or agreement which will or may require shares to be
allotted pursuant to an existing authority the directors
be and are hereby generally and unconditionally
authorised pursuant to s551 of the companies act
2006 the act to exercise all the 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 £121030
and 
ii subject to the passing of ordinary resolution 10
below up to a further aggregate nominal amount
of £121030 provided they are equity securities
within the meaning of section 560 of the act and
they are offered by way of a rights issue in favour
of holders of ordinary shares in the capital of the
company in proportion as nearly as practicable
to their existing holdings of ordinary shares but
subject to such exclusions or other arrangements
as the directors deem necessary or expedient in
relation to fractional entitlements or any legal
regulatory or practical problems under the laws of
any territory or the requirements of any
regulatory body or stock exchange
notice is hereby given that the annual general meeting agm of office2office plc the company will be
held at st crispins duke street norwich nr3 1pd on wednesday 22 may 2013 at 930 am to consider
and if thought fit pass the following resolutions which will be proposed as ordinary resolutions with the
exception of resolutions 8 9 and 11 which will be proposed as special resolutions
for a period expiring unless previously revoked
varied or renewed on 22 august 2014 or if
sooner the end of the next agm of the company
but the company may make an offer or agreement
which would or might require shares to be allotted
after this authority expires and the directors may
allot shares in pursuance of such offer or
agreement as if this authority had not expired
8 that subject to the passing of ordinary resolution 7
above the directors be and are hereby generally
empowered pursuant to s570 of the act to allot equity
securities within the meaning of s560 of the act for
cash pursuant to the authority conferred by the ordinary
resolution 7 as if s561 1 of the act did not apply to
such allotment provided that this power shall expire on
22 august 2014 or if sooner the end of the next agm of
the company and provided further that the power shall
be limited to
i the allotment of equity securities in connection
with an offer of equity securities including
without limitation under a rights issue open offer
or similar arrangement in favour of the holders of
ordinary shares in proportion with as nearly as
may be practicable their existing holdings of
ordinary shares but subject to such exclusions or
other arrangements as the directors deem
necessary or expedient in relation to fractional
entitlements or any legal regulatory or practical
problems under the laws of any territory or the
requirements of any regulatory body or stock
exchange and 
ii the allotment otherwise than pursuant to sub
paragraph i above of equity securities up to an
aggregate nominal value of £18154 representing
5 of the issued ordinary share capital of the
company 
but the company may make an offer or agreement
which would or might require equity securities to
be allotted after this power expires and the
directors may allot equity securities in pursuance
of such offer or agreement as if this power had not
expired
9 that the company be and is hereby generally and
unconditionally authorised for the purposes of s701 of
the act to make market purchases within the meaning of
s6934 of the act of its ordinary shares on such terms
and in such manner as the directors shall determine o2o plc report and accounts 2012 77
provided that
i the maximum number of ordinary shares hereby
authorised to be purchased does not exceed
3630898 and
ii the maximum price which may be paid for each
ordinary share shall be no more than the higher of
a 5 above the average of the middle market
quotations for an ordinary share as derived from
the london stock exchange daily official list for
the five business days immediately before the day
on which the purchase is made in each case
exclusive of expenses and b that stipulated in
article 51 of the buyback and stabilisation
regulations 2003 being 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 in each case exclusive of
expenses and
iii the minimum price which may be paid for each
ordinary share shall be 1 pence and
iv this authority unless previously revoked varied or
renewed shall expire on 22 august 2014 or if
sooner the end of the next agm of the company
except in relation to the purchase of ordinary
shares the contract for which was concluded
before such date and which will or may be
executed wholly or partly after such date
other business
10 that subject to the passing of resolution 7ii above the
provision treated pursuant to paragraph 422a of
schedule 2 to the act commencement no 8
transitional provisions and savings order 2008 as a
provision of the articles setting the maximum number of
ordinary shares that may be allotted by the company be
and is hereby revoked
11 that a general meeting other than an agm may be called
on not less than 14 clear days’ notice this authority shall
expire at the end of the next agm of the company
notes to the notice of agm
these notes are important and require your immediate
attention
i a shareholder entitled to attend and vote at the agm is
entitled to appoint one or more proxies to attend speak
and vote instead of that shareholder a proxy need not be
a member of the company a shareholder may appoint
more than one proxy provided each proxy is appointed to
exercise rights attached to a different share or shares
held by the shareholder
ii pursuant to regulation 41 of the uncertificated
securities regulations 2001 only those shareholders
registered in the register of members of the company as
at 600 pm on monday 20 may 2013 shall be entitled to
attend or vote at the agm or adjourned meeting in
respect of the number of ordinary shares registered in
their name at that time changes to entries on the
register of members after that time will be disregarded
in determining the right of any person to attend or vote
at the meeting or adjourned meeting
iii a proxy form is enclosed with the document of which this
notice forms part instructions for use are shown on the
form of proxy t o be valid the form of proxy together
with the power of attorney or other authority if any
under which it is signed or a notarially certified copy of
such power or authority must be returned using the
prepaid business reply service to capita registrars
freepost rsbhuxkslrbc pxs 34 beckenham road
kent br3 4tu so as to be received no later than 48
hours before the time of the meeting or any
adjournment thereof 
iv the completion and return of the form of proxy will not
however preclude a shareholder from attending and
voting in person at the agm
v any person to whom this notice is sent who is a person
nominated under s146 of the act to enjoy information
rights a nominated person may under an agreement
between himher and the shareholders by whom heshe
was nominated have a right to be appointed or to have
someone else appointed as a proxy for the agm if a
nominated person has no such proxy appointment right
or does not wish to exercise it heshe may under any
such agreement have a right to give instructions to the
shareholder as to the exercise of voting rights
vi the statements of the rights of shareholders in relation
to the appointment of proxies in this notice do not apply
to a nominated person these rights can only be
exercised by shareholders of the company nominated
persons should contact the registered holder of their
shares and not the company on matters relating to
their investments in the company
vii under s319a of the act any member attending the
meeting has the right to ask questions the company
must answer any question relating to the business being
dealt with at the meeting but no such answer need be
given if a to do so would interfere unduly with the
preparation for the meeting or involve the disclosure of
confidential information b the answer has already been
given on a website in the form of an answer to a question
or c it is undesirable in the interests of the company or
the good order of the meeting that the question be
answered
viii as at 25 march 2013 being the last business day prior
to the publication of this notice the company’s issued
share capital consists of 36308984 ordinary shares
carrying one vote each therefore the total voting rights
in the company as at 25 march 2013 are 36308984
ix t o appoint a proxy or to give or amend an instruction to a
previously appointed proxy via the crest system the
crest message must be received by the issuer’s agent
ra10 by 930 am on 20 may 2013 for this purpose
the time of receipt will be taken to be the time as
determined by the timestamp applied to the message by
the crest applications host from which the issuer’s
agent is able to retrieve the message after this time any
change of instructions to a proxy appointed through o2o plc report and accounts 2012 78
crest should be communicated to the proxy by other
means crest personal members or other crest
sponsored members and those crest members who
have appointed voting service providers should contact
their crest sponsor or voting service providers for
assistance with appointing proxies via crest  for further
information on crest procedures limitations and
system timings please refer to the crest manual
available via wwweuroclearcomcrest we may treat
as invalid a proxy appointment sent by crest in the
circumstances set out in regulation 355 a of the
uncertificated securities regulations 2001 in any case
your proxy form must be received by the company’s
registrars no later than 48 hours before the time of
meeting or any adjournment thereof
x any corporation which is a member can appoint one or
more corporate representatives who may exercise on its
behalf all of its powers as a member provided that they
do not do so in relation to the same shares 
xi under s527 of the act members meeting the threshold
requirements set out in that section have the right to
require the company to publish on a website a
statement setting out any matter relating to i the
audit of the company’s accounts including the auditor’s
report and the conduct of the audit that are to be laid
before the agm or ii any circumstance connected with
an auditor of the company ceasing to hold office since
the previous meeting at which annual accounts and
reports were laid in accordance with s437 of the act
the company may not require the members requesting
any such website publication to pay its expenses in
complying with s527 or s528 of the act  where the
company is required to place a statement on a website
under s527 of the act it must forward the statement to
the company’s auditor not later than the time when it
makes the statement available on the website the
business which may be dealt with at the agm includes
any statement that the company has been required
under s527 of the act to publish on a website
xii a copy of this notice and information required by s311a
of the act can be found on the company’s website
wwwoffice2officecouk 
xiii copies of the directors’ service contracts and the
register of directors’ interests in shares will be available
for inspection at the registered office of the company
during normal business hours on any weekday excluding
saturdays and public holidays and at the registered
office of the company for at least 15 minutes prior to
and during the agm
by order of the directors
d rodwell
company secretary
25 march 2013
explanatory notes to the notice of agm
the directors believe that the proposed resolutions the
resolutions set out in the notice of agm are in the best
interests of the company and the shareholders as a whole
accordingly they unanimously recommend that shareholders
vote in favour of each resolution as they themselves intend
to do in respect of their own shareholdings in the company 
ordinary resolutions
resolutions 1 to 7 inclusive and resolution 10 are ordinary
resolutions and are entirely routine more than half of the
votes cast must be in favour of the resolution for each
resolution to be carried 
explanation of resolution 6 – election of hugh cawley as
a director
hugh cawley was appointed group finance director by the
board on 25 february he will offer himself for election being
the first opportunity to do so in accordance with the articles
biographical details are provided on page 14  in the accounts
explanation of resolution 7 – authority to allot ordinary
shares
the act prevents directors from allotting unissued shares
without the authority of shareholders in general meeting in
certain circumstances this could be unduly restrictive the
directors’ existing authority to allot ordinary shares will
expire at the end of this year’s agm and this resolution seeks
renewal of that authority up to i a maximum nominal amount
of £121030 and subject to the passing of resolution 10 up
to ii a further maximum nominal amount of £121030 where
the allotment is in connection with an offer by way of a rights
issue representing one third and an additional third
respectively of the nominal value of the ordinary shares in
issue on 25 march 2013 being the last practicable date
before the publication of this document the company does
not currently hold any shares as treasury shares
the directors have no present plans to allot unissued
ordinary shares however the directors believe it to be in the
best interests of the company that they should continue to
have the authority to allot ordinary shares so that such
allotments can take place to finance appropriate business
opportunities that may arise
explanation of resolution 10 – revocation of provision in
the articles setting the maximum number of shares that
may be allotted
provision 3 of the articles states the maximum number of
ordinary shares that may be allotted by the company rather
than requiring a company to amend its articles to revoke this
maximum paragraph 422 of the act commencement no 8
transitional provisions and savings order 2008 permits this
revocation to be done by ordinary resolution resolution 10
therefore seeks to revoke this maximum number in order that
the authority to allot proposed in resolution 7ii is effective o2o plc report and accounts 2012 79
special resolutions
resolutions 8 9 and 11 will be proposed as special
resolutions at least threequarters of the votes cast must be
in favour of the resolution for each resolution to be carried
explanation of resolution 8 – authority to disapply pre
emption rights
unless they are given an appropriate authority by
shareholders if the directors wish to allot any of the unissued
ordinary shares for cash or grant rights over ordinary shares
they must first offer them to existing shareholders in
proportion to their existing holdings this is known as pre
emption rights 
the existing disapplication of these statutory preemption
rights will expire at the end of this year’s agm and resolution
8 seeks to renew this authority to give the directors power to
allot ordinary shares without the application of these
statutory preemption rights first in relation to offers of
equity securities by way of rights issues open offer or similar
arrangements and secondly in relation to the allotment of
equity securities for cash up to a maximum aggregate nominal
amount of £18154 representing approximately 5 of the
nominal value of the ordinary shares in issue on 25 march
2013 being the last practicable date before the publication
of this document 
in accordance with the guidelines issued by the preemption
group the directors confirm their intention that no more than
75 of the issued share capital will be issued for cash on a
non preemptive basis during any rolling threeyear period
explanation of resolution 9 – authority for the company
to purchase its own ordinary shares
this resolution will grant authority to the company to make
market purchases of up to 3630898 ordinary shares this
equals approximately 10 of the ordinary shares in issue on
25 march 2013 being the last practicable date before the
publication of this document the minimum price that may be
paid shall be the nominal value of an ordinary share 1 pence
the maximum price which may be paid for each ordinary
share shall be no more than the higher of a 5 above the
average of the middle market quotations for an ordinary
share as derived from the london stock exchange daily
official list for the five business days immediately before
the day on which the purchase is made in each case exclusive
of expenses and b that stipulated in article 51 of the buy
back and stabilisation regulation being 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 in each case exclusive of expenses
y our directors are committed to managing the company’s
capital effectively although the directors have no plans to
make such purchases buying back the ordinary shares is one
of the options they keep under review purchases would only
be made after considering the effect on earnings per share
and the benefits for shareholders generally
the company may hold in treasury any of its own ordinary
shares that it purchases pursuant to i the treasury share
regulations and ii the authority conferred by this
resolution this would give the company the ability to re
issue ordinary shares quickly and cost effectively and would
provide the company with greater flexibility in the
management of its capital base
as at the date of the agm notice there were options
outstanding over 3583522 ordinary shares which if
exercised at that date would have represented 987 of the
issued ordinary share capital if the authority given by this
resolution were to be fully used these would then represent
1097 of the issued ordinary share capital
explanation of resolution 11 – notice period for general
meetings
changes made to the act by the shareholder rights’
regulations increase the notice period required for general
meetings of the company to 21 days unless shareholders
approve a shorter notice period which cannot however be
less than 14 clear days  agm’s will continue to be held on at
least 21 clear days’ notice
before the coming into force of the shareholder rights’
regulations on 3 august 2009 the company was able to call
general meetings other than an agm on 14 clear days’
notice without obtaining such shareholder approval  in order
to preserve this ability resolution 11 seeks such approval
the shorter notice period would not be used as a matter of
routine for such meetings but only where the flexibility is
merited by the business of the meeting and is thought to be
to the advantage of shareholders as a whole
the approval will be effective until the company’s next agm
when it is intended that a similar resolution will be proposed  
note that the changes to the act mean that in order to be
able to call a general meeting on less than 21 clear days’
notice the company must make a means of electronic
voting available to all shareholders for that meeting o2o plc report and accounts 2012 80
registered office
st crispins
duke street
norwich nr3 1pd
united kingdom
t elephone 44 0 1603 691 102
fax 44 0 1603 691 106
website wwwoffice2officecouk
email infooffice2officebiz
professional advisers
independent auditors
pricewaterhousecoopers llp
chartered accountants and statutory auditors
the atrium
st georges street
norwich nr3 1ag
broker
panmure gordon  co
one new change
london ec4m 9af
financial advisers
n m rothschild  sons
1 park row
leeds ls1 5nr
solicitors
macfarlanes llp
20 cursitor street
london ec4a 1l t
company details shareholder information 
financial calendar 2013
announcement of final results for the year ended 31 december 2012
26 march 2013
annual general meeting
22 may 2013
payment of final dividend on ordinary shares to shareholders on
the share register at the close of business on 17 may 2013
11 july 2013
registrar and transfer office
enquiries about administrative matters relating to
shareholding and dividends should be addressed to the
company’s registrars
capita registrars
northern house
woodsome park
fenay bridge
huddersfield
west y orkshire hd8 0la
t elephone 0871 664 0300 calls cost 10p per minute plus
network extras
international 44 0 208 639 3399
lines are open 830am to 530pm monday to friday
or by email to ssdcapitaregistrarscom
share price
information concerning the day to day movement of the
share price of the company can be found on our website
wwwoffice2officecouk or that of the london stock
exchange wwwpriceslondonstockexchangecom the share
price can also be found in the appropriate sections of
national newspapers under the classification ‘support
services’ and under the ticker code ‘off l ’ or ‘off’ 
unsolicited mail
as the company’s share register is by law open to public
inspection shareholders may receive unsolicited mail from
organisations that use it as a mailing list t o reduce the
amount of unsolicited mail you receive contact 
the mailing preference service
freepost 22
london w1e 7ez
t elephone 44 0 845 703 4599
website wwwmpsonlineorguk  
the maintenance and integrity of the
office2office website is the
responsibility of the directors the work
carried out by the auditors does not
involve consideration of these matters
and accordingly the auditors accept no
responsibility for any changes that may
have occurred to the financial
statements since they were initially
presented on the website legislation in
the united kingdom governing the
preparation and dissemination of
financial statements may differ from
legislation in other jurisdictions  head office and registered office
st crispins duke street norwich nr3 1pd
telephone 0845 226 7780 wwwoffice2officecouk
registered in england and wales
registered number 04083206
we are committed to environmental practices 
so this annual report has been laminated with
cellogreen to enable you to recycle it 
thank you for your support
cover and inside pages
the cover and inside pages of this report 
are printed on antalis cocoon silk 100 which is
100 deinked recycled waste with fsc
®
recycled certification
printed by banner managed communication 
which is part of the office2office group


Summary:
 o2o plc report and accounts 2012 1
2012 2011
key financials
revenue £2273m £1935m
profit before tax £07m £43m
basic earnings per share 09p 120p
underlying profit before tax
1
£65m £84m
underlying earnings per share
2
134p 207p
operating cash flow £65m £109m
net debt £290m £277m
final dividend proposed
total dividend for the year
£13m £28m
36p per share 78p per share
£26m £41m
72p per share 114p per share
1 profit before tax nonrecurring costs of £40m 2011 £24m £05m share option charges 2011 £04m and amortisation of
intangibles of £12m 2011 £13m refer to the consolidated income statement on page 32 and note 5 on nonrecurring costscredits
2 profit after tax before the after tax effect of nonrecurring costs share option charges and amortisation of intangibles divided by the
weighted average number of ordinary shares in issue refer to note 11 to the financial statements