ProspectusO

cado Group plc

Ocado Group plc, Titan Court, 3 Bishops Square, Hatfield Business Park, Hatfield, Herts AL10 9NE Ocado Group plc

Prospectus

Ocado prospectuscoverfinal.indd 1 02/07/2010 09:32

15JUN201018262606

A copy of this document, which comprises a prospectus relating to Ordinary Shares prepared in accordance with the ProspectusRules made under section 73A of FSMA, has been approved by the Financial Services Authority in accordance with section 87A ofFSMA and made available to the public as required by section 3.2 of the Prospectus Rules.

The Directors, whose names appear on page 32 of this Prospectus, and the Company accept responsibility for the informationcontained in this Prospectus. To the best of the knowledge of the Directors and the Company (who have taken all reasonable careto ensure that such is the case) such information is in accordance with the facts and this Prospectus does not omit anything likely toaffect the import of such information.

Application will be made to the UK Listing Authority for all of the Ordinary Shares (including the 32,476,700 Ordinary Shares heldby the EBT Trustee) to be admitted to the premium listing segment of the Official List and to the London Stock Exchange for theOrdinary Shares to be admitted to trading on the London Stock Exchange’s market for listed securities (‘‘Admission’’), whichtogether will constitute official listing on a stock exchange under the Listing Rules. No application has been made or is currentlyintended to be made for the Ordinary Shares to be admitted to listing or dealt on any other exchange. Conditional dealings in theOrdinary Shares (on a ‘‘when issued’’ basis) are expected to commence on 21 July 2010. It is expected that Admission will becomeeffective and that unconditional dealings in the Ordinary Shares will commence at 8.00 a.m. (London time) on 26 July 2010(International Security Identification Number: GB00B3MBS747). Dealings on the London Stock Exchange before Admission willonly be settled if Admission takes place. All dealings before the commencement of unconditional dealings will be of noeffect if Admission does not take place and such dealings will be at the sole risk of the parties concerned.

Applicants who purchase or subscribe for Ordinary Shares should note that dealings in the Ordinary Shares will commence prior totheir Share Account Statements being made available online. Applicants who purchase or subscribe for Ordinary Shares and whodeal prior to their Share Account Statements being made available online, do so at the risk of selling Ordinary Shares for whichthey will not have received an allocation. Share Account Statements will be made available online to successful applicants by4 August 2010.

Prospective investors should read the whole of this document, including the discussion of certain risks and other factorsthat should be considered in connection with an investment in the Ordinary Shares as set out in the Risk Factors section.Prospective investors should be aware that an investment in the Company involves a degree of risk and that, if certain of the risksdescribed in the Prospectus occur, investors may find their investment materially adversely affected. Accordingly, an investment inthe Ordinary Shares is only suitable for investors who are particularly knowledgeable in investment matters and who are able tobear the loss of the whole or part of their investment.

OCADO GROUP PLC(incorporated and registered in England and Wales under the Companies Act 2006, registered number 7098618)

Offers of up to 257,666,236 Ordinary Shares of 2 pence each at a price expected to bebetween 200p and 275p per Ordinary Share and admission to the premium listing segment of

the Official List and to trading on the London Stock Exchange

Joint Sponsor, Joint Global Joint Sponsor, Joint Global Joint Sponsor, Joint GlobalCo-ordinator and Joint Bookrunner Co-ordinator and Joint Bookrunner Co-ordinator and Joint Bookrunner

Goldman Sachs International J.P. Morgan Cazenove UBS Investment Bank

Co-Bookrunner Co-Bookrunner

Barclays Capital HSBC Bank plc

Co-Lead Manager Co-Lead Manager Co-Lead Manager

Jefferies International Limited Lloyds TSB Corporate Markets Numis Securities Limited

EXPECTED ORDINARY SHARE CAPITAL IMMEDIATELY FOLLOWING ADMISSION(ASSUMING THE OFFER PRICE IS SET AT THE BOTTOM OF THE PRICE RANGE)

Issued and fully paidUp to Up to

(number) (amount)

546,129,814 Ordinary Shares of 2 pence each £10,922,596

Issued and fully paid and excluding 32,476,700 Ordinary Shares held by the EBT TrusteeUp to Up to

(number) (amount)

513,653,114 Ordinary Shares of 2 pence each £10,273,062

This document does not constitute an offer of, or the solicitation of an offer to buy or to subscribe for, Ordinary Shares toany person in any jurisdiction to whom or in which jurisdiction such offer or solicitation is unlawful and, in particular, isnot for distribution in Australia, Canada or Japan. The offer, sale and/or issue of the Ordinary Shares has not been andwill not be registered under the US Securities Act of 1933, as amended (the ‘‘US Securities Act’’) or qualified for saleunder the laws of any state of the United States or under any applicable securities laws of Australia, Canada or Japan.Subject to certain exceptions, the Ordinary Shares may not be offered, sold or delivered within Australia, Canada, Japanor the United States or to, or for the benefit of, any national, resident or citizen of Australia, Canada or Japan. TheOrdinary Shares are being offered and sold within the United States only to ‘‘qualified institutional buyers’’ (‘‘QIBs’’) (asdefined in Rule 144A under the US Securities Act (‘‘Rule 144A’’)) and in reliance on Rule 144A or another exemption from,or in a transaction not subject to, the registration requirements of the US Securities Act and outside the United States inreliance on Regulation S under the US Securities Act (‘‘Regulation S’’).

The Price Range is indicative only, it may change during the course of the Offers and the Offer Price may be set within, above orbelow the Price Range. A number of factors will be considered in determining the Offer Price and basis of allocation, including thelevel and nature of demand for Offer Shares during the book building process, prevailing market conditions and the objective ofestablishing an orderly after-market in the Ordinary Shares. If the Price Range does change during the course of the Offers theCompany would not envisage making an announcement until determination of the Offer Price, unless required to do so by law orregulation. The Company expects to announce the Offer Price and publish the Pricing Statement on or about 21 July 2010. Furtherdetails of how the Offer Price is to be determined are contained in Part IX (Information about the Offers).

The number of Ordinary Shares to be made available by the Selling Shareholders pursuant to the Offers is indicative only. Althoughthat number of Ordinary Shares cannot be increased it can decrease, including, in theory, to nil. The selling indications of MajorSelling Shareholders described in this document are non-binding. That means that although a Major Selling Shareholder may notsell any more Existing Shares pursuant to the Offers than he or it has indicated he or it may sell, he or it may decide, at his or itsabsolute discretion, to sell fewer or none at all. The Company has established a facility through which Minor Selling Shareholdersmay sell some or all of their Existing Shares pursuant to the Offers. As at the date of this document, the Company does not knowwith certainty whether any such persons will sell any or all such Existing Shares pursuant to the Offers, however, the Company hasreceived non-binding indications from Minor Selling Shareholders holding 28,861,700 Existing Shares, in aggregate, that they donot intend to sell any Existing Shares pursuant to the Offers. The Company has also established a facility through which SellingOptionholders may sell, pursuant to the Offers, some or all of the New Ordinary Shares which will be issued to them if they exercisetheir exercisable options or warrants prior to Admission. Subject to the Offer Price being not less than £1.90, Ranelagh NomineesLimited has irrevocably committed to exercise certain warrants held by it provided that it may sell the resulting 5,611,200 NewOrdinary Shares issued to it or its nominee pursuant to the Offers. As at the date of this document, the Company does not knowwhether any other such persons will exercise any or all of their exercisable options, or, if they do so, whether such persons will sell,pursuant to the Offers, any or all of the New Ordinary Shares issued as a result.

The Ordinary Shares to be made available pursuant to the Offers will, on Admission, rank pari passu in all respects with all otherOrdinary Shares, including for all dividends and other distributions declared, made or paid on the Ordinary Shares after Admission.

The distribution of this document and the offer, sale and/or issue of Ordinary Shares in certain jurisdictions may be restricted by law.No action has been or will be taken by the Company, the Directors, or the Joint Global Co-ordinators, the Co-Bookrunners or theCo-Lead Managers to permit a public offer of Ordinary Shares or possession or distribution of this document (or any other offering orpublicity material or application form relating to the Ordinary Shares) in any jurisdiction, other than in the United Kingdom. Personsinto whose possession this document comes are required by the Company, the Directors, the Joint Global Co-ordinators, the Co-Bookrunners or the Co-Lead Managers to inform themselves about and to observe any such restrictions. This document does notconstitute or form part of an offer to sell, or the solicitation of an offer to buy, Ordinary Shares to any person in any jurisdiction towhom or in which such offer or solicitation is unlawful.

NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED STATES

The Ordinary Shares offered pursuant to the Offers have not been and will not be registered under the US Securities Act, and maynot be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of theUS Securities Act and in compliance with any applicable state securities laws. Prospective investors are hereby notified that sales ofOrdinary Shares may be made in reliance on an exemption from the provisions of Section 5 of the US Securities Act. TheUnderwriters, through their respective selling agents, may arrange for the Offers and resale of the Ordinary Shares in the UnitedStates only to persons reasonably believed to be QIBs in reliance on Rule 144A or another exemption from, or in a transaction notsubject to, the registration requirements of the US Securities Act and in offshore transactions outside the United States in relianceon Regulation S. Any offer or sale of shares in reliance on Rule 144A will be made by broker-dealers who are registered as suchunder the US Securities Exchange Act of 1934, as amended (the ‘‘US Exchange Act’’). For a description of these and certain furtherrestrictions on the offer, sale and transfer of the Ordinary Shares and distribution of this document, see section 28 of Part XIII(Additional Information). Please note that by receiving this document, purchasers shall be deemed to have made certainrepresentations, acknowledgements and agreements set out herein including, without limitation, those set out in section 28.2 ofPart XIII (Additional Information).

THE ORDINARY SHARES OFFERED BY THIS DOCUMENT HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE USSECURITIES AND EXCHANGE COMMISSION (THE ‘‘SEC’’), ANY STATE SECURITIES COMMISSION IN THE UNITEDSTATES OR ANY OTHER US REGULATORY AUTHORITY, NOR HAVE SUCH AUTHORITIES PASSED UPON ORENDORSED THE MERITS OF THE OFFERING OF ORDINARY SHARES OR THE ACCURACY OR ADEQUACY OF THISDOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENCE HAS BEEN FILED UNDERCHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES (‘‘RSA 421-B’’) WITH THE STATE OF NEW HAMPSHIRENOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEWHAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE THAT ANYDOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THEFACT THAT ANY EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THESECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE HAS PASSED IN ANY WAY UPON THE MERITS ORQUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL, TO, ANY PERSON, SECURITY OR TRANSACTION. IT ISUNLAWFUL TO MAKE OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT, ANYREPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

AVAILABLE INFORMATION FOR INVESTORS IN THE UNITED STATES

Neither the Company nor any of its subsidiaries is required to file periodic reports under Section 13 or Section 15(d) of the USExchange Act. For so long as any Ordinary Shares are ‘‘restricted securities’’ within the meaning of Rule 144(a)(3) of the US

2

Securities Act, the Company will, during any period in which it is neither subject to Section 13 or 15(d) of the US Exchange Act norexempt from reporting pursuant to Rule 12g3-2(b) of the US Exchange Act, provide, upon written request, to holders of OrdinaryShares, any owner of any beneficial interest in Ordinary Shares or to any prospective purchaser designated by such holder orowner, the information required to be delivered pursuant to Rule 144A(d)(4) under the US Securities Act.

This document is being furnished by the Company in connection with an offering exempt from the registration requirements of theUS Securities Act, solely for the purpose of enabling a prospective investor to consider the subscription for or acquisition of OrdinaryShares described herein. The information contained in this document has been provided by the Company and other sourcesidentified herein or therein. This document is being furnished on a confidential basis only to persons reasonably believed to be QIBsin the United States. Any reproduction or distribution of this document, in whole or in part, in the United States and any disclosure oftheir contents or use of any information herein or therein in the United States for any purpose, other than in considering aninvestment by the recipient in the Ordinary Shares offered hereby or thereby, is prohibited. Each potential investor in the OrdinaryShares, by accepting delivery of this document agrees to the foregoing.

DEFINED TERMS

Certain terms used in this document are defined in the ‘‘Definitions’’ section of this document.

The date of this document is 6 July 2010.

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CONTENTS

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS . . . . . . . . . 32

EXPECTED TIMETABLE FOR THE OFFERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

OFFER STATISTICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

PART I INFORMATION ABOUT THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

PART II DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

PART III SELECTED HISTORICAL FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . 64

PART IV OPERATING AND FINANCIAL REVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

PART V HISTORICAL FINANCIAL INFORMATION RELATING TO THE GROUP . . . . . . . 99

PART VI UNAUDITED PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . 158

PART VII UNAUDITED INTERIM FINANCIAL INFORMATION RELATING TO THE GROUPFOR THE 24 WEEKS ENDED 16 MAY 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . 161

PART VIII CAPITALISATION AND INDEBTEDNESS STATEMENT . . . . . . . . . . . . . . . . . . . 177

PART IX INFORMATION ABOUT THE OFFERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

PART X TERMS AND CONDITIONS OF THE CUSTOMER AND EMPLOYEE OFFER . . . 187

PART XI TERMS AND CONDITIONS OF THE OCADO SHARE ACCOUNT . . . . . . . . . . . 195

PART XII TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214

PART XIII ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275

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SUMMARY

THE FOLLOWING INFORMATION SHOULD BE READ AS AN INTRODUCTION TO THISPROSPECTUS

Any decision as to whether to invest in Ordinary Shares should be based on consideration of thisdocument as a whole. Where a claim relating to the information contained in this document is broughtbefore a court, you might, under the national legislation of the European Economic Area member states,have to bear the costs of translating the Prospectus before the legal proceedings are initiated. Civilliability attaches to the Directors and the Company, who are responsible for this summary, but only if thesummary is misleading, inaccurate or inconsistent when read together with the other parts of thisdocument.

Unless stated otherwise, all financial information quoted in this summary has been audited save that noneof the financial information in this summary relating to the Group for P1-3 2009, P1-6 2009 or P1-6 2010has been audited, nor has any financial information not relating to the Group (unless indicated otherwise).

Certain figures contained in this summary, including financial information, have been subject to roundingadjustments. Accordingly, in certain instances (i) the sum or percentage change of such numbers may notconform exactly with the total figure given; and (ii) the sum of the numbers in a column or a row in certaintables may not conform exactly with the total figure given for that column or row.

1. Information about the Company

1.1 Overview

Ocado is the only dedicated online supermarket in the UK and the largest dedicated online supermarketby turnover in the world. Ocado:

• provides a market leading customer offering;

• offers delivery of grocery products to customers centrally picked from a single, state-of-the-art, highlyautomated warehouse (the customer fulfilment centre or ‘‘CFC’’);

• sells more than 20,000 different products, the vast majority of which are sourced through Waitrose, aleading high quality UK supermarket. Approximately 4,300 of the products sold by Ocado areWaitrose own-label products. Ocado’s product range includes a small but expanding range of Ocadoown-label products;

• generated gross sales of £427 million in FYE 2009 and has delivered significant year-on-year growthin gross sales since it started trading. Ocado’s gross sales have grown at a CAGR of 21 per cent.between FYE 2007 and FYE 2009. Ocado’s gross sales in P1-6 2010 were £246 million (unaudited),an increase of 30 per cent. from P1-6 2009;

• has achieved positive and growing EBITDA since FYE 2008 and generated £9.2 million of EBITDA inFYE 2009 and £8.0 million of EBITDA in P1-6 2010 (unaudited). The Directors believe that Ocadohas greater EBITDA margin potential than its store-based competitors; and

• is well placed, the Directors believe, to benefit from the growing demand for ordering groceriesonline.

2. Strengths of the Ocado Business

2.1 Significant market opportunity

The UK grocery market is by far the largest of the UK retail segments, yet the Directors believe it has thelowest online penetration of all the core UK consumer markets and online penetration is expected to growrapidly. The Directors believe that Ocado is well placed to take advantage of this growth, and to increaseits share of the UK online grocery market from its current estimated 14 per cent. market share.

2.2 Unique, attractive business model with structural advantages over traditional groceryretailers

Ocado is the only UK online supermarket that provides all of its services from a dedicated warehouse, theCFC. Ocado’s competitors’ supply chains operate through a network of regional distribution centreswhich deliver produce to their stores, where the majority of online orders are then picked for customers.

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Summary

The Directors believe that Ocado’s aggregation of scale, removal of a layer of the supply chain andautomation of the CFC provide clear service and cost benefits to the Business and its customers. Thecustomer benefits include greater availability, a wider range of products and improved freshness.The cost benefits include the elimination of store staff costs, store property costs and regional distributioncentres costs as well as lower utility costs and reduced wastage.

2.3 Superior customer offer in online food retailing driving market share

Ocado prides itself on having developed and sustained a market-leading customer offering in onlinegrocery retailing, as shown by the consumer and industry awards it has received to date and continues toreceive. Ocado focuses on the following areas in achieving these high levels of satisfaction:

• Product offering

• Range: Ocado offers an extensive product range of more than 20,000 products.

• Quality and freshness: Ocado is the only UK online grocer to state use-by dates for the majorityof its fresh produce on the Website and guarantees to match or better them.

• Environmental credentials: Ocado prides itself on the environmental efficiency with which theBusiness is run as recognised by the awards it has won such as Green Retailer of the Year 2009at the Grocer Gold Awards.

• Price

• Ocado aims to price competitively in order to provide customers with value for money.

• Customer service

• Website: The Website is designed to be attractive and helpful for customers and includesfeatures such as displaying product use-by dates and nutritional information, generating instantorders, prompting customers to see if they have forgotten to add items to their orders (based onpast orders), recommending items to customers and providing recipe suggestions.

• Accuracy and Availability: Ocado’s availability system ensured that in FYE 2009 (and P1-32010), approximately 99 per cent. of items ordered were delivered as ordered.

• Delivery service: Ocado strives to deliver to customers exactly what they have ordered, at thetime they have requested.

2.4 Proprietary intellectual property has created significant barriers to entry

Ocado’s current IT systems are predominantly bespoke (there often being no suitable alternativesavailable commercially) and most have been developed in-house by Ocado’s IT team. Much of themachinery employed in the CFC is also bespoke. Ocado’s proprietary intellectual property is integral tothe functionality of all aspects of its operations and, the Directors believe, has had a direct and positiveimpact on the Business.

2.5 Strong track record of growth delivered by entrepreneurial Executive Directors

Ocado has generated strong revenue growth delivered by its experienced, stable team of entrepreneurialDirectors. Gross sales have consistently increased year on year, growing from £291 million in FYE 2007to £427 million in FYE 2009, a CAGR of 21 per cent. Ocado’s consistent gross sales growth combinedwith the operational leverage in the Business’s cost base has led to Ocado achieving significantimprovement in EBITDA.

2.6 Considerable operational leverage with margin potential

The Directors believe that Ocado can achieve higher sales volumes and that further increases in salesshould improve the EBITDA margin of the Business given the economies of scale within the CFC anddelivery structure. In addition, the Directors have identified opportunities to increase further the efficiencyand effectiveness of the CFC and delivery operations, without compromising Ocado’s customer offeringor its value proposition. In particular, these efficiencies are expected to be achieved through increased

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Summary

CFC labour productivity as a result of an enhanced technology mix and increased automation, andincreased delivery productivity as a result of more efficient allocation of driver resources and optimiseddelivery route planning. The Directors believe that as a result of these opportunities and efficienciesOcado can achieve a higher EBITDA margin than a typical store-based competitor.

2.7 Significant opportunity for continued expansion

Ocado’s business model presents it with growth opportunities outside its core business. These includethe possibility of further expansion into non-grocery products such as baby products, health and beautyand kitchenware and replicating the Group’s business model overseas.

3. Ocado’s strategy

Ocado intends to continue with the areas of strategic focus that have delivered strong revenue growthand improving EBITDA margin to date, and investigate additional adjacent growth opportunities by:

• Improving the customer offering continually through maintaining and improving the customerexperience; increasing its core product range; and continuing to offer value for money to customers.

• Improving cost efficiency through continued innovation to maximise profitability withoutcompromising Ocado’s customer offering or value for money proposition.

• Expanding CFC capacity (including building the second CFC) and the Spoke network.

• Exploring further growth opportunities by, where appropriate, extending the product range furtherinto non-grocery products and exploring other opportunities including the possibility of replicating thebusiness model overseas.

4. Information about the Offers

The Offers comprise:

• the Institutional Offer to institutional investors in the UK, the United States, the EU and elsewhere;and

• the Customer and Employee Offer to Eligible Customers and Eligible Employees.

The Customer and Employee Offer will comprise approximately 15 per cent. of the total number ofOrdinary Shares comprised in the Offers, although the Company reserves the right to adjust the sizedepending on demand.

The Ordinary Shares which are the subject of the Offers comprise:

• approximately £205 million of New Ordinary Shares to be issued by the Company, raising primaryproceeds net of fees and expenses (but including cash received on the exercise of options andwarrants) of £200 million. If the Offer Price is set at the mid-point in the Price Range, this will result inthe issue of approximately 86,273,616 New Ordinary Shares pursuant to the Offers and up to afurther 10,134,074 New Ordinary Shares to Selling Optionholders pursuant to the exercise of optionsor warrants; and

• up to 155,216,316 Ordinary Shares that may be sold by the Selling Shareholders pursuant to theOffers. This figure is based on the maximum number of Ordinary Shares that each Major SellingShareholder has indicated he or it may sell, the Minor Selling Shareholders potentially selling all oftheir Ordinary Shares and the maximum number of Ordinary Shares which Selling Optionholdersmay sell.

If, the Company is not able to agree pricing or if it is unable to raise net proceeds of £200 million,Admission will not occur. The Underwriting and Selling Shareholders’ Agreements are conditional onAdmission.

The selling indications of Major Selling Shareholders are non-binding. That means that although a MajorSelling Shareholder may not sell any more Ordinary Shares pursuant to the Offers than he or it hasindicated, he or it may decide, at his or its absolute discretion, to sell fewer or none. The Company hasprovided a facility through which Minor Selling Shareholders and Selling Optionholders may sell some or

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Summary

all of their Ordinary Shares pursuant to the Offers. As at the date of this document, the Company does notknow with certainty whether any such persons will sell any or all such Ordinary Shares. However, theCompany has received non-binding indications from Minor Selling Shareholders holding28,861,700 Ordinary Shares, in aggregate, that they do not intend to sell any Ordinary Shares pursuant tothe Offers.

The JGCs will solicit bids from prospective institutional investors to acquire Ordinary Shares in theInstitutional Offer.

The Company is offering Eligible Customers and Eligible Employees the opportunity to subscribe for orpurchase Ordinary Shares in the Customer and Employee Offer at the Offer Price.

5. Reasons for the Offers and use of proceeds and other resources

The Directors believe that the Offers and Admission will assist in positioning the Company for its nextstage of development. The Company expects to receive primary proceeds net of fees and expenses (butincluding cash received from the exercise of options and warrants) of £200 million from the issue of NewOrdinary Shares at the Offer Price pursuant to the Offers and from the issue of New Ordinary Shares toSelling Optionholders. All of the funds received from the issue of New Ordinary Shares will initially be heldon deposit, with approximately £45 million expected to be used within six months of Admission to repaysome of the Group’s existing debt.

On Admission, the Company will have total credit facilities (including the New Facility) of approximately£197 million, excluding the expected repayments of approximately £45 million. This includes £177 millionof committed credit facilities, of which the £100 million of debt funding available under the New Facility willbe undrawn and available for investment, and approximately £20 million of undrawn credit lines availablefor asset financing.

In the medium term, the balance of the net proceeds of the Offers of approximately £155 million receivedby the Company, together with the undrawn debt facilities and credit lines of approximately £120 millionand the cash flow generated by its operations will be used:

• to invest approximately £80 million in the existing CFC in order to increase effective capacity fromapproximately 105,000 to approximately 180,000 orders per week;

• to develop existing Spokes and to invest between £2 million and £10 million per year in the mediumterm to establish new ones;

• to purchase a site and fund the estimated total construction cost and related fit-out and machineryspend of approximately £210 million to build the second CFC (costed at a sterling : euro exchangerate of £1 = e1.10). If required, the Company believes that it will be able to procure additional fundingfor completion of the construction and fit-out of the second CFC through additional finance leasesand other forms of debt; and

• for general corporate purposes.

6. Summary of financial information

Summary consolidated income statement

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

Revenue . . . . . . . . . . . . . . . . . . 272.9 321.3 402.0 84.6 110.2

Gross profit . . . . . . . . . . . . . . . 88.0 102.8 122.8 25.7 33.3

Operating profit/(loss) beforeadministrative expenses . . . . (4.9) 3.5 15.1 1.6 6.2

Operating loss . . . . . . . . . . . . . (30.1) (21.6) (14.4) (4.6) (1.9)

Loss before tax . . . . . . . . . . . . . (40.2) (33.3) (25.5) (7.2) (4.0)

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Summary

In P1-6 2010, revenue was £230.3 million (P1-6 2009: £178.3 million) and gross profit was £70.7 million(P1-6 2009: £54.6 million). Operating loss in P1-6 2010 was £(2.7) million (P1-6 2009: £(7.4) million).

Ocado has not made any corporation tax payments to date, reflecting the losses it has incurred. Ocadohad approximately £270 million of unutilised carried forward tax losses as at the end of FYE 2009 whichmay be carried forward against future profits.

As at 16 May 2010, Ocado had net debt of approximately £110.2 million comprising £54.6 million ofborrowings, £65.6 million of finance leases and £10.0 million of cash and cash equivalents.

Other operating information

The table below sets out Ocado’s gross sales and EBITDA for P1-3 2010, P1-3 2009, FYE 2009, FYE2008 and FYE 2007.(1)

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

Gross sales(1) . . . . . . . . . . . . . . . 291.4 341.0 427.3 89.6 117.2EBITDA(2) . . . . . . . . . . . . . . . . . . (9.5) 2.2 9.2 0.5 3.4

In P1-6 2010, gross sales were £245.6 million (P1-6 2009: £189.1 million) and EBITDA was £8.0 million(P1-6 2009: £2.8 million).

(1) The Group defines gross sales as sales (net of returns), including charges for delivery, before deducting relevant vouchers/offers and value added tax. Gross sales is not a measure of operating performance under IFRS-EU and an investor should notconsider it as an alternative to any other measure of performance under generally accepted accounting principles.

(2) The Group defines EBITDA as operating profit/(loss) before amortisation expenses, impairment of property, plant andequipment, depreciation of property, plant and equipment, net finance cost and taxation. The Directors believe that EBITDA isuseful in evaluating its operating performance because a number of companies also publish these figures as key performanceindicators. EBITDA is not a measure of operating performance in accordance with IFRS-EU. EBITDA should not beconsidered a substitute for gross profit/(loss), operating profit/(loss), profit/(loss) before tax, cash flow from operating activitiesor other income or cash flow statement data as determined in accordance with IFRS-EU, or as a measure of profitability orliquidity.

The following table sets out selected operating information for the Business.

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)

Average order size (£)(1) . . . . . . . 112.17 116.30 115.94 122.81 119.38Average orders per week . . . . . . 49,968 56,384 70,873 60,769 81,823CFC efficiency (units per hour)(2) . 95 114 124 114 124Average deliveries per van per

week . . . . . . . . . . . . . . . . . . . 99 106 121 107 126Average number of operational

staff (full time equivalent) . . . . . 2,033(5) 2,730 3,151 3,119 3,610Average product wastage

(per cent. of gross sales)(3) . . . . 1.15 0.78 0.57 0.64 0.65Items delivered exactly as ordered

(per cent.)(4) . . . . . . . . . . . . . . 98.59 99.11 99.41 99.35 98.76

Source: The information in the table above is derived from information extracted from management accounts and internal financialand operating reporting systems and is unaudited.

(1) Average retail value of goods a customer receives (including VAT and delivery charge) per order.

(2) Measured as units dispatched from the CFC per hour worked by CFC operational personnel.

(3) Value of products purged for having passed Ocado’s ‘‘use by’’ life guarantee and stock adjustments (net of sales to thecompany shop), divided by gross sales.

(4) Percentage of all items delivered exactly as ordered, i.e. the percentage of items neither missing nor substituted.

(5) Excludes, for the period prior to their transfer to Ocado, staff working for a third-party logistics contractor who transferred toOcado in April 2007.

9

Summary

Weekly orders exceeded 100,000 for the first time in the week commencing 10 May 2010 and the averagenumber of weekly orders in P1-6 2010 was 88,407 (P1-6 2009: 66,132). The average order size was£115.77 (P1-6 2009: £119.15). During the same period, CFC efficiency was 123 and average deliveriesper van per week was 131.

7. Summary of the Risk Factors

Prospective investors should consider carefully the risks that relate to the Group, its industry and aninvestment in Ordinary Shares, which could adversely affect the Group’s business, results of operations,financial condition and prospects and the value of the Ordinary Shares, included but not limited to therisks summarised below.

• The online grocery industry in the UK may not sustain or improve upon current levels of demand

• Ocado has a relatively short operating history and operates in a new and evolving market

• Ocado has incurred substantial net losses to date and anticipates possible future losses

• The Group’s relationship with Waitrose exposes it to a number of risks:

• The Group relies on the Waitrose brand and Waitrose own-label products

• The arrangements contain provisions restricting the operation of WaitroseDeliver inside the M25which will expire in June 2011

• The 2010 Agreement contains minimum sourcing provisions which may restrict the Group’sgrowth

• The Sourcing Agreement and Branding Arrangements could be terminated early following aUK competitor of Waitrose acquiring control of the Group

• The Group is dependent on the existing single CFC in Hatfield

• The Group may fail to compete effectively with traditional online retailers of groceries

• The Group is dependent on its Executive Directors

• The Group may not successfully replicate its business system to new CFCs on time and withinbudget

• The Group will be reliant on the New Facility

• The Group may need to raise substantial additional funding from 2012 and a failure to do so mayrestrict its development

• The Group relies on its Spokes

• There are limitations on the current CFC and Spokes

• The Group may not have adequate protection for its intellectual property rights

• Growth may place significant demands on the Group’s infrastructure and management

• The Group may be affected by new entrants to the online market

• The Group may face unexpected increases in operating and other expenses

• The Group is dependent on UK and global economic conditions

• The Group may face online security breaches including hacking and vandalism

• The number of Ordinary Shares to be made available by the Selling Shareholders pursuant to theOffers is indicative only

• The price of the Ordinary Shares may fluctuate

• The Company does not expect that dividends will be declared or paid in the foreseeable future

10

RISK FACTORS

In addition to all other information set out in this document, investors should carefully consider the riskfactors below. If any of the following risks were to materialise, the business, financial condition and futureprospects of the Group could be materially and adversely affected. In such circumstances, the price of theOrdinary Shares could decline and investors could lose all or part of their investment.

If investors are in any doubt about the action they should take, they should consult a professional adviserauthorised under the FSMA if they are in the United Kingdom or, if not, another appropriately authorisedindependent financial adviser.

The risks and uncertainties described below represent those known to the Directors at the date of thisdocument which the Directors consider to be material. However, these risks and uncertainties do notnecessarily comprise all of those associated with an investment in the Company and are not set out in anyorder of priority. Additional risks and uncertainties currently unknown to the Directors and/or the Group, orwhich the Directors and/or the Group currently believe are immaterial, may also have a material adverseeffect on its business, financial condition or future prospects or the trading price of the Ordinary Shares.

1. Risks relating to the Group

1.1 The online grocery industry in the UK may not sustain or improve upon current levels ofdemand and customer acceptance in line with the expectations of the Group

The Business has no physical locations at which customers can purchase goods. It relies solely on ordersreceived through the Website and, more recently, Ocado On the Go (an application for iPhones, iPadsand Android smart phones) for sales. Although the Directors expect the online grocery market to continueto grow, the online grocery industry in the UK is nevertheless relatively new and rapidly evolving. It is stilluncertain whether the Business will sustain and improve on current levels of demand and customeracceptance. The Group’s success will depend to a substantial extent on the willingness of consumers toincrease their use of online services as a method of buying groceries and other products and services. Ifthe online grocery industry in the UK does not improve upon current levels of demand and customeracceptance does not increase in line with the expectations of the Directors, then this would have anadverse effect on the Group’s business strategy, results of operations, financial condition and futureprospects.

1.2 Ocado has a relatively short operating history and operates in a new and evolving market

Ocado began commercial operations in 2000. The Group has a comparatively short operating historywhich makes an evaluation of the Group’s business and prospects difficult. In addition, the UK onlinegrocery industry is new and rapidly evolving. The Group’s business and prospects must, therefore, beconsidered in light of the risks and difficulties the Group encounters operating in the relatively new andevolving online grocery industry. These risks and difficulties include:

• difficulties in managing rapid growth in personnel and operations;

• a complex business system unproven at the expected maximum capacity of the CFC;

• lack of profitability to date; and

• high capital expenditures associated with expanding the capacity of the Business particularly inbuilding and fitting-out the second CFC.

The Group cannot be certain that its business strategy will be successful or that it will successfullyaddress these risks. The Group’s failure to address any of the risks described above could have anadverse effect on the Business.

In particular, Ocado has experienced significant revenue growth in recent periods. Such growth rates maynot be sustainable and may decrease in the future. In view of the rapidly evolving nature of the Businessand Ocado’s rate of growth in prior years, the Directors believe that period-to-period comparisons of itsoperating results, including the Group’s EBITDA margin and cost of sales as a percentage of revenue, arenot necessarily meaningful and should not be relied upon as an indication of future performance.

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Risk Factors

1.3 Ocado has incurred substantial net losses since inception to date and anticipates possiblefuture losses

Ocado has incurred substantial net losses since inception in 2000 which aggregated to approximately£341 million (Group: £347 million) at the end of P1-3 2010. To date, Ocado has been financed by capitalcontributions from its investors and debt financing. Ocado has not achieved a profit on its ordinaryactivities before taxation in any financial year, and may continue to make losses on its ordinary activitiesbefore taxation in the future while it pursues the Group’s growth strategy. The Group will continue to incursignificant capital and operating expenses in coming years in connection with its planned expansion.

Over the next few years such expenses will include investment in the existing CFC to increaseoperational efficiency and capacity, the construction and related fit-out of the second CFC (assuming thatthe Business grows at the rate the Directors expect it to and, to the extent necessary, appropriatefinancing is obtained) at an estimated cost of approximately £210 million (costed at a sterling : euroexchange rate of £1 = e1.10), to develop existing Spokes and establish new ones, together with branddevelopment and marketing activities, increases in personnel at the existing and proposed future CFCand its head office and continued development of the Group’s IT systems (including the warehousemanagement and order fulfilment systems) and delivery infrastructure. In order to become profitable, theBusiness will need to increase its sales or reduce costs and expenses as a proportion of such sales.There is no certainty that the Company will be able to achieve efficiency targets and reduce such costsand expenses as a proportion of sales.

1.4 The Group’s relationship with Waitrose exposes it to a number of risks

Details of the arrangements under which Waitrose sources and supplies products for the Group are setout in section 7.4 of Part I (Information about the Company) and section 17.1 of Part XIII (AdditionalInformation).

The Group relies on the Waitrose brand and Waitrose own-label products

Ocado’s reputation as a supplier of high quality products is based, at least in part, on its relationship withWaitrose and its ability to supply Waitrose own-label products. If, for any reason, Waitrose ceased tosupply the Group with such products during the term of the Sourcing Agreement or the SourcingAgreement or Branding Arrangements were to terminate or expire, or if Waitrose were to sufferreputational damage which impacted on the Waitrose brand, there could be an adverse effect on theGroup’s financial condition and future prospects.

In FYE 2009 46 per cent. of Ocado’s product sales constituted sales of Waitrose own-label products.Ocado is precluded from selling the own-label products of any UK competitor of Waitrose for the durationof the Sourcing Agreement. If the Sourcing Agreement were to end and Ocado wished to replace theWaitrose own-label products in its range it would need to find or create a replacement range of own-labelproducts. Ocado currently stocks approximately 70 Ocado own-label products, and is in the process ofextending this range, but there is nevertheless no assurance that it will be able independently to develop asufficient Ocado own-label range or be able to obtain an alternative own-label range from anothersupermarket or supplier.

Such a failure to develop a sufficient Ocado own-label range or to offer an alternative own-label rangecould adversely affect the Group’s financial condition and future prospects.

The 2008 Agreement and the 2010 Agreement contain various exclusivity provisions which bindWaitrose. These provisions will be progressively relaxed from 1 January 2011 and expire at the end ofJune 2011, and in any event the Group is likely to face ongoing or increased competition from Waitrose’sinternet delivery arm WaitroseDeliver

Waitrose’s own online grocery business, WaitroseDeliver, competes directly with Ocado. The 2008Agreement and the 2010 Agreement currently include certain exclusivity provisions which limit the extentto which the WaitroseDeliver service may compete with the Group in the Greater London area (the areabounded by the M25 motorway). Approximately 50 per cent. of Ocado’s gross sales in FYE 2009 werederived from the area bounded by the M25.

If Waitrose expands the WaitroseDeliver service both within and outside the M25, there could be anadverse impact on the ability of the Business to win new and retain existing customers.

12

Risk Factors

The success or otherwise of WaitroseDeliver may affect the willingness of Waitrose to extend or renewthe Sourcing Agreement and Branding Arrangements beyond their scheduled expiry. Moreover, suchsuccess or otherwise may result in Waitrose being less willing to cooperate under the SourcingAgreement because it may consider that to do so will compromise its own business. While Waitrosewould remain subject to contractual obligations under the Sourcing Agreement, the failure of the Group’skey supplier to cooperate fully in its relationship with the Group could have an adverse effect on theGroup’s financial condition and future operations.

The 2010 Agreement contains minimum sourcing provisions which may restrict the Group’s growth

The 2010 Agreement contains provisions which restrict the extent to which Ocado can source productsother than from Waitrose, and the extent to which Ocado’s range of Ocado own-label products may beexpanded. While the Directors do not believe that these restrictions will have a significant impact on thegrowth of the Business or their intended expansion of the range of products stocked by Ocado, to theextent that, in this respect, the Business develops in a way other than the Directors currently expect, theminimum sourcing restrictions may have an adverse effect on the Group’s financial positionand prospects.

The Sourcing Agreement and Branding Arrangements could be terminated early by John Lewis followinga change of control of the Group after Admission (and in certain other circumstances)

The 2010 Agreement allows any of the parties to terminate the Sourcing Agreement and BrandingArrangements by giving three months’ notice if certain competitors of Waitrose or John Lewis gain controlof the Ocado Board or acquire 50 per cent. or more of the issued share capital of the Company.

Following Admission, the Company will have no control over the acquisition and disposal of the OrdinaryShares. Accordingly, a relevant competitor of Waitrose or John Lewis could acquire 50 per cent. or moreof the issued share capital of the Company, which could result in the early termination of the SourcingAgreement and Branding Arrangements by John Lewis or Waitrose. Following termination in thesecircumstances, Ocado is obliged to pay Waitrose £40 million.

If Waitrose fails to source products for the Group, the Group may be unable to replace the WaitroseSourcing Agreement and Branding Arrangements on acceptable terms or at all

Under the Sourcing Agreement Waitrose negotiates terms of supply (primarily product specification andcost prices) with various suppliers on behalf of both itself and Ocado. If the arrangements with Waitrosecome to an end, Ocado will have to agree new terms (for example, as to branding of products) withexisting suppliers or find appropriate suppliers itself, as well as negotiate prices itself. This will require it toengage a substantial number of additional personnel in, at a minimum, its retail and buying teams and itsfood technology team. While certain suppliers will continue to supply Ocado without Waitrose as anintermediary, there can be no assurance that a sufficient number will agree to do so nor that Ocado will beable to find an adequate number of alternative suppliers. In addition, Ocado may not be able to obtainprices that are equivalent to the prices obtained by Waitrose.

Currently, approximately 15 per cent. by volume of the goods that Ocado sells were delivered to it via theWaitrose logistics infrastructure. This is provided for in the Sourcing Agreement. The balance of productsare delivered directly to the CFC by the relevant supplier or manufacturer. If the Sourcing Agreementwere to end, or if Waitrose were unable or unwilling to source products for the Group during the course ofthe current term of the Sourcing Agreement (if, for example, there were a failure in Waitrose’s logisticalinfrastructure), the Group would have no immediately available infrastructure for sourcing directly thoseproducts sourced via the Waitrose infrastructure.

Any disruption to the Waitrose supply system may disrupt the availability of the Group’s products to itscustomers. This has happened infrequently in the past; for example the H5N1 bird flu epidemic in 2008had little effect on the Group, doing little more than disrupting Waitrose’s supply of organic turkeys.Nevertheless, it remains a risk to which the Group is exposed. Although the Sourcing Agreement providesthat on the occurrence of a failure in the Waitrose supply system those goods that are available must beapportioned between Waitrose and Ocado pro rata to their ‘‘good faith requirements’’, there can be noguarantee that any such supply will be sufficient to meet Ocado’s requirements or that such supply willoccur in a timely manner, on acceptable terms or at all.

13

Risk Factors

Therefore, any failure of Waitrose to supply goods to the Group could cause a temporary or, in the case ofcertain products, permanent, inability for the Group to stock and sell those goods, which could have anadverse effect on the Group’s financial condition, results of operations and future prospects.

The Sourcing Agreement may not be renewed following its ultimate expiry

The Sourcing Agreement will expire on 1 September 2020, although it may be terminated from 1 March2017 onwards by either party giving the other requisite notice. Although the Group would haveconsiderable notice of Waitrose’s intention to cease sourcing products for it in these circumstances, andwould have the opportunity to develop its own relationships with suppliers (which to some extent it hasdone already), the termination or the expiry of the Sourcing Agreement would, at the very least, result inthe Group ceasing to be able to supply Waitrose own-label products which, for the reasons describedabove, could have an adverse effect on the Group’s financial condition and future prospects.

Even if the Sourcing Agreement were renewed or extended so that it did not expire on 1 September 2020,the Group may not be able to agree terms with Waitrose which are as favourable to it as the terms onwhich the current arrangements were concluded. Any deterioration in the terms on which the Group andWaitrose contract could have an adverse effect on the Group’s financial condition and future prospects.

1.5 The Group’s Business currently depends entirely on a single CFC in Hatfield

The Business currently operates from a single CFC which is located in Hatfield (in South East England). Itis therefore entirely dependent on the continued efficient operation of the existing CFC, the ability toincrease the capacity of the existing CFC in order to continue to satisfy any increase in the number ofcustomer orders, and the ability to maintain a high level of accuracy in fulfilling these orders. Anydisruption to the efficient operation of the existing CFC may therefore have an adverse effect on theGroup’s financial condition and future prospects.

The CFC may suffer prolonged power or equipment failures, refrigeration failures, failures in its ITsystems or networks or damage from fires, floods, other disasters or other unforeseen events which maynot be covered by or may be in excess of its insurance coverage. Damage resulting from any of theseevents may take considerable time to repair. The direct effect of the events described above and aprolonged period before rectification could have an adverse effect on the Group’s financial condition andfuture prospects. Moreover, the complete destruction of the CFC through a single catastrophic eventwould have an adverse impact on the operation of the Business and the Group’s financial condition andprospects for a significant period of time.

As described in more detail in section 7.5 of Part I (Information about the Company), a higher number oforders are placed to arrive on Mondays, Fridays and Saturdays than on other days. In order to keepeffective capacity of the CFC as high as possible, steps are taken to ‘‘smooth’’ the delivery profile acrossthe week, such as offering cheaper (or free) deliveries at certain times. If the steps taken to prevent thedaily spikes in delivery numbers cease to have the effect on customer buying habits that the Directorscurrently believe they do, the effective capacity of the CFC would be reduced, which would have amaterial adverse effect on the Group’s financial condition and future prospects.

1.6 The Group is dependent on its Executive Directors

The future success of the Group is, to an extent, dependent upon the specialist skills of its ExecutiveDirectors. The unexpected departure or loss of any of its Executive Directors could have an adverseeffect on the financial condition and results of operations of the Group, and there can be no assurancethat the Group will be able to attract or retain suitable replacements for such Executive Directors.

1.7 The Group may fail to compete effectively with traditional and online retailers of groceryproducts

The Group competes primarily with traditional grocery retailers and with other online grocers. Its mainonline competitors are Tesco.com, Sainsburys.co.uk, ASDA.com and WaitroseDeliver, each of whomcurrently has financial resources substantially greater than those of the Group. The traditional groceryretailers may also have brands that are more widely recognised by grocery shoppers throughout the UKthan the Ocado brand. The relative size and established nature of the Group’s competitors could meanthat the Business may lose its current market share if the online grocery market becomes increasingly

14

Risk Factors

important to the grocery industry and its competitors invest heavily in their online operations. In addition,further operating losses may put the Group at a competitive disadvantage in what is a comparatively newand evolving market.

The principal competitive factors that currently affect the Business are availability and breadth of productrange, geographic reach, product quality, order accuracy, service, price, promotional activities andcustomer loyalty to traditional and other online grocery retailers. If the Group fails to compete effectively inany one of these areas it may lose existing customers and fail to attract new customers, which may havean adverse effect on the Group’s financial condition and future prospects.

1.8 The Group may not successfully replicate its business systems to new CFCs on time andwithin budget

A critical part of the Group’s business strategy is to expand its operations by building at least oneadditional CFC in the UK in the medium term to increase the capacity of the Business to servicecustomers.

The Group is yet to acquire a site for the second CFC and, even if the Group grows at the rate that theDirectors expect, the Group will not begin operating the second CFC until the end of 2012 at the earliest(assuming that construction begins in the first quarter of 2011 and, to the extent necessary, appropriatefinancing is obtained). Moreover, if the Group grows at a slower rate than the Directors expect, the Groupmay not commence operating the second CFC until later, if at all.

While the Directors are confident that the business systems of the existing CFC can be replicated in thesecond CFC (and in any further CFCs in the future), the Group’s ability to replicate its business model innew CFCs generally (and the second CFC in particular), cost-effectively and in a timely fashion willdepend upon a variety of factors. These include:

• fluctuations in the cost of particular commodities (in particular, steel) required to build a CFC and thecurrency (principally euro) in which plant and machinery for a CFC would be purchased;

• the availability of appropriate and affordable sites that can accommodate a CFC, which in turndepends on a combination of physical and geographical factors;

• the Group’s ability to obtain necessary planning consents;

• the Group’s ability successfully and cost-effectively to hire and train employees to operate any newCFC;

• the Group’s ability to roll out the business systems in any new CFC;

• finding suitable, reliable and trustworthy developers;

• the availability of appropriate material handling equipment and the contractors to design and installsuch equipment; and

• management resources.

Significant overruns of the predicted budget of building and fitting-out the second CFC might make suchbuilding and fit-out economically unviable. If the replication strategy fails, Ocado could be forced to delayexpansion.

If the Group successfully builds the second CFC, there is no guarantee that it or any other additionalCFCs will achieve a sufficient level of operational efficiency, market penetration or customer orders toensure that such CFC will become commercially viable. If the replication of the Group’s business systemsfails for any reason, or is more expensive or slower than planned, then this may have an adverse effect onthe Group’s financial condition and future prospects.

1.9 The Group will be reliant on the New Facility

The funds to be borrowed by the Group under the New Facility will be substantially relied upon by theGroup to fund its planned development of the Business in the medium term. The New Facility may beterminated by the lenders in circumstances customary for such a facility. The New Facility may also beterminated by the lenders if the Branding Arrangements and Sourcing Agreement with Waitrose and John

15

Risk Factors

Lewis are terminated for any reason or if notice of termination is served. However, with the exception ofthe change of control termination right described in paragraph 1.4 above (which is customary for anagreement of that type), the Company is in control of whether any such termination rights will arise.

In the unlikely event that the New Facility is terminated, the Group may not be able to obtain equivalentfinancing on similar terms or at all. Termination of the New Facility may, therefore, adversely affect thefinancial condition and future prospects of the Group.

1.10 The Group may need to raise substantial additional funding from 2012 and a failure to do somay restrict its development

The Group’s growth and profitability from 2012 may depend on its ability to access funding for furtherdevelopment. The Group’s funding requirements and ability to raise funding will depend on numerousfactors, including its profitability, cash generation and levels of investment and its ability to maintain andexpand its penetration of the markets in which it operates. The Group’s ability to raise funding will also bedependent on the general availability of credit. The Group will continue to incur significant capital andoperating expenses in coming years in connection with its planned expansion. These expenses include:

• costs of additional expansion (including plant and machinery) to increase capacity at the existingCFC;

• land acquisition costs for new CFCs and Spokes and the related site preparation and external workscosts;

• all of the costs associated with developing new CFCs and Spokes, such as professional fees,building and related fit-out costs, IT costs and the costs of plant and machinery;

• increased vehicle costs as the delivery fleet is expanded; and

• increased staff costs as the staff headcount grows to meet the demands of the expanded Business.

The Group’s longer term capital needs will be dependent on the actual cost of its expansion programme,especially the second CFC and any additional CFCs the Group builds, the timing of the start of operationsat additional CFCs and their success. The Group may need to raise capital in addition to that currentlyanticipated to fund its expansion. Any such required additional funding may not be available to the Groupon favourable terms when required, or at all.

If the Group is unable to obtain sufficient capital when needed, the Group may be forced to alter itsbusiness strategy, or delay or abandon some or all of its planned expansion. Any of these events wouldhave an adverse effect on the Group’s development, growth, financial condition and prospects.Furthermore, any additional equity fundraising in the capital markets may be dilutive for Shareholders andadditional debt-based funding may bind the Group to restrictive covenants and curb its operating activitiesand ability to pay potential future dividends even when profitable.

1.11 The Group may suffer from exchange rate fluctuations

A significant amount of the machinery used at the CFC is sourced from suppliers located in countries thathave adopted the euro, and most of the competing suppliers that the Group has investigated are also incountries that have adopted the euro. The Directors expect to contract with these suppliers for the supplyof machinery to develop the second CFC and expand the capacity of the current CFC. These supplierswill generally be paid either in euro or at a spot sterling rate for euro, while the Group’s revenues are insterling. The total construction costs of the second CFC are currently estimated at approximately£210 million. This figure was costed at a sterling : euro exchange rate of £1 = e1.10. Any depreciation ofsterling in relation to the euro will increase the sterling equivalent of the price paid for such imports andmay have an impact on the Group’s financial condition and future prospects.

1.12 The Group relies on its Spoke sites

The Group relies on Spoke sites to deliver orders to customers that cannot be efficiently fulfilled directlyfrom the existing CFC in Hatfield. Spokes are able, to some extent, to serve geographies of neighbouringSpokes provided they have the vans available to do so; however, they are unlikely to be able to deliver tothese geographies as economically as they can deliver to their own. Therefore, any disruption to theefficient operation of a Spoke may affect the ability of the Business to deliver products to certaincustomers, or to do so economically, which may have an adverse effect on the Group’s financial conditionand future prospects.

16

Risk Factors

In addition, a Spoke may suffer prolonged power or equipment failures, refrigeration failures, or damagefrom fires, floods, other natural disasters or other unforeseen events which may not be covered byinsurance coverage. Damage resulting from any of these events may also take considerable time torepair.

A number of Spokes are leased by Ocado (as opposed to owned). Ocado could breach the terms of suchleases inadvertently through the day-to-day operation of the Business. Any breach of the terms of theleases on which they are held could result, if not waived or deemed waived by the relevant landlord, in theearly termination of the lease.

The prolonged shutdown of a Spoke or the early termination of a lease on which a Spoke is held couldhave an adverse effect on the Group’s financial condition and future prospects.

The Group is reliant on developing new Spokes in order to increase the breadth and depth of theBusiness’ penetration. Developing new Spokes is considerably less complicated than developing newCFCs. However, to the extent the Group is unable to develop new Spokes, for example, if it is unable tofind suitable sites in which to locate them, the Group’s expansion will be adversely affected.

1.13 There are limitations on the current CFC and Spokes

The current CFC and Spokes can together only provide Ocado’s service to approximately 66 per cent. ofUK households. Increasing the geographic reach of the Business would require the Group to establishmore Spokes and there is a limit to the number of additional Spokes that can be efficiently served from theexisting CFC.

The Directors believe that, with further capital investment, the existing CFC’s effective capacity could beincreased to approximately 180,000 orders per week from approximately 105,000 orders per week that itis currently capable of processing. The second CFC is required to increase the capacity at which theBusiness operates as well as to limit, in part, the effect of any catastrophic failure at the current CFC.

Failure to expand the capacity of the existing CFC or to develop new CFCs and Spokes may adverselyaffect the future prospects and financial condition of the Group, in particular if customer demand for theGroup’s services is greater than the Group’s capacity to process such demand.

Without further capital expenditure, either to increase the capacity of existing Spokes or to develop newones, the Business will not be able to grow beyond a certain size, which may adversely affect the Group’sfinancial position and future prospects.

1.14 The Business may not be able to deliver products to its customers

The Business is subject to the risks associated with its ability to provide delivery services. In particular, theBusiness is entirely reliant on deliveries by road: from suppliers to the CFC, from the CFC to the Spokesand from the Spokes or the CFC to customers. In addition the Business relies on the ability of employeesto be able to get to their place of work, either at the CFC or the Spokes. This leaves the Business exposedto traffic congestion, road works, congestion charging and inclement weather, particularly snow, all ofwhich could render deliveries difficult or even impossible. For example, the unusually snowy periods inDecember 2009 and January 2010 caused some deliveries during that period to be delayed, and some tobe cancelled.

The Business is also subject to regulations governing the number of hours that drivers can work onconsecutive days, and as a result, the Business may not have enough drivers available to work duringperiods of very high demand or adverse weather conditions.

Regulations also govern the weight limits of the loads each van can take. For instance, other than theelectric van currently in testing, all of the Ocado delivery vans are limited to a loaded weight of 3.5 tonnes.This affects the operational efficiency of the Group’s delivery infrastructure and any changes to theseregulations may have a negative effect on its financial prospects; further changes to the regulatory regimemay increase this adverse effect.

17

Risk Factors

1.15 The Group may be unable to develop and reinforce consumer trust in the Ocado brand, ormay attract negative publicity

Maintaining the reputation of, and value associated with, the Ocado brand is of central importance to thesuccess of the Group. Brand identity is a critical factor in retaining existing and attracting new customers.Promotion and enhancement of the Ocado brand is expected to depend on Ocado’s success in providinga high quality customer experience for buying groceries and other products. Brand loyalty will beespecially important if the Group’s branding arrangements with Waitrose end and/or competition fromWaitrose increases. Furthermore, the importance of brand loyalty may increase as new online groceryretailers join the market.

From time to time the Group has received complaints about advertising campaigns it has run, includingcomplaints from the Advertising Standards Authority (the ‘‘ASA’’). For example, it was unsuccessful indefending a complaint brought by the ASA regarding the advertising of its Tesco Price Match policy, and itis currently providing information to the ASA regarding statements made regarding the Group’senvironmental credentials. A successful complaint against one of the Group’s advertising campaignscould generate negative publicity or result in a cost to the Business were it required to change any of itsadvertising.

Unfavourable publicity concerning the Group or the industry sector could damage the Group’s brand andif future branding efforts are not successful, the Group’s sales and ability to attract customers will beunfavourably impacted, which may have an adverse effect on the Group’s financial condition and futureprospects.

1.16 The Group is subject to payments-related risks

The Group accepts payments using credit, debit and John Lewis’s account cards. If the Group offers newpayment options to customers, it may be subject to additional regulations and compliance requirementsand may be increasingly exposed to fraud (although fraud is not currently a significant concern). TheGroup pays interchange and other fees for these card payments, which may increase over time and raiseoperating costs and lower margins. The Group relies on third parties to provide payment processingservices, and it could disrupt the Group’s operations if these companies become unwilling or unable toprovide these services. The Group is also subject to payment card association operating rules,certification requirements, Payment Card Industry Data Security Standards (‘‘PCI-DSS’’) and rulesgoverning electronic funds transfers, which could change or be reinterpreted to make them difficult orimpossible to comply with. If the Group fails to comply with these rules or requirements, it may be subjectto fines and/or higher transactions fees and in extreme cases may lose its ability to accept credit, debit orJohn Lewis’s account card payments from customers, process electronic funds transfers or facilitateother types of online payments.

As part of its merchant obligations Ocado submitted a level 2 self assessment under the PCI-DSS in April2009. Ocado did not fully comply with this standard and it is in the process of implementing a remediationplan to ensure compliance before the end of 2010. The most significant part of that plan is to outsourcepayment processing to a significant third party service provider. No guarantee can be given that suchplans to outsource payment processing will be successful or will complete on schedule. Compliancedifficulties with the PCI-DSS are common to a range of business sectors: analyst research published inMarch 2010 indicated that 89 per cent. of businesses in retail, financial services and hospitality sectorswere not certified as compliant with the PCI-DSS. Non-compliance with these standards can lead toincreased customer payment processing fees or, should a security breach occur and customer data beaccessed or stolen, then Ocado could be liable for losses associated with the breach.

Any failure of the Group’s payment processing systems, whether caused by a systems failure orotherwise, will adversely affect the Group’s income in the short term and may result in it losing customerswhich may have an adverse effect on the Group’s financial condition and future prospects.

In addition, there can be no assurance that advances in computer capabilities, new discoveries in the fieldof cryptography, or other events or developments will not result in a compromise or breach of theprocesses used by the Group to protect customer transaction data. If any such compromise or breachwere to occur, it could have an adverse effect on the Group’s reputation, business, future prospects,financial condition and results of operations.

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Risk Factors

1.17 The Group may not have adequate protection for its intellectual property rights

The business and IT systems operating in the CFC and other key proprietary intellectual property are notprotected by patents or registered design rights which means that the Group cannot preclude or inhibitcompetitors from entering the same market if they develop the same or similar technology independently.The Group is therefore particularly reliant on copyright, trade secret protection and confidentiality andlicense agreements with its employees, customers, suppliers, consultants and others to protect itsintellectual property rights. Although the Group has taken steps consistent with industry practice toreduce these risks, such steps may be inadequate.

In addition, third parties may independently discover Ocado’s trade secrets and proprietary information orsystems, and, in such cases, Ocado may not be able to rely on any intellectual property rights to preventthe use of such trade secrets, information or systems by such parties. Costly and time-consuminglitigation could be necessary to determine and enforce the scope of Ocado’s proprietary rights and theoutcome of such litigation could not be guaranteed. Failure to prevent the use of such secrets, informationor systems by such third parties could adversely affect Ocado’s competitive business position, financialcondition and future prospects.

1.18 The Group’s use of open source software may restrict its ability to exploit its proprietarysoftware and IT systems and exposes it to certain risks

The Group’s key proprietary software and critical IT systems incorporate significant elements of ‘‘opensource’’ software, the use of which by Ocado is subject to the terms of applicable licences. Open sourcesoftware is typically licensed for use at no initial charge on terms which allow modification and distributionof the software by the licensee. However, licence terms may impose on the user compliancerequirements and obligations to disclose modifications Ocado has made to the software to third parties.Ocado’s ability to realise fully the commercial benefits of any such software may be restricted because:

• open source licences may be drafted in legally ambiguous language and may result in unanticipatedconsequences or obligations regarding Ocado’s software;

• due to the requirements to licence modified software, Ocado’s competitors or licensees may haveaccess to information which may help them to develop competitive products;

• open source software is available to the public for anyone to access and utilise, including Ocado’scompetitors; and

• it may be difficult for Ocado to identify accurately the developers of the open source code (who maybe licensors of the software) and whether the licensed software infringes third party intellectualproperty rights.

Furthermore, to the extent Ocado uses open source software it faces certain more general risks whichapply to any organisation making use of such software. For example, the scope and requirements of themost common open source software licence, the GNU General Public Licence (‘‘GPL’’) have not beeninterpreted in a court of law. Use of GPL software could subject certain portions of Ocado’s proprietarysoftware to GPL requirements, including an obligation on Ocado to disclose that software to third partiesand to permit them to use the software free of charge. Finally, open source licences typically presentonerous compliance risks, and failure to observe these may result in litigation or the loss of the right to usethe software which may have an adverse effect on the Group’s financial condition and future prospects.Ocado is not aware that it has breached any of these compliance requirements nor has any third partyclaimed that software owned by Ocado should be made available on an open source basis.

Any of the risks or restrictions relating to open source software mentioned above could have an adverseimpact on the Group’s financial condition and future prospects.

1.19 The Group’s IT systems depend on each other and a failure in one may disrupt the efficiencyand functioning of the Group’s operations

The Group’s business model relies on the complex integration of the Website (through which all customerorders (other than those placed via the Ocado on the Go applications) are placed), the highly automatedCFC and goods handling equipment and the order fulfilment and delivery operations. The Business istherefore reliant on numerous systems to manage the entire process from the receipt and processing of

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Risk Factors

goods at the CFC to the picking, packing and delivery of these goods to customers in one-hour deliveryslots. The different IT systems are dependent on each other to be able to complete their processes.Therefore, a failure of any of the core IT systems may result in failures of other IT systems as well, whichin turn could result in customer orders being unable to be captured on the Website or processed throughthe CFC.

The Group relies to a significant degree on the efficient and uninterrupted operation of its computer andcommunications systems and those of third parties, including the internet. Customer access to theWebsite and the speed with which a customer navigates and makes purchases on the Website affects thesales of the Group and the attractiveness of its services. Any failure of the internet generally or any failureof current or new computer and communication systems could impair the value of orders, the processingand storage of data and the day-to-day management of the Group’s business. While the Group does havenormal disaster recovery and business continuity contingency plans, no assurance can be given that, if aserious disaster affecting the Business, systems or operations occurred such plans would be sufficient toenable the Group to recommence trading without loss of business.

Furthermore, the Group has, from time to time, experienced operational ‘‘bugs’’ in its systems andtechnologies which have resulted in order errors such as missing items and delays in deliveries. TheGroup expects operational bugs to continue to occur from time to time due to a combination of one ormore of the following: electro-mechanical equipment failures, computer server or system failures,network outages, software performance problems or power failures.

The efficient operation of the Group’s business systems and IT is critical to attracting and retainingcustomers. If the Group is unable to meet customer demand or service expectations due to one or more ofthe aforementioned issues arising, a deterioration in the Group’s financial condition and future prospectsmay occur.

1.20 The Group may not keep pace with new technological developments

The Group’s success depends in part upon its ability to store, retrieve, process and manage substantialamounts of information. To achieve its strategic objectives and remain competitive, the Group mustcontinue to develop and enhance its information systems. This may require the acquisition of equipmentand software and the development, either internally or through independent consultants, of newproprietary software. No assurance can be given that the Group will be able to continue to design,develop, implement or utilise, in a cost-effective manner, information systems that provide the capabilitiesnecessary for the Group to compete effectively. Any failure to adapt to technological developments couldmean that the Group fails to capture what may become an increasingly important part of the onlinegrocery market and this may have an adverse effect on the Group’s financial condition and futureprospects.

1.21 The Group is dependent on relations with other third party suppliers

In addition to its relationship with Waitrose, the Group is dependent on relations with third party suppliers,landlords and distributors.

Ocado is also dependent upon the manufacturers, suppliers and maintenance providers of its machinery,including the machinery used within the CFC, its Spokes and its delivery vehicles. A reduction inavailability or level of service offered by these providers could restrict the ability of the Group to conduct itsbusiness and thereby adversely impact its financial condition and future prospects.

For example, Ocado has formed a long term relationship with Mercedes and Paneltex for themanufacture and customisation of its vans. Although Ocado would be able to source customised vanselsewhere if either Mercedes or Paneltex ceased to be able to supply it, the end of the relationship witheither could adversely affect the Group’s operations or financial condition while a new solution was beingfound, and there could be no guarantee that any new solution would be as satisfactory as the existingarrangements.

1.22 Growth may place significant demands on the Group’s management and infrastructure

The growth of the Business to date, and its future growth (in particular through the development of thesecond CFC), has placed and is expected to continue to place significant demands on the Group’s

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Risk Factors

management and its operational and financial infrastructure. As the Group’s operations grow further, itwill need to continue to improve and upgrade its systems and infrastructure. This expansion will requirethe Group to commit substantial financial, operational and technical resources in advance of an increasein the size of the Business, with no assurance that the volume of business will increase.

Continued growth could also strain the Group’s ability to maintain reliable service levels for its customers,develop and improve its operational, financial and management controls, enhance its reporting systemsand procedures and recruit, train and retain employees.

Managing growth will require significant expenditure and allocation of management resources, as well asan expansion in headcount. If the Group fails to achieve the necessary level of efficiency as it grows, therecould be an adverse effect on the Business and its operating results and financial condition.

Ocado’s business systems may be unable to accommodate a significant increase in the number ofcustomers or orders as the existing CFC or any new CFC begin to operate at or near capacity. If Ocado isunable to accommodate a substantial increase in customer orders, its growth strategy may be adverselyaffected.

1.23 Any expansion by the Group through joint ventures or other collaborative activities may notbe successful

The Group may expand through joint ventures and other collaborative activities with third parties.

Participation in joint projects contains an inherent risk in their management and it can be difficult toguarantee the achievement of joint goals. Similarly, cooperating in this way with third parties may requirethe Group to rely on its partners to help achieve its aims and maintain the Group’s reputation.

Joint ventures, including the difficulties involved in integrating companies, businesses or assets, maydivert financial and management resources from the Group’s core business, which could have anadverse effect on the Group’s financial condition and future prospects.

1.24 Any expansion by the Group through merger and acquisition activity may be unsuccessful

The Group may expand through mergers and acquisitions. In identifying potential merger and acquisitiontargets, the Group would make every effort to ensure appropriate due diligence is carried out, butacquisitions would necessarily leave the Group exposed, at least to some degree, to any operationalfailings of the target company and potentially to overpaying for any such target. Any payment for suchtarget company with Ordinary Shares could dilute the interests of Shareholders.

Merger and acquisition activity, including the difficulties involved in integrating companies, businesses orassets, may divert financial and management resources from the Group’s core business, which couldhave an adverse effect on the Group’s financial condition and future prospects. In addition, there cannever be a guarantee that mergers or acquisitions will successfully achieve their aims.

1.25 The Group is reliant on its staff

The Group is reliant on its staff for the management, operation, creation, maintenance, repair andupgrading of its business, operations and systems. The Group’s ability to recruit or adequately replace,retain and motivate suitably qualified and experienced staff is important for the Group’s ongoing success.An inability to recruit and retain sufficient personnel of the right calibre or the incurring of significant costsin order to do so may have an adverse effect on the Group’s financial condition and future prospects.

The Business has had good relations with its workforce to date and a works council has recently beenestablished with a remit to discuss, amongst other things, the terms and conditions of employment for theworkforce. This may further improve the relationship between the Group and its workforce but could alsolead to disputes between the workforce and management and even strike action. This may beexacerbated by the workforce, which is not currently unionised, becoming unionised. The Company iscurrently in negotiations with Usdaw over its request for recognition as the trade union for allnon-managerial Ocado employees at the CFC. The Group is aware of other trade unions havinginformally approached its employees at some of its Spoke sites, although has received no directcommunications from them.

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Risk Factors

Any significant disagreements between the Group and its employees could have an adverse effect on theGroup’s financial condition and future prospects.

1.26 The Group’s entry into new business areas may not be successful

The Group may choose to expand its operations by offering different services to existing and newcustomers, promoting new or complementary products or sales formats, expanding the breadth ofproducts offered or expanding its market presence through relationships with third parties (either in theUK or overseas).

The Group may not be able to do this in a cost-effective or timely manner. Furthermore, any new businessor website launched by the Group that is not favourably received by consumers could damage theGroup’s reputation or brand.

Such expansion of the Group’s operations would also be likely to require significant additional investment,together with operations and resources, which would strain the Group’s management, financial andoperational resources. The lack of market acceptance of such efforts or the Group’s inability to generatesatisfactory revenues from such expanded services or products to offset their costs could have anadverse effect on the Group’s financial condition and future prospects.

1.27 The Group may suffer if taxation rates or law change

Changes in taxation rates or law, or misinterpretation of the law or any failure to manage tax risksadequately could result in increased charges, financial loss, including penalties, and reputationaldamage, which may have an adverse effect on the Group’s financial condition and future prospects.

Various products sold by the Group, including, in particular, alcohol and tobacco, are subject to varyingtypes of taxes including VAT and duty. The level of these taxes and duties can be changed by thegovernment at very short notice. A material change in the level of taxes and duties levied on theseproducts could have a significant adverse effect on the sales, profits and financial condition of the Group.On 22 June 2010, the UK Government announced its intention to increase the standard rate of VAT from17.5 per cent. to 20 per cent. for any supply made on or after 4 January 2011.

The Company agrees with HMRC, on an annual basis, a blended rate of VAT payable by it on its deliverycharges. Any failure to continue to make such an agreement with HMRC, or a failure to agree a rate thatmeets the Group’s expectations, may have an adverse effect on the Group’s financial condition and futureprospects.

As described in more detail in section 7 of Part XIII (Additional Information) below, Ocado has granted itswholly owned subsidiary, Ocado Information Technology Limited (which is incorporated in the Republic ofIreland), the exclusive rights to use and sub-licence Ocado’s IT and IP to third parties for use outside theUK. This licence was granted at what the Directors considered (based on an independent valuation) to bea market rate and Ocado Information Technology Limited is yet to grant, and is not in discussions with anyperson concerning the grant of, any such sub-licences. However, to the extent that HMRC (or any otherrelevant tax authorities) do not consider that the licence was granted at a market rate, Ocado could besubject to a tax charge. If significant, such tax charge may have an adverse impact on Ocado’s financialcondition.

1.28 Ocado has considerable carried forward tax losses which could be lost

Ocado had approximately £270 million of unutilised carried forward tax losses as at the end of FYE 2009.Tax rules exist which prevent the use of such losses where there is a major change in the nature orconduct of a trade carried on by a company in the three years before or after a change in ownership of thecompany.

The recent reorganisation of the Group involved a change in ownership and the issue and sale ofOrdinary Shares pursuant to the Offers may constitute a change in ownership too. However, the Directorsdo not consider that there has been a major change in the nature or conduct of Ocado’s trade since, or inthe three years before, the recent reorganisation.

To date Ocado has not paid corporation tax as it has not had taxable profits. The carried forward taxlosses may have a material effect on the future tax charge of Ocado by reducing the amount of tax

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Risk Factors

payable. Therefore, if there were a major change in the nature or conduct of Ocado’s trade, there may bean adverse impact on the future tax charge of Ocado.

2. Risks relating to the industry

2.1 The Group may be affected by new entrants to the online grocery market

The Group may be adversely affected by the entrance of new competitors in the online grocery market. Inparticular, Marks & Spencer, Morrisons, Somerfield and The Co-op have not yet entered this market. Thegrowth of the Business in recent years has shown that, despite grocery retail being a mature market, thebarriers to entry into the UK online grocery market are high but not insurmountable. The Group’scompetitors may also merge or form strategic partnerships, which could cause significant additionalcompetition for the Group. If the market becomes more competitive between similar products andservices, especially in the Group’s target areas, then the Group’s effectiveness in winning new andretaining existing customers may be diminished, which may have an adverse effect on the Group’sfinancial condition and future prospects.

2.2 The Group may face unexpected increases in operating and other expenses

The Group’s operating and other expenses could increase without a corresponding increase in revenue.Factors which could increase operating and other expenses include unforeseen increases in:

• interest rates affecting the cost of Ocado’s debt and equipment leases;

• costs associated with the Company being listed;

• rental costs;

• business rates;

• payroll expenses (for example, due to increases in the minimum wage or National Insurance);

• the costs of energy;

• food costs (and the costs of other products stocked by Ocado) which cannot be fully passed on tocustomers;

• fuel costs which will increase the costs of deliveries;

• new vehicle costs relating to the delivery fleet;

• property taxes and other statutory charges;

• insurance premiums;

• increased tax charges; and

• the rate of general inflation,

together with changes in laws, regulations or government policies (including those relating to health andsafety, planning and environmental compliance) which increase the costs of compliance with such laws,regulations or policies.

To the extent that such increases in operating and other expenses exceed or are not in line with increasesin the Group’s revenues, the Group’s profitability will be reduced further and any such reduction couldhave an adverse effect on the Group’s financial condition and future prospects.

2.3 The Group is dependent on UK and global economic conditions

Adverse developments in the macro-economic situation, such as the on-going UK and global economicslowdown, could adversely impact the Group’s business and operating results. The global economy hasrecently been experiencing a period of significant turbulence and uncertainty. The Group’s performancedepends to a certain extent on a number of macro-economic factors outside the control of the Groupwhich impact on UK consumer spending, including political, financial and economic conditions. Factorswhich impact on disposable consumer income and terms of trade include, among other things, grossdomestic product growth, unemployment rates, consumer confidence, social and industrial unrest, the

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Risk Factors

availability and cost of credit, interest rates, taxation, regulatory changes, oil and utility prices and terroristattacks. Each of these factors could have an adverse effect on the Group’s financial condition and futureprospects.

The future and long-term impact that the UK and global financial slowdown will have on the Group isdifficult to predict. The recessionary conditions in the UK have led to a deterioration in consumerconfidence and commercial spending which could in the future reduce the level of demand for, and supplyof, the Group’s products and services. There can be no assurance as to levels of future economic growthand further significant deterioration in the UK’s economy could have an adverse impact on the futureresults of operations of the Group. Moreover, any future economic growth may be modest. The rate atwhich deterioration of the global and UK economies has occurred has proven very difficult to predict andthis will apply to any further deterioration or any recovery. The exact nature of the risks faced by the Groupis difficult to predict and guard against in view of the severity of the global financial crisis and difficulties inpredicting the rate at which further economic deterioration may occur and the duration of any suchdeterioration.

In addition, due to the current economic slowdown in both the UK and globally, there is an increased riskthat third parties may face financial difficulties, become insolvent and/or cease trading which may result indisruption to the provision of products or services by them to the Group. Further, the slowdown hasseverely impacted the availability of credit and the terms on which credit is available which may have thesame effect. If there is any interruption to the products or services provided by third parties, the Businessmay be adversely affected and the Group may be unable to find adequate replacement products orservices acceptable to the Group or its customers on a timely basis, or at all. This could result in a loss ofcustomers, which may have an adverse effect on the Group’s financial condition and future prospects.

2.4 The Group may face product recalls and product liability claims

The sale of food or other products for human consumption involves the risk of injury to the Group’scustomers or others. While the Group is subject to inspection and regulations and the Directors believethat the Group’s facilities and operations comply in all material respects with all applicable laws andregulations, the actual or perceived sale of contaminated food or other products by the Group could resultin product recalls or product liability claims, the settlement or outcome of which could have an adverseeffect on the Group’s financial condition and future prospects.

Even if an event causing a product recall proves to be unfounded or if a product liability claim against theGroup is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that theproducts supplied by the Group caused illness or injury, or any product recall, could adversely affect boththe Group’s reputation with existing and potential new customers and the Group’s corporate and brandimage. An additional risk is that the Group may incur liability for mislabelling products, even if themislabelled information was supplied by the product supplier. Any such event could, therefore, have anadverse effect on the Group’s financial condition and future prospects.

2.5 The Group is required to comply with health and safety law and regulations

A violation of health and safety laws or regulations relating to the Group’s operations or a failure to complywith the instructions of the relevant health and safety authorities could lead to, among other things,negative publicity and reputational damage, fines, costly compliance procedures and, in extremis, atemporary shutdown of all or part of the Business. Such violations could, therefore, have an adverseeffect on the Group’s financial condition and future prospects.

2.6 The Group may incur additional costs or delays in complying with new regulations applicableto the sale of food products

The handling of raw food items in the CFC, such as meat and fish, is subject to strict regulations. Thereare also regulations concerning the preparation and packaging of prepared meals and other food items.Modification of existing legislation or regulation, or the introduction of new legislative or regulatoryinitiatives may lead to increased compliance costs or delay the availability of a number of items and mayalso affect the market for such products, the Group’s operations and the conduct of the Business.

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Risk Factors

In addition, any inquiry or investigation from a food regulatory authority could have a negative impact onthe Group’s reputation. Any of these events may have an adverse effect on the Group’s financialcondition and future prospects.

2.7 The Group may face increased environmental costs

Environmental sustainability is likely to be of continuing importance to governments, regulators and otherinterested or influential bodies. There may be changes to existing legislation or regulation or theintroduction of new legislation, regulation or government policies or practice, which could adversely affectthe Group’s operations and conduct of its business, particularly in relation to the packaging and labellingof products, the use of energy, emission charges and the delivery of customers’ groceries in plastic bags.If there is a change to environmental legislation there may be a decrease in demand for the Group’sproducts and services, or an increase in the Group’s costs, which may adversely affect the Group’sfinancial condition and future prospects.

2.8 The Group may face increased costs in relation to regulated or restricted products and theregulation of its other activities

The sale of, and storage requirement for, certain products including tobacco, alcohol, medicines,aerosols and razor blades is subject to extensive regulation, including in some instances the requirementto obtain and comply with licences, restrictions on the quantity of items that can be sold at one time andrestrictions on the minimum age of customers. Further modification to existing legislation and/orregulation or the introduction of new legislative or regulatory initiatives could have a significant adverseeffect on markets and demand for such products, the Group’s operations and the conduct of its business.The cost and/or the effect of complying with such modified and/or new legislation or regulation may havean adverse effect on the Group’s financial condition and future prospects.

2.9 There may be a decrease in demand for the Group’s products in the event of health concernsand pandemics

In recent years there have been outbreaks of a number of diseases that have had the potential to spreadrapidly over very large geographic areas and/or other health-related concerns which have been, or havebeen perceived to be, associated with food products (for example, Bovine Spongiform Encephalopathy(‘‘BSE’’), ‘‘Foot and Mouth’’, ‘‘avian flu’’, ‘‘swine flu’’ and salmonella). Any outbreak of one or more of thesediseases and/or other widespread health-related food concerns could increase costs for the Group insourcing alternative suppliers and/or have an adverse impact on consumer preferences and spending. Awidespread outbreak of any such disease or concerns in the UK or elsewhere could have an adverseeffect on the Group’s suppliers and customers and on the economy in general, with a consequentialadverse effect on the demand for products sold by the Group, the Group’s financial condition and futureprospects.

2.10 The Group may face online security breaches including hacking and vandalism

The Group relies on encryption and authentication technology to provide the security necessary to effectthe secure transmission of information from its customers, such as credit or debit card numbers. TheGroup cannot guarantee absolute protection against unauthorised attempts to access its IT systems,including malicious third party applications that may interfere with or exploit security flaws in its productsand services. Viruses, worms and other malicious software programs could, among other things,jeopardise the security of information stored in a user’s computer or in the Group’s computer systems orattempt to change the internet experience of users by interfering with the Group’s ability to connect with itsusers. If any compromise in the Group’s security measures were to occur and the Group’s efforts tocombat this breach are unsuccessful, the Group’s reputation may be harmed leading to an adverse effecton the Group’s financial condition and future prospects.

The Group also processes personal data (some of which may be sensitive) as part of its business. Thereis a risk that such data could become public if there were a security breach in respect of such data and, ifone were to occur, the Group could face liability under data protection laws and lose the goodwill of itscustomers, which may have an adverse effect on the Group’s financial condition and future prospects.

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Risk Factors

2.11 The Group may be affected by an increase in governmental regulation of the internet and/oronline retail

The application or modification of existing laws or regulations, or adoption of new laws and regulationsrelating to the internet and online retail operations could adversely affect the manner in which the Groupcurrently conducts its business. The law of the internet remains largely unsettled, even in areas wherethere has been some legislative action. In addition, the growth and development of the market for onlineretail may lead to more stringent customer protection laws which may impose additional burdens on theGroup, all of which may have an adverse effect on the Group’s financial condition and future prospects.

3. Risks relating to the Offers and the Ordinary Shares

3.1 A competitor of Waitrose or John Lewis acquiring 50 per cent. or more of the Ordinary Sharescould result in the termination of the Sourcing Agreement and Branding Arrangements

The 2010 Agreement allows any of the parties to it to terminate the Sourcing Agreement and BrandingArrangements by giving three months’ notice if certain competitors of Waitrose or John Lewis acquire50 per cent. or more of the issued share capital of the Company, in which case the Company will beobliged to pay Waitrose £40 million. This may have an adverse effect on the value of the Ordinary Shares.

3.2 The Directors and other Major Shareholders will retain a significant interest in the Company.Their interests may conflict with those of other Shareholders

Following Admission, the Directors and Major Shareholders and their related interests will collectivelyown approximately half of the share capital of the Company (assuming the Offer Price is set at the mid-point of the Price Range). Accordingly, these Shareholders may (were they to act in concert with eachother) be in a position to exert significant influence over the outcome of matters relating to the Company,including appointments to the Board and the approval of significant transactions, including change ofcontrol transactions. The interests of these Shareholders may be different from the interests of theCompany or the other Shareholders. In particular, this control may have the effect of making certaintransactions more difficult without the support of the Directors and Major Shareholders and may have theeffect of delaying or preventing an acquisition or other change in control of the Company.

It is noted, however, that no one Major Shareholder currently acts in concert with any other MajorShareholder. Full details of the Directors’ and Major Shareholders’ shareholdings are set out in sections 8and 9.3 of Part XIII (Additional Information).

3.3 When the lock-up arrangements to which the Directors and certain Shareholders are subject,and the undertakings to which the Company is subject, expire, more Ordinary Shares maybecome available on the market

Subject to certain limited exceptions, the Directors and certain Shareholders will be prevented fromselling Ordinary Shares held by them for a period of 365 and 180 days, respectively, following Admission.Similarly, the Company will be restricted, subject to certain limited exceptions, for six months fromAdmission from issuing Ordinary Shares. On the expiry of these periods, the Company may issueOrdinary Shares and the Directors and relevant Shareholders will be free (subject to applicable law) tosell the Ordinary Shares held by them. The potentially increased supply of Ordinary Shares on the marketmay have an adverse effect on the market price of the Ordinary Shares.

Similarly, Directors or significant Shareholders selling additional Ordinary Shares, or the Companyissuing additional Ordinary Shares, may affect the confidence of the market in the Ordinary Shares andcause the market price of the Ordinary Shares to fall.

3.4 The number of Ordinary Shares to be made available by the Selling Shareholders pursuant tothe Offers is indicative only

The number of Ordinary Shares to be made available by the Selling Shareholders pursuant to the Offersis indicative only. Although that number of Ordinary Shares cannot be increased it can decrease,including, in theory, to nil. The selling indications of Major Selling Shareholders described in thisdocument are non-binding. That means that although a Major Selling Shareholder may not sell any moreExisting Shares pursuant to the Offers than he or it has indicated he or it may sell, he or it may decide, at

26

Risk Factors

his or its absolute discretion, to sell fewer or none at all. The Company has established a facility throughwhich Minor Selling Shareholders may sell some or all of their Existing Shares pursuant to the Offers. Asat the date of this document, the Company does not know with certainty whether any or all such personswill sell any such Existing Shares pursuant to the Offers, however, the Company has received non-binding indications from Minor Selling Shareholders holding 28,861,700 Existing Shares, in aggregate,that they do not intend to sell any Existing Shares pursuant to the Offers. The Company has alsoestablished a facility through which Selling Optionholders may sell, pursuant to the Offers, some or all ofthe Ordinary Shares which will be issued to them if they exercise their exercisable options prior toAdmission. As at the date of this document, the Company does not know whether any such person willexercise any or all of their exercisable options, or, if he does so, whether such person will sell, pursuant tothe Offers, any or all of the New Ordinary Shares issued as a result.

If the Major Selling Shareholders sell fewer Existing Shares than they have indicated they may do and, toa lesser extent, the Minor Selling Shareholders and the Selling Optionholders sell fewer Existing Sharesor New Ordinary Shares (respectively) than set out in the Offer Statistics section (or, indeed, none at all),the liquidity of the Ordinary Shares after Admission may be reduced and there may be increased sellingpressure on the Ordinary Shares, particularly after the expiry of the lock-up arrangements described insection 10 of Part IX (Information about the Offers). This may have an adverse affect on the market valueof the Ordinary Shares.

3.5 There may be no active trading market for the Ordinary Shares

There has been no public market for the Ordinary Shares to date. After the Offers, there can be noassurance that an active trading market for the Ordinary Shares will develop or, if developed, that it will bemaintained. Although investments in shares traded on the main market of the London Stock Exchangeare perceived to involve a lesser degree of risk and to be more liquid than investments in shares traded oncertain other exchanges, investors may have difficulty selling their Ordinary Shares.

3.6 The price of the Ordinary Shares may fluctuate

Following Admission, the trading price of the Ordinary Shares may be subject to wide fluctuations inresponse to many factors, including those referred to in this section, as well as stock market fluctuationsand general economic conditions that may adversely affect the market price of the Ordinary Shares.Publicly traded securities from time to time experience significant price and volume fluctuations that maybe unrelated to the operating performance of the companies that have issued them. In addition, themarket price of the Ordinary Shares may prove to be highly volatile. The market price of the OrdinaryShares may fluctuate significantly in response to a number of factors, some of which are beyond theCompany’s control, including:

• variations in operating results in the Group’s reporting periods;

• any shortfall in revenue or net profit or any increase in losses from levels expected by marketcommentators;

• increases in capital expenditure compared to expectations;

• failure to make efficiency improvements;

• changes in financial estimates by securities analysts;

• changes in market valuations of similar companies;

• announcements by the Group of significant contract gains or losses, acquisitions, strategic alliances,joint ventures, new initiatives, new products or new product ranges;

• regulatory matters;

• additions or departures of key personnel; and

• future issues or sales of Ordinary Shares.

Any or all of these events could result in material fluctuations in the price of Ordinary Shares which couldlead to investors getting back less than they invested or a total loss of their investment.

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Risk Factors

The Offer Price might not be indicative of prices that will prevail in the trading market and investors maynot be able to resell the Ordinary Shares at or above the price paid.

A public perception that the Company is an internet, e-commerce or technology company may result inthe price of the Ordinary Shares moving in line with other shares in companies of this nature. Traditionally,the share prices of internet, e-commerce and technology companies have tended to be more volatile thanshare prices of companies operating in other industries.

3.7 The Company does not expect that dividends will be declared or paid in the foreseeablefuture

Neither Ocado nor the Company has ever declared or paid a dividend. The Business may continue tomake operating losses while it continues to make capital investments. In addition, the Company currentlyintends to retain any future earnings of the Business to invest in the Business and fund its future growth.The Directors do not, therefore, anticipate declaring or paying a dividend in the foreseeable future.

3.8 Future issues of Ordinary Shares may dilute the holdings of Shareholders

Other than the proposed offering of Ordinary Shares, the Company has no current plans for an offering ofOrdinary Shares and, as described above, will be unable to do so for a fixed period after Admission(subject to certain limited exceptions). However, it is possible that the Company may decide to offeradditional Ordinary Shares in the future, either to raise capital or for other purposes. Subject to anyapplicable statutory pre-emption rights, an additional offering may have a dilutive effect on the holdings ofShareholders and could have an adverse effect on the market price of Ordinary Shares as a whole.

3.9 An investment in Ordinary Shares by an investor whose principal currency is not sterling maybe affected by exchange rate fluctuations

The Ordinary Shares are, and any dividends to be paid in respect of them will be, denominated in sterling.An investment in Ordinary Shares by an investor whose principal currency is not sterling exposes theinvestor to foreign currency exchange rate risk. Any depreciation of sterling in relation to such foreigncurrency will reduce the value of the investment in the Ordinary Shares or any dividends in relation tosuch foreign currency.

3.10 There may be an unavailability of pre-emption rights for US and other non-EU holders ofOrdinary Shares

In the case of certain increases in the Company’s share capital, existing holders of the Ordinary Sharesare generally entitled to pre-emption rights to subscribe for such shares, unless Shareholders waive suchrights by a resolution at a Shareholders’ meeting, or in certain other circumstances as stated in the FinalArticles. US and other non-EU holders of the Ordinary Shares are customarily excluded from exercisingany such pre-emption rights they may have, unless exemptions from any overseas securities lawrequirements are available. The Company cannot assure prospective investors that any exemption fromsuch overseas securities law requirements would be available to enable US or other non-EU holders toexercise such pre-emption rights or, if available, that the Company will utilise any such exemption.

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STABILISATION

In connection with the Offers, the Stabilising Manager (or any of its agents), may (but will be under no obligation to), tothe extent permitted by law and for stabilisation purposes, effect transactions (on any securities market,over-the-counter market, stock exchange or otherwise) with a view to supporting the market price of the OrdinaryShares at a level higher than that which might otherwise prevail in the open market, including over-allotting OrdinaryShares up to a maximum of approximately 18.1 million Ordinary Shares or 10 per cent. of the total number of OrdinaryShares comprised in the Offers (assuming no exercise of the Over-allotment Option). The Stabilising Manager willenter into the Stock Lending Agreement in order, amongst other things, to satisfy any such over-allotment of OrdinaryShares.

The Stabilising Manager has entered into the Over-allotment Option with UBS Holdings Cayman Limited pursuant towhich it may purchase or nominate purchasers for Ordinary Shares (the ‘‘Over-allotment Shares’’) at the Offer Pricerepresenting up to a maximum of approximately 18.1 million Ordinary Shares or 10 per cent. of the number ofOrdinary Shares comprised in the Offers (assuming there is no exercise of the Over-allotment Option), for thepurposes of redelivering equivalent securities under the Stock Lending Agreement, to the extent that it is unable to doso using Ordinary Shares acquired by it for the purposes of stabilisation. The Over-allotment Option may beexercised in whole or in part upon notice by the Stabilising Manager, at any time during the period beginning on thecommencement of conditional dealings and ending 30 days thereafter. The Over-allotment Shares made availablepursuant to the Over-allotment Option will be sold at the Offer Price on the same terms and conditions as, and willrank pari passu with, the Ordinary Shares, including for all dividends and other distributions declared, made or paidon the Ordinary Shares after Admission and will form a single class for all purposes with the Ordinary Shares.

In no event will measures be taken to stabilise the market price of the Ordinary Shares above the Offer Price. Save asrequired by law or regulation, neither the Stabilising Manager nor any of its agents intends to disclose the extent ofany over-allotments and/or stabilisation transactions under the Offers.

THE JOINT GLOBAL CO-ORDINATORS, CO-BOOK-RUNNERS AND CO-LEAD MANAGERS

Each of Goldman Sachs International, J.P. Morgan Cazenove, Barclays Capital, HSBC Bank plc, JefferiesInternational Limited, Lloyds TSB Corporate Markets and Numis Securities Limited is authorised and regulated in theUnited Kingdom by the FSA, and together with UBS Limited (together the ‘‘Banks’’), are acting exclusively for theCompany and no one else in connection with the Offers and none of them will regard any other person (whether or nota recipient of this document) as their respective clients in relation to the Offers and will not be responsible to anyoneother than the Company for providing the protections afforded to their respective clients nor for giving advice inrelation to the Offers or any transaction, arrangement or other matter referred to in this document.

The Banks and any of their respective affiliates may have engaged in transactions with, and provided variousinvestment banking, financial advisory and other services for, the Company and certain of the Selling Shareholders,for which they would have received customary fees. The Banks and any of their respective affiliates may provide suchservices to the Company and the Selling Shareholders and any of their respective affiliates in the future.

In connection with the Offers, each of the Banks and any of their respective affiliates acting as an investor for its ortheir own account, may retain, purchase, sell, offer to sell or otherwise deal for its or their own account(s) in theOrdinary Shares, any other securities of the Company or other related investments in connection with the Offers orotherwise. Accordingly, references in this document to the Ordinary Shares being offered or otherwise dealt withshould be read as including any offer to, or dealing by the Banks and any of their respective affiliates acting as aninvestor for its or their own account(s). The Banks do not intend to disclose the extent of any such investment ortransaction otherwise than in accordance with any legal or regulatory obligation to do so. In addition, in connectionwith the Institutional Offer, certain of the Banks may enter into financing arrangements with investors, such as shareswap arrangements or lending arrangements where Ordinary Shares are used as collateral, that could result in suchBanks acquiring shareholdings in the Company.

Certain of the Banks have the following interests in the Company:

• Goldman Sachs International holds 870,300 Ordinary Shares and 3,333,300 Preference Shares which it will notsell pursuant to the Offers;

• Michael Sherwood, who is Co-Chief Executive of Goldman Sachs International, holds 166,700 PreferenceShares which he will not sell pursuant to the Offers;

• UBS Holdings Cayman Limited, an affiliate of UBS Limited holds 13,600 Ordinary Shares and 36,249,900Preference Shares. UBS Holdings Cayman Limited has provided a non-binding indication that it may sell up toits entire holding pursuant to the Offers and the Over-allotment Option (it being the provider of theOver-allotment Option);

• UBS AG, an affiliate of UBS Limited, holds 2,980,100 Preference Shares. Subject to the Offer Price being setnot lower than the bottom of the Price Range, UBS AG has committed to sell its entire holding pursuant to theOffers;

• Ranelagh Nominees Limited, an affiliate of Lloyds TSB Bank plc, holds warrants over 5,611,200 OrdinaryShares which, subject to the Offer Price being no less than £1.90, it has irrevocably committed to exercise priorto Admission provided that it may sell the resulting 5,611,200 Ordinary Shares that it or its nominee will beissued pursuant to the Offers; and

• Lloyds TSB Bank plc holds 17,800 Preference Shares which it may sell pursuant to the Offers.

All Preference Shares in existence will convert into Ordinary Shares immediately before Admission on a one for onebasis.

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RELIANCE ON THIS DOCUMENT

Prospective investors should rely only on the information contained in this document. No person has been authorisedto give any information or make any representations other than those contained in this document and, if given ormade, such information or representations must not be relied on as having been so authorised by the Company, theDirectors, Goldman Sachs International, J. P. Morgan Cazenove or UBS Limited. In particular, the content of theWebsite, the Offer Website and the Corporate Website do not form part of this document and prospective investorsshould not rely on it.

Without prejudice to any legal or regulatory obligation on the Company to publish a supplementary prospectuspursuant to section 87G of FSMA and Rule 3.4 of the Prospectus Rules, neither the delivery of this document nor anysale made pursuant to it shall, under any circumstances, create any implication that there has been no change in theaffairs of the Company or the Group taken as a whole since the date of this document or that the informationcontained herein is correct as of any time after the date of this document.

The contents of this document are not to be construed as legal, business or tax advice. Each prospective investorshould consult their own legal adviser, financial adviser or tax adviser for legal, financial or tax advice.

Information in this document will be updated in accordance with the Listing Rules, the Prospectus Rules and theDisclosure and Transparency Rules as appropriate.

ENFORCEMENT OF JUDGMENTS

The Company is a public company incorporated under the laws of England and Wales. The vast majority of the assetsof the Company are located in England. None of the Directors or officers are citizens or residents of the United States.As a result, it may not be possible for investors to effect service of process within the United States upon theCompany or such persons or to enforce outside the United States judgments obtained against the Company or suchpersons in US courts, including, without limitation, judgments based upon the civil liability provisions of US federalsecurities laws or the laws of any state or territory within the United States. In addition, awards of punitive damages inactions brought in the United States or elsewhere may be unenforceable in the United Kingdom. Investors may alsohave difficulties enforcing, in original actions brought in courts in jurisdictions outside the United States, liabilitiesunder US federal securities laws.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document, including those in the Risk Factors section, Part I (Information aboutthe Company) (and in particular the references in section 4.2 of that Part to the Directors’ long-term targets for CFCefficiency and the drops per van per week and the references in section 7.5 to the expected relative EBITDA marginof the second CFC), Part IV (Operating and Financial Review) (and in particular the references in section 1 of that partto the Directors’ long-term targets for CFC efficiency and the drops per van per week) and Part IX (Information aboutthe Offers), constitute ‘‘forward-looking statements’’. In some cases, these forward-looking statements can beidentified by the use of forward-looking terminology, including the terms ‘‘believes’’, ‘‘estimates’’, ‘‘forecasts’’,‘‘plans’’, ‘‘prepares’’, ‘‘anticipates’’, ‘‘expects’’, ‘‘intends’’, ‘‘may’’, ‘‘will’’ or ‘‘should’’ or, in each case, their negative orother variations or comparable terminology. Such forward-looking statements involve known and unknown risks,uncertainties and other factors, which may cause the actual results, performance or achievements of the Company orindustry results, to be materially different from any future results, performance or achievements expressed or impliedby such forward-looking statements.

In particular, the following are forward-looking in nature: (i) certain statements in the Risk Factors section with regardto risks relating to regulations that may be or become applicable to the Group, regulatory or legal actions which mightinvolve the Group, the Group’s competitive position and its management and information systems and targets;(ii) certain statements in Part I (Information about the Company) with regard to strategy and management objectives,trends in market shares, prices, market standing and product volumes and the effects of changes or prospectivechanges in regulation; and (iii) certain statements in Part IV (Operating and Financial Review) with regard to trends intargets, results, prices, volumes, operations, margins, overall market trends, risk management and exchange ratesand with regard to the effects of changes or prospective changes in regulation.

It is strongly recommended that investors read the Risk Factors section for a more complete discussion of the factorsthat could affect the Group’s future performance and the industry in which it operates. In light of these risks,uncertainties and assumptions, the forward-looking events described in this document may not occur. The forward-looking statements referred to above speak only as at the date of this document. The Company will not undertake anyobligation to release publicly any revisions or updates to these forward-looking statements to reflect events,circumstances or unanticipated events occurring after the date of this document, except as required by law or by anyappropriate regulatory authority.

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Unless otherwise indicated the financial information included into this document is based on International FinancialReporting Standards as adopted by the European Union and International Financial Reporting InterpretationsCommittee interpretations and those parts of the Companies Act applicable to companies reporting underInternational Financial Reporting Standards (‘‘IFRS-EU’’). IFRS-EU differs in certain aspects from internationalfinancial reporting standards, or IFRS, as published by the International Accounting Standards Board.

The preparation of financial information in conformity with IFRS-EU requires the use of certain critical accountingestimates. Please refer to section 10, ‘‘Critical accounting policies and estimates’’ of Part IV (Operating and FinancialReview). It also requires management to exercise its judgment in the process of applying the Group’s accountingpolicies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimatesare significant to the consolidated financial information are disclosed in the notes to the financial information set out inPart V (Historical Financial Information relating to the Group).

Ocado prepared its financial statements in accordance with United Kingdom Generally Accepted AccountingPrinciples (‘‘UK GAAP’’) through FYE 2008. The financial statements for FYE 2009 are Ocado’s first financialstatements prepared under IFRS-EU. Comparative information for FYE 2008 and FYE 2007, included in the financialstatements for FYE 2009, and from which certain information set-out in this document has been extracted, was alsoprepared under IFRS-EU. Ocado’s unaudited financial information for P1-3 2009 and P1-6 2010 and its auditedfinancial information for P1-3 2010 have also been prepared in accordance with IFRS-EU applied consistently withthe FYE 2009 full-year financial statements. IFRS-EU differs in significant respects from UK GAAP.

The financial information presented in this document was not prepared in accordance with US Generally AcceptedAccounting Principles (‘‘US GAAP’’) or audited in accordance with US Generally Accepted Auditing Standards (‘‘USGAAS’’) or the standards of the Public Company Accounting Oversight Board (‘‘PCAOB Standards’’). No opinion orany other assurance with regard to any financial information was expressed under US GAAP, US GAAS or PCAOBStandards and the financial information is not intended to comply with SEC reporting requirements. Compliance withsuch requirements would require the modification, reformulation or exclusion of certain financial measures. Inaddition, changes would be required in the presentation of certain other information. In particular, no reconciliation toUS GAAP is provided.

Certain non-IFRS-EU measures such as gross sales and EBITDA have been reported as the Directors believe thatthese provide important alternative measures with which to assess the Group’s performance. You should notconsider gross sales or EBITDA as alternatives for Revenue and Operating Profit/(Loss) which are the IFRS-EUmeasures. Additionally, the Company’s calculation of gross sales and EBITDA may be different from the calculationused by other companies and therefore comparability may be limited.

The Group’s activities are not segmented and the Group does not report any geographic segments because all of theGroup’s operations are within the United Kingdom which is one economic environment in the context of the Group’sactivities.

ROUNDING OF FIGURES

Certain figures contained in this document, including financial information, have been subject to roundingadjustments. Accordingly, in certain instances (i) the sum or percentage change of such numbers may not conformexactly with the total figure given; and (ii) the sum of the numbers in a column or a row in certain tables may notconform exactly with the total figure given for that column or row.

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DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS

Directors Michael Grade, Non-Executive ChairmanDavid Grigson, Non-Executive Director and

Senior Independent DirectorTim Steiner, Chief Executive OfficerNeill Abrams, Director of Legal and Business AffairsAndrew Bracey, Chief Financial OfficerJason Gissing, Director of People, Culture and CommunicationsRuth Anderson, Non-Executive DirectorRobert Gorrie, Non-Executive DirectorJorn Rausing, Non-Executive DirectorDavid Young, Non-Executive DirectorPatrick Lewis, Non-Executive DirectorMichael Robarts, Non-Executive Director

Company secretary Neill Abrams

Registered office Titan Court, 3 Bishops Square, Hatfield Business Park, Hatfield,Hertfordshire AL10 9NETelephone No: +44 (0)1707 228 000

Joint Global Co-ordinator, Goldman Sachs International, Peterborough Court,Joint Sponsor and Joint 133 Fleet Street, London EC4A 2BBBookrunner

Joint Global Co-ordinator, J.P. Morgan Cazenove, 10 Aldermanbury, London EC2V 7RFJoint Sponsor and JointBookrunner

Joint Global Co-ordinator, UBS Limited, 1 Finsbury Avenue, London EC2M 2PPJoint Sponsor and JointBookrunner

Co-Bookrunner Barclays Capital, the investment banking division of BarclaysBank PLC, 5 The North Colonnade, London E14 4BB

Co-Bookrunner HSBC Bank plc, 8 Canada Square, London E14 5HQ

Co-Lead Manager Jefferies International Limited, Vintners Place, 68 Upper ThamesStreet, London EC4V 3BJ

Co-Lead Manager Lloyds TSB Corporate Markets, 25 Gresham Street,London EC2V 7HN

Co-Lead Manager Numis Securities Limited, 10 Paternoster Square,London EC4M 7LT

Stabilising Manager Goldman Sachs International, Peterborough Court,133 Fleet Street, London EC4A 2BB

Legal adviser to the Company Slaughter and May, One Bunhill Row, London EC1Y 8YYas to English law

Legal adviser to the Company Davis Polk & Wardwell LLP, 99 Gresham Street,as to US law London EC2V 7NG

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Directors, Company Secretary, Registered Office and Advisers

Legal adviser to the Joint Allen & Overy LLP, One Bishops Square, London E1 6ADSponsors, Joint GlobalCo-ordinators, JointBookrunners, Co-Bookrunnersand Co-Lead Managers as toEnglish and US law

Auditors PricewaterhouseCoopers LLP, 10 Bricket Road,St. Albans AL1 3JX

Reporting Accountants PricewaterhouseCoopers LLP, 1 Embankment Place,London WC2N 6RH

Receiving Agent Capita Registrars Limited, Corporate Actions, The Registry,34 Beckenham Road, Beckenham, Kent BR3 4TU

Registrar Capita Registrars Limited, The Registry, 34 Beckenham Road,Beckenham, Kent BR3 4TU

Public relations advisers to Brunswick Group LLP, 16 Lincoln’s Inn Fields,the Company London WC2A 3ED

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EXPECTED TIMETABLE FOR THE OFFERS

2010

Commencement of the application period for the Customer andEmployee Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 July

Latest date and time for Minor Selling Shareholders and SellingOptionholders to confirm the number of Ordinary Shares they wish to sellpursuant to the Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . noon on 13 July

Latest date and time for online receipt of completed Customer andEmployee Offer Application Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.59 p.m. on 18 July

Latest date for receipt of indications of interest in the Institutional Offer . . . . 20 July

Announcement of the Offer Price, publication of Pricing Statement(1) andnotification of allocation of Ordinary Shares under the Customer andEmployee Offer and the Institutional Offer . . . . . . . . . . . . . . . . . . . . . . . . 21 July

Commencement of conditional dealings on the London Stock Exchange . . . 21 July

Admission and commencement of unconditional dealings on the LondonStock Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 July

Ordinary Shares credited to CREST accounts and the Ocado ShareAccount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 July

Ocado Share Account Statements made available online(2) . . . . . . . . . . . . 4 August

(1) The Pricing Statement will not automatically be sent to persons who receive this document but it will be available on theOffer Website.

(2) Shareholders with Ordinary Shares in the Ocado Share Account will be able to buy and sell Ordinary Shares from Admission.

It should be noted that, if Admission does not occur, all conditional dealings will be of no effectand any such dealings will be at the sole risk of the parties concerned.

All times are London times. Each of the times and dates in this table are indicative only and subject tochange without further notice.

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OFFER STATISTICS

Price Range(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 pence to 275 pence

Total number of Ordinary Shares which may be comprised in theOffers(2), (3), (4), (5), (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . up to 257,666,236

Number of Existing Shares comprised in the Offers which may be sold byMajor Selling Shareholders(2), (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . up to 82,377,000

Number of Existing Shares comprised in the Offers which may be sold byMinor Selling Shareholders(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . up to 62,705,242

Number of potential New Ordinary Shares comprised in the Offers whichmay be sold by Selling Optionholders(5) . . . . . . . . . . . . . . . . . . . . . . . . . . up to 10,134,074

Number of New Ordinary Shares comprised in the Offers to be issued andsold by the Company(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . up to 102,449,920

Ordinary Shares comprised in the Offers as a percentage of the OrdinaryShares (excluding the 32,476,700 Ordinary Shares held by theEBT Trustee) in issue on Admission(2), (3), (4), (5), (6) . . . . . . . . . . . . . . . . . . . 50%

Number of Ordinary Shares subject to the Over-allotment Arrangements(2) . 18,131,750

Number of Ordinary Shares in issue on Admission (assuming the OfferPrice is set at the mid-point of the Price Range) (excluding the 32,476,700Ordinary Shares held by the EBT Trustee)(5), (7), (8) . . . . . . . . . . . . . . . . . . 497,476,810

Market capitalisation at the mid-point of the Price Range excluding the32,476,700 Ordinary Shares held by the EBT Trustee(1), (5), (7) (9) . . . . . . . . . £1,182m

Proceeds receivable by the Company after expenses(10), (11) . . . . . . . . . . . . £200m

(1) It is currently expected that the Offer Price will be within the Price Range; however, this range is indicative only and maychange during the course of the Offers. If the Price Range does change, the Company would not envisage making anannouncement until determination of the Offer Price, unless required to do so by law or regulation. The Company expects toannounce the Offer Price and publish the Pricing Statement on or about 21 July 2010.

(2) Based on the maximum number of Existing Shares each Major Selling Shareholder has indicated he or it may sell pursuant tothe Offers. The selling indications of Major Selling Shareholders are non-binding. That means that although a Major SellingShareholder may not sell any more Existing Shares pursuant to the Offers than he or it has indicated he or it may sell, he or itmay decide, at his or its absolute discretion, to sell fewer or none at all. This number excludes approximately 18.1 millionExisting Shares that UBS Holdings Cayman Limited has committed to provide pursuant to the Over-allotment Option, butwhich may be sold pursuant to the Offers if and to the extent that the number of Ordinary Shares subject to the Over-allotmentArrangements is reduced from the maximum number set out in the table above.

(3) Assumes that no Over-allotment Shares are sold pursuant to the Over-allotment Arrangements.

(4) Based on the total number of Ordinary Shares held by Minor Selling Shareholders. The Company has established a facilitythrough which Minor Selling Shareholders may sell some or all of their Existing Shares pursuant to the Offers. As at the date ofthis document, the Company does not know with certainty whether any such person will sell any or all such Ordinary Sharespursuant to the Offers, however, the Company has received non-binding indications from Minor Selling Shareholders holding28,861,700 Existing Shares, in aggregate, that they do not intend to sell any Existing Shares pursuant to the Offers.

(5) Based on the total number of shares that may be issued to Selling Optionholders prior to Admission pursuant to the exercise ofoptions or warrants. The Company has established a facility through which Selling Optionholders may sell, pursuant to theOffers, some or all of the New Ordinary Shares which will be issued to them if they exercise their exercisable options orwarrants prior to Admission. Subject to the Offer Price being not less than £1.90, Ranelagh Nominees Limited has irrevocablycommitted to exercise certain warrants held by it provided that it may sell the resulting 5,611,200 New Ordinary Shares thatare issued to it or its nominee pursuant to the Offers. As at the date of this document, the Company does not know whether anyother Selling Optionholder will exercise any or all of his or its exercisable options, or, if he or it does so, whether such personwill sell, pursuant to the Offers, any or all of the Ordinary Shares issued as a result.

(6) This assumes that the Offer Price is set at the bottom of the Price Range. If the Offer Price is set at the mid-point in the PriceRange, the Company will issue 86,273,616 New Ordinary Shares and if the Offer Price is set at the top of the Price Range, theCompany will issue 74,509,032 New Ordinary Shares.

(7) This assumes that the Offer Price is set at the mid-point in the Price Range which would mean that the Company would issue86,273,616 New Ordinary Shares. If the Offer Price is not set at the mid-point in the Price Range this figure will change.

(8) All Preference Shares in existence will convert into Ordinary Shares immediately before Admission on a one for one basis.

(9) The market capitalisation of the Company at any given time will depend on the market price of the Ordinary Shares at thattime. There can be no assurance that the market price of an Ordinary Share will be equal to or exceed the Offer Price.

(10) The estimated net proceeds receivable by the Company are stated after the deduction of underwriting commissions and otherestimated fees and expenses incurred in connection with the Offers of approximately £15 million (excluding any amounts inrespect of VAT) and includes cash of £10 million received pursuant to the exercise of warrants over 5,611,200 OrdinaryShares at a subscription price of £1.80 per share by Ranelagh Nominees Limited prior to Admission.

(11) If the Company is not able to agree pricing or it is unable to raise net proceeds of £200 million (including amounts received bythe exercise of options and warrants by holders of options and warrants), Admission will not occur.

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PART I

INFORMATION ABOUT THE COMPANY

Ocado is the operating company of the Group. The Company has, since 9 February 2010, been theholding company of the Group and Ocado is a wholly owned indirect subsidiary of it. All descriptions inthis document of the Business and the financial performance of the Group will be by reference to thehistoric performance of Ocado.

1. Introduction

Ocado is the only dedicated online supermarket in the UK and the largest dedicated online supermarketin the world by turnover. Ocado:

• has, since inception, consistently sought to provide a market leading customer offering. Ocado hasover 240,000 active customers and can process over 100,000 orders per week. In FYE 2009,99.4 per cent. of items were delivered exactly as ordered and 95 per cent. of products were availablefor next day delivery. In P1-6 2010, 95 per cent. of deliveries were on time or early. This has beenwidely recognised with Ocado having been awarded numerous awards for the quality of the servicesit provides;

• offers delivery of grocery products to customers centrally picked from a single, state-of-the-art,highly-automated warehouse (the customer fulfilment centre or ‘‘CFC’’);

• sells more than 20,000 different products, the majority of which are sourced through Waitrose underthe Sourcing Agreement. Approximately 4,300 of the products sold by Ocado are Waitrose own-labelproducts. Ocado’s product range also includes a small but expanding range of Ocado own-labelproducts;

• has developed its own highly bespoke software systems which underpin its superior customeroffering and the operations of the CFC;

• has generated significant year-on-year growth in gross sales since it started trading just overeight years ago. Ocado generated gross sales of £427 million in FYE 2009 and gross sales havegrown at a CAGR of 21 per cent. between FYE 2007 and FYE 2009. Ocado’s gross sales in P1-62010 were £246 million (unaudited), an increase of 30 per cent from P1-6 2009;

• has achieved positive and growing EBITDA since FYE 2008 and generated £9.2 million of EBITDA inFYE 2009 and £8.0 million of EBITDA in P1-6 2010 (unaudited). The Directors believe that Ocadohas greater EBITDA margin potential than its store-based competitors;

• approximately one million items are picked in the CFC every day, of which approximately 55 per cent.are ambient products, 40 per cent. are chilled products and 5 per cent. are frozen products;

• Ocado currently covers 66 per cent. of UK households, with half of all its customers living outside theM25 region. 85 per cent. of Ocado’s customers have not previously used Waitrose for their regularshop and the average household income of Ocado’s customers has lowered progressively;

• will, following Admission, be the largest listed dedicated European online retailer (by turnover); and

• is well placed, the Directors believe, to benefit from the growing demand for ordering groceriesonline.

The Directors believe that consumers are increasingly seeking an online grocery shopping propositionthat allows them to save time and effort whilst still retaining the wide range, high quality and low cost thatthey expect from a store-based supermarket.

Traditional supermarkets primarily satisfy this by providing online services out of their existing storenetwork. The Directors believe that Ocado’s highly automated and purpose-built distribution systemallows it to deliver a fresher and broader range of groceries in a more accurate and efficient manner thanits competitors.

Ocado’s mission statement is to revolutionise the way people shop, by giving them a uniquely innovativeand greener alternative to traditional grocery shopping. It aims to achieve this through four key values:providing great value, great service, great choice and a more environmentally responsible way to shop.

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2. Industry overview

General

Food retailing is the single largest category of retail spend in the UK and every other major Europeanmarket. In 2009, it represented approximately £146 billion in the UK (Source: The Institute of GroceryDistributors (‘‘IGD’’) Research 2009). Unlike many other categories of consumer spending, groceriescomprise a necessary and regular retail spend rather than a discretionary item. For example, in 2008 and2009, when the UK experienced negative real GDP growth, food sales in the UK continued to growpositively.

Online food retailing

Estimates of the size of the UK online grocery market for 2009 vary considerably, with estimates rangingfrom £2.8 billion to £5.3 billion. The Directors estimate the total market size to be closer to the lower end ofthis range at approximately £3 billion, and have used this figure as the benchmark for key statistics aboutthe size of the UK online grocery market in this document.

The only supermarkets in the UK offering an online grocery retailing service are Tesco.com (a division ofTesco plc), Sainsburys.co.uk (a division of J Sainsbury plc), ASDA.com (a division of ASDA StoresLimited, a subsidiary of Wal-Mart Stores, Inc.) and WaitroseDeliver (owned and operated by Waitrose).These are, with Ocado, also the only significant participants in the online grocery market. Iceland FoodsLimited offers a store-based delivery service, but Iceland’s customers cannot shop online atIceland.co.uk. Certain small specialists operate in sub-sections of the online market (such as Abel & ColeLimited which, through its website AbelandCole.co.uk, sells a range of organic foods). A number ofsupermarket chains in the UK do not currently run online grocery businesses. These include Marks &Spencer plc, Wm Morrison Supermarkets plc and the two food divisions of The Co-operative Group, TheCo-op and Somerfield.

Tesco.com, which is the largest UK online grocer by sales, had online grocery sales in the year endedFebruary 2010 of approximately £1.7 billion. ASDA Stores Limited and J Sainsbury plc have reportedonline sales of over £500 million, although it is not possible to state comparative figures accuratelybecause there is no consistent method by which supermarkets report online sales.

Ocado currently offers its services to approximately 66 per cent. of UK households compared with 99 percent. by Tesco.com, 90 per cent. by Sainsbury.co.uk, 97 per cent. by ASDA.com and 40 per cent. byWaitroseDeliver (Source: Relevant companies’ statutory filings and websites, TNS analysis).

Growth of the UK online grocery market

The Directors believe that the UK online grocery market comprises approximately two per cent. of thetotal UK grocery market. To the extent that UK grocery shoppers continue the trend of moving from thetraditional grocery market to the online market, there is significant scope for continued growth of theonline market, even if the traditional market does not grow (although Verdict expects total food andgrocery expenditure to grow at an average annual growth rate of 3.4 per cent. in the period 2009 to 2013(Source: UK Retailing Forecasts 2013)), and the Directors believe that the online market will continue togrow rapidly.

There are a number of factors which may encourage this shift to the online market to take place. Internetusage generally is rising, with the percentage of the UK adult population shopping online also increasing.According to Verdict, UK e-Retail 2009, 45 per cent. of UK adults shopped online in 2007, rising to anestimated 59 per cent. in 2009.

Waitrose

Waitrose, through whom Ocado sources the vast majority of products it sells (and whose own-labelproducts it sells), is a UK supermarket chain and the food division of the privately owned retailer JohnLewis. It has over 220 branches across the UK. Waitrose sells high quality food and places an emphasison the provenance and traceability of the food that it sells. In its last financial year (ended 30 January2010) it had gross sales of £4.5 billion and made an operating profit of £268.4 million (Source: John LewisPartnership plc unaudited results for the year ended 30 January 2010).

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3. Strengths of the Ocado Business

3.1 Significant market opportunity

The UK grocery market is by far the largest of the UK retail segments, yet the Directors believe it has thelowest percentage online of all the core UK consumer markets and online penetration is expected to growrapidly. The Directors believe that Ocado is well placed to take advantage of this growth, and to increaseits share of the UK online grocery market from its current estimated 14 per cent. as it continues to invest inand improve its customer offering, and increase its penetration, the frequency with which customers placeorders, the amount that they spend and, to some extent, geographic reach.

By way of comparison, shifts in the UK retail market from conventional to online shopping have occurredin other sectors. For example, in 2000, the online UK book, news and stationery market comprised 1.6 percent. of the total UK book, news and stationery market, rising to 6.4 per cent. in 2009 (Source: Verdict, UKRetail 2013). Similarly, in 2003, the online UK electricals market comprised 5.5 per cent. of the total UKelectricals market, rising to 23.7 per cent. in 2009 (Source: Verdict, UK Retail 2013).

3.2 Unique, attractive business model with structural advantages over traditional groceryretailers

Ocado’s business model has, since the Business’s inception, been predicated on delivering a superiorcustomer offering in terms of quality and freshness of produce and convenience, reliability and accuracyof delivery.

Ocado is the only UK online supermarket that provides all its services from a dedicated warehouse whereall the picking and packing of products is performed centrally. The Directors believe that the automation ofequivalent store operations in the CFC, the aggregation of stock and demand in one building, real-timecontrol over stock, not having to rent or purchase sites in expensive locations, reduced staff costs andbeing less constrained by space (allowing Ocado to take direct deliveries to the CFC and cutting out thecosts of regional distribution centres), all provide clear cost and service benefits to the Business.

The state-of-the-art, highly-automated CFC is currently capable of picking over one million items per dayand processing approximately 105,000 orders per week. These items are delivered to customers eitherdirectly from the CFC or via the Spokes (the trans-shipment points for deliveries not made directly fromthe CFC). The Directors believe that the maximum effective capacity of the CFC (after further capitalinvestment) will be approximately 180,000 orders per week.

Ocado had gross sales of £427 million in FYE 2009 (P1-6 2010: £246 million (unaudited)), all of whichwere picked and packed at the CFC. The Directors estimate the CFC’s sales volumes to be equivalent toapproximately 25 average sized Waitrose supermarkets. This, they believe, has a number of materialscale and structural advantages compared to the model operated by its competitors (all of whom havestore networks and regional distribution centres and predominantly provide their online services out ofthose stores), including the following:

Customer proposition

• the eventual ability to stock a greater range of products (currently the CFC stocks in excess of20,000), including a ‘‘long-tail’’ of slower moving products which a traditional supermarket mightstruggle to stock efficiently;

• greater availability and reduced product substitution (in FYE 2009, 99.4 per cent. of all items weredelivered by Ocado as ordered); and

• improved product freshness for customers due to faster stock turn and reduced stockholding levelswhile nevertheless maintaining reduced levels of wastage (only 0.57 per cent. of gross sales inFYE 2009).

Cost efficiency

• it results in Ocado achieving a higher sales growth as a multiple of its capital expenditure. From FYE2007 to FYE 2009, Ocado’s sales grew by 1.8 times its capital expenditure. In the same period,

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Tesco plc’s sales grew at 1.0 times its capital expenditure, J Sainsbury plc’s at 0.7 times andWm Morrison Supermarkets plc’s at 1.2 times (Source: statutory accounts of the relevantcompanies; this figure is calculated by dividing incremental sales for the period by capitalexpenditure in the same period); and

• it results in Ocado already achieving a higher revenue per employee. In FYE 2009, Ocado achievedannual sales of £128,000 per employee. In the same year, Tesco plc achieved annual sales peremployee of £116,000, J Sainsbury plc achieved £127,000 and Wm Morrison Supermarkets plcachieved £116,000 (Source: statutory accounts of the relevant companies; this figure is calculatedby dividing sales for the period by number of employees in the period).

The Directors believe that the structural advantages of Ocado’s business model become more apparentthe more orders it processes. Between FYE 2007 and FYE 2009, Ocado’s average number of orders perweek increased from 49,968 to 70,873, a CAGR of 19 per cent. Over the same period, CFC costsincreased by a significantly lower CAGR of 3.4 per cent. as a result of increasing efficiency in inboundproduct receiving and decanting, picking of customer orders and outbound despatch of deliveries.

3.3 Superior customer offer in online food retailing driving market share

Ocado prides itself on having developed and sustained a market-leading customer offering in onlinegrocery retailing, as shown by the consumer and industry awards it has received and continues toreceive. Ocado focuses on the following areas in achieving these high levels of satisfaction:

• Product offering:

• Range: Ocado offers an extensive product range of more than 20,000 products, a range thathas increased by approximately 60 per cent. since the end of FYE 2007. The product rangeincludes the majority of Waitrose’s product range (including approximately 4,300 Waitroseown-label products) as well as a small but growing range of Ocado own-label products.Therefore, over three quarters of the products stocked are not own-label products. In 2009,Ocado added an in-house butcher and fishmonger (called the ‘‘Service Counter’’) allowingcustomers to select the size of meat and fish cuts and specify whether fish should be whole orfilleted. Ocado also offers a growing range of non-grocery products, such as magazines, toys,flowers and homewares. The Directors believe that Ocado’s product range is larger than thatcurrently found in the largest Waitrose supermarket.

• Quality and freshness: Product freshness, with a guarantee that use-by dates will match orbetter those displayed to customers on the Website further enhances the customer experience.No other UK online supermarket guarantees use-by dates in this way. The strict management ofstock levels and visibility over customer ordering, together with direct deliveries to the CFC,ensure Ocado customers receive products which the Directors believe to be fresher thancustomers could typically buy in a supermarket.

• Environmental credentials: Ocado prides itself on the environmental efficiency with which theBusiness is run. For example, streamlining the Business through a CFC rather than a chain ofphysical stores saves on energy usage and associated costs. Equally, the route optimisationsoftware ensures that fuel is used efficiently and keeps journey times and distances to aminimum. Ocado has extremely low wastage levels (which the Directors believe to be lower thanthose of any other supermarket) and offers to collect its plastic bags from customers in order torecycle them.

• Price: Ocado aims to price competitively in order to provide customers with value for money. Forexample, through its Tesco Price Match policy which started in 2008, each week Ocado checks theprices on all identical branded products sold on the Tesco.com website and, if necessary, adjusts theOcado price to match the standard Tesco price (this excludes temporary promotions, in respect ofwhich Ocado typically follows the Waitrose promotional calendar). Ocado’s Tesco Price Match policycurrently covers approximately 7,000 products stocked by Ocado. Ocado also continues to developits own-brand range, which is tiered to the mainstream own-label brands of its competitors.

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• Customer service

• Website: On logging onto the Website, customers can create or edit an order. The Directorsbelieve that a number of features on the Website, such as displaying product use-by dates,generating instant orders and prompting customers to see if they have forgotten to add items totheir orders (based on past orders), are unique to Ocado. The Directors further believe thatthese features result in the Website being attractive and helpful for customers to use (as doother features of the Website such as the display of nutritional information and recipesuggestions). Recently Ocado has introduced the Ocado on the Go application (for iPhone, iPadand Android smart phones) to increase further the ease with which customers are able to placeand edit orders, in particular, while they are away from their computers.

• Accuracy and availability: Ocado’s availability system (referred to as ‘‘Availability to Promise’’ or‘‘ATP’’) calculates the expected stock position for every product into the future, so that once acustomer has chosen their delivery slot the Website prevents them from ordering productswhich will be out of stock when the order is due to be picked in the CFC. This feature reduces theneed to find substitutions for out-of-stock products at picking time and it is made possible byOcado’s warehouse model and sophisticated inventory management system and is not offeredby Ocado’s competitors. As a result, in FYE 2009 (and P1-3 2010), approximately 99 per cent. ofitems ordered were delivered exactly as ordered.

• Delivery service: Timely delivery within one-hour time slots (starting on the hour and half hour)chosen by the customer and direct delivery to the customer’s kitchen make for an attractivecustomer experience. In P1-6 2010, 95 per cent. of all deliveries were on time or early.

3.4 Proprietary intellectual property has created significant barriers to entry

Each year since operations began, Ocado has implemented new IT systems and highly automated, oftenpurpose-built, machinery which, together, reduce ongoing operating costs as a percentage of grosssales. The Directors believe that, as Ocado’s IT systems and machinery become ever more efficient andsophisticated, the barriers to entry for a potential competitor become greater.

The majority of Ocado’s current IT systems are bespoke (there often being no suitable alternativesavailable commercially) and have predominantly been developed in-house by Ocado’s IT team. Ocado’sproprietary intellectual property is integral to the functionality of all aspects of its operations, including theWebsite, the stock management systems, the CFC, the customer delivery system and the van routingsystem. The Directors believe that the implementation of many of these IT systems, coupled with theplant and machinery at the CFC (much of which is also bespoke to the Business) together with theexpertise to manage these operational processes have had a direct and positive impact on the Business,such as:

• the bespoke stock ordering system has increased product availability by using replenishmentalgorithms designed specifically for Ocado’s mix of SKUs and product categories while at the sametime increasing efficiency of stock control but without materially increasing waste. Thus, whileaverage orders per week grew by over 25 per cent. from FYE 2008 to FYE 2009, absolute stocklevels remained relatively constant during the same period;

• the bespoke computer code that controls CFC machinery has increased the number of unitsdispatched from the CFC per hour by increasing throughput above the machinery manufacturers’expectations. Outbound units per hour worked have increased by a CAGR of 14 per cent. since FYE2007; and

• the bespoke route optimisation application, combined with increased customer density, hasincreased deliveries per van per week by a CAGR of 11 per cent. since FYE 2007. This has reduceddelivery costs as a percentage of gross sales from 14.7 per cent. in FYE 2007 to 12.9 per cent. inFYE 2009 while serving a larger delivery area.

This bespoke IT, plant and machinery has underpinned the sustained incremental evolution of the CFC,the Website and distribution operations. The Directors believe that the systems required for suchoperations and the management know-how required to operate such systems and machinery amount to asignificant barrier to entry. Accordingly, they believe that Ocado’s business model would be difficult to

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replicate to the same level of performance and specification without significant capital expenditure andtime, given the considerable amount of technical and logistical expertise inherent in it.

3.5 Strong track record of growth delivered by entrepreneurial Executive Directors

Ocado has generated strong revenue growth over each of the last three years. Gross sales haveconsistently increased year on year, growing from £291 million in FYE 2007 to £427 million in FYE 2009,a CAGR of 21 per cent. Gross sales in P1-3 2010 were £117 million, an increase of 31 per cent. over thesame period in the previous financial year, and gross sales in P1-6 2010 were £246 million (unaudited),an increase of 30 per cent. over the same period in the previous financial year.

Ocado’s strong track record of revenue growth has been delivered by its experienced and stable team ofentrepreneurial Executive Directors, and demonstrates the success of its strategy of organic growththrough customer focus, process and technological innovation and expanding regional penetration.

Of the Company’s four Executive Directors, Tim Steiner and Jason Gissing founded Ocado in 2000. NeillAbrams was an adviser to Ocado from the beginning and joined the founders later in 2000 (the same yearas Ocado became operational). Andrew Bracey joined the Board in 2009 having provided substantialadvice to Ocado in the preceding years. Andrew has considerable experience in the retail industrygenerally, including having been on the board of the company that owned the UK supermarket chainSomerfield. The Directors believe that the expertise and dedication of Ocado’s Executive Directorsprovide the Group with a strong foundation to pursue its future strategy.

3.6 Considerable operational leverage with margin potential

The Directors believe that Ocado can achieve higher sales volumes and that further increases in salesshould improve the EBITDA margin of the Business given the economies of scale within the CFC anddelivery structure. In addition, the Directors have identified opportunities to increase further the efficiencyand effectiveness of the CFC and delivery operations, without compromising Ocado’s customer offeringor its value proposition. In particular, these efficiencies are expected to be achieved through increasedCFC labour productivity as a result of an enhanced technology mix and increased automation, andincreased delivery productivity as a result of more efficient allocation of driver resources and optimiseddelivery route planning. The Directors believe that as a result of such opportunities and efficienciesOcado can achieve a higher EBITDA margin than a typical store-based competitor. In order to realisesome of these efficiencies Ocado will need to undertake additional capital expenditure.

This gross sales growth combined with the operational leverage in the cost base has led to Ocadoachieving EBITDA of £2.2 million in FYE 2008 and £9.2 million in FYE 2009. In FYE 2009, Ocado had apositive cash inflow of £4.1 million at the operating cash flow level. EBITDA in P1-3 2010 was £3.4 million,and EBITDA in P1-6 2010 was £8.0 million (unaudited).

As demonstrated by the key performance indicators below, as the scale of the Business has increased inthe last three financial years, so has its efficiency:

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)

Average order size (£)(1) . . . . . . . 112.17 116.30 115.94 122.81 119.38Average orders per week . . . . . . 49,968 56,384 70,873 60,769 81,823CFC efficiency (units per hour)(2) . 95 114 124 114 124Average deliveries per van per

week . . . . . . . . . . . . . . . . . . . 99 106 121 107 126Average number of operational

staff (full time equivalent) . . . . . 2,033(5) 2,730 3,151 3,119 3,610Average product wastage

(per cent. of gross sales)(3). . . . 1.15 0.78 0.57 0.64 0.65Items delivered exactly as ordered

(per cent.)(4) . . . . . . . . . . . . . . 98.59 99.11 99.41 99.35 98.76

Source: The information in the table above is derived from information extracted from management accounts and internal financialand operating reporting systems and is unaudited.

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(1) Average retail value of goods a customer receives (including VAT and delivery charge) per order.

(2) Measured as units dispatched from the CFC per hour worked by CFC operational personnel.

(3) Value of products purged for having passed Ocado’s ‘‘use by’’ life guarantee and stock adjustments (net of sales to thecompany shop), divided by gross sales.

(4) Percentage of all items delivered exactly as ordered, i.e. the percentage of items neither missing nor substituted.

(5) Excludes, for the period prior to their transfer to Ocado, staff working for third-party logistics contractor who transferred toOcado in April 2007.

3.7 Significant opportunity for continued expansion

Ocado’s business model presents it with growth opportunities outside its core business. The Directorsbelieve that Ocado’s brand recognition and superior delivery infrastructure provide opportunities forfurther expansion into non-grocery products such as baby products, health and beauty and kitchenware.In addition, the worldwide growth of online shopping provides possibilities for replicating the Group’sbusiness model overseas.

4. Ocado’s strategy

Ocado intends to continue with the areas of strategic focus that have delivered strong revenue growthand improving EBITDA margin to date, in particular through continued innovation of the customer offeringand operational cost efficiencies.

In order to successfully fulfil anticipated future demand, Ocado intends to continue to expand CFCcapacity (including building and fitting out the second CFC) and the Spoke network.

In addition, Ocado intends to investigate additional adjacent growth opportunities, leveraging itsknowledge of its existing customer base, its proprietary intellectual property and its overall businessmodel. This may be achieved through further expansion of its non-grocery range and/or internationalexpansion, as appropriate.

The four limbs of Ocado’s strategy are, therefore, to improve continually the customer offering drivingsales growth; to improve cost efficiency through continued innovation to maximise profitability; to expandCFC capacity and the Spoke network; and to exploit further growth opportunities, including the possibilityof replicating the business model overseas.

4.1 Continually improve the customer offering

Ocado focuses on improving its customer offering in order to retain existing customers and encouragethem to make greater use of the Ocado service, as well as attracting new customers. The Directors seekto achieve this through:

• Customer Service: Maintaining and improving the customer experience. The Directors believe thataccuracy, product quality and freshness, product availability and convenient delivery service arefundamental to Ocado’s customer proposition and intend to continue to improve these aspects toprovide superior customer service. Ocado also intends to continue to improve its customer interface,for example by adding further functionality to the Website, facilitating easier order placing with Ocadoon the Go applications.

• Product Range: Increasing the core product range. The Directors intend to expand the range ofSKUs sold by Ocado to approximately 23,000 products by the end of 2010 with eventual expansionthereafter to over 30,000 products. This will partly be achieved through the addition of brandedproducts which are not currently stocked by Waitrose but are stocked by other major grocers. As aresult of its centralised and automated distribution centre, the Ocado model is well suited to stockinga ‘‘long-tail’’ of slow moving grocery products. Ocado also plans to increase the range of Ocado own-label products, from the current range of approximately 70 products to approximately 250 to 300products by the end of 2010 with further expansion thereafter. In this regard, Ocado has recentlyrecruited a head of own-label with extensive experience in the industry, and plans to have a broaderown-label range tiered in line with the mainstream own-label ranges of the major UK supermarkets.

• Value for Money: Continuing to offer value for money to customers and making use of the fact thatonline grocery shopping is attractive to a broad demographic of the population. This includes the useof loyalty programmes such as the Ocado Delivery Pass service and price initiatives such as Tesco

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Price Match. The expansion of the Ocado own-label range, as detailed above, will allow Ocado toincrease the range of products in standard tier price points.

Ocado continually seeks to improve its customer offering through innovation of new products andservices. Since the beginning of 2008, Ocado has introduced a large number of innovations in all of theabove categories. For example in Customer Service, Ocado has introduced Ocado on the Go allowingOcado and its customers to interact directly through applications for the iPhone, iPad and Android smartphones; in Product Range, Ocado has introduced an in-house butcher and fishmonger (called the‘‘Service Counter’’) allowing customers to select the size of meat and fish cuts and specify whether fishshould be whole or filleted; and in Value for Money, Ocado has introduced the Ocado Delivery Pass andTesco Price Match. The Directors believe that all of these innovations promote customer satisfaction anddrive order growth, and Ocado intends to continue to roll out further innovations in the future.

4.2 Improve cost efficiency through continued innovation to maximise profitability

Without compromising Ocado’s customer offering or value for money proposition, the Directors striveconsistently to increase the efficiency and effectiveness of Ocado’s operations from the Website and theCFC to customer delivery by continuing to improve its technology, systems and training.

CFC productivity is measured by average units processed per labour hour (‘‘UPH’’). Ocado is targeting along term increase in productivity at the existing CFC to 180 UPH, up from 124 in FYE 2009. Thislong-term target assumes that the existing CFC has reached and is operating at its maximum effectivecapacity of 180,000 orders per week. This will be influenced by a number of factors, including:

• improvement in technology mix through upgrading the existing equipment at the CFC and increasedautomation of the picking process; and

• continued development of more intelligent IT algorithms and code to increase efficiency of existingCFC operations.

Similarly, delivery productivity is measured by average drops per van per week (‘‘DVW’’). Ocado istargeting a long term increase in delivery productivity to 175 DVW, up from 121 in FYE 2009. This will beinfluenced by a number of factors, including:

• increasing customer density, thereby reducing time spent driving between customers; and

• continued development of more intelligent IT algorithms and code to allow efficient allocation ofdriver resources and optimised route planning.

4.3 Expand CFC capacity (including building the second CFC) and the Spoke network

The Directors intend to increase the Business’s current capacity and geographic coverage by increasingthe capacity of the existing CFC, adding new Spokes and building the second CFC, in order to satisfy theanticipated demand growth.

Ocado intends to expand the effective capacity of the existing CFC from processing 105,000 orders perweek to approximately 180,000 orders per week. Increases in the current capacity of the existing CFC willtake place on a phased basis. A significant proportion of existing warehouse operations already has thecapacity to process 150,000 orders per week, however, increasing capacity to 180,000 orders per weekwill require more significant capital expenditure across the CFC to utilise free space, upgrade existingmachinery, purchase and install new machinery and improve the infrastructure of the site.

Ocado plans to develop the second CFC to increase both the capacity at which the Business can operateand its geographic reach. The second CFC is expected ultimately to have an effective capacity to processapproximately 180,000 orders per week once fully operational, although in the short to medium term isintended only to have an effective capacity of approximately 120,000 orders per week. Assuming theconstruction of the second CFC begins in the first quarter of 2011, and, to the extent necessary,appropriate financing is obtained, the Group would expect to begin operating the second CFC by the endof 2012 at the earliest. Further details about the increasing capacity of the existing CFC and the plannedsecond CFC are set out in section 7.5 below.

Ocado intends to open an average of two new Spokes per year in the medium term. These Spokes areprimarily intended to increase delivery capacity and to improve the efficiency of deliveries in areas of highcustomer density. New Spokes may also be used to increase Ocado’s geographic coverage. Ocado

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expects to open a new Spoke in South West England in early 2011, increasing coverage byapproximately 0.5 million households. There are no further plans for geographic expansion in the nearfuture.

4.4 Explore further growth opportunities

Ocado may, in the appropriate circumstances:

• extend its product range further into non-grocery products. Ocado already has a non-food range buttypically focuses on general grocery merchandising and only a small percentage of the products soldby Ocado are items which fall outside the core grocery range (such as a limited amount of toys andcookware). The Directors recognise that many areas of non-grocery online retail are already wellserved, and do not currently intend to enter many of these markets. Nevertheless, Ocado has thedistribution capacity and customer base to offer a more extensive range of non-grocery productssuch as baby products, health and beauty and kitchenware; and

• exploit and evaluate other opportunities including the possibility of replicating the Ocado businessmodel overseas.

5. Reasons for the Offers and use of proceeds and other resources

The Directors believe that the Offers, and the admission of the Ordinary Shares to the premium listingsegment of the Official List, will assist in positioning the Group for its next stage of development. TheCompany expects to receive primary proceeds net of fees and expenses (but including the cash receivedfrom the exercise of warrants and options) of £200 million from the issue of the New Ordinary Shares atthe Offer Price pursuant to the Offers. All of the funds received from the issue of New Ordinary Shares willinitially be held on deposit, with approximately £45 million expected to be used within six months ofAdmission to repay some of the Group’s existing debt.

On Admission, the Company will have total credit facilities (including the New Facility) of approximately£197 million, excluding the expected repayments of approximately £45 million. This includes £177 millionof committed credit facilities, of which the £100 million of debt funding available under the New Facility willbe undrawn and available for investment, and approximately £20 million of undrawn credit lines availablefor asset financing.

In the medium term, the balance of the net proceeds of the Offers of approximately £155 million receivedby the Company, together with the undrawn debt facilities and credit lines of approximately £120 millionand the cash flow generated by its operations, will be used:

• to invest approximately £80 million in the existing CFC in order to increase effective capacity fromapproximately 105,000 to approximately 180,000 orders per week;

• to develop existing Spokes and establish new ones. This is to increase Ocado’s capacity and,depending on the relevant Spoke’s location, either increase geographic penetration or improvedelivery economics by increasing the number of deliveries per van per week. Based on CFC capacityand customer demand, Ocado expects to establish an average of two new Spokes per year at anaverage estimated cost of between £1 million and £5 million per Spoke per year in the medium term.Therefore the Group expects to invest between £2 million and £10 million per year in the mediumterm establishing new Spokes;

• to purchase a site and fund the estimated total construction cost and related fit-out spend ofapproximately £210 million to build the second CFC (costed at a sterling : euro exchange rate of£1 = e1.10). If required, the Company believes that it will be able to procure additional funding forcompletion of the construction and fit-out of the second CFC through additional finance leases andother forms of debt; and

• for general corporate purposes.

Furthermore, the Directors believe that Admission will:

• enhance the profile of the Group with existing and potential suppliers and customers;

• provide an additional incentivisation mechanism for retaining existing and attracting futureemployees and promote co-ownership amongst them; and

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• give the Selling Shareholders an opportunity to realise some of their investment in the Group andprovide all Shareholders with a market for their Ordinary Shares going forward.

If, the Company is not able to agree pricing or it is unable to raise net proceeds of £200 million, Admissionwill not occur. The Underwriting and Selling Shareholders’ Agreements are conditional on Admission.

The auditor’s report on the Statutory Financial Statements of Ocado Limited for the 52 weeks ended29 November 2009 was unqualified but included an emphasis of matter relating to going concern on thebasis of the uncertainty of the Group’s future funding, since the £200 million of net proceeds from theoffers of shares (the ‘‘Offers’’) and the ability of the Group to be able to draw down on the new bank facility(the ‘‘New Facility’’) could not be taken into account when forming that opinion. That uncertainty will beresolved on the receipt by the Company of £200 million of net proceeds from the Offers and the Groupbeing able to draw down on the New Facility and therefore there is no emphasis of matter contained in theAccountant’s Report on the Historical Financial Information contained in Part V(A) of this document.

Financial impact of the Offers

A pro forma statement of net assets illustrating the hypothetical effect of the Offers on the Group’s netassets as at 16 May 2010 as if the net proceeds of £200 million from the Offers had been received at thatdate is set out in Part VI (A) (Unaudited Pro Forma Financial Information). This information is unauditedand has been prepared for illustrative purposes only. It shows that net proceeds from the Offers of£200 million would have led to a pro forma increase in net assets, from net liabilities of £36.9 million to netassets of £164.2 million as at 16 May 2010.

Had the net proceeds of £200 million from the Offers been received on 30 November 2009, the resultingimpact on earnings would have been to reduce losses for the 24 weeks ended 16 May 2010 by theamount the Group would have received as interest on the £200 million of net proceeds from the Offers.

6. History and development

Ocado was founded by Tim Steiner, Jason Gissing and Jonathan Faiman as L.M. Solutions (UK) Limitedin January 2000 before changing its name to Ocado Limited in June 2001. In October 2000, Ocadoentered into its first branding and sourcing arrangements with Waitrose.

Ocado began to equip a temporary warehouse in May 2001, began pilot deliveries in October 2001 andstarted its commercial delivery service in January 2002, operating initially in the small Hertfordshire areaof St. Albans and Hemel Hempstead. Ocado’s delivery area expanded rapidly, and by May 2002 Ocadobegan to deliver in North London. Over its first 12 months Ocado’s delivery area increased from an initial100,000 households to approximately 2,200,000 households, and gross sales rose to £440,000 per weekin December 2002.

In September 2002, Ocado opened its CFC in Hatfield, and in January 2003 it centralised all warehousingoperations within it. Ocado’s first Spoke was opened in Weybridge, Surrey in September 2002, followedby further Spokes in Aylesford, Kent in August 2003 and Rugby, Warwickshire in October 2003. Theselatter Spokes were subsequently replaced with Spokes in Dartford and Coventry respectively.

During the period 2004 to 2009, Ocado opened additional Spokes in Manchester, Southampton, Leedsand White City (London).

Since inception, Ocado has invested significant management, operational and financial resources indeveloping its business processes, infrastructure, brand and customer offering. Key recentdevelopments include:

• increasing the available product range from approximately 8,500 SKUs in the financial year ended1 December 2002 to over 20,000 currently;

• introducing Tesco Price Match and the Ocado own-label grocery range in 2008;

• introducing the Service Counter – an online butcher and fishmonger – in 2009;

• improving the delivery options available to customers in 2008 and 2009 by introducing one-hourdelivery slots on the hour and half hour, the Ocado Delivery Pass, Ocado Reserved and Sundaydeliveries; and

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• launching the Ocado on the Go iPhone application in July 2009, the equivalent Android application inApril 2010 and the iPad application in June 2010.

Investment to date has been financed through borrowings, equity investment and finance and operationalleases.

From FYE 2007 to FYE 2009, Ocado’s gross sales have grown at a CAGR of 21 per cent., to£427 million†. As at March 2010, Ocado had a single CFC, seven Spokes, approximately 700 vans and55 LGVs, and can provide its services to approximately 17.3 million households, being approximately66 per cent. of UK households.

Historical investment

In 2000, in exchange for an investment of £35 million of capital, John Lewis acquired 40 per cent. ofOcado’s share capital and became its largest shareholder. On 5 November 2008, John Lewis transferredits shareholding in Ocado to the John Lewis Pension Fund. Responsibility for the shareholding now restswith the trustees of the John Lewis Pension Fund rather than the management of John Lewis andWaitrose.

Since 2000, Ocado has raised more than £230 million of additional equity capital from a number ofsources other than John Lewis. John Lewis participated in Ocado’s equity capital funding rounds between2000 and 2004, and at one point held interests equivalent to approximately 45 per cent. of the capital ofOcado. As a result of not participating in any further funding rounds until 2009, and by redeeming aconvertible instrument it held, the John Lewis Pension Fund currently holds a 26.5 per cent. shareholdingin the Company’s issued share capital as at 5 July 2010 (the latest practicable date prior to the publicationof this document). Neither John Lewis nor Waitrose has any other direct or indirect equity interest inOcado.

7. Ocado’s current operations

7.1 Customer offering

Ocado’s customers

Ocado had over 1 million registered accounts as at 16 May 2010, of whom over 240,000 were activecustomers (defined as having shopped within the previous 12 weeks). Over 134,000 of these customersplaced orders in the previous two weeks.

Ocado’s customers are independent of Waitrose, in that Waitrose has no access to Ocado’s customerinformation, and Ocado markets to them using its own brand name. There is likely to be a large crossoverof customers who shop with both Ocado and Waitrose, however there is large crossover with othersupermarket operators as well. Over 85 per cent. of Ocado’s new customers, when surveyed from1 January 2010, indicated that they had previously shopped predominantly with supermarkets other thanWaitrose.

Ocado gathers relatively little demographic information about its customers through their ordinary use ofOcado’s service because it respects its customers’ privacy and to maintain as simple a customerinterface as possible. Nevertheless, through voluntary surveys of customers conducted in 2009, Ocadohas established that its typical customer is female, around 40 years old and has an above averagehousehold income. A significant number of Ocado’s customers also have families with young children.However, as Ocado’s product offering evolves and its geographic reach extends, these demographicsare broadening.

Ocado’s delivery footprint covers approximately 66 per cent. of UK households. Ocado started in theSouth East of England and therefore has the highest penetration levels in this area. Within the South Eastof England, some postcode sectors have penetration levels above seven per cent., which means that inan average week, over seven per cent. of all households in that area receive a delivery from Ocado. Forexample, in P1-6 2010, the average weekly penetration in the top five postcode sectors in which Ocadohad the deepest customer penetration ranged from 6 to 9 per cent. of households in those sectors.††

† The Group defines gross sales as sales (net of returns), including charges for delivery, before deducting relevant vouchers/offers and value added tax. Gross sales is not a measure of operating performance under IFRS-EU and an investor should notconsider it as an alternative to any other measure of performance under generally accepted accounting principles.

†† Ocado defines weekly penetration as the percentage of households in a given postcode sector who shopped with Ocado in agiven week. The range shown represents the weekly penetration, averaged over the 24 weeks to 16 May 2010, for each of thehouseholds in the five postcode sectors.

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Moreover, Ocado has found that its sales in areas of high penetration continue to grow, notwithstandingtheir levels of penetration, due, amongst other things, to the ever improving customer proposition, thereinforcing effect of van presence, word-of-mouth and existing customers shopping more frequently. Todate, there has been no evidence of areas reaching a ceiling on penetration. For example, in the top fivepostcode sectors, sales grew at between 22 and 27 per cent. during 2009.

Ocado has expanded from the South East of England with Spokes in Coventry, Manchester,Southampton and Leeds. These Spokes have grown successfully and demonstrate strong demandoutside the South East of England. For example, the growth in the average number of orders per weekfrom FYE 2008 to FYE 2009 was 150 per cent. in a postcode sector in West Yorkshire and 284 per cent. ina postcode sector in North Yorkshire in the same period. Approximately half of Ocado’s orders in FYE2009 were delivered outside the M25.

From FYE 2007 to FYE 2009, the Directors estimate that Ocado’s delivery footprint (measured ashouseholds in Ocado’s delivery footprint as a percentage of households in the UK) increased from 57 percent. to 66 per cent.

In FYE 2009, a customer’s average order was £115.94 (unaudited) (£119.38 in P1-3 2010 (unaudited))and consisted of approximately 55 products. New customers typically have an average order size that isbelow the average for all customers, increasing to the average order size over a number of orders. Theaverage order size varies across the Spokes, although the average order size delivered from any oneSpoke is typically no more than 10 per cent. lower or higher than the average across the Business.

Ocado prides itself on its customer service and has achieved high customer satisfaction levels. In recentsurveys by Which? Magazine, Ocado has been ranked consistently highly in terms of quality, accuracyand delivery (Source: Which? Magazine June 2009 and February 2010). Ocado has received numerousawards, including: Online Retailer of the Year (2005, 2007, 2009 and 2010 Grocer Gold Awards),Customer Technology of the Year 2010 (BT Retail Week Technology Awards), Best Retail Website 2007(Retail Systems Awards) and Company Driver Safety Award 2010 (Brake Road Safety Awards).

Website

The current version of the Website is its fourth iteration, with the fifth iteration currently underconstruction. On logging onto the Website, customers can create or edit an order. All product lines areeasily searchable (with the Website displaying photographs of almost all products) and on searching for atype of product, particular items that the customer has ordered before are clearly displayed.

A number of features on the Website make it an attractive and helpful website for customers to use.These features include:

• for almost every product, displaying back of packet details such as ingredients and allergyinformation and, where relevant, a use-by date and nutritional information;

• ‘‘Your instant shop’’, is a list of grocery items generated automatically by the Website which acustomer (with a shopping history) can order with one click or edit before ordering. Instant orders arean algorithm-generated prediction based on the customer’s historical ordering patterns;

• displaying all items that a customer has ordered before that are currently on promotion;

• ‘‘Did you forget’’ prompts to customers, before checking out, to add products which they may haveneglected to order. These prompts are based on many of the same criteria on which instant shopsare based, in particular, referring to a customer’s historical ordering patterns to anticipate whichitems a customer may be running or have run out of;

• ‘‘Recommended to you’’ are recommendations to customers based on (i) items ordered by othercustomers that regularly order similar items to them or (ii) which are connected to items that theyhave ordered before or which are in their current basket;

• allowing customers to review and rate products and displaying those reviews and ratings to othercustomers in the product information; and

• providing recipe suggestions for particular products, along with the ability to order all of the otheringredients required for that recipe with a single click.

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All of these features help to improve customer satisfaction (and increase sales). It is extremely importantfor any internet retailer that its website be available as near to constantly as possible. Since FYE 2007,the Website has had over 99 per cent. up-time.

Depending on the customer’s delivery address and time of intended delivery, a customer may amend anorder at any time up to nine hours before delivery.

In addition to placing orders through the Website, customers are also able to place and amend ordersthrough the Ocado on the Go application (using an iPhone (or an iPod Touch device), iPad or Androidsmart phone). The iPhone application was launched in July 2009 and the Android application in April2010. The Android mobile system supports the use of speech recognition and barcode scanning asalternative ways for a customer to search for products. These applications represent the most consumer-facing software developments created by Ocado’s in-house team since the Website, and arerepresentative of Ocado’s efforts to improve and innovate customer service through the use of IT.

The iPhone application has been downloaded over 170,000 times. Approximately 6 per cent. of ordersduring April 2010 were placed or amended using the Ocado on the Go application. No other UK onlinegrocery retailer sells its products through a dedicated iPhone, iPad or Android application.

In June 2010 Ocado won Customer Technology of the Year for Ocado on the Go at the BT Retail WeekTechnology Awards 2010.

Delivery options

Approximately 15 per cent. of Ocado’s customers are able to request same day delivery provided thattheir order is placed by approximately 10.30 a.m. that day; otherwise Ocado offers a next day deliveryservice. Customers may also place orders for delivery up to 21 days in advance. Deliveries are made onMondays to Saturdays in the entire delivery area and, in respect of approximately 71 per cent. of thehouseholds served by Ocado, Sundays as well. Ocado’s service is only unavailable on six Sundays andthree UK bank holidays (and occasional half days either side of certain UK bank holidays) each yearwhich are reserved for carrying out maintenance to the CFC. All deliveries are made in one-hour timeslots chosen by the customer: time slots are offered starting on the hour and on the half-hour. Deliveriesstart at either 6.00 a.m. or 7.00 a.m. (depending on the areas being delivered to) and continue until11.30 p.m. (that is, for 16 and a half or 17 and a half hours per day), except on Sundays when deliveriesare made between 6.00 a.m. and 3.00 p.m. (9 hours).

By comparison, a sample conducted in London on 8 May 2010 showed that Tesco.com and ASDA.comonly offered two hour time slots, in the case of Tesco.com from 9.00 a.m. until 11.00 pm (14 hours perday) and in the case of ASDA.com from 10.00 a.m. until 10.00 p.m. (12 hours per day). Sainsburys.co.ukdid offer one-hour delivery slots, but delivered only from 10.00 a.m. until 10.00 p.m. (12 hours per day).WaitroseDeliver, which currently operates predominantly outside the M25, offered some one hour andsome two hour delivery slots, from 9.00 a.m. until 10.00 p.m. (13 hours per day). This meant that Ocadooffered 27 daily slots (except on Sundays), double that of any of its competitors.

Ocado charges customers between nothing and £6.99 for deliveries (except in the week beforeChristmas when delivery charges are higher to manage demand), and customers must place a minimumorder value of £40. In addition to placing orders on an ad hoc basis, customers are offered two options(which may be used together or independently):

• Ocado Delivery Pass, where instead of paying delivery fees on each order, customers can have all oftheir deliveries for a fixed regular fee (currently £9.99 per month or £109.99 for the year). If usedregularly, Ocado Delivery Pass cuts the cost of deliveries for customers and encourages them toshop more frequently. The Directors believe that the Ocado Delivery Pass improves customerretention and has driven the frequency and total value of the orders of this customer set; and

• Ocado Reserved, which is a free service allowing customers to reserve permanently the weeklydelivery slot of their choosing. The Directors believe that Ocado Reserved also improves customerretention and order frequency. The Ocado Reserved service also incorporates the ‘‘instant order’’function, so a customer can opt for an entirely automated weekly shop.

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Product freshness and stock control

Key to Ocado’s customer offering is the availability of the products offered and their freshness whendelivered to the customer. Customers’ receipts are arranged by use-by date to underpin the message ofthe guaranteed freshness of the products ordered. As described below, these are achieved through theaggregation of Ocado’s operations and its bespoke software operational systems.

Aggregation refers to the centralised volumes of products which are processed for delivery at the CFC. Asdescribed above, the Directors believe that the CFC generates revenue equivalent to approximately 25average sized Waitrose stores. Unlike 25 individual stores, however, the CFC operates a single stockcontrol system.

Ocado’s inventory system records all available stock in the CFC and the planned arrival times of futureordered stock. Since Ocado has only online customers, it has a record of all the items ordered at anygiven time, and is therefore able to indicate on the Website to other customers placing their orders whichitems will be in stock and available for the delivery slot selected by the customer. Ocado calls this feature‘‘Availability to Promise’’ or ‘‘ATP’’ and believes that it significantly reduces the amount of substitution andnon-availability of items ordered by customers.

Ocado’s inventory system (including ATP) is managed by the in-house developed ‘‘Utopia’’ softwaresystem. Utopia generates sales forecasts for each product item and replenishment recommendations. Itactively measures the performance of its own forecasts, the fulfilment level of suppliers and the productlife received from suppliers, using these data to determine an optimum amount of contingency that shouldbe ordered for each item. The more accurate a forecast becomes the less contingency Utopia willrecommend; this increases product life for customers and the availability of products on the Website whileat the same time ensures low stock levels in the CFC. High selling items such as certain fruits are oftendelivered to the CFC and on-delivered to customers on the same day. As described above, the efficiencyof this system resulted in flat stock levels in FYE 2009 as compared with FYE 2008, despite the increasein order numbers from FYE 2008 and the increase in the range of SKUs stocked.

As described, the centralisation of all inbound and outbound activities in the CFC means that Ocado doesnot need to receive interim deliveries to regional distribution centres before the on-delivery of products tostores for sale to customers. This reduces the amount of time it takes for a product to reach a customerfrom the supplier compared to a traditional supermarket and also goes, therefore, to improving productfreshness.

Combined, these factors allow Ocado to guarantee product freshness to its customers.

7.2 Product offering

Ocado sells Waitrose own-label, Ocado own-label, John Lewis own-label and third party-brandedproducts via the Website. Of the approximately 20,000 products sold by Ocado, over three-quarters arenot supermarket own-label products. Of the remainder, approximately 4,300 are Waitrose own-label, andapproximately 70 are Ocado own-label. The Sourcing Agreement with Waitrose allows Ocado to providesubstantially the same product range as a Waitrose store (in fact, the Directors believe that the Ocadorange is over 2,000 SKUs larger than the grocery offer in the largest Waitrose supermarket).

The Ocado own-label products are currently predominantly basic grocery items. However, the Directorsintend to expand this range considerably. The Ocado own-label range is priced around the level of themainstream own-label brands of Ocado’s competitors. 41 per cent. of all orders placed in 2010 containedat least one Ocado own-label product, and this number increases to 61 per cent. for new customersplacing an order with Ocado for the first time.

Ocado introduced a new service called the Service Counter in 2009. The Service Counter is effectively anonline butcher and fishmonger, through which customers are able to specify the size and specific cuts ofmeat and fish they would like to order.

The Directors intend to expand the range of SKUs sold by Ocado to approximately 23,000 by the end of2010 with eventual expansion thereafter to over 30,000 products by both increasing Ocado’s range ofown-label core grocery products as well as its ranges of slower selling and specialist SKUs. Ocado’srange already includes certain speciality products such as regional ales, artisan breads and fresh kosher

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meat, and the Directors intend to increase the range of slower selling and specialist SKUs to includeproducts such as a wider range of oriental and Asian foodstuffs and other speciality products. Althoughthese products may only comprise a small percentage of certain customers’ total orders, Ocado believesthat by stocking such products, customers who wish to buy them are more likely to buy the rest of theirgroceries from Ocado as well.

Ocado’s business model enables it to stock this ‘‘long tail’’ of slower moving items more efficiently than itscompetitors. Products tend to have to be stocked by supermarkets in minimum quantities because of theinefficiencies of breaking up a tray of products prior to their delivery to the store. If a traditionalsupermarket chain wants to stock a slow moving product in a store, it would have to stock that minimumquantity in that store, even if that quantity of product was likely to take a long time to sell in that one store.This often makes stocking slow moving items with a short shelf life (such as fresh kosher meat)uneconomic for stores in many supermarket chains.

Ocado, on the other hand, needs to order that minimum quantity of slow moving product only once for theCFC to service its entire delivery area. As described above, the Directors believe that the revenuegenerated by the CFC is equivalent to approximately 25 average sized Waitrose stores. The effect ofaggregating sales in a single CFC therefore allows Ocado to stock slow moving products efficiently andwithout the same risk of uneconomic wastage.

7.3 Marketing, promotion and pricing

Ocado’s marketing activities focus on rewarding and incentivising existing customers and attracting newones.

Ocado has a good understanding of its existing customers’ buying habits through its web-based customercontact. This permits highly focused and cost-effective marketing, whilst respecting customers’ privacy.Ocado uses predominantly targeted (and often personalised) direct marketing, such as emails to existingand lapsed customers and vouchers to reward them. It also uses vouchers to entice new customers orreward existing ones.

New customers are attracted through less targeted marketing, such as media advertising, althoughOcado uses comparatively little of this as the proliferation of Ocado’s vans creates a significant visualpresence. Ocado also attracts new customers by offering vouchers both to them and to existingcustomers who have recommended them.

In FYE 2009, Ocado spent approximately 1 per cent. of gross sales on marketing (P1-3 2010:1.1 per cent.).

Ocado aims to price its goods competitively. To this end, it established Tesco Price Match in 2008. Underthis policy, each week Ocado compares and price matches branded goods sold by Tesco plc on theTesco.com website. This price match applies to the standard retail price of identical products only andexcludes temporary promotions. Each price-matched product is flagged on the Website. These prices arere-checked, usually weekly, and the date and time when the most recent price check was begun isdisplayed. Data are collected for Ocado by an independent price comparison consultancy to produce alist of Tesco.com products and prices.

As described above, the introduction of Ocado own-label groceries reflects Ocado’s aim of providing itscustomers with value for money. The Directors believe that the Ocado brand has been positioned toappeal to customers on a unified platform of quality, convenience, value, range and service.

7.4 Relationship with Waitrose and the sourcing of products

Ocado, Waitrose and John Lewis first entered into the Sourcing Agreement and the Branding Agreementon 13 October 2000.

The key benefit to Ocado of the Sourcing Agreement and Branding Arrangements has always been thatthey give Ocado access to Waitrose own-label and third party-branded products on the same terms(including cost price) as Waitrose sources them. Ocado also benefits from the premium and qualityassociations of the Waitrose brand. The arrangement allows Ocado to choose to participate in certain

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promotional activities arranged by Waitrose with suppliers (although the parties are free to arrange theirown promotional activities as well).

The relationship is, the Directors believe, beneficial for Waitrose as well. Aggregating Ocado’s sales withits own gives Waitrose increased purchasing power and, as described below, Waitrose receives asourcing fee in respect of Ocado’s sales of products that it sources through Waitrose. Since Ocadooperates in a number of areas in which Waitrose has no stores, Ocado also extends the geographic reachof the Waitrose brand.

In 2000, in exchange for these sourcing arrangements and an investment of capital, John Lewis acquired40 per cent. of Ocado’s share capital and became its largest shareholder. Only Waitrose had the right toterminate the arrangements.

The 2000 sourcing arrangements were subsequently renegotiated as follows:

• negotiations took place in 2005, as a result of which Ocado agreed to pay Waitrose a sourcing fee onthe retail price (excluding VAT) of all products sourced through the Waitrose arrangements. Underthis renegotiation Waitrose undertook not to exercise its termination rights for so long as the sourcingfee was being paid;

• a significant renegotiation took place in 2008 as part of the transfer by John Lewis of its shareholdingto the John Lewis Pension Fund. Significant terms agreed in the 2008 Agreement included:

• the extension of the agreement to September 2013;

• the increase of the sourcing fee;

• the variation of various provisions restricting the operation of the WaitroseDeliver service insidethe M25. These restrictions were varied from the terms previously contained in theshareholders’ agreement between the parties; and

• the ability for Ocado (but not for Waitrose) to terminate the sourcing arrangements early withoutcause if it wished; and

• further negotiations to extend the term of and make further changes to the arrangements took placein May 2010 resulting in the 2010 Agreement. The current arrangements, resulting from thesechanges, are described below (and set out in more detail in section 17.1 of Part XIII (AdditionalInformation)). Pursuant to the 2010 Agreement Ocado agreed to procure that the Company wouldpay John Lewis a fee of £850,000 following Admission in recognition of the support provided to theBusiness by John Lewis and in partial reimbursement for the costs incurred by the John LewisPension Fund (of which John Lewis is sponsor) in respect of the Offers.

Terms of the Sourcing Agreement and Branding Arrangements

The Sourcing Agreement will expire on 1 September 2020, although either party may terminate theagreement early by giving the requisite notice, the earliest termination can take place in thesecircumstances is 1 March 2017. Under the Sourcing Agreement, Waitrose acts as Ocado’s sourcingagent for the negotiation and entry into of Ocado’s supply requirements. Ocado is then able to place itsorders for goods with the relevant supplier on the terms obtained by Waitrose. In return, Ocado paysWaitrose a sourcing fee.

Ocado has the right to stock and sell all goods and products in the assortment of grocery productsstocked by Waitrose supermarkets (subject to certain limited exceptions) (the ‘‘Waitrose assortment’’). IfOcado wishes to introduce a new product not included in the Waitrose assortment then it may develop theproduct itself or source it directly from a third party (provided that the product does not carry a brand ofcertain Waitrose competitors). The exception to this is where the product Ocado wishes to stock is notincluded in the Waitrose assortment but is a product in a range that is included, such as different flavoursor varieties of a product range already stocked by Waitrose. In these circumstances Ocado must offerWaitrose a right of first refusal to source such products for it.

Ocado is under no obligation to offer Waitrose a right of first refusal to source products for the Ocadoown-label range. Ocado already stocks a number of Ocado own-label products which it sources directly

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from suppliers and is in discussions with other third party suppliers for the supply of further Ocadoown-label products.

The mutual obligations on Ocado to source through Waitrose and on Waitrose to source for Ocado meanthat approximately 98.5 per cent. of SKUs sold (by value) are currently sourced under the sourcingarrangements. Of these, currently approximately 85 per cent. of goods by volume are delivered to theCFC directly by the supplier, with whom Ocado agrees its own delivery and billing arrangements. This85 per cent. comprises goods from approximately 350 different suppliers, of which 150 are suppliers ofWaitrose own-label products. Only the remaining 15 per cent. are delivered to the CFC directly byWaitrose.

Of the goods sold by Ocado, 10 suppliers (excluding Waitrose) make up approximately 23 per cent. of thegoods sold by Ocado (by value) with 20 suppliers (excluding Waitrose) accounting for approximately33 per cent.

For the reasons described above, the Directors believe that the sourcing relationship is mutuallybeneficial for the parties. In addition, the Directors believe that the range of products sourced fromWaitrose contributes to an attractive customer offering.

If the relationship between the parties were to cease, through either the current agreements not beingrenewed or an earlier termination, the Directors believe that Ocado now has sufficient scale to operateautonomously, although clearly it would no longer be able to supply Waitrose own-label products. If thiswere to occur, the Directors recognise that Ocado would need adequate time to prepare by increasing thesize of its current procurement team, approaching suppliers to build standalone relationships andcarrying out necessary marketing work with customers which would involve an additional expense for theBusiness.

It should be noted that the termination or notice of termination of the Sourcing Agreement and BrandingArrangements in any circumstances is an event of default under the New Facility. However, with theexception of the change of control termination right described in paragraph 1.4 of the Risk Factorssection, which is customary for an agreement of that type, the Company is in control of whether any suchtermination rights will arise.

7.5 The CFC

At present, Ocado has one CFC, based in Hatfield, which has a footprint of 295,000 square feet and aninternal 4-floor mezzanine across more than half of the building.

The CFC operations are divided between inbound and outbound activity.

Inbound

The inbound activities cover receiving goods from suppliers, checking volumes, weights, date-codes andquantities and physically putting products away in the correct locations for picking. These activities arethe supermarket equivalent of delivering goods in bulk to a regional distribution centre, unpacking themand then delivering them in smaller quantities to the store room of individual stores, then putting them onto the supermarket shelves, and then replenishing the shelves from the back of the store whenever thesupplies run low.

A combination of barcode scanning and human input tells the warehouse management system (‘‘WMS’’)about the quantity and expiry date of each product received. Groceries may be stored on the same palletson which they are received or decanted into smaller storage totes or trays. Except for a small minority ofitems, once received the products are not manually handled as they move from the inbound area to theirfinal storage locations through a combination of automated conveyors and cranes. The precise locationfor each product is determined by a bespoke product layout system, which uses a neural network topredict picking speeds for individual products according to their location and physical characteristics, andthereby optimises the throughput of each picking aisle.

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Outbound

Each customer’s order is allocated a number of plastic crates or ‘‘totes’’ into which plastic bags are placedto receive the order. Each order comprises approximately four totes. The totes are transported throughthe CFC using automated conveyors, some of which run at up to 7,200 totes per hour. The totes stop atvarious points in the CFC for items to be placed in them to make up the order. Chilled and frozen goodsare packed in separate totes so that they remain at the correct temperature until delivered to thecustomer. Each item is scanned before being put into a bag to ensure the accuracy of the order.

The WMS also instructs the picker to place items in a specific bag within the tote ensuring that productslikely to damage each other are separated and that Ocado complies with product segregation regulations.This removes the requirement for bags to be arranged by pickers manually. Scanning also allows theWMS to track which member of staff picked which items of a customer’s order, providing both a detailedaudit trail for each customer order and statistics to drive picking speed and accuracy. The final stagewithin the CFC involves first buffering the totes so that all totes are lined up to be loaded onto the correctvan, then loading the totes into delivery frames which fit into the back of the delivery van or long goodsvehicle. Barcode scanning of each tote and delivery frame ensures that the correct orders are loaded intothe correct vehicle for each route, and are arranged in the van to ensure correct weight distribution overthe course of the delivery.

The WMS also controls the workload at each picking station, and regulates staff breaks to ensure staffingoptimisation.

Ocado has, since 2008, operated an Order Storage and Retrieval (‘‘OSR’’) machine, which storesapproximately 7,000 product lines in high racking that is not accessible to CFC staff, relying entirely onautomation both to put away and retrieve the products.

Further capacity

The Directors believe that the CFC currently has the effective capacity to process approximately 105,000orders per week. In FYE 2009, Ocado processed an average of 70,873 orders per week (P1-3 2010:81,823). In the week commencing 10 May 2010, the CFC processed more than 100,000 orders for thefirst time in a single week. This requires the ability to pick over a million items at the CFC in a single day.To ensure efficient allocation of capital resources, the order processing capacity of the CFC has neverbeen significantly higher than the maximum number of orders predicted in a given period.

The Directors believe that the CFC will ultimately have the effective capacity to process approximately180,000 orders per week (assuming similar trading hours and weekly delivery profiles currentlyexperienced, and assuming also that the necessary capital expenditure can be made). The approximateexpenditure required to achieve this expansion is an additional £80 million of which £30 million is requiredto reach a capacity of 150,000 orders per week.

The CFC’s capacity is described in terms of ‘‘effective’’ capacity. The CFC’s daily output capacity isapproximately 18,800 orders per day. Theoretically, therefore, the CFC has a current capacity in excessof 130,000 orders per week. However, a disproportionately high percentage of customer orders are fordelivery on Mondays, Fridays and Saturdays. Therefore, the ‘‘effective’’ capacity of 105,000 assumesnear maximum delivery numbers on Mondays and Fridays, and fewer deliveries during the rest of theweek. To have an effective capacity of 130,000 orders per week, the CFC would in fact need to be able toprocess significantly more than 18,800 orders per day on peak days. Ocado’s estimates of future CFCcapacity are based on the assumption that the ‘‘shape’’ of the distribution of customer orders across theweek remains approximately the same as currently.

The second CFC

Ocado is in negotiations to purchase the land for, commission, build and fit out the second CFC toincrease both the geographic reach of the Business and the capacity at which it operates. The Groupdoes not expect to begin operating the second CFC until the end of 2012 at the earliest (assumingconstruction begins in the first quarter of 2011 and, to the extent necessary, appropriate financing isobtained).

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The second CFC is expected to become fully operational over a number of years by gradually movingsome volume from the existing CFC and serving new customer growth. The Directors expect that onbecoming operational the second CFC will have an effective capacity of 120,000 orders per week(although it will not process this number of orders from opening). Once fully operational, the second CFCis expected to have an effective capacity of 180,000 orders per week, although moving from 120,000 to180,000 orders will require further capital expenditure. The full cost of reaching effective capacity of180,000 orders per week is currently estimated to be approximately £210 million (costed at a sterling :euro exchange rate of £1 = e1.10). The second CFC will be funded by the net proceeds of the Offers andthe other resources available to the Company including the cash flow generated by its operations and theNew Facility. If required, the Company believes that it will be able to procure additional funding forcompletion of the second CFC through finance leases and other forms of debt.

Once the second CFC is fully operational, the fulfilment of customer orders will be distributed between thetwo CFCs. While Ocado’s overall capacity to fulfil customer orders will approximately double, each of theCFCs is expected initially to operate below its effective capacity, but at a level which enables each site torun efficiently.

The second CFC will use substantially the same technology and software as found in the existing CFC.However, since this technology and software will represent the latest iterations of Ocado’s technologyand software, and will not have to undergo years of iterations as they did in the current CFC, thedevelopment process is expected to be more efficient than developing the current CFC has been.

Subject to the second CFC opening in line with the Directors’ expectations, the Directors expect that, onopening, orders delivered from the second CFC will have a two to three per cent. higher EBITDA margin(pre-CFC fixed costs) than the existing CFC. This, they believe, will be due to reduced trunking costs,minimal incremental administrative expenses and higher productivity (off-set by higher wastage). TheDirectors expect this margin to increase further as the number of orders delivered from it increases.

The plans for the development of the second CFC are predicated on the Business growing at the rate thatthe Directors expect. To the extent that it does not grow as quickly as expected, the second CFC may notbecome operational until later than expected, or may never become operational.

For a more detailed description of the capital expenditure required in developing the second CFC and theDirectors’ expectations in respect of it, see section 6.3 of Part IV (Operating and Financial Review).

7.6 Spokes

Deliveries in much of Greater London, Hertfordshire, Bedfordshire, Essex, South Cambridgeshire,Buckinghamshire, East Oxfordshire, East Berkshire, East Northamptonshire and a small section of NorthSurrey are mostly made directly from the CFC and the orders for customers in these areas are loadeddirectly onto delivery vans. Deliveries to these areas accounted for approximately 32 per cent. of alldeliveries in P1-6 2010. Deliveries to customers in other areas are made via the Spokes. These ordersare loaded from the CFC into LGVs. Each LGV carries either 7.5 or 12 vans’ worth of orders; they arearranged in delivery frames in the LGV so that they can be easily trans-shipped at the Spokes intodelivery vans for the final delivery to the customer. This process is more efficient than individual deliveryvans delivering to customers throughout the country from Hatfield. The Group intends to move, over time,from a fleet of predominantly single deck LGVs to one of double decks. This will allow for cost efficiencysavings in fuel and direct labour as well as reducing the number of LGVs required since the double deckLGVs can hold more orders than single deck LGVs.

The Spokes increase both the geographic range of the Ocado service and the efficiency with whichdeliveries can be made by allowing a single route driven by one van to encompass more deliveries.

The Spokes themselves are small warehouses used as transhipment facilities, where the delivery vansfor the local area are based. Each Spoke has refrigerated storage space so that arrival of the loaded LGVdoes not have to coincide precisely with the totes being picked up by the delivery vans, allowing deliveriesto be made at the times requested by customers.

Each Spoke covers deliveries within a certain area. To some extent, the boundaries between these areascan be adjusted to optimise the delivery loads on individual vans, to account for changes in demand andto try to minimise the effect on customers of disruption at any Spoke.

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The CFC and the seven current Spokes (in Weybridge, Dartford, Coventry, Manchester, Leeds,Southampton and White City) are capable of serving approximately 17.3 million UK households(approximately 66 per cent. of UK households).

Ocado intends to open two additional Spokes each year on average in the medium term to increase thecapacity of the Business. This will be achieved either by building new Spokes in areas already served bythe Business, thus increasing the capacity of the Business in those areas, or by building in areas notcurrently served by the Business. Typically, Ocado would expect each new Spoke to have the capacity forbetween 10,000 and 25,000 incremental weekly deliveries and cost between £1 million and £5 milliondepending, amongst other things, on its location, the infrastructure on the site and tenure.

A number of the Spokes are approaching their current maximum capacities. The Group is taking varioussteps to address this to ensure that Spoke capacity grows with the Business and various developmentopportunities at existing Spokes and potential new Spoke sites have been identified. The total capacity ofthe existing Spoke network is approximately 130,000 orders per week. The Directors estimate that lessthan £1 million capital expenditure would be required to increase this to approximately 150,000 orders perweek. The Group intends to open a new Spoke in South West England in early 2011, increasing coverageby approximately 0.5 million households.

The map below illustrates the location of the CFC (Hatfield) and each of the Spokes, together with thegeographic coverage of the Business.

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7.7 Delivery

Routing systems

Key to the efficiency of Ocado’s delivery solution is its in-house developed routing system. This softwarecalculates an optimised delivery route for each van for each journey it makes. Included in its calculationsare:

• the location and timing of each delivery;

• the weight and volume of each order being delivered;

• expected traffic conditions (for example, the software will know which roads are typically busierduring the school run);

• the typical parking time at each customer’s location;

• the expected duration of the delivery itself;

• road speed adjustments for extreme weather conditions;

• the speed at which the vans can safely travel; and

• the need for each driver to take a break over the course of their delivery run.

In order to produce an optimised route, the software is capable of iterating approximately 2.5 millionchanges to the delivery schedule per second.

The routing software continues to be improved. Recent developments have delivered significantimprovements to the number of drops per route a driver can make, and reduced the time customers waitto be advised of available delivery slots during the ordering process on the Website.

With Ocado’s vans travelling an average of over half a million miles each week, optimisation of the routingsoftware is a significant driver of the overall efficiency of the Business. Each incremental improvement inrouting has, therefore, the ability to drive considerable overall efficiencies. In the period from FYE 2007 toFYE 2009, average deliveries per van per week increased from 99 to 121 due in part to improved routingsystems. This has meant that during that period, while the average number of weekly orders grew from49,968 to 70,873, an increase of 42 per cent., the yearly average number of vans increased from 506 to587, an increase of only 16 per cent.

The routing software works in tandem with the Website to ensure that customers are offered delivery slotsthat ensure timely delivery and allow Ocado to make its deliveries as efficiently as possible. The routingsystems allow Ocado to offer customers considerable choice over delivery slots, especially in areas ofhigh penetration. In addition, customers will not be offered particular slots if the software calculates that itwould be unable to deliver to that location at that time reliably or efficiently, and customers areencouraged to take particular slots through differential pricing. Customers are also offered ‘‘green’’ slotsto help reduce Ocado’s carbon footprint by optimising the delivery route.

Ocado’s Vans

The Ocado fleet of over 700 vans uses the Mercedes Sprinter model, with various modifications. Thesemodifications are unique to Ocado and have been developed by it in collaboration with a van customiser,Paneltex Limited (‘‘Paneltex’’), and Mercedes-Benz, over the last nine years. The back section of eachvan has two separate compartments, one of which is refrigerated, so that chilled, frozen and ambient foodcan be carried to the customer at the right temperature. Ocado owns 25 per cent. of the share capital ofPaneltex and has the right to appoint (and has appointed) a director to its board. This enables the Groupto gain a better understanding of developments in the light vehicle market and, in the past, to ensure thatthis key supplier is sufficiently funded.

Ocado spends considerable amounts of time with engineers from Paneltex and Mercedes-Benz working,amongst other things, to improve the load-carrying capacity of its vans. Measures to improve the capacityhave included removing the passenger seat and various unnecessary internal panels. The maximumweight that vans may carry is governed by law.

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Part I Information About the Company

Ocado leases all of its vans from either Mercedes-Benz Charterway or Lombard, other than a smallnumber that it owns outright and uses for training purposes. Van leases typically last for five or six yearsand end on a staggered basis so that the van fleet is constantly being renewed. Newly leased vans (whichtend to have a higher load capacity than the older ones) are rolled out at the busiest Spokes, with eachSpoke’s vans then being sent down to the next busiest Spoke, the oldest vans being retired on reachingthe end of their leases. Thus the vans at each Spoke are on a rolling programme of renewal.

Separately, two electric vans are currently being trialled at the White City Spoke.

Last mile solution

All Ocado vans are equipped with a removable on-board computer (the Panasonic U1), referred to withinthe Business as the ‘‘handheld device’’. The handheld device:

• includes a satellite navigation system which allows drivers to pinpoint the exact address of and findthe quickest route to each customer on their route;

• functions as a tracking system allowing the Ocado customer services team to locate each van on anear real time basis;

• directs drivers to the position of the relevant totes in the van at each delivery;

• stores relevant customer and order details and provides bespoke functionality allowing the driver tooffer excellent customer service. For example, if a customer has any complaints about their order (forinstance, they are not happy with a substitution), the order can be edited and the total cost adjustedimmediately by the driver using the handheld device, rather than the customer having to apply for arefund at a later date (Ocado does not charge customers until the drivers return to the Spoke, whenthe final order details are uploaded from the handheld device); and

• can be used to update a customer’s details (for example, with specific directions on finding acustomer’s address or how long it takes to park outside the customer’s house).

All of these functions of the handheld device improve the efficiency of the service offered, reduce thescope for error and improve customer satisfaction.

A combination of the dedication of Ocado’s delivery personnel and the functionality of the handhelddevice ensures that there is relatively little post-delivery adjustment to customers’ orders. According toOcado’s management information, items delivered exactly as ordered was approximately 99 per cent. ineach of FYE 2007, FYE 2008, FYE 2009 and P1-3 2010.

An IT project is currently underway to develop further the software for the handheld device to enabledynamic tracking of the vans, provide advance warning of vans that are running behind schedule andimprove functionality for the drivers, such as displaying potential parking places as they approach acustomer location.

December 2009 and January 2010 saw periods of prolonged and settled snow in much of the UK. Duringthese periods, the Business coped well, with 98.7 per cent. of orders still being delivered on the dayintended (compared to an average week of 99.99 per cent.). Subsequently, winter tyres have beenacquired for the delivery fleet to try to ensure even better performance in future cold snaps.

8. Intellectual Property and Information Technology

IT Systems and interaction with the Business

Ocado has a dedicated in-house software design and development team and uses increasingly lesssoftware supplied by third parties. Many of the IT systems that Ocado has developed provide solutions toproblems for which off-the-shelf IT solutions either do not exist or are inadequate for the Business.Ocado’s 160-strong in-house IT team has written entire software packages such as the slot booking anddelivery optimisation system, the package for the handheld device and the majority of the software for theWMS and the Website (including the Ocado On the Go applications). For this reason, IT research anddevelopment forms an important facet of Ocado’s strategy.

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Ocado’s in-house software development team continually improves Ocado’s software systems. Oneadvantage of having an in-house team is that it can communicate directly and regularly with the staff usingthe software and tailor it precisely to the Business’s needs. In FYE 2009 there were almost daily newsoftware releases developed by the in-house team. Many developments related to further improving theCFC control systems.

The intellectual property for some software used within the Business is held by third parties. This includescommodity software, such as Oracle Financials and Microsoft Office, and software published under freeand open source software licences, such as the GNU Public Licence or the Apache Licence. The Groupalso uses certain bespoke third party software, principally for historic reasons. This includes Dispatcher(the underlying software in the WMS), and parts of the database schemas underlying the Website andsupply chain systems. Modifications made to the original Dispatcher source code by (i) Ocado; (ii) thesoftware provider at Ocado’s request; or (iii) Ocado and the software provider together, are jointly ownedby Ocado and the software provider.

Charges over the IT Systems

Ocado’s key IT Systems, including software and intellectual property, are subject to a charge in favour ofLloyds TSB Bank plc pursuant to Ocado’s facility with Lloyds TSB Bank plc. When that facility is repaid,those IT Systems will be subject to a charge in favour of Barclays Bank PLC as security trustee for theNew Facility. Both facilities are more fully described in section 17.3 of Part XIII (Additional Information).

Other intellectual property

Ocado’s key brand is the Ocado name itself, which is used both as a plain word and in its stylised formtogether with the Ocado logo. Ocado’s portfolio of registered trade marks includes a series of UK andEuropean marks which protect both the Ocado name and the Ocado name and logo in addition to anumber of other trade marks. Ocado also owns a number of domain name registrations, includingwww.ocado.com but does not own any other registered rights (for example, patents or trade markregistrations outside the EU).

Ocado’s sub-brands and other branding material, such as slogans, logos, colours and designs are alsofeatured on the Website and in Ocado marketing. These materials are not protected by registered rights,but some protection may be afforded by unregistered design rights, unregistered trade marks andcopyright.

The Waitrose brand and Waitrose trade marks also feature in Ocado marketing and on the Website andare licensed by Waitrose under the Branding Arrangements, more fully described in section 17.1 ofPart XIII (Additional Information).

Charges over other intellectual property

Ocado’s registered trade marks and future registrations, unregistered brands and the domain namewww.ocado.com are subject to a mortgage under two separate security agreements both dated11 September 2008, one in favour of Barclays Bank PLC and one in favour of Barclays MercantileBusiness Finance Ltd.

Data centre, resilience and disaster recovery

Ocado has invested in building a data centre with standardised and scalable hardware, which providesonsite failover and an offsite disaster recovery facility located approximately 1 mile from the CFC.

Ocado historically hosted the Website and applications offsite in a commercial data centre. In 2007 and2008 Ocado invested £1.1 million in a new primary data centre located next to the CFC. This facility hostsall applications and the Website. The data centre is maintained by the in-house IT operations team.

This facility has been designed so that a hardware failure on a live operational application will failover toeither alternative hardware within the data centre or in the disaster recovery facility. Failover tests on themajority of databases were successfully completed during the first quarter of 2010.

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Resiliency to power failure is provided by uninterrupted power supplies, the CFC’s diesel generators anda dedicated data centre generator. This power failure equipment is tested monthly and should supportoperations for at least two days.

In the event of a disaster, Ocado’s business continuity plans will be invoked and the data centreapplications can be hosted from an offsite IT room in the HQ building, which is approximately one milefrom the CFC. This facility currently supports standby database servers, storage and network links, and isin the process of being expanded so that it can support all systems in the event of a disaster.

In addition, the IT department operates an on-call rota to ensure that IT operational issues can be dealtwith on a timely basis with minimal disruption to the Business.

Ocado’s wide area network has three major locations (the CFC, head office site and the data centre).Each location has network connections to the other two, as a contingency against a failure in a single linkor site. Ocado has dual internet connections: one provided by BT into the headquarters building and theother by NTL/Virgin into the CFC.

Ocado’s network security employs common enterprise level hardware. In addition, Ocado contracts athird party to complete regular independent security testing on its network and systems.

9. Ocado’s people

Ocado’s staff are key to its Business and are the most visible part of the Business to its customers. Ocadoaims, therefore, to achieve high levels of employee satisfaction in order to achieve high levels ofperformance. Ocado aims to do this in the following ways:

• Co-ownership: all of Ocado’s staff are granted share options in the Company (as described inmore detail in section 11.1 of Part XIII (Additional Information)). To this end it is hoped that theOffers will prove attractive to employees, providing them with a liquid market for any OrdinaryShares they hold (or will hold when they exercise their share options).

• Empowerment: Ocado’s staff, in particular its van drivers (referred to as ‘‘customer servicesteam members’’ or ‘‘CSTMs’’) as the only face-to-face contact between customers and theBusiness, are empowered to make decisions, such as amending customer orders and invoicesin the customer’s home, refunding damaged items and accepting rejections of substitutions.

• Training: Ocado staff are well trained. Pickers (referred to as ‘‘personal shoppers’’), beforestarting work in the CFC, undertake a one-week training course and receive periodic refreshercourses and training in new methods as necessary. CSTMs are fully trained by Ocado in-houseand work to make sure the delivery process works smoothly and efficiently. The CSTM trainingis a customer-focused programme, which seeks to ensure that the face-to-face contact withcustomers at their homes exceeds customers’ expectations and provides an additional sellingpoint for the Business. This includes factors such as delivering groceries into the customers’kitchens, confirming whether the customer is satisfied with any substitutions and asking thecustomers whether they have any plastic bags for recycling.

• Incentivisation: In addition to co-ownership, personal shoppers are rewarded with higher paythe more productive they are. Similarly, CSTMs are given bonuses based on various factorsincluding customer satisfaction. All weekly paid staff receive an increase in their hourly pay rateon each anniversary of the start of their employment for the first five years of their employment,which is aimed at encouraging staff loyalty.

• Engagement: A national Ocado Council and four subsidiary constituency Councils have beenestablished to represent the views of Ocado’s staff to senior management. Ocado does not haverecognition agreements with any trade union, although Ocado is currently in negotiations withUsdaw over its request for recognition as the trade union for all non-managerial Ocadoemployees employed at the CFC. These negotiations are taking place under the Trade Unionand Labour Relations (Consolidation) Act 1992. The Group is aware of other trade unionshaving informally approached its employees at some of its Spoke sites, although has receivedno direct communications from them.

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The Directors would prefer the turnover of staff at Ocado to be lower, but do not consider staff turnover tobe a cause for concern. The measures described above are all aimed at keeping staff turnover at amanageable level.

For a breakdown of the number of staff employed by the Group in FYE 2007, FYE 2008 and FYE 2009,please see note 8 in Part V (Historical Financial Information relating to the Group). All of Ocado’semployees are employed in the UK.

The average number of employees employed by Ocado during P1-6 2010 was 4,135.

Ocado is committed to the principle of equal opportunity in employment. No applicant or employeereceives less favourable treatment on the grounds of nationality, age, gender, religion, disability, race orsexual orientation.

10. Environmental awareness

Ocado was voted Green Retailer of the Year 2009 in The Grocer Gold Awards, Large Retailer of the Year2008 in the Online Green Awards and won Ethical/Green Practice 2009 at the IMRG E-CommerceAwards for Excellence.

A traditional supermarket requires deliveries first to be made to a regional distribution centre and then tothe supermarket itself. Customers then often drive to the supermarket in order to shop, and thesupermarkets themselves require energy to be lit and heated and tend to have open fridges and freezersin an otherwise ambient environment.

Ocado delivers straight from the CFC to a customer’s kitchen, which eliminates much of the carbonemissions generated by traditional supermarkets and their stores, and also reduces the number of carson the road. Each Ocado delivery van replaces a significant number of car journeys every day.

Other measures taken by Ocado to lower its carbon footprint and reduce its environmental impactinclude:

• closed-loop grocery bag recycling, whereby when making a delivery, drivers offer to collect usedbags from customers which are recycled within the UK to make new Ocado grocery bags;

• wasting, the Directors believe, significantly less food as a percentage of gross sales than any of itscompetitors; and

• signing up to the Climate Change Agreement (with the Carbon Trust), which places certainobligations on management to monitor and lower carbon usage.

Ocado has co-developed two prototype electric powered vans, which are currently completing testingbefore being introduced into Ocado’s delivery fleet.

11. Research and development

As described above, the Group’s research and development primarily focus on IT and improvements tothe CFC and the material handling equipment in it. In addition, the Company dedicates research anddevelopment resources to the other elements of the Business. The research and development teamactively investigates ways of making the Business more efficient. The team regularly attends trade showsand tours the warehouse facilities of existing and potential goods suppliers and those of non-competingcompanies.

The team also ensures that it maintains a close relationship with its goods suppliers and its facilities andtechnology suppliers, helping it to pick up on supplier innovations and, where relevant, carry out jointresearch on areas of mutual interest. For example, Ocado has worked actively with one of the suppliers ofthe conveyor systems used in the CFC to develop technology that allows tote traffic on two conveyors tomerge onto a single conveyor at a rate of 3,600 totes per hour, approximately 50 per cent. higher than theindustry standard.

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12. Regulation

Ocado’s obligations as an online grocer include the safe and careful handling of products from receipt atthe CFC through to delivery to the customer’s home. Ocado has a health and safety department withmanagers dedicated to the CFC and the delivery operation, respectively.

Ocado also has a food hygiene department, and procedures are monitored closely to ensure theprotection of product safety, quality standards and compliance with all food law. Scheduled internal andexternal audits are conducted by qualified food technologists to ensure procedural compliance andadherence with Ocado’s Hazard Analysis Critical Control Point system. This is a system that identifies,evaluates, and controls hazards that are significant for food safety, taking account of the Food Safety Act1990, the Food Hygiene (General) Regulations 1995 and the Food Hygiene (Temperature Control)Regulations 1995.

Ocado operates a fleet of 55 LGV tractors and approximately 90 LGV trailers under its Operator’s Licenceissued by the UK Vehicle and Operator Services Agency. Road Transport legislation and regulationsdetermine the maximum load that the LGVs and vans can carry, and the maximum number of hours adriver can work in a 24 hour period.

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PART II

DIRECTORS

The Directors of the Company are:

• Michael Grade (Non-Executive Chairman)

• David Grigson (Non-Executive Director and Senior Independent Director)

• Tim Steiner (Chief Executive Officer)

• Neill Abrams (Director of Legal and Business Affairs)

• Andrew Bracey (Chief Financial Officer)

• Jason Gissing (Director of People, Culture and Communications)

• Ruth Anderson (Non-Executive Director)

• Robert Gorrie (Non-Executive Director)

• Jorn Rausing (Non-Executive Director)

• David Young (Non-Executive Director)

• Patrick Lewis (Non-Executive Director)

• Michael Robarts (Non-Executive Director)

The business address of each Director is Titan Court, 3 Bishops Square, Hatfield Business Park, Hatfield,Hertfordshire AL10 9NE.

Michael Grade is non-executive chairman and joined the Board in 2006. He has had a long anddistinguished career in broadcasting, encompassing ITV, BBC and 9 years as Chief Executive ofChannel 4 Television. He is currently non-executive chairman of Pinewood and Shepperton Film Studios.Michael sits on the nomination committee.

David Grigson is a non-executive Director and joined the Board in March 2010. He was Chief FinancialOfficer of Reuters Group PLC until May 2008. Prior to joining Reuters in 2000, he was group financedirector of Emap PLC and chairman of Emap Digital. His current non-executive directorships includeStandard Life PLC (which he joined in October 2009) and he is chairman of Creston PLC. Until March2010 he was a non-executive director of Carphone Warehouse PLC. David is the Senior IndependentDirector on the Board and sits on the audit committee and chairs the nomination committee.

Tim Steiner is the Chief Executive Officer and is a founding Director. As well as having general oversightof the Business, the IT, logistics and engineering, warehousing, operations, business planning and retaildivisions of Ocado report directly to him. Prior to Ocado, Tim spent eight years as a banker at GoldmanSachs. During his time there, he was based in London, Hong Kong and New York in the Fixed Incomedivision. Tim graduated from Manchester University with an honours degree in economics, finance andaccountancy in 1992.

Neill Abrams is Director of Legal and Business Affairs and has been a Director since September 2000.He is responsible for Ocado’s business support, including legal, insurance, risk management, and servicedelivery divisions. Prior to Ocado, Neill was a barrister in practice at One Essex Court and an executivedirector and counsel at Goldman Sachs in London. Neill graduated from Sidney Sussex College,Cambridge with a masters degree in law in 1989, having previously obtained BA and LLB degrees fromthe University of the Witwatersrand in Johannesburg. He is also admitted as a member of the New YorkBar and as a South African Advocate.

Andrew Bracey joined the Ocado Board as Chief Financial Officer in November 2009 and previously hadan 18 year career in investment banking with a significant focus on the consumer and retail sector. Prior toOcado, he was Head of Consumer and Retail Investment Banking at Jefferies International. Andrew wasat Barclays Capital from 2003 as Managing Director, Principal Investments which undertook a number ofconsumer and retail investments, including Somerfield and Alliance Boots. Between 2000 and 2003 hewas a Managing Director in the Investment Banking division of Credit Suisse. Andrew started his careerat UBS in 1991, where he ran the Retail team in Corporate Finance and advised a number of retailcompanies including Kingfisher, Dairy Farm and Somerfield. He studied history of architecture atMagdalene College, Cambridge, having previously obtained a BA from the University of East Anglia.

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Jason Gissing is Director of People, Culture and Communications and is a founding Director. He hasboard responsibility for Ocado’s people, culture and communications and is a co-founder of Ocado. Heleads customer and employee engagement, working on internal and external communication includingbrand and people motivation, retention and development. In addition, Jason leads Ocado’s greeninitiatives and some operational aspects of the business such as service delivery and product range. Hewas previously Chief Financial Officer. Prior to Ocado, Jason spent eight years as a banker at GoldmanSachs. He graduated from Worcester College, Oxford with an honours degree in jurisprudence in 1992.

Ruth Anderson is a non-executive Director and joined the Board in March 2010. Until April 2009 she wasa Vice-Chairman of KPMG in the UK. She joined KPMG in 1976 and became a partner in 1989. She hasworked extensively as an adviser with UK and international businesses and is a fellow of the Institute ofChartered Accountants in England and Wales and a member of the Chartered Institute of Taxation. Ruthis a non-executive director of The Royal Parks, an executive agency of the Department of Culture, Mediaand Sport, a trustee of The Eve Appeal, a gynaecological cancer charity, and a trustee of the Duke ofEdinburgh’s Award. Ruth chairs the audit committee and sits on the remuneration and nominationcommittees.

Robert Gorrie is a non-executive Director. From April 2000 until early 2005, Robert was Ocado’sLogistics Director. He was previously Group Director of Information Technology at TransportDevelopment Group PLC (‘‘TDG’’), reporting directly to the Group Chief Executive. He has a wealth ofexperience in IT and logistics services more generally. Robert spent 10 years with TDG, establishinge-business as a strategic business priority. Prior to that he spent 10 years in North America with thelogistics service business Christian Salvesen PLC, where he reached the position of Director of BusinessDevelopment before moving to TDG. Robert graduated from Corpus Christi College, Oxford with anhonours degree in modern history and economics. Robert sits on the audit, remuneration and nominationcommittees.

Jorn Rausing joined the Board in 2003 with the initial investment by Apple Trust (of which he is abeneficiary) in Ocado. He is a non-executive member of the Tetra Laval Group board, and a member ofthe boards of Alfa Laval AB and DeLaval Holdings AB. Jorn is also Tetra Laval Group’s Head of Mergersand Acquisitions. He holds a degree in business administration from Lund University, Sweden. Jorn sitson the nomination and remuneration committees.

David Young is a non-executive Director and joined the Ocado Board in 2000 with the initial investmentin Ocado by John Lewis. He retired from John Lewis in 2002 where he was deputy chairman. Davidpreviously worked for the Ministry of Defence between 1963 and 1982 with a secondment to the CabinetOffice from 1975 to 1977. David joined John Lewis in February 1982, where he became finance directorand a member of the board in 1987 and was appointed deputy chairman in February 1993. David servedas an independent member of the steering board of Companies House from 1988 to 1993. He wastreasurer of the Open University from 1997 until 2001, and a member of its council from 1996 until 2001.He was a trustee of the Royal Air Force Museum from 1999 until 2005, a trustee of the Textile IndustryChildren’s Trust from 2000 to 2008 and a member of the advisory panel of Greenwich Hospital from 2002to 2007. David was the chairman of the Higher Education Funding Council for England from 2001 to 2007.He is currently the treasurer of the Soil Association and a member of the council of Sheffield University.David was appointed CBE in 2007. David chairs the remuneration committee and sits on the audit andnomination committees.

Patrick Lewis is a non-executive Director and was appointed to the Board by the John Lewis PensionFund. Patrick joined the Board in October 2009. Having previously worked for Bain & Company andProctor & Gamble, Patrick joined the John Lewis Partnership in 1994. He has been Supply Chain Directorand Retail Operations Director for John Lewis and is now Partners’ Counsellor on the John LewisPartnership Board. Patrick sits on the nomination committee.

Michael Robarts is a non-executive Director and was appointed to the Board by the John Lewis PensionFund. Michael joined the Board in January 2010. Michael previously worked for Hewitt Associates,advising major occupational pension schemes, including the John Lewis Pension Fund. He wasappointed a director of the John Lewis Pension Fund following his retirement from Hewitt in 2009. Prior tojoining Hewitt in 1999, he was employed by N M Rothschild & Sons (as a director from 1977) andsubsequently by Fleming Investment Management from 1989. He is a Chartered Accountant. Michael willstep down from the Board following Admission. Michael currently sits on the nomination committee.

Except as described in section 13.2 of Part XIII (Additional Information) all non-executive Directors aredeemed by the Company to be independent.

63

PART III

SELECTED HISTORICAL FINANCIAL INFORMATION

The following selected historical consolidated financial information relating to the Group has beenextracted without material adjustment from the historical financial information included in Part V of thisProspectus.

Also included below is certain unaudited operating information which has been derived from informationextracted from management accounts and internal financial and operating reporting systems and notfrom the historical financial information included in Part V of this document for the periods described.

The selected financial and unaudited operating data set out below should also be read in conjunction withPart IV (Operating and Financial Review) and Part V (Historical Financial Information Relating to theGroup) of this Prospectus.

In this Selected Historical Financial Information, references to ‘‘P1-3 2009’’ and ‘‘P1-3 2010’’ refer to the12 weeks ended 22 February 2009 and 21 February 2010, respectively. References to ‘‘FYE 2007’’, ‘‘FYE2008’’ and ‘‘FYE 2009’’ refer to the 52 weeks ended 2 December 2007, 30 November 2008 and29 November 2009, respectively.

Certain figures contained in this document, including financial information, have been subject to roundingadjustments. Accordingly, in certain instances (i) the sum or percentage change of such numbers may notconform exactly with the total figure given; and (ii) the sum of the numbers in a column or a row in certaintables may not conform exactly with the total figure given for that column or row.

1. Consolidated income statement data of the Group

The table below sets out the consolidated income statement data of the Group for FYE 2007, FYE 2008,FYE 2009, P1-3 2009 and P1-3 2010:

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

Continuing operationsRevenue . . . . . . . . . . . . . . . . . . . . 272.9 321.3 402.0 84.6 110.2Cost of sales . . . . . . . . . . . . . . . . . (184.9) (218.5) (279.2) (58.9) (76.9)

Gross profit . . . . . . . . . . . . . . . . . 88.0 102.8 122.8 25.7 33.3Other income . . . . . . . . . . . . . . . . . 0.6 1.8 2.6 0.5 1.2Distribution costs . . . . . . . . . . . . . . (93.5) (101.1) (110.3) (24.6) (28.3)

Operating profit/(loss) beforeadministrative expenses . . . . . . (4.9) 3.5 15.1 1.6 6.2

Administrative expenses . . . . . . . . . (25.1) (25.2) (29.5) (6.2) (8.1)

Operating loss . . . . . . . . . . . . . . . (30.1) (21.6) (14.4) (4.6) (1.9)Finance income . . . . . . . . . . . . . . . 0.8 0.1 — — —Finance costs . . . . . . . . . . . . . . . . (10.9) (11.8) (11.1) (2.7) (2.1)

Loss before tax . . . . . . . . . . . . . . (40.2) (33.3) (25.5) (7.2) (4.0)Taxation . . . . . . . . . . . . . . . . . . . . — — 2.3 — —

Loss for the period attributable tothe owners of the Group . . . . . . (40.2) (33.3) (23.2) (7.2) (4.0)

pence pence pence pence pence

Loss per share(1)

Basic and diluted loss per share . . . (12.12) (9.77) (6.05) (1.92) (0.99)

(1) Loss per share is calculated by dividing the loss attributable to equity holders by the weighted average number of OrdinaryShares and Preference Shares in issue during the period excluding 32,476,700 Ordinary Shares held by the EBT Trustee,adjusted to reflect the conversion of Ocado Limited Ordinary Shares and Ocado Limited Preference Shares to OrdinaryShares and Preference Shares on a 1:100 basis on 9 February 2010.

64

Part III Selected Historical Financial Information

2. Consolidated balance sheet data of the Group

The table below sets out the consolidated historical balance sheets of the Group as at the dates indicated.

As at

2 December 30 November 21 November 21 February2007 2008 2009 2010

£ million £ million £ million £ million

Non-current assetsIntangible assets . . . . . . . . . . . . . . . . . . 6.8 7.0 6.7 6.9Property, plant and equipment . . . . . . . . . 89.9 90.5 90.3 90.1Deferred tax asset . . . . . . . . . . . . . . . . . — — 2.3 2.3Available-for-sale financial assets . . . . . . 0.4 0.4 0.4 0.4

97.1 98.0 99.6 99.8

Current assetsInventories . . . . . . . . . . . . . . . . . . . . . . . 8.3 9.1 9.2 9.5Trade and other receivables . . . . . . . . . . 9.2 12.0 14.7 15.5Cash and cash equivalents . . . . . . . . . . . 10.9 5.9 13.0 10.4

28.4 27.0 36.9 35.4

Total Assets . . . . . . . . . . . . . . . . . . . . . 125.6 125.0 136.6 135.2

Current liabilitiesTrade and other payables . . . . . . . . . . . . (33.2) (40.3) (47.2) (46.5)Borrowings . . . . . . . . . . . . . . . . . . . . . . (0.9) (15.0) (12.1) (27.8)Convertible loan stock . . . . . . . . . . . . . . — (14.5) — —Obligations under finance leases . . . . . . . (5.1) (10.0) (19.7) (19.3)

(39.2) (79.8) (79.0) (93.5)

Net current liabilities . . . . . . . . . . . . . . (10.8) (52.8) (42.0) (58.1)

Non-current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . . . . (46.3) (28.4) (42.7) (28.2)Convertible loan stock . . . . . . . . . . . . . . (33.1) — — —Obligations under finance leases . . . . . . . (49.7) (53.7) (45.7) (46.3)Derivative liability . . . . . . . . . . . . . . . . . . (1.0) (1.1) (1.1) (1.1)Provisions . . . . . . . . . . . . . . . . . . . . . . . (0.2) (0.2) (0.4) (0.4)

(130.3) (83.4) (89.8) (76.0)

Net liabilities . . . . . . . . . . . . . . . . . . . . (43.9) (38.2) (32.2) (34.4)

EquityShare capital . . . . . . . . . . . . . . . . . . . . . — — — 8.7Share premium account . . . . . . . . . . . . . 241.1 281.6 310.8 —Treasury reserve . . . . . . . . . . . . . . . . . . — — — (47.7)Reverse acquisition reserve . . . . . . . . . . — — — (116.2)Convertible loan interest reserve . . . . . . . 8.2 1.1 — —Accumulative (deficit)/surplus . . . . . . . . . . (293.2) (321.0) (343.0) 120.9

Deficit attributable to equity holders . . . (43.9) (38.2) (32.2) (34.4)

65

Part III Selected Historical Financial Information

3. Consolidated cash flow data of the Group

The table below sets out the consolidated cash flow statement data of the Group for FYE 2007, FYE2008, FYE 2009, P1-3 2009 and P1-3 2010:

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

Cash flow from operating activitiesLoss before income tax . . . . . . . . . . (40.2) (33.3) (25.5) (7.2) (4.0)Adjustments for:

Depreciation expense . . . . . . . . . . 17.6 19.8 17.9 4.0 4.3Amortisation expense . . . . . . . . . . 2.4 3.9 4.7 1.0 1.0Impairment of property, plant and

equipment . . . . . . . . . . . . . . . . 0.6 0.1 1.0 — —Provisions for dilapidations expense — — 0.2 — —Share-based payments charge . . . . 0.2 0.1 0.1 — —Finance costs . . . . . . . . . . . . . . . 10.9 11.8 11.1 2.7 2.1Finance income . . . . . . . . . . . . . . (0.8) (0.1) — — —

Changes in working capital:(Increase)/decrease in inventories . (1.1) (0.8) (0.1) 0.9 (0.3)(Increase)/decrease in trade and

other receivables . . . . . . . . . . . 1.9 (2.8) (2.7) (1.2) (0.7)Increase/(decrease) in trade and

other payables . . . . . . . . . . . . . (9.7) 6.6 10.1 (3.2) (0.8)

Net cash inflow/(outflow) fromoperations . . . . . . . . . . . . . . . . . (18.1) 5.3 16.8 (3.0) 1.7

Finance costs paid . . . . . . . . . . . . . (8.1) (9.0) (12.7) (2.8) (2.1)

Net cash inflow/(outflow) fromoperating activities . . . . . . . . . . . (26.2) (3.7) 4.1 (5.8) (0.4)

Cash flow from investing activitiesPurchase of property, plant and

equipment . . . . . . . . . . . . . . . . . (19.6) (15.7) (15.2) (5.5) (1.6)Proceeds from sale of property, plant

and equipment . . . . . . . . . . . . . . 0.2 — — — —Purchase of intangible assets . . . . . . (3.4) (4.1) (4.4) (0.9) (1.2)Finance income received . . . . . . . . . 2.0 0.1 — — —

Net cash used in investingactivities . . . . . . . . . . . . . . . . . . (20.7) (19.8) (19.6) (6.3) (2.8)

Cash flow from financing activitiesProceeds from the issue of ordinary

share capital . . . . . . . . . . . . . . . . 30.2 17.9 29.1 — 1.7Proceeds from borrowings . . . . . . . . 25.2 8.0 25.1 2.1 3.0Repayment of borrowings . . . . . . . . (10.6) (11.1) (28.4) (0.6) (1.8)Proceeds from asset based financing

arrangements . . . . . . . . . . . . . . . 10.0 9.0 7.1 5.1 1.8Repayment of obligations under

finance leases . . . . . . . . . . . . . . . (7.9) (5.3) (10.3) (1.6) (4.1)

Net cash from/(used in) financingactivities . . . . . . . . . . . . . . . . . . 46.8 18.4 22.7 5.0 0.7

Net increase/(decrease) in cash andcash equivalents . . . . . . . . . . . . (0.1) (5.0) 7.2 (7.2) (2.6)

Cash and cash equivalents atbeginning of period . . . . . . . . . . . 11.0 10.9 5.9 5.9 13.0

Cash and cash equivalents/(debt)at end of period . . . . . . . . . . . . . 10.9 5.9 13.0 (1.3) 10.4

66

Part III Selected Historical Financial Information

4. Non-IFRS performance measures and other operating information

The table below sets out the Group’s gross sales and EBITDA for FYE 2007, FYE 2008, FYE 2009, P1-32009, P1-3 2010:

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

Gross sales(1) . . . . . . . . . . . . . . . 291.4 341.0 427.3 89.6 117.2EBITDA(2) . . . . . . . . . . . . . . . . . . (9.5) 2.2 9.2 0.5 3.4

(1) The Group defines gross sales as sales (net of returns), including charges for delivery, before deducting relevant vouchers/offers and value added tax. Gross sales is not a measure of operating performance under IFRS-EU and an investor should notconsider it as an alternative to any other measure of performance under generally accepted accounting principles. Becauseother companies may calculate gross sales differently from the way in which the Group does, gross sales may be of limitedusefulness as a comparative measure. The following table sets out the reconciliation of gross sales to revenue:

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

Revenue . . . . . . . . . . . . . . . . . . 272.9 321.3 402.0 84.6 110.2VAT . . . . . . . . . . . . . . . . . . . . . 15.2 17.1 18.8 3.9 5.6Marketing vouchers . . . . . . . . . . . 3.4 2.5 6.5 1.0 1.4

Gross sales . . . . . . . . . . . . . . . . 291.4 341.0 427.3 89.6 117.2

(2) The Group defines EBITDA as operating profit/(loss) before amortisation expenses, impairment of property, plant andequipment, depreciation of property, plant and equipment, net finance cost and taxation. The Directors believe that EBITDA isuseful in evaluating its operating performance because a number of companies also publish these figures as key performanceindicators. EBITDA is not a measure of operating performance in accordance with IFRS-EU. EBITDA should not beconsidered a substitute for gross profit/(loss), operating profit/(loss), profit/(loss) before tax, cash flow from operating activitiesor other income or cash flow statement data as determined in accordance with IFRS-EU, or as a measure of profitability orliquidity. EBITDA is included herein as a supplemental disclosure, because the Directors believe that this measure, whenconsidered in connection with cash flows from operating, investing and financing activities, provides useful comparativeinformation to an investor and helps investors evaluate the performance of the underlying business as it removes the impact of(1) differences in capital structure, including the effects of finance income and expenses; (2) differences in tax regimes;(3) differences in the method of acquisition and approach to impairment testing of productive assets; and (4) differences in thehistoric timing of initial investments and the corresponding differences in depreciation and amortisation charges.

However, because other companies may calculate EBITDA differently from the way in which the Group does, EBITDA may beof limited usefulness as a comparative measure. Other limitations are: (1) EBITDA does not reflect cash expenditures, orfuture requirements for capital expenditures or contractual commitments; (2) EBITDA does not reflect changes in, or cashrequirements for, working capital needs for the Group; (3) EBITDA does not reflect the finance costs, or the cash requirementsnecessary to service the principal payments on the Group’s debt; (4) EBITDA does not reflect taxation or the cashrequirements for any tax payments; and (5) although impairment is a non-cash charge, the assets being impaired will oftenhave to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements.

The following table sets out the reconciliation of EBITDA to operating loss:

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

Operating loss . . . . . . . . . . . . . . (30.1) (21.6) (14.4) (4.6) (1.9)Adjustments for:Depreciation of property, plant and

equipment . . . . . . . . . . . . . . . . 17.6 19.8 17.9 4.0 4.3Impairment of property, plant and

equipment . . . . . . . . . . . . . . . . 0.6 0.1 1.0 — —Amortisation expense . . . . . . . . . . 2.4 3.9 4.7 1.0 1.0

EBITDA . . . . . . . . . . . . . . . . . . . (9.5) 2.2 9.2 0.5 3.4

67

Part III Selected Historical Financial Information

The following table sets out a summary of selected unaudited operating information for the Business forFYE 2007, FYE 2008, FYE 2009, P1-3 2009 and P1-3 2010:

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)

Average order size (£)(1) . . . . . . . 112.17 116.30 115.94 122.81 119.38Average orders per week . . . . . . 49,968 56,384 70,873 60,769 81,823CFC efficiency (units per hour)(2) . 95 114 124 114 124Average deliveries per van per

week . . . . . . . . . . . . . . . . . . . 99 106 121 107 126Average number of operational

staff (full time equivalent) . . . . . 2,033(5) 2,730 3,151 3,119 3,610Average product wastage (per

cent. of gross sales)(3) . . . . . . . 1.15 0.78 0.57 0.64 0.65Items delivered exactly as ordered

(per cent.)(4) . . . . . . . . . . . . . . 98.59 99.11 99.41 99.35 98.76

Source: The information in the table above is derived from information extracted from management accounts and internal financialand operating reporting systems and is unaudited.

(1) Average retail value of goods a customer receives (including VAT and delivery charge) per order.

(2) Measured as units dispatched from the CFC per hour worked by CFC operational personnel.

(3) Value of products purged for having passed Ocado’s ‘‘use by’’ life guarantee and stock adjustments (net of sales to thecompany shop), divided by gross sales.

(4) Percentage of all items delivered exactly as ordered, i.e. the percentage of items neither missing nor substituted.

(5) Excludes, for the period prior to their transfer to Ocado, staff working for a third-party logistics contractor who transferred toOcado in April 2007.

68

PART IV

OPERATING AND FINANCIAL REVIEW

The following operating and financial review is intended to convey management’s perspective on theoperating performance and financial condition of the Group during the period under review, as measuredin accordance with IFRS-EU. This disclosure is intended to assist readers in understanding andinterpreting the consolidated financial information of the Group included elsewhere in this Prospectus.The discussion should be read in conjunction with Part III (Selected Historical Financial Information) andPart V (Historical Financial Information relating to the Group). The Group is required to comply withIFRS-EU, and its accounting policies have been established accordingly.

The following discussion contains forward-looking statements. The Group has based these forward-looking statements on its current projections and expectations which the Directors consider reasonableabout future events. The Group’s actual results may differ materially from those anticipated inthese forward-looking statements as a result of many important factors, including those set forthin the Risk Factors section in this Prospectus. See ‘‘Forward-looking Statements’’.

In this Operating and Financial Review, references to ‘‘P1-3 2009’’ and ‘‘P1-3 2010’’ refer to the 12 weeksended 22 February 2009 and 21 February 2010, respectively, and references to ‘‘P1-6 2009’’ and ‘‘P1-62010’’ refer to the 24 weeks ended 17 May 2009 and 16 May 2010, respectively. References to ‘‘FYE2007’’, ‘‘FYE 2008’’ and ‘‘FYE 2009’’ refer to the 52 weeks ended 2 December 2007, 30 November 2008and 29 November 2009, respectively.

Certain figures contained in this Part IV, including financial information, have been subject to roundingadjustments. Accordingly, in certain instances, (i) the sum or percentage change of the numbers may notconform exactly with the total figure given; and (ii) the sum of the numbers in a column or row in certaintables may not conform exactly with the total figure given for that column or row.

Unless stated otherwise, all financial information in Part IV that relates to the Group for FYE 2007, FYE2008, FYE 2009 and P1-3 2010 has been audited. For the avoidance of doubt, such financial informationrelating to the Group does not include operating information relating to the Group, even where suchoperating information includes certain financial metrics. Such operating information which is not auditedincludes, without limitation, average order size and average product wastage.

None of the financial information in this Part IV relating to the Group for P1-3 2009, P1-6 2009 or P1-62010 has been audited, nor has any financial information not relating to the Group.

1. Background

Ocado is the only dedicated online supermarket in the UK. Ocado provides its service from a singlewarehouse, the CFC, and seven Spokes, while its competitors provide online grocery services operatingprimarily out of existing stores. The Directors believe that Ocado’s business model offers a costadvantage compared to providing online grocery services out of existing stores due to savings generatedby the automation of equivalent store operations in the CFC, the absence of regional distribution centres,direct delivery, real-time control over stock, higher stock turn, minimisation of wastage and greateranticipation of supply and demand.

The Group’s gross sales(1) increased from £291.4 million in FYE 2007 to £427.3 million in FYE 2009 andfrom £89.6 million in P1-3 2009 (unaudited) to £117.2 million in P1-3 2010. As the volume of gross saleshas increased, the Group has been able to deliver significant improvements in the performance of boththe CFC and the delivery operations. Although the Group is not profitable on an operating profit level, theGroup achieved positive EBITDA(2) of £2.2 million and £9.2 million in FYE 2008 and FYE 2009,respectively (FYE 2007: £(9.5) million), and £3.4 million in P1-3 2010. These improvements weredelivered while managing the increasing complexity of the operation as a consequence of the extensionof the range and services offered. The Group may continue to make losses before taxation in the futurewhile it pursues its growth strategy.

Ocado has operated and continuously expanded and upgraded the CFC and its delivery operations sinceSeptember 2002. The Group’s prospects must be considered in light of the risks, expenses anddifficulties frequently encountered by companies in new and rapidly evolving markets such as onlinecommerce and in particular online grocery retail. In view of the rapidly evolving nature of the Business andOcado’s rate of growth in prior years, the Directors believe that period-to-period comparisons of itsoperating results, including the Group’s operating profit margin and cost of sales as a percentage ofrevenue, should not be relied upon as an indication of future performance.

69

Part IV Operating and Financial Review

The following table sets out a summary of the Group’s gross sales, revenue, operating loss and EBITDAfor FYE 2007, FYE 2008, FYE 2009, P1-3 2009 and P1-3 2010:

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

Gross sales(1) . . . . . . . . . . . . . 291.4 341.0 427.3 89.6 117.2Revenue . . . . . . . . . . . . . . . . 272.9 321.3 402.0 84.6 110.2Operating loss . . . . . . . . . . . . (30.1) (21.6) (14.4) (4.6) (1.9)EBITDA(2) . . . . . . . . . . . . . . . . (9.5) 2.2 9.2 0.5 3.4

(1) The Group defines gross sales as sales (net of returns), including charges for delivery, before deducting relevant vouchers/offers and value added tax. Gross sales is not a measure of operating performance under IFRS-EU and an investor should notconsider it as an alternative to any other measure of performance under generally accepted accounting principles. Becauseother companies may calculate gross sales differently from the way in which the Group does, gross sales may be of limitedusefulness as a comparative measure. The following table sets out the reconciliation of gross sales to revenue:

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

Revenue . . . . . . . . . . . . . . . . 272.9 321.3 402.0 84.6 110.2VAT . . . . . . . . . . . . . . . . . . . 15.2 17.1 18.8 3.9 5.6Marketing vouchers . . . . . . . . . 3.4 2.5 6.5 1.0 1.4

Gross sales . . . . . . . . . . . . . . 291.4 341.0 427.3 89.6 117.2

(2) The Group defines EBITDA as operating profit/(loss) before amortisation expenses, impairment of property, plant andequipment, depreciation of property, plant and equipment, net finance cost and taxation. The Directors believe that EBITDA isuseful in evaluating its operating performance because a number of companies also publish these figures as key performanceindicators. EBITDA is not a measure of operating performance in accordance with IFRS-EU. EBITDA should not beconsidered a substitute for gross profit/(loss), operating profit/(loss), profit/(loss) before tax, cash flow from operating activitiesor other income or cash flow statement data as determined in accordance with IFRS-EU, or as a measure of profitability orliquidity. EBITDA is included herein as a supplemental disclosure, because the Directors believe that this measure, whenconsidered in connection with cash flows from operating, investing and financing activities, provides useful comparativeinformation to an investor and helps investors evaluate the performance of the underlying business as it removes the impact of(1) differences in capital structure, including the effects of finance income and expenses; (2) differences in tax regimes;(3) differences in the method of acquisition and approach to impairment testing of productive assets; and (4) differences in thehistoric timing of initial investments and the corresponding differences in depreciation and amortisation charges.

However, because other companies may calculate EBITDA differently from the way in which the Group does, EBITDA may beof limited usefulness as a comparative measure. Other limitations are: (1) EBITDA does not reflect cash expenditures, orfuture requirements for capital expenditures or contractual commitments; (2) EBITDA does not reflect changes in, or cashrequirements for, working capital needs for the Group; (3) EBITDA does not reflect the finance costs, or the cash requirementsnecessary to service the principal payments on the Group’s debt; (4) EBITDA does not reflect taxation or the cashrequirements for any tax payments; and (5) although impairment is a non-cash charge, the assets being impaired will oftenhave to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements.

The following table sets out the reconciliation of EBITDA to operating loss:

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

Operating loss . . . . . . . . . . . . (30.1) (21.6) (14.4) (4.6) (1.9)Adjustments for:Depreciation of property, plant

and equipment . . . . . . . . . . . 17.6 19.8 17.9 4.0 4.3Impairment of property, plant and

equipment . . . . . . . . . . . . . . 0.6 0.1 1.0 — —Amortisation expense . . . . . . . . 2.4 3.9 4.7 1.0 1.0

EBITDA . . . . . . . . . . . . . . . . (9.5) 2.2 9.2 0.5 3.4

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Part IV Operating and Financial Review

The following table sets out a summary of selected unaudited operating information for the Business forFYE 2007, FYE 2008, FYE 2009, P1-3 2009 and P1-3 2010:

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)

Average order size (£)(1) . . . . . 112.17 116.30 115.94 122.81 119.38Average orders per week . . . . . 49,968 56,384 70,873 60,769 81,823CFC efficiency (units per

hour)(2) . . . . . . . . . . . . . . . . 95 114 124 114 124Average deliveries per van per

week . . . . . . . . . . . . . . . . . 99 106 121 107 126Average number of operational

staff (full-time equivalent) . . . 2,033(5) 2,730 3,151 3,119 3,610Average product wastage

(per cent. of gross sales)(3). . 1.15 0.78 0.57 0.64 0.65Items delivered exactly as

ordered (per cent.)(4) . . . . . . 98.59 99.11 99.41 99.35 98.76

Source: The information in the table above is derived from information extracted from management accounts and internal financialand operating reporting systems and is unaudited.

(1) Average retail value of goods a customer receives (including VAT and delivery charge) per order.

(2) Measured as units dispatched from the CFC per hour worked by CFC operational personnel.

(3) Value of products purged for having passed Ocado’s ‘‘use by’’ life guarantee and stock adjustments (net of sales to thecompany shop), divided by gross sales.

(4) Percentage of all items delivered exactly as ordered, i.e. the percentage of items neither missing nor substituted.

(5) Excludes, for the period prior to their transfer to Ocado, staff working for a third-party logistics contractor who transferred toOcado in April 2007.

The Directors use this unaudited information to provide insight into the underlying trends in the Business.The Directors believe that trends in gross sales and revenue are explained by the size of customerbaskets (average order size) and the number of purchases in a given week (average orders per week).The key operational trends are explained by examining productivity of the CFC staff (CFC efficiency) andof the delivery vehicles (average deliveries per van per week). Changes in these operational metricsreflect changes in operational efficiency due to both operational leverage and process improvements.Both operational metrics have shown significant improvement in recent years.

The Directors have a long-term target for efficiency of the existing CFC of approximately 180 units perhour (compared to 124 units per hour achieved in FYE 2009) and approximately 175 average deliveriesper van per week (compared to 121 deliveries per van per week achieved in FYE 2009). These long-termtargets assume that the existing CFC has reached and is operating at its maximum effective capacity of180,000 orders per week. The targeted improvements in CFC efficiency are expected to be driven byimprovements in technology mix through upgrading the existing equipment at the CFC and increasedautomation of the picking process and continued development of more intelligent IT algorithms toincrease the efficiency of existing CFC operations. Increases in deliveries per van per week are expectedto be driven primarily by increasing efficiency due to increasing customer density (the number of Ocadocustomers in any given postcode), continued development of more intelligent IT algorithms to allowefficient allocation of driver resources and optimised route planning. These forward-looking statementsmay be affected by the factors set forth in ‘‘Risk Factors’’.

The Group’s activities consist solely of the retailing and distribution of groceries and related productswithin the UK. Consequently all activities relate to this one segment.

2. Principal factors affecting results of operations

The Group’s operating and financial results are affected by a number of factors. These factors havematerially influenced the Group’s financial condition and results of operations during the periods underreview and are expected to continue to influence the Group’s financial condition and results of operations.

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2.1 Growth of the online grocery market in the UK

Estimates of the size of the UK online grocery market for 2009 vary considerably, with estimates rangingfrom £2.8 billion to £5.3 billion. The Directors estimate the total market size to be closer to the lower end ofthis range at approximately £3 billion. The Directors believe that the UK online grocery market has grownand will continue to grow substantially over the next five years, fuelled by a general trend of shoppersspending more online. See section 2 of Part I (Information about the Company) for further detail.

2.2 Increasing capacity of the Business

Ocado has expanded the effective capacity of the CFC, from early FYE 2007, when Ocado wasprocessing fewer than 55,000 orders per week, to the current effective capacity of approximately 105,000orders per week. The CFC’s effective capacity takes into account Ocado’s order profile, which varies on adaily basis with delivery peaks typically occurring on Mondays, Fridays and Saturdays. The effectivecapacity of the CFC is lower than its maximum capacity, which assumes full utilisation of the CFCthroughout the week.

Ocado is continuing to expand the capacity of the CFC and plans to further expand the effective capacityto approximately 150,000 orders per week and further to approximately 180,000 orders per week, subjectto suitable growth in order volumes and incurring necessary additional capital expenditure.

Ocado also plans to develop a second CFC to increase both the geographic reach of the Business andthe overall capacity at which it operates. The second CFC is expected to have an effective capacity toprocess approximately 180,000 orders per week once fully operational and in the short to medium term itis intended to have an effective capacity of approximately 120,000 orders per week (although it will notprocess this number of orders from opening). The Group does not expect to begin operating the secondCFC until the end of 2012 at the earliest (assuming construction begins in the first quarter of 2011 and, tothe extent necessary, appropriate financing is obtained).

The second CFC is expected to become fully operational over several months by gradually moving somevolume from the existing CFC and serving new customer growth, during which time Ocado’s distributioncosts as a percentage of gross sales are expected to increase. Once the second CFC is fully operational,the fulfilment of customer orders will be distributed between the two CFCs. While Ocado’s overallcapacity to fulfil customer orders will approximately double, each of the CFCs is expected to initiallyoperate below its effective capacity, but at a level which enables each site to run efficiently in terms of thedistribution costs as a percentage of gross sales and allows the Group to benefit from lower trunking anddelivery costs as a percentage of gross sales as a result of the second CFC. In connection with thesecond CFC, the Group’s distribution costs as a percentage of gross sales are therefore expected toincrease initially and subsequently decrease with further growth in gross sales enabled by increasedeffective capacity.

Ocado expects to establish an average of two new Spokes per year in the medium term. Typically, Ocadowould expect each new Spoke to have the capacity for between 10,000 and 25,000 incremental weeklydeliveries. Depending on the relevant Spoke’s location, it is expected either to expand the geographicreach of the Business or improve the efficiency of deliveries in areas of higher customer density byincreasing the number of drops per van per week.

The Group’s plans to increase the capacity of the Business, especially the building and fitting-out of thesecond CFC, and the timing and cost of achieving planned increases in capacity face variousuncertainties. See section 2.6 and section 6.3 of this Part IV for additional detail regarding the Group’splanned capital investment.

2.3 Increased number of customers, orders and order size leading to revenue growth

The Group has experienced significant revenue growth due to increases in the number of customers,orders and order size. The Group’s gross sales increased from £291.4 million in FYE 2007 to£427.3 million in FYE 2009 and from £89.6 million in P1-3 2009 (unaudited) to £117.2 million in P1-3 2010as a result of competitive pricing initiatives, product range extension and improved product mix.

• The average number of active customers, which Ocado defines as customers who have placed atleast one order in the preceding 12 weeks, increased by 5.8 per cent. in FYE 2008 and by 13.9 per

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cent. in FYE 2009. This was driven primarily by increased penetration in Ocado’s existing deliveryareas. As of 16 May 2010, Ocado had over 240,000 active customers. There is a substantiallong-term retention rate of the new customers who complete several orders with Ocado followingtheir initial order.

• The average number of orders per week increased from 49,968 in FYE 2007 to 70,873 in FYE 2009,and from 60,769 in P1-3 2009 to 81,823 in P1-3 2010, with the highest number in any one weekexceeding 100,000 in the week commencing 10 May 2010.

• The average order size, which is measured as the average retail value of goods a customer receivesincluding the delivery charge and value added tax, increased from £112.17 in FYE 2007 to £116.30in FYE 2008 and declined slightly to £115.94 in FYE 2009. The average order size decreased from£122.81 in P1-3 2009 to £119.38 in P1-3 2010. These numbers are unaudited. The increase in FYE2008 and first half of FYE 2009 was driven primarily by improved product mix and price inflation. Theaverage order size decreased in FYE 2009 and P1-3 2010 due primarily to the popularity of theOcado Delivery Pass, which enables customers to obtain deliveries without paying delivery chargesin exchange for either a fixed annual payment or monthly subscription payments, and whichencouraged customers to shop more frequently. Customer data collected by Ocado indicates thatthe order size typically increases substantially between a customer’s first and tenth order, due toseveral factors, including increased confidence in online grocery shopping with Ocado.

Ocado has implemented and will continue to implement a strategy of continually improving its offering tocustomers to attract long-term customers and increase gross sales:

• Ocado has initiated competitive pricing strategies, such as Tesco Price Match in March 2008, whichhave had a positive effect on gross sales, but put downward pressure on gross margin.

• Ocado has expanded its product range from approximately 12,500 products at the end of FYE 2007to over 20,000 products at the end of FYE 2009. Approximately 4,300 products in Ocado’s range asof the end of P1-3 2010 were Waitrose own-label products. Sales of Waitrose own-label productsrepresented approximately 46 per cent. of the Group’s product sales in FYE 2009.

• In December 2008, Ocado launched Ocado own-label products. As of the end of P1-3 2010, Ocadooffered approximately 70 Ocado own-label products. Approximately 41 per cent. of all orders during2010 contained at least one Ocado own-label product and approximately 61 per cent. of all first timeorders contained at least one Ocado own-label product. Ocado own-label products represented3.4 per cent. of the value of first time orders.

2.4 Increased operational efficiency and scale leading to decreasing CFC and trunking anddelivery costs as percentage of gross sales

The Group currently provides its service from a single warehouse, the CFC, unlike its competitors, whichprovide online grocery services primarily out of existing stores. The Directors believe that this businessmodel offers a significant cost advantage compared to online grocery services out of existing stores. TheDirectors believe that the cost advantage of Ocado’s business model will, over time, more than offset thehigher warehouse and delivery costs, both of which have historically declined, and the Directors believewill decline further, as a percentage of gross sales. The Directors also believe the business modelenables Ocado to operate with higher stock turnover than its competitors.

As the volume of gross sales has increased, Ocado has been able to significantly decrease costs,including CFC and trunking and delivery costs, as a percentage of gross sales, whilst improving servicequality and inventory performance. The improvements cover primarily operational costs, such as labourproductivity, delivery efficiency and waste. The improvements have been delivered through a mixture ofcapital expenditure projects, mainly aimed at:

• reducing labour requirements and enabling more intensive use of the advanced technologicalplatform supporting the Business;

• work process and staff rostering developments to enable more efficient use of staff; and

• a series of IT system improvements, mainly developed in-house, that have supported the operationalimprovements.

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Approximately 44 per cent. of CFC costs were variable employment costs in FYE 2009, with the balanceprimarily representing depreciation and amortisation and other fixed costs. Excluding depreciation andamortisation costs, approximately 58 per cent. of CFC costs were variable employment costs in FYE2009. On a per order basis, CFC employment costs are a function of the number of units in an order andhave an inverse relationship with CFC efficiency. Delivery costs are mostly variable and are primarily afunction of the number of deliveries made and the efficiency with which these orders are delivered. On aper order basis, delivery costs generally have an inverse relationship with the average deliveries per vanper week.

Ocado increased CFC efficiency from 95 units per hour in FYE 2007 to 124 units per hour in FYE 2009, anincrease of 30.5 per cent. The average number of deliveries per van per week increased from 99 in FYE2007 to 121 in FYE 2009, an increase of 22.2 per cent. as a result of increases in drops per route androutes per van per week. Distribution costs, which include costs relating to the CFC and the deliveryoperations, as a percentage of gross sales decreased from 32.1 per cent. in FYE 2007 to 25.8 per cent. inFYE 2009 primarily as a function of the benefits of scale; increasing customer density; the implementationof more efficient routing software; and increasing the number of orders that can fit in a van. Theseimprovements were delivered while the complexity of Ocado’s operations increased as a consequence ofthe extension of the range and services offered (such as the introduction of the Service Counter) as wellas the geographic reach of the Business.

2.5 Increased geographical penetration and coverage and broadening of customer base

Ocado has increased its geographical coverage from approximately 53 per cent. of households in the UKat the beginning of FYE 2007 to approximately 65 per cent. of households in October 2008. In March2010, Ocado further increased its geographical coverage by approximately 0.5 million households (toapproximately 17.3 million households).

Ocado has also increased customer penetration and ordering frequency in its existing delivery areas,which were the main drivers of the recent growth in gross sales. Ocado’s penetration is highest in areaswhere Ocado has operated the longest. To date, Ocado’s penetration has continued to grow both in areaswith low and with high penetration and there has been no evidence of areas reaching a ceiling onpenetration.

According to voluntary surveys of active customers conducted in 2009, Ocado has established that itstypical customer is female, has an average age of around 40 and has an above average householdincome. A significant number of Ocado’s customers also have families with young children. However, asOcado’s product range increases and its geographic reach extends, these demographics are broadening.Ocado’s price initiatives, targeted marketing and the introduction of Ocado’s own-label productscontributed to the broadening of Ocado’s customer demographics.

2.6 Significant and continuing capital expenditure and investment in the Business

From 2000 through to the end of FYE 2009, the Group has made investments totalling over £200 millionto develop and expand its Business to its current scale. Over the medium term, the Group anticipatessignificant capital expenditure needs for the building and fitting-out of the second CFC; continuedinvestment in the existing CFC to expand its capacity and increase operational efficiency; development ofnew Spokes; expansion of the vehicle fleet; continued development of IT systems; and maintenance andcapital expenditure. See section 6.3 of this Part IV for additional detail. In addition, Ocado continues toinvest in developing its brand and marketing to new customers.

The Group has historically funded, and expects to continue to fund capital expenditure using its cash flowfrom operations, equity, debt and lease financing. See section 6.3 of this Part IV for additional detail.

As the Group incurs more debt in connection with financing its capital expenditure, its finance costs willincrease, which will be offset at least in part by the reduction in interest expense payable on the debtrepaid with the proceeds from the Offers.

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2.7 Relationship with Waitrose

Ocado is party to Sourcing Agreement and Branding Arrangements with Waitrose and John Lewis. Underthese arrangements, Waitrose acts as Ocado’s sourcing agent for the negotiation and entry into of thepricing terms of Ocado’s supply commitments. Waitrose is obliged to use its reasonable endeavours toprocure terms for Ocado which are comparable to those obtained by Waitrose itself, including volumediscounts and availability of support for promotions. Nearly all of the products Ocado currently offers to itscustomers are sourced through Waitrose.

During the periods under review, the sourcing fee payable by Ocado to Waitrose, which is included in costof sales and therefore reduces the Group’s gross profit, was £1.3 million in FYE 2007, £1.1 million inFYE 2008, £4.7 million in FYE 2009 and £1.4 million in P1-3 2010.

The parties agreed a new sourcing fee under the 2010 Agreement to take effect from 1 December 2010.Unlike the fee currently paid, the new sourcing fee will vary according to whether the product sold is thirdparty-branded, Waitrose own-label, John Lewis own-label or sourced from John Lewis (the percentagebeing higher in respect of the latter categories than the former). Accordingly, the new sourcing fee will riseto the extent that Ocado sells a higher percentage of products that are Waitrose own-label, John Lewisown-label or sourced from John Lewis, and (subject to the minimum sourcing fee described below) will fallto the extent that Ocado sells a higher percentage of Ocado own-label, third party-branded products andproducts not sourced through Waitrose.

The Directors estimate that the sourcing fee of £4.7 million paid by Ocado to Waitrose in FYE 2009 wouldhave increased to £6.4 million had the sourcing fee payable from 1 December 2010 been payable in FYE2009.

From 1 December 2010, there will also be a minimum annual sourcing fee payable by Ocado to Waitrose.The Directors expect that this minimum fee will be broadly equivalent, as a percentage of the Group’srevenue (exclusive of delivery charges, certain refunds and VAT) generated from sales of groceryproducts, to the fee paid in FYE 2009.

Ocado receives deliveries of approximately 15 per cent. of goods by volume from the Waitrose networkwith the remaining 85 per cent. being delivered and invoiced directly from suppliers. With respect toproducts delivered through Waitrose, Ocado pays an additional logistics fee, which varies by item andaveraged 0.6 per cent. of gross sales in FYE 2009.

The Sourcing Agreement will expire on 1 September 2020, unless terminated earlier by any party givingwritten notice. The earliest the agreement may expire is 1 March 2017. To terminate by notice with effectfrom 1 March 2017, at least 18 months’ written notice must be given; such notice period reduces on asliding scale so that to terminate by notice with effect from 1 September 2017 onwards, only 12 months’notice need be given.

For a detailed description of the terms of the Branding Arrangements and Sourcing Agreement, thetermination and other provisions, see section 17.1 of Part XIII (Additional Information).

Termination or notice of termination of the Branding Arrangements and Sourcing Agreement would be anevent of default under the New Facility. However, with the exception of the change of control terminationright described in paragraph 1.4 of the Risk Factors, which is customary for an agreement of that type, theCompany is in control of whether any such termination rights will arise.

2.8 Seasonality

Family groups represent a significant proportion of Ocado’s customer base. As a result, the Group’srevenue has historically been lower during UK summer and Easter school holidays with peaks during theChristmas period. In addition, adverse weather conditions, such as snow or flooding, can increasecustomer demand, although they can also adversely affect Ocado’s ability to deliver products tocustomers. Ocado has implemented a series of operational steps (such as the scheduling of staffvacation periods and setting the timing of delivery of new vans replacing old vans to take into accountseasonality), which have had the effect of lowering variable costs during seasonal periods with lowerdemand. In addition, Ocado has undertaken steps to improve its ability to make deliveries in adverseweather conditions (such as fitting its delivery vans with winter tyres).

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3. Recent developments, current trading and prospects

In P1-6 2010, the Group has continued to grow at a strong rate in terms of orders, revenue and EBITDA.In P1-6 2010, gross sales increased by 29.9 per cent. to £245.6 million (P1-6 2009: £189.1 million) andrevenue increased by 29.2 per cent. to £230.3 million (P1-6 2009: £178.3 million).

During the same period, gross profit increased by 29.5 per cent. to £70.7 million (P1-6 2009:£54.6 million). Gross margin (gross profit as a percentage of gross sales) remained constant at 28.8 percent. Distribution costs increased by 18.7 per cent. to £58.7 million (P1-6 2009: £49.4 million), comprising£26.5 million of CFC costs (P1-6 2009: £22.5 million), £29.9 million of trunking and delivery costs (P1-62009: £25.1 million) and £2.3 million of other costs (P1-6 2009: £1.8 million). EBITDA increased by180.7 per cent. to £8.0 million (P1-6 2009: £2.8 million) and operating loss was reduced by 63.0 per cent.to £(2.7) million (P1-6 2009: £(7.4) million). Loss before tax was reduced by 47.1 per cent. to £(6.7) million(P1-6 2009: £(12.7) million).

Weekly orders exceeded 100,000 for the first time in the week commencing 10 May 2010 and the averagenumber of weekly orders in P1-6 2010 increased 33.7 per cent. to 88,407 (P1-6 2009: 66,132). Averageorder size declined by 2.8 per cent. to £115.77 (P1-6 2009: £119.15). During the same period, CFCefficiency, as measured by units per hour, increased by 3.3 per cent. from 119 to 123 and deliveryefficiency, as measured by average deliveries per van per week, also increased by 14.3 per cent. from115 to 131. Average product wastage (as a percentage of gross sales) was 0.69 per cent. in P1-6 2010(P1-6 2009: 0.63 per cent.). The number of items delivered exactly as ordered in P1-6 2010 was 99.07 percent. (P1-6 2009: 99.47 per cent.).

All financial and operational information for the periods P1-6 2009 and P1-6 2010 is unaudited.

On 25 May 2010, Ocado, Waitrose and John Lewis entered into the 2010 Agreement. Further informationabout this agreement can be found in section 17.1 of Part XIII (Additional Information).

On 5 July 2010, Ocado (as original borrower) entered into a sterling term loan facility (the ‘‘New Facility’’)between, among others, Barclays Bank PLC, HSBC Bank plc and Lloyds TSB Bank plc (as mandatedlead arrangers and lenders) and Barclays Bank PLC (as agent and security trustee). The lenders haveagreed to make available £100 million to the borrowers under the New Facility. The New Facility has anaccordion feature which allows for the amount available under the New Facility to be increased up to£130 million, subject to lenders (existing or additional) agreeing to make the additional amount available.The New Facility contains customary warranties, representations and covenants (including restrictionson debt incurrence and financial covenants, as further described in Part XIII) and events of default(including on a material adverse change).

In May and July 2010, Ocado also entered into arrangements for an additional £18.4 million for thefinance leasing of its future vehicle requirements.

On 26 May 2010, Ocado entered into with Lloyds TSB Bank plc as lender a new three year term loan in anaggregate principal amount of £7.5 million and a revolving credit facility in an aggregate principal amountof £7.5 million.

For additional information on these facilities, see section 6.2 of this Part IV.

On 23 June 2010, the Company re-registered as a public limited company.

† The following table sets out the reconciliation of EBITDA to operating loss for P1-6 2009 and P1-6 2010:

P1-6 2009 P1-6 2010

(unaudited) (unaudited)£ million £ million

Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.4) (2.7)Adjustment for:Depreciation of property, plant and equipment . . . . . . . . . . . . . . . . . . . . 8.1 8.7Amortisation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 2.0

EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8 8.0

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The Company does not intend to publish a financial report for P1-6 2010. However, financial informationfor this period is included in Part VII (Unaudited Interim Financial Information relating to the Group for the24 Weeks Ended 16 May 2010).

4. Description of key income statement items

Revenue consists of online sales (net of returns) through the Website and mobile applications, includingcharges for delivery, but excluding relevant vouchers/offers and value added tax. Relevant vouchers/offers include money-off coupons, conditional spend vouchers and multi-buy offers, such as buy three forthe price of two.

Cost of sales consists of the cost of groceries and other products the Group sells, any associated licensefees which are linked to the volume of sales of specific products or product groups, including the brandingand sourcing fees payable to Waitrose, adjustments to inventory, and charges for transportation of goodsfrom a supplier to the CFC.

Distribution costs include all costs to the point of sale, which is usually the customer’s home. There aretwo main components, CFC costs and delivery costs:

• CFC costs include employment and operating costs relating to the CFC (inbound product receivingand decanting into the picking area or to storage, outbound product picking and packing for customerorders and loading of orders for despatch) and all associated depreciation and amortisation.

• Delivery costs include costs relating to the trunking of customer orders from the CFC to the Spokes,where required, and van delivery to customers’ homes, including employment costs of LGV anddelivery van drivers and operational management, fuel, tolls, insurance and maintenance of vehicles,the operating costs of the Spokes, including operating lease rentals and all associated depreciation,amortisation, impairment and any losses on disposal of assets.

Distribution costs also include costs relating to the call centre and payment processing.

Other income consists primarily of advertising revenue for advertising services provided by Ocado tosuppliers and other third parties on the Website, commission income received and sublease paymentsreceived. Other income is recognised in the period to which it relates on an accruals basis.

Administrative expenses consist of all IT costs, advertising and marketing expenditure, employment costsof all head office functions, which include legal, finance, human resources, marketing and procurement,rent and other property-related costs for the head office, all fees for professional services and thedepreciation, amortisation and impairment associated with head office IT equipment, software, fixturesand fittings and expenses relating to the ESOS and the JSOS.

Net finance costs consist of finance income and finance costs. Finance income is comprised principally ofbank interest receivable and other interest. Finance costs are comprised of interest payable on bankloans and overdrafts, interest on finance leases and interest on other financing arrangements.

5. Results of operations

The financial information in this section relates to the Group’s results from continuing operations.

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5.1 Comparison of the financial results of the Group for P1-3 2009 (unaudited) and P1-3 2010

The following table sets out the Group’s consolidated statement of comprehensive income for P1-3 2009(unaudited) and P1-3 2010:

P1-3 2009 P1-3 2010 Change

(unaudited)£ million £ million %

Continuing operationsRevenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.6 110.2 30.3Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (58.9) (76.9) 30.5

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.7 33.3 29.7Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5 1.2 115.1Distribution costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (24.6) (28.3) 14.9

Operating profit before administrative expenses . . . . . . . 1.6 6.2 282.5Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . (6.2) (8.1) 30.8

Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.6) (1.9) (58.9)Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.7) (2.1) (21.7)

Loss before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.2) (4.0) (45.2)Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —

Loss for the period attributable to the owners of theGroup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.2) (4.0) (45.2)

The following table sets out selected unaudited operating information for the Business for P1-3 2009 andP1-3 2010:

P1-3 2009 P1-3 2010 Change

(unaudited) (unaudited)%

Average order size (£)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 122.81 119.38 (2.8)Average orders per week . . . . . . . . . . . . . . . . . . . . . . . . . . 60,769 81,823 34.6CFC efficiency (units per hour)(2) . . . . . . . . . . . . . . . . . . . . 114 124 8.0Average deliveries per van per week . . . . . . . . . . . . . . . . . 107 126 18.0Average number of operational staff (full-time equivalent) . . . 3,119 3,610 15.7Average product wastage (per cent. of gross sales)(3) . . . . . . 0.64 0.65 1.5Items delivered exactly as ordered (per cent.)(4) . . . . . . . . . . 99.35 98.76 0.6

Source: The information in the table is derived from and extracted from management accounts and internal financial and operatingreporting systems and is unaudited.

(1) Average retail value of goods a customer receives (including VAT and delivery charge) per order.

(2) Measured as units dispatched from the CFC per hour worked by CFC operational personnel.

(3) Value of products purged because passed Ocado’s ‘‘use by’’ life guarantee and stock adjustments (net of sales to thecompany shop), divided by gross sales.

(4) Percentage of all items delivered exactly as ordered, i.e. the percentage of items ordered neither missing nor substituted.

(A) Gross sales and revenue

Gross sales increased from £89.6 million in P1-3 2009 (unaudited) to £117.2 million in P1-3 2010, anincrease of £27.7 million, or 30.9 per cent. Like-for-like gross sales, a non-IFRS measure used to removethe impact of Ocado’s increase in geographic coverage, when compared with the previous period,increased by the same amount, because the geographical reach of the Business was not extended duringthe period. Revenue increased from £84.6 million in P1-3 2009 (unaudited) to £110.2 million in P1-32010, an increase of £25.6 million, or 30.3 per cent.

Gross sales and revenue increased primarily as a result of the increase in the number of customers andthe average number of orders per week from 60,769 in P1-3 2009 to 81,823 in P1-3 2010. The 34.6 per

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cent. increase in the average number of orders per week was due to increased frequency of ordering byexisting customers and new customer gains in existing delivery areas.

The average order size was £122.81 in P1-3 2009 (unaudited) and decreased by 2.8 per cent to £119.38 inP1-3 2010 (unaudited). The change was due to the increase in the number of customers subscribing to theOcado Delivery Pass and placing a smaller weekly grocery order rather than a larger, less frequent shop.The average basket size for customers not using the Ocado Delivery Pass increased in the same period.

Marketing vouchers, which are money-off coupons that reduce the amount a customer pays for theirorder, increased from £1.0 million in P1-3 2009 (unaudited) to £1.4 million in P1-3 2010. This promotionaltool is used to acquire new customers and encourage existing customers to shop more frequently or ondays which have lower demand, thereby ensuring a more efficient asset utilisation for Ocado and reducedpressure on the more popular shopping days. This promotional tool is also used to introduce customers toand encourage uptake of the Ocado Delivery Pass. The increase in marketing vouchers in P1-3 2010mainly reflected increased use of marketing vouchers during the period to promote deliveries on dayswith lower demand, increasing Ocado’s operating efficiency on such days.

(B) Gross profit

Cost of sales increased from £58.9 million in P1-3 2009 (unaudited) to £76.9 million in P1-3 2010, anincrease of £18.0 million, or 30.5 per cent., broadly in line with overall growth in gross sales. Gross profitincreased from £25.7 million in P1-3 2009 (unaudited) to £33.3 million in P1-3 2010, an increase of£7.6 million, or 29.7 per cent. Gross margin, expressed as gross profit as a percentage of gross sales,remained relatively stable at 28.7 per cent. in P1-3 2009 and 28.4 per cent. in P1-3 2010 as a result ofpositive changes in input prices, retail price inflation and changes in product mix, offset by the impact ofthe ‘‘internet only’’ prices for most Waitrose own-label products introduced in May 2009 (and discontinuedin May 2010).

(C) Other income

Other income increased from £0.5 million in P1-3 2009 (unaudited) to £1.2 million in P1-3 2010. Theincrease was primarily due to the increase in advertising revenue to £1.0 million in P1-3 2010 from£0.5 million in P1-3 2009 (unaudited).

(D) Distribution costs

Distribution costs increased from £24.6 million in P1-3 2009 (unaudited) to £28.3 million in P1-3 2010, anincrease of £3.7 million, or 14.9 per cent. During the same period, the average number of orders per weekincreased by 34.6 per cent., whilst CFC efficiency increased by 8.0 per cent. and average deliveries pervan per week increased by 18.0 per cent.

Distribution costs as a percentage of gross sales decreased from 27.5 per cent. in P1-3 2009 to 24.1 percent. in P1-3 2010 as a result of operational leverage, increasing efficiency in both inbound productreceiving and decanting and in outbound customer order picking and as a result of increasing dropdensity and a range of further operational efficiency initiatives.

The following table sets out the Group’s distribution costs for P1-3 2009 and P1-3 2010:

P1-3 2009 P1-3 2010 Change

(unaudited)£ million £ million %

Employment costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.4 17.1 18.5Depreciation of property, plant and equipment . . . . . . . . . . . 3.5 3.7 4.6Operating lease rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.4 0.4 2.5Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3 7.1 13.2

Total distribution costs . . . . . . . . . . . . . . . . . . . . . . . . . . 24.6 28.3 14.9

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Employment costs increased from £14.4 million in P1-3 2009 (unaudited) to £17.1 million in P1-3 2010,an increase of £2.7 million or 18.5 per cent. The increase was primarily due to the increased number ofemployees in the CFC and delivery operations required for the increased volume of orders. The rate ofincrease of 18.5 per cent was less than the rate of growth in revenue, 30.3 per cent, due to the increasedefficiency in the CFC and trunking and delivery operations.

Depreciation of property, plant and equipment increased from £3.5 million in P1-3 2009 (unaudited) to£3.7 million in P1-3 2010, an increase of £0.2 million, or 4.6 per cent. The increase was primarily due to theadditional depreciation charges on new capital investment to increase operational capacity and efficiency.

Other distribution costs (which include vehicle fuel and other vehicle operating costs, credit cardprocessing charges, order related costs and facility costs related to operational sites) increased from£6.3 million in P1-3 2009 (unaudited) to £7.1 million in P1-3 2010. This increase was due to the highervolume of orders, but partially offset by the impact of operational efficiencies achieved in each businessarea.

The following table sets out the Group’s distribution costs for P1-3 2009 and P1-3 2010 as they relate toCFC costs, trunking and delivery costs, and other costs:

P1-3 2009 P1-3 2010 Change

(unaudited) (unaudited)£ million £ million %

CFC costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.3 12.7 13.0Trunking and delivery costs . . . . . . . . . . . . . . . . . . . . . . . . 12.5 14.4 15.4Other costs (call centre and payment processing) . . . . . . . . 0.9 1.1 31.6

Total distribution costs . . . . . . . . . . . . . . . . . . . . . . . . . . 24.6 28.3 14.9

CFC costs increased from £11.3 million in P1-3 2009 (unaudited) to £12.7 million in P1-3 2010(unaudited), an increase of 13.0 per cent. CFC costs as a percentage of gross sales decreased from12.6 per cent. in P1-3 2009 to 10.9 per cent. in P1-3 2010. CFC efficiency (measured as units dispatchedfrom the CFC per hour worked by CFC operational personnel) increased by 8.0 per cent. due to thebenefits from higher volumes and a number of operational improvement projects. Employment costsrelating to CFC direct and indirect staff increased marginally while CFC throughput grew significantly.

Trunking and delivery costs increased from £12.5 million in P1-3 2009 (unaudited) to £14.4 million in P1-32010 (unaudited), an increase of 15.4 per cent. Trunking and delivery costs as a percentage of grosssales decreased from 13.9 per cent. in P1-3 2009 to 12.3 per cent. in P1-3 2010. The improved efficiencyof the delivery operation is primarily due to the continued development of Ocado’s bespoke system forroute optimisation and increased customer density, as well as a number of other small improvementprojects. Each of these efficiency gains contributed to improvements in the average number of deliveriesper van per week from 107 in P1-3 2009 to 126 in P1-3 2010 and reduced the delivery cost per order.

(E) Operating profit before administrative expenses

As a result of the foregoing, operating profit before administrative expenses increased from £1.6 million inP1-3 2009 (unaudited) to £6.2 million in P1-3 2010, an increase of £4.6 million.

(F) Administrative expenses

Administrative expenses increased from £6.2 million in P1-3 2009 (unaudited) to £8.1 million in P1-32010, an increase of £1.9 million, or 30.8 per cent.

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The following table sets out the Group’s administrative expenses for P1-3 2009 and P1-3 2010:

P1-3 2009 P1-3 2010 Change

(unaudited)£ million £ million %

Employment costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7 4.3 18.1Marketing costs (excluding promotional vouchers) . . . . . . . . 0.6 1.3 120.7Depreciation and amortisation . . . . . . . . . . . . . . . . . . . . . . 1.6 1.6 3.1Operating lease rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . — 0.2 N.M.Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3 0.6 103.3

Total administrative expenses . . . . . . . . . . . . . . . . . . . . . 6.2 8.1 30.8

N.M.:Not meaningful.

Employment costs increased from £3.7 million (unaudited) to £4.3 million, or 18.1 per cent., due to anincrease in the average number of operational staff from 3,119 in P1-3 2009 to 3,610 in P1-3 2010 and anincrease in the average number of support staff from 336 in P1-3 2009 to 393 in P1-3 2010, which wasrequired to support the growth of revenue, product range and IT capability.

Marketing costs (excluding promotional vouchers) increased from £0.6 million in P1-3 2009 (unaudited)to £1.3 million in P1-3 2010, an increase of £0.7 million. This increase included an increase ofapproximately £0.5 million in direct mail spend mainly due to invoice timing and an increase ofapproximately £0.3 million in spend on broadcast media. The spend on broadcast media related to brandbuilding activity on radio and a limited number of unsuccessful direct TV initiatives.

(G) Operating loss

Operating loss decreased from £(4.6) million in P1-3 2009 (unaudited) to £(1.9) million in P1-3 2010, adecrease of £2.7 million, or 58.9 per cent. The decrease was primarily due to the growth in revenuecoupled with greater cost efficiencies within the Business.

(H) Net finance costs

Net finance costs decreased from £2.7 million in P1-3 2009 (unaudited) to £2.1 million in P1-3 2010, adecrease of £0.6 million, or 21.7 per cent. There was no finance income in P1-3 2009 (unaudited) or P1-32010. The decrease in finance costs was primarily due to a decrease in interest related to finance leasesas interest is charged on a reducing balance basis as those leases age. The decrease also reflects adecrease in interest on other loans due to refinancing of a convertible loan and a reduction in interestrates.

(I) Loss before tax

As a consequence of the above, loss before tax decreased from £(7.2) million in P1-3 2009 (unaudited) to£(4.0) million in P1-3 2010, a decrease of £3.3 million, or 45.2 per cent.

(J) Taxation

The statutory rate of tax applicable was 28 per cent. in P1-3 2009 and P1-3 2010. No current or deferredtax or charge credit was recognised in P1-3 2009 or P1-3 2010.

(K) Loss for the period attributable to the owners of the Group

The Group recorded a £(7.2) million loss in P1-3 2009 (unaudited) which decreased to a £(4.0) millionloss in P1-3 2010, a £3.3 million or 45.2 per cent. decrease.

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5.2 Comparison of the financial results of the Group for FYE 2007, FYE 2008 and FYE 2009

The following table sets out the Group’s consolidated statements of comprehensive income for FYE2007, FYE 2008 and FYE 2009:

Change ChangeFYE 2007 FYE 2008 FYE 2009 FYE 2007- FYE 2008-

FYE 2008 FYE 2009

£ million £ million £ million % %

Continuing operationsRevenue . . . . . . . . . . . . . . . . . . 272.9 321.3 402.0 17.8 25.1Cost of sales . . . . . . . . . . . . . . . (184.9) (218.5) (279.2) 18.2 27.8

Gross profit . . . . . . . . . . . . . . . 88.0 102.8 122.8 16.8 19.5Other income . . . . . . . . . . . . . . . 0.6 1.8 2.6 195.4 46.1Distribution costs . . . . . . . . . . . . (93.5) (101.1) (110.3) 8.1 9.2

Operating profit/(loss) beforeadministrative expenses . . . . (4.9) 3.5 15.1 N.M. 327.9

Administrative expenses . . . . . . . (25.1) (25.2) (29.5) 0.0 17.5

Operating loss . . . . . . . . . . . . . (30.1) (21.6) (14.4) (28.2) (33.4)Finance income . . . . . . . . . . . . . 0.8 0.1 — (88.0) (87.9)Finance costs . . . . . . . . . . . . . . . (10.9) (11.8) (11.1) 8.2 (5.7)

Loss before tax . . . . . . . . . . . . . (40.2) (33.3) (25.5) (17.1) (23.4)Taxation . . . . . . . . . . . . . . . . . . . — — 2.3 — N.M.

Loss for the period attributableto the owners of theCompany . . . . . . . . . . . . . . . . (40.2) (33.3) (23.2) (17.1) (30.3)

N.M.:Not meaningful.

The following table sets out selected unaudited operating information for the Business for FYE 2007, FYE2008 and FYE 2009:

Change ChangeFYE 2007 FYE 2008 FYE 2009 FYE 2007- FYE 2008-

FYE 2008 FYE 2009

(unaudited) (unaudited) (unaudited)£ million £ million £ million % %

Average order size (£)(1) . . . . . . . 112.17 116.30 115.94 3.7 (0.3)Average orders per week . . . . . . 49,968 56,384 70,873 12.8 25.7CFC efficiency (units per hour)(2) . 95 114 124 20.7 8.6Average deliveries per van per

week . . . . . . . . . . . . . . . . . . . 99 106 121 7.7 13.5Average number of operational

staff (full time equivalent) . . . . . 2,033(5) 2,730 3,151 34.3 15.4Average product wastage (per

cent. of gross sales)(3) . . . . . . . 1.15 0.78 0.57 (32.2) (26.9)Items delivered exactly as ordered

(per cent.)(4) . . . . . . . . . . . . . . 98.59 99.11 99.41 0.5 0.3

Source: The information in the table above is derived from information extracted from management accounts and internal financialand operating reporting systems and is unaudited.

(1) Average retail value of goods a customer receives (including VAT and delivery charge) per order.

(2) Measured as units dispatched from the CFC per hour worked by CFC operational personnel.

(3) Value of products purged for having passed Ocado’s ‘‘use by’’ life guarantee and stock adjustments (net of sales to thecompany shop), divided by the gross sales.

(4) Percentage of all items delivered exactly as ordered, i.e. the percentage of items neither missing nor substituted.

(5) Excludes, for the period prior to their transfer to Ocado, staff working for a third-party logistics contractor who transferred toOcado in April 2007.

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Part IV Operating and Financial Review

(A) Gross sales and revenue

Gross sales increased from £291.4 million in FYE 2007 to £341.0 million in FYE 2008, an increase of£49.6 million, or 17.0 per cent and to £427.3 million in FYE 2009, an increase of £86.3 million, or 25.3 percent. Like-for-like gross sales increased by 15.3 per cent from FYE 2007 to FYE 2008 and by 22.3 percent from FYE 2008 to FYE 2009. Revenue for FYE 2007 was £272.9 million and increased to£321.3 million in FYE 2008, an increase of £48.5 million, or 17.8 per cent and to £402.0 million in FYE2009, an increase of £80.7 million, or 25.1 per cent.

The average number of orders per week increased from 49,968 in FYE 2007 to 56,384 in FYE 2008 andto 70,873 in FYE 2009. The average order size was £112.17 in FYE 2007, £116.30 in FYE 2008 and£115.94 in FYE 2009. These numbers are unaudited.

Revenue increased from FYE 2007 to FYE 2008 primarily as a result of increased frequency of orderingby customers due to competitive pricing initiatives, product range extension from approximately 12,500 atthe end of FYE 2007 to 16,000 at the end of FYE 2008 and improved product mix. The average number ofactive customers increased by 5.8 per cent. in FYE 2008 compared to FYE 2007. Ocado introduced theTesco Price Match scheme in March 2008, which made a significant contribution to revenue growth in thesecond half of FYE 2008. Ocado also introduced same-day delivery in part of its delivery area starting inJuly 2008, 30-minute intervals for the one hour delivery slots in August 2008, and individual product lifeinformation on the Website. The effect of Tesco Price Match on an average item price was countered bychanges in product mix and general price inflation.

Revenue increased from FYE 2008 to FYE 2009 primarily as a result of increased spend and frequency ofordering by existing customers and new customer gains in existing delivery areas (including the deliveryarea served by the Leeds Spoke which became operational in October 2008 and increased the range ofareas in which its service is provided by approximately 1.8 million households to a total of approximately16.8 million households). The average number of active customers increased by 13.9 per cent. in FYE2009 compared to FYE 2008. This was also a result of competitive pricing initiatives including the launchin December 2008 of Ocado’s own-label product range; increase in the number of products sold byOcado from approximately 16,000 as at the end of FYE 2008 to over 20,000 as at the end of FYE 2009;improved product mix; the introduction of the Ocado Delivery Pass in November 2008; and to a lesserextent as a result of price inflation.

Additional factors contributing to the increase in revenue included the continued increase in popularity ofinternet grocery shopping, the launch of the Ocado iPhone application in April 2009 and thecommencement in September 2009 of Sunday deliveries in approximately 45 per cent. of the householdsin the delivery area in which Ocado operated. Currently, approximately 70 per cent. of Ocado’s deliveryarea has a Sunday delivery service, which is expected to be rolled out to the remainder of Ocado’sdelivery area in 2010.

Ocado did not expand its geographic reach in FYE 2009. However, in FYE 2009, Ocado opened two newSpokes, one in Dartford (replacing the smaller Aylesford site) and one in White City, increasing thecapacity in the Group’s existing delivery area.

The average order size increased in FYE 2008 primarily due to increased product range, improvedproduct mix, price inflation and increased delivery income. The average order size declined slightly inFYE 2009 as a result of the introduction of the Ocado Delivery Pass, which was largely offset by priceinflation and changes in product price. Although the introduction of the Ocado Delivery Pass encouragedholders to shop more frequently, the average order size of these customers decreased, while the averageorder size for customers without an Ocado Delivery Pass increased.

Delivery income increased in FYE 2008 due to the full-year effect of the introduction in the summer of2007 of dynamic delivery charges to reflect customer demand and in FYE 2009 due to the introduction ofthe Ocado Delivery Pass.

Marketing vouchers, which are money-off coupons that reduce the amount a customer pays for theirorder, decreased from £3.4 million in FYE 2007 to £2.5 million in FYE 2008 and increased to £6.5 millionin FYE 2009. This promotional tool is used to acquire new customers, encourage customers to purchasethe Ocado Delivery Pass and to encourage customers to shop more frequently and on days with lowerdemand, increasing Ocado’s operating efficiency on such days.

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(B) Gross profit

Cost of sales increased from £184.9 million in FYE 2007 to £218.5 million in FYE 2008, an increase of£33.6 million, or 18.2 per cent. and to £279.2 million in FYE 2009, an increase of £60.7 million, or 27.8 percent, in each case broadly in line with the overall growth in gross sales. Gross profit increased from£88.0 million in FYE 2007 to £102.8 million in FYE 2008, an increase of £14.8 million or 16.8 per cent. andincreased to £122.8 million in FYE 2009, an increase of £20.0 million, or 19.5 per cent. Gross margin(gross profit as percentage of gross sales) decreased slightly from 30.2 per cent. in FYE 2007 to 30.1 percent. in FYE 2008 and decreased further to 28.7 per cent. for FYE 2009.

Gross margin decreased in FYE 2008 as a result of input cost inflation and product mix changes, partiallyoffset by a lower branding and sourcing fee paid during the period. The reduction in gross margin in FYE2009 was predominantly due to the full year effect of the increased branding and sourcing fee on sales ofgoods sourced by Waitrose from September 2008 and the ‘‘internet only’’ prices for most Waitrose own-label products introduced in May 2009. The branding and sourcing fee decreased from £1.3 million inFYE 2007 to £1.1 million in FYE 2008 and increased to £4.7 million in FYE 2009.

(C) Other income

Other income increased from £0.6 million in FYE 2007 to £1.8 million in FYE 2008, an increase of£1.2 million, and to £2.6 million in FYE 2009, an increase of £0.8 million. The increase was primarily dueto the increase in advertising revenue from zero in FYE 2007 to £1.0 million in FYE 2008 and £2.0 millionin FYE 2009.

(D) Distribution costs

Distribution costs increased from £93.5 million in FYE 2007 to £101.1 million in FYE 2008, an increase of£7.5 million, or 8.1 per cent., and to £110.3 million in FYE 2009, an increase of £9.3 million, or 9.2 percent. From FYE 2007 to FYE 2008 to FYE 2009 the average number of orders per week increased by12.8 per cent. and 25.7 per cent., respectively, CFC efficiency increased by 20.7 and 8.6 per cent.,respectively, and average deliveries per van per week increased by 7.7 per cent. and 13.5 per cent.,respectively.

Distribution costs as a percentage of gross sales decreased from 32.1 per cent. in FYE 2007 to 29.6 percent. in FYE 2008 and to 25.8 per cent. in FYE 2009 as a result of operational leverage, increasingefficiency in both inbound product receiving and decanting and in outbound customer order picking aswell as a result of increasing drop density, routing improvements stemming from the implementation ofnew routing software, and a range of operational efficiency initiatives.

The following table sets out the Group’s distribution costs for FYE 2007, FYE 2008 and FYE 2009:

Change ChangeFYE 2007 FYE 2008 FYE 2009 FYE 2007- FYE 2008-

FYE 2008 FYE 2009

£ million £ million £ million % %

Employment costs . . . . . . . . . . . 46.6 56.5 65.3 21.1 15.5Depreciation of property, plant

and equipment . . . . . . . . . . . . 16.2 17.8 15.3 10.0 (14.1)Impairment of property, plant and

equipment . . . . . . . . . . . . . . . . 0.6 0.1 1.0 (89.2) N.M.Operating lease rentals . . . . . . . . 1.5 1.8 1.7 15.3 (2.0)Other . . . . . . . . . . . . . . . . . . . . . 28.5 24.9 27.0 (12.7) 8.3

Total distribution costs . . . . . . . 93.5 101.1 110.3 8.1 9.2

N.M.:Not meaningful.

Employment costs increased from £46.6 million in FYE 2007 to £56.5 million in FYE 2008, an increase of£9.9 million, or 21.1 per cent. and to £65.3 million in FYE 2009, an increase of £8.8 million, or 15.5 percent. The increase was primarily due to the increase in wages and salaries and related costs relating to anadditional 697 operational FTE staff in FYE 2008, an increase of 34.3 per cent., and a further 421additional FTE staff in FYE 2009, an increase of 15.4 per cent. raising the total operational FTE staff to

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3,151 at the end of FYE 2009. During FYE 2007, a third-party logistics contract for workers in the CFCended at which point each worker joined Ocado and became an Ocado employee. The costs relating tothis contract for the part year in FYE 2007 prior to the termination of the contract were £7.3 million(unaudited) and were categorised under other costs. Subsequently, these costs were categorised asemployment costs. Excluding this change, the increase in employment costs in FYE 2008 was anincrease of £2.6 million (unaudited), or 4.8 per cent., which primarily reflected additional personnel hiredto support the increased volume of orders. The relative increase in the number of staff hired has beenlower than the relative growth in gross sales due to increased productivity of the CFC and deliveryoperations.

Depreciation of property, plant and equipment increased from £16.2 million in FYE 2007 to £17.8 millionin FYE 2008, an increase of £1.6 million, or 10.0 per cent., and decreased to £15.3 million in FYE 2009, adecrease of £2.5 million, or 14.1 per cent. The majority of depreciation is attributable to the CFC withapproximately £4 million (unaudited) in each year being due to the trunking and delivery operations. Theincrease from FYE 2007 to FYE 2008 was primarily due to higher charges arising from continuedinvestment in the CFC offset in part by the increase in the estimated useful life of certain assets resultingin a reduction of the depreciation charge by £0.9 million. In October 2008, the Group revised theestimated useful life of certain assets, due to the increased resilience of the CFC and greater certainty ofthe long-term picking solutions. The change was only applied from October 2008, and saw a decrease ofthe depreciation charge for FYE 2008 of £0.9 million. If the change had been applied from the beginningof FYE 2008, depreciation would have fallen by a further £2.4 million. For the majority of assets revised,this doubled the estimated useful life from 5 to 10 years, although a small number of higher value assetshad their life halved from 20 years. If the useful lives of the assets had not been revised, the depreciationcharge in FYE 2009 would have been £4.9 million higher.

Other distribution costs (which include vehicle fuel and other vehicle operating costs, credit cardprocessing charges, order related costs and facility costs related to operational sites) decreased from£28.5 million in FYE 2007 to £24.9 million in FYE 2008, a 12.7 per cent. decrease, and increased to£27.0 million in FYE 2009, an 8.3 per cent. increase. The decrease from FYE 2007 to FYE 2008 wasprimarily the result of the termination of the third-party logistics contract described above. Excluding thischange, other distribution costs for FYE 2007 would have been £21.3 million (unaudited) and would haveincreased by £3.6 million to £24.9 million in FYE 2008, an increase of 17.1 per cent, primarily due to thegrowth in the volume of orders. The increase from FYE 2008 to FYE 2009 was primarily the result of thegrowth in the volume of orders.

The following table sets out the Group’s distribution costs for FYE 2007, FYE 2008 and FYE 2009 as theyrelate to CFC costs, trunking and delivery and other costs:

Change ChangeFYE 2007 FYE 2008 FYE 2009 FYE 2007- FYE 2008-

FYE 2008 FYE 2009

(unaudited) (unaudited) (unaudited)£ million £ million £ million % %

CFC costs . . . . . . . . . . . . . . . . . 47.5 49.5 50.8 4.1 2.7Trunking and delivery costs . . . . . 42.9 48.3 55.3 12.6 14.4Other costs (call centre and

payment processing) . . . . . . . . 3.1 3.3 4.2 5.6 29.2

Total distribution costs . . . . . . . 93.5 101.1 110.3 8.1 9.2

Costs relating to the CFC increased from £47.5 million in FYE 2007 (unaudited) to £49.5 million in FYE2008 (unaudited), an increase of 4.1 per cent., and to £50.8 million in FYE 2009 (unaudited), an increaseof 2.7 per cent. Costs relating to the CFC as a percentage of gross sales decreased from 16.3 per cent. inFYE 2007 to 14.5 per cent. in FYE 2008 and to 11.9 per cent. in FYE 2009. CFC efficiency increased from95 units per hour in FYE 2007 to 114 in FYE 2008 and to 124 in FYE 2009. These increases were due tothe benefits from higher volumes and a number of improvement projects. These overall efficiency gainswere offset in part by other business initiatives, such as the introduction of the Service Counter inSeptember 2009. In FYE 2009, variable employment costs were the largest component of CFC costs,representing approximately 44 per cent. of the total CFC costs (or 58 per cent. of total CFC costsexcluding depreciation and amortisation), with the balance of CFC costs being primarily fixed.

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Trunking and delivery costs increased from £42.9 million in FYE 2007 to £48.3 million in FYE 2008, anincrease of 12.6 per cent., and to £55.3 million in FYE 2009, an increase of 14.4 per cent. Trunking anddelivery costs as a percentage of gross sales decreased from 14.7 per cent. in FYE 2007 to 14.2 per cent.in FYE 2008 and to 12.9 per cent. in FYE 2009. The improved efficiency of the delivery operation wasprimarily due to the continued development of Ocado’s bespoke system for route optimisation andincreased customer density, as well as a number of other small improvement projects, which contributedto improvements in the number of deliveries per van per week from 99 in FYE 2007 to 106 in FYE 2008 to121 in FYE 2009, reducing the delivery cost per order.

(E) Operating profit/(loss) before administrative expenses

As a result of the foregoing, operating profit/(loss) before administrative expenses moved from anoperating loss of £(4.9) million in FYE 2007 to an operating profit of £3.5 million in FYE 2008, animprovement of £8.5 million and to an operating profit of £15.1 million in FYE 2009, an increase of£11.6 million.

(F) Administrative expenses

Administrative expenses were £25.1 million in FYE 2007, £25.2 million in FYE 2008 and increased to£29.5 million in FYE 2009, an increase of £4.4 million, or 17.5 per cent., as the Group invested inadditional central costs to serve the higher demand.

The following table sets out the Group’s administrative expenses for FYE 2007, FYE 2008 and FYE 2009:

Change ChangeFYE 2007 FYE 2008 FYE 2009 FYE 2007- FYE 2008-

FYE 2008 FYE 2009

£ million £ million £ million % %

Employment costs . . . . . . . . . . . 11.8 14.0 17.0 18.4 21.5Marketing costs (excluding

promotional vouchers) . . . . . . . 6.8 3.6 4.3 (47.1) 21.4Depreciation and amortisation . . . 3.8 5.9 7.3 55.3 23.5Operating lease rentals . . . . . . . . 0.2 0.2 0.1 (3.9) (23.5)Other . . . . . . . . . . . . . . . . . . . . . 2.5 1.5 0.8 (41.8) (47.9)

Total administrative expenses . . 25.1 25.2 29.5 — 17.5

Employment costs increased from £11.8 million in FYE 2007 to £14.0 million in FYE 2008 to £17.0 millionin FYE 2009, resulting from an increase in the average number of IT and head office staff from 256 in FYE2007 to 293 in FYE 2008 and to 343 in FYE 2009. The increase also reflected an increase in remunerationof the board of directors from £0.7 million in FYE 2008 to £1.7 million in FYE 2009.

Marketing costs (excluding promotional vouchers) decreased from £6.8 million in FYE 2007 to£3.6 million in FYE 2008, a £3.2 million or 47.1 per cent. decrease, and increased to £4.3 million in FYE2009, a £0.8 million or 21.4 per cent. increase. The decrease from FYE 2007 to FYE 2008 was primarilydue to the change in marketing strategy away from TV and radio advertising to focus on e-mail marketingactivities, including vouchers, to existing and lapsed customers and to invest in reducing retail pricesrather than generic marketing activities designed to attract new customers. The increase from FYE 2008to FYE 2009 reflected increased direct mail and other promotional activities.

Depreciation and amortisation increased from £3.8 million in FYE 2007 to £5.9 million in FYE 2008, a£2.1 million or 55.3 per cent increase, and to £7.3 million in FYE 2009, a £1.4 million or 23.5 per cent.increase due to an increase in the value of IT asset purchases and the value of internal IT developmentcosts that have been capitalised.

(G) Operating loss

Operating loss decreased from £(30.1) million in FYE 2007 to £(21.6) million in FYE 2008, a decrease of£8.5 million, or 28.2 per cent. and to £(14.4) million in FYE 2009, a decrease of £7.2 million, or 33.4 percent. The decrease was primarily due to the growth in revenue which enabled greater operatingefficiencies within the Business, as described above.

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(H) Net finance costs

Net finance costs increased from £10.1 million in FYE 2007 to £11.7 million in FYE 2008, an increase of£1.6 million, or 16.1 per cent., and decreased to £11.1 million in FYE 2009, a decrease of £0.6 million, or5.0 per cent. Finance income decreased from £0.8 million in FYE 2007 to £0.1 million in FYE 2008 to £nilin FYE 2009 primarily due to lower average cash balances. Within finance costs, interest on financeleases increased from £3.3 million in FYE 2007 to £3.8 million in FYE 2008 to £5.0 million in FYE 2009due to an increase in the level of borrowing through finance leases. Interest on convertible loansincreased from £2.0 million in FYE 2007 to £2.4 million in FYE 2008 but decreased to £0.3 million in FYE2009 due to repayment of certain convertible loan notes in FYE 2008 and FYE 2009.

(I) Loss before tax

As a consequence of the above, the Group recorded a loss before tax of £(40.2) million in FYE 2007which decreased to a loss before tax of £(33.3) million for FYE 2008, a decrease of £6.9 million or 17.1 percent., and further decreased to a loss before tax of £(25.5) million in FYE 2009, a decrease of £7.8 million,or 23.4 per cent. The decrease was primarily due to the improved operating result year on year.

(J) Taxation

The statutory rate of tax applicable was 30 per cent. in FYE 2007, 28.71 per cent. in FYE 2008 and 28 percent. in FYE 2009. No current or deferred tax charges were recognised in FYE 2007 or FYE 2008. Adeferred tax credit of £2.3 million was recognised in FYE 2009. Ocado had approximately £270 million ofunutilised carried forward tax losses as at the end of FYE 2009.

(K) Loss for the period attributable to the owners of the Group

The Group recorded a loss of £(40.2) million in FYE 2007 which decreased to a loss of £(33.3) million inFYE 2008, a £6.9 million decrease, and further decreased to a loss of £(23.2) million in FYE 2009, a£10.1 million or 30.3 per cent. decrease.

6. Liquidity and capital resources

Since inception, the Group has financed its operations primarily through private placements of loan notesconvertible into preference shares and private placements of ordinary and preference shares as well assecured and unsecured bank and other loans and finance leases. The Group’s principal uses of cashhave been for capital expenditure, operating expenses, working capital requirements as well as thepayment of interest and repayment of principal on borrowings.

6.1 Cash flow analysis for FYE 2007, FYE 2008, FYE 2009, P1-3 2009, and P1-3 2010

The following table sets out selected cash flow information for the Group for FYE 2007, FYE 2008, FYE2009, P1-3 2009 (unaudited) and P1-3 2010:

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

Net cash inflow/(outflow) fromoperating activities . . . . . . . . . . (26.2) (3.7) 4.1 (5.8) (0.4)

Net cash used in investingactivities . . . . . . . . . . . . . . . . . (20.7) (19.8) (19.6) (6.3) (2.8)

Net cash from financing activities . 46.8 18.4 22.7 5.0 0.7

Net (decrease)/increase in cashand cash equivalents . . . . . . . (0.1) (5.0) 7.2 (7.2) (2.6)

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(A) Operating activitiesFYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

Loss before income tax . . . . . . . . (40.2) (33.3) (25.5) (7.2) (4.0)Adjustments for:Depreciation expense . . . . . . . . . 17.6 19.8 17.9 4.0 4.3Amortisation expense . . . . . . . . . 2.4 3.9 4.7 1.0 1.0Impairment of property, plant and

equipment . . . . . . . . . . . . . . . . 0.6 0.1 1.0 — —Provision for dilapidations

expense . . . . . . . . . . . . . . . . . — — 0.2 — —Share based payments charge . . . 0.2 0.1 0.1 — —Finance costs . . . . . . . . . . . . . . . 10.9 11.8 11.0 2.7 2.1Finance income . . . . . . . . . . . . . (0.8) (0.1) — — —Changes in working capital:

(Increase)/decrease ininventories . . . . . . . . . . . . . . (1.1) (0.8) (0.1) 0.9 (0.3)

(Increase)/decrease in tradeand other receivables . . . . . . 1.9 (2.8) (2.7) (1.2) (0.7)

Increase/(decrease) in tradeand other payables . . . . . . . . (9.7) 6.6 10.1 (3.2) (0.8)

Net cash inflow/(outflow) fromoperations . . . . . . . . . . . . . . . (18.1) 5.3 16.8 (3.0) 1.7

Finance costs paid . . . . . . . . . . . (8.0) (9.0) (12.7) (2.8) (2.1)

Net cash inflow/(outflow) fromoperating activities . . . . . . . . (26.2) (3.7) 4.1 (5.8) (0.4)

The Group’s net cash flow from operating activities decreased to an outflow of £0.4 million in P1-3 2010from an outflow of £5.8 million in P1-3 2009 (unaudited). The movement is primarily the result of adecrease in the operating loss from £4.6 million in P1-3 2009 (unaudited) to £1.9 million in P1-3 2010 andan improvement in changes to working capital, which comprise movements in inventories, trade and otherreceivables, and trade and other payables. Trade and other receivables comprise mainly monies duefrom suppliers. Trade receivables in respect of consumer sales are low due to the nature of the Group’sbusiness. Trade and other payables includes balances due to suppliers of products sold by Ocado,balances due to non-trading creditors (such as fuel, insurance and marketing costs) and other accruals,including CFC costs.

The Group’s net cash outflow from operating activities decreased from an outflow of £26.2 million in FYE2007 to an outflow of £3.7 million in FYE 2008 and moved to an inflow of £4.1 million in FYE 2009. Thedecrease from FYE 2007 to FYE 2008 primarily reflects a decrease in operating loss of £8.5 million andmovement in working capital of £3.0 million. The decrease in trade and other payables in FYE 2007reflects primarily the termination of the third-party logistics contract for workers in the CFC, followingwhich those workers became Ocado employees. These movements were offset in part by an increase infinance costs paid of £0.9 million.

The movement from FYE 2008 to FYE 2009 is primarily the result of the decrease in operating loss of£7.2 million and positive movement in working capital of £7.3 million. These movements were offset inpart by a decrease of finance costs paid of £3.7 million and a decrease in depreciation of property, plantand equipment of £2.0 million primarily due to the increase in the estimated useful life of certain assetsadopted in October 2008.

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(B) Investing activitiesFYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

Purchase of property, plant and equipment . (19.6) (15.7) (15.2) (5.5) (1.6)Proceeds from sale of property, plant and

equipment . . . . . . . . . . . . . . . . . . . . . . 0.2 — — — —Purchase of intangible assets . . . . . . . . . . (3.4) (4.1) (4.4) (0.9) (1.2)Finance income received . . . . . . . . . . . . . 2.0 0.1 — — —

Net cash used in investing activities . . . (20.7) (19.8) (19.6) (6.3) (2.8)

The Group’s net cash used in investing activities decreased from £6.3 million in P1-3 2009 (unaudited) to£2.8 million in P1-3 2010. The movement is primarily a result of lower capital expenditure on property,plant and equipment and offset in part by increased expenditure on intangible assets.

The Group’s net cash used in investing activities was £20.7 million in FYE 2007, £19.8 million in FYE2008 and £19.6 million in FYE 2009. The difference between the capital expenditure set out in section 6.3of this Part IV and cash used in investing activities set out in the table above is due to the accountingtreatment of assets being financed by financing leases and the timing of the payment of invoices receivedbut unpaid at the end of the financial year. Net cash used for investing activities is a cash flow measureand excludes any assets which are lease financed in the relevant financial year or invoices related tocapital expenditure which are unpaid at the end of the financial year.

(C) Financing activitiesFYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

Proceeds from the issue of ordinary sharecapital . . . . . . . . . . . . . . . . . . . . . . . . . 30.2 17.9 29.1 — 1.7

Proceeds from borrowings . . . . . . . . . . . . 25.2 8.0 25.1 2.1 3.0Repayment of borrowings . . . . . . . . . . . . . (10.6) (11.1) (28.4) (0.6) (1.8)Proceeds from asset-based financing

arrangements . . . . . . . . . . . . . . . . . . . . 10.0 9.0 7.1 5.1 1.8Repayment of obligations under finance

leases . . . . . . . . . . . . . . . . . . . . . . . . . (7.9) (5.3) (10.3) (1.6) (4.1)

Net cash from financing activities . . . . . 46.8 18.4 22.7 5.0 0.7

Financing activities represent the net proceeds from loan advances, loan repayments (including newfinance leases) and equity injections.

The Group’s net cash from financing activities decreased from an inflow of £5.0 million in P1-3 2009(unaudited) to an inflow of £0.7 million in P1-3 2010. The movement is primarily a result of the increase inthe repayment of obligations under finance leases and other borrowings and a reduction in the level ofnew finance lease income offset in part by an increase in new borrowings and the receipt of equityproceeds following the setting up of the employee benefit trust which was established for the purposes ofthe JSOS.

During FYE 2007, the Group raised £30.2 million in equity from new and existing investors and£35.1 million new borrowings and proceeds from asset based financing. The repayment of existing leasesand borrowings was £18.5 million.

During FYE 2008, the Group raised £17.9 million in equity from new and existing investors, and£17.0 million in new borrowings and proceeds from asset based financing. The repayment of existingleases and borrowings was £16.5 million.

During FYE 2009, the Group raised £29.1 million in new equity from existing and new investors and£32.2 million in new borrowings and proceeds from asset based financing. The repayment of existingleases and borrowings was £38.7 million.

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As a result, the Group’s net cash from financing activities decreased from £46.8 million in FYE 2007 to£18.4 million in FYE 2008 and increased to £22.7 million in FYE 2009.

6.2 External sources of funding, financing and indebtedness

Ocado closely manages its trading capital, which it defines as its net assets plus net debt. Net debt iscalculated as total debt (finance leases, convertible loan stock and borrowings as shown in the balancesheet), less cash and cash equivalents.

The main areas of capital management revolve around the management of the components of workingcapital, including monitoring stock turn, age of stock, age of debtors, debtor days, creditor days, balancesheet re-forecasting, period projected loss, weekly cash flow forecasts, and daily cash balances. TheBusiness typically has a negative working capital position (in line with other food retailers) as a result oflow inventory days and minimal debtors. In periods of growth the Business benefits from cash inflows as aresult of creditors days being longer than those of inventory and receivables. Major investment decisionsare based on reviewing the expected future cash flows and all major capital expenditure requiresapproval from the Board.

The Group’s net debt decreased from £124.2 million at the end of FYE 2007 to £115.7 million at the end ofFYE 2008 and to £107.0 million at the end of FYE 2009. The Group’s net debt was £111.1 million as at theend of P1-3 2010, £110.2 million as at the end of P1-6 2010 (unaudited) and £113.7 million as at 13 June2010 (unaudited). Since the end of P1-6 2010, the Group repaid a £5 million loan from Barclays Bank PLCand incurred additional £7.5 million in debt under a new revolving credit facility from Lloyds TSB Bank plc,as described below. The borrowing requirements of the Group are not subject to seasonality.

Headroom available (defined as aggregate funds available to be borrowed under the Group’s existingfacilities available minus net debt) was £30.9 million, £16.3 million and £30.9 million at the end of FYE2007, FYE 2008 and FYE 2009, respectively. Headroom available was £30.4 million as at the end of P1-32010 and £27.7 million as at 13 June 2010 (unaudited). The Group had cash and cash equivalents of£10.9 million, £5.9 million and £13.0 million as at the end of FYE 2007, FYE 2008 and FYE 2009,respectively. The Group had cash and cash equivalents of £10.4 million, £10.0 million and £8.2 million asat the end of P1-3 2010, P1-6 2010 (unaudited) and as of 13 June 2010 (unaudited), respectively.

Principal amount outstandingOriginalfacility As at end of As at

Lender amount Maturity Interest rate P1-6 2010 13 June 2010

(unaudited) (unaudited)£ million £ million £ million

Secured loansBarclays Bank PLC(4) . . . . . . 5.0 On demand LIBOR(2) + 2.75% 5.0 —Barclays Bank PLC(5) . . . . . . 8.0 Feb 2015 BOEBR(1) + 3.0% 7.5 7.5Barclays Bank PLC(6) . . . . . . 1.5 Dec 2011 BOEBR(1) + 1.5% 1.0 1.0Barclays Bank PLC(6) . . . . . . 1.5 Feb 2012 LIBOR(2) + 2.25% 1.3 1.3Barclays Bank PLC(6) . . . . . . 2.9 Dec 2012 LIBOR(2) + 3.5% 2.7 2.7Lloyds TSB Bank plc(4) . . . . . 35.0 Dec 2010/Dec 2011(3) LIBOR(2) + 6% 27.1 27.1Lloyds TSB Bank plc(4) . . . . . 7.5 May 2013 LIBOR(2) + 5% — 7.4

Unsecured loansArlington Property

Developments Ltd . . . . . . 6.8 Mar 2012 14.2% 1.7 1.7Bank of London and the

Middle East plc . . . . . . . . 10.0 Jul 2012 8% equivalent 7.7 7.7Premium credit . . . . . . . . . . 1.9 Sep 2010 7.4% 0.5 0.5

Obligations under financeleasesMaterial handling equipment . 5 year leases Various 40.6 39.1Vehicle leases . . . . . . . . . . 5 year leases Various 13.0 13.8Capitalised element of CFC

lease for IFRS . . . . . . . . . 12.0 12.0

Total borrowings and leases . 120.2 121.9

(1) Bank of England Base Rate.

(2) London Inter-Bank Offer Rate.

(3) Of the principal amount outstanding, £15.6 million is due in December 2010 and the balance is due in December 2011.

(4) Secured over warehouse assets and intellectual property.

(5) Secured over warehouse assets.

(6) Secured over freehold property.

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Ocado is also party to a standby overdraft facility with Barclays Bank PLC of up to £5.0 million.

Some of Ocado’s loan agreements contain restrictions on the payment of dividends and redemption ofshares and change of control provisions providing for full payment of all monies owed upon change ofcontrol as defined by the individual agreement. Under the £35 million and the new £7.5 million term loanand £7.5 million revolving credit facilities with Lloyds TSB Bank plc, Ocado is not permitted to declare,make or pay any dividend or other distribution on or in respect of its share capital, repay or distribute anydividend or share premium reserve or redeem, repurchase, retire or repay any of its share capital orresolve to do so. Ocado also may not enter into any demerger, merger or corporate reconstruction. Underthe same agreement, Ocado will owe all monies drawn if control over more than 50 per cent. of votingpower at a general meeting, the power to appoint or remove all or the majority of directors or equivalentofficers of Ocado or the beneficial holding of more than 50 per cent. of Ocado passes to a party, other thanJohn Lewis, without the prior written consent of the lending bank. The £10 million loan agreement withBank of London and the Middle East plc restricts the distribution of dividends unless the Group is currentwith all payments under the agreement and provided that such distribution does not exceed 50 per cent.of Ocado’s net profit for the period on which the distribution is being made. Under the £6.8 millionArlington Properties Development Ltd loan, Ocado will owe all monies drawn if control of Ocado passes toa party, other than John Lewis, without the prior written consent of the lending bank. In addition, certain ofthe loan agreements with Barclays Bank PLC contain change of control provisions. For more informationon the £35 million Lloyds TSB Bank plc facility and the Bank of London and the Middle East plc facility,see section 17.3 of Part XIII (Additional Information)

On 5 July 2010 Ocado, (as original borrower) entered into a sterling term loan facility (the ‘‘New Facility’’)between, among others, Barclays Bank PLC, HSBC Bank plc and Lloyds TSB Bank plc (as mandatedlead arrangers and lenders), and Barclays Bank PLC (as agent and security trustee). The lenders haveagreed to make available £100 million to the borrowers under the New Facility. All amounts borrowedunder the New Facility shall be applied towards: (i) the acquisition of land located in England and Wales;(ii) the acquisition of building materials, fixtures and buildings attached to land located in England andWales; and/or (iii) the acquisition of plant, machinery, equipment, fittings and/or any other tangiblemovable property to be located at the existing CFC, the second CFC and the Spokes located in Englandand Wales. The New Facility has an accordion feature which allows for the amount available under it to beincreased up to £130 million, subject to the lenders (existing or additional) agreeing to make the additionalamount available.

The borrowers may only draw down under the New Facility if certain customary conditions precedent aresatisfied and Admission takes place. The New Facility is secured against the LOKI/Fenrir softwareprogram and the assets financed by the New Facility. The New Facility is guaranteed by the Companyand Ocado Holdings Limited and Ocado in the event of an additional borrower drawing down under it. Anyof the Company’s subsidiaries whose EBITDA, gross assets or turnover account for 5 per cent. or more ofthe Group’s EBITDA, gross assets or turnover (calculated on a consolidated basis) shall becomeadditional guarantors, and the guarantors (taken together) must account for at least 90 per cent. of theGroup’s EBITDA, gross assets and turnover. The agreement also contains customary warranties,representations, financial and other covenants and events of default.

Loans drawn under the New Facility bear interest at the London Inter-Bank Offer Rate (‘‘LIBOR’’) plus amargin of 3.5 per cent. per year together with a sum for certain mandatory costs (if any). Repayment isdue on the termination date of the New Facility, 6 January 2014.

The New Facility may be terminated if the Sourcing Agreement and Branding Arrangements areterminated in any circumstances. However, with the exception of the change of control termination rightdescribed in paragraph 1.4 of the Risk Factors, which is customary for an agreement of that type, theCompany is in control of whether any such termination rights will arise.

For a detailed description of the New Facility, see section 17.3 of Part XIII (Additional Information).

On 20 May 2010, Ocado received an additional £3.4 million of finance leasing for vans fromMercedes-Benz Charterway. On 2 July 2010, Ocado entered into arrangements with Santander UK plcfor the extension of credit lines for finance leasing of future delivery vans up to the amount of £15 million.Together, this provides Ocado with a credit line of £18.4 million for the finance leasing of its future vehiclerequirements.

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On 26 May 2010, Ocado entered into with Lloyds TSB Bank plc as lender a new three year term loan in anaggregate principal amount of £7.5 million and a revolving credit facility in an aggregate principal amountof £7.5 million. The term loan is repayable in three equal instalments, the payments being due on 26 May2011, 2012 and 2013. Both facilities will mature in May 2013. Borrowings under the term loan andrevolving credit facility bear an interest rate of LIBOR plus a margin of 5 per cent. per year and LIBOR plusa margin of 7 per cent. per year, respectively, and are secured against certain of Ocado’s intellectualproperty. The term loan was fully drawn at 28 May 2010. The term loan and revolving credit facility areotherwise entered into on the same terms as Ocado’s £35 million loan with Lloyds TSB Bank plc.

Approximately £45 million of the net proceeds from the Offers received by the Company is expected to beused within six months of Admission to repay amounts drawn by the Group under certain of the existingborrowing facilities.

6.3 Capital expenditure

The Group’s capital expenditure has focused on four main areas supporting the Group’s long-termgrowth, which included increasing the capacity and operating efficiency of the CFC, increasing thecapacity of the distribution network, growing the van fleet and replacing vehicles as they age and ongoingdevelopment of IT capabilities and infrastructure.

The amount of capital expenditure has remained relatively stable over the period FYE 2007 to FYE 2009and declined as a percentage of gross sales, however the focus of the expenditure has changed. In FYE2007 and FYE 2008, the Group focused its capital expenditure on projects to increase capacity andefficiency in the CFC with the focus moving to the development of the Spoke network and delivery fleetand continued investment in IT capability in FYE 2009. Ocado achieved an increase of effective capacityof the CFC from fewer than 55,000 orders per week in early 2007 to the current effective capacity ofapproximately 105,000 orders per week with capital expenditure of £31.3 million over the periodFYE 2007-FYE 2009.

The following table sets out the Group’s capital expenditure (unaudited) for FYE 2007, FYE 2008, FYE2009, P1-3 2009, and P1-3 2010:

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)£ million £ million £ million £ million £ million

CFC . . . . . . . . . . . . . . . . . . . 16.3 10.1 4.9 1.2 1.3Vehicles . . . . . . . . . . . . . . . . . 3.2 3.4 4.7 1.0 2.5Distribution sites (Spokes) . . . . 0.1 3.6 5.4 2.9 0.1IT Hardware & Software . . . . . 5.4 6.6 7.5 1.7 1.4Other . . . . . . . . . . . . . . . . . . . 1.0 1.0 0.5 0.1 0.1

Total . . . . . . . . . . . . . . . . . . . 26.0 24.7 23.0 6.9 5.4

The above table includes amounts invoiced in respect of capital expenditure which were unpaid at theperiod end and assets financed using finance leases.

Over the medium term, the Group anticipates significant capital expenditure for the building and fitting outof the second CFC; continued investment in the existing CFC to expand its capacity and increase itsoperational efficiency; development of new Spokes; expansion of the vehicle fleet; continueddevelopment of IT systems; and maintenance capital expenditure. The timing and amount of theseplanned capital expenditures are subject to ongoing review by the Directors and may be affected byvarious factors, including the level of demand for Ocado’s services, opportunities for additionalimprovements of the capacity and efficiency of the operations, and the availability of required financing onterms acceptable to Ocado.

The total construction costs of the second CFC are currently estimated at approximately £210 million(costed at a sterling : euro exchange rate of £1 = e1.10). This includes costs of site acquisition andpreparation, construction of the external building and internal fit-out (approximately £90 million) and theacquisition and installation of material handling equipment (approximately £120 million). The Directorsbelieve that Ocado has a degree of flexibility to adjust the timing of the fit-out of the second CFC and theinstallation of the material handling equipment to match customer demand and required capacity. While

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site acquisition costs are expected to be committed at the time of the acquisition and the building costsare expected to be committed at the point of the commencement of construction, the costs relating tomaterial handling equipment are expected to be committed at the time of the order of the equipment, withthe full cost being paid in stages up to the full installation of the equipment. The Directors expect that theexpenditure on material handling equipment, and therefore expansion of effective capacity, will bestaged, with an initial estimated effective capacity of the second CFC of approximately 120,000 ordersper week, with subsequent expansion to approximately 180,000 orders per week. The total actual spendon the second CFC will be subject to several factors and uncertainties outside of Ocado’s control. Theseinclude the market price of steel (due to approximately one-third of the cost of material handlingequipment being linked to steel prices) and changes in the euro/sterling exchange rate (as the materialhandling equipment is expected to be priced in euro).

In addition to the construction and related fit-out of the second CFC, the planned capital expenditure overthe medium term comprises:

• Continued investment in the existing CFC. Ocado plans to continue investing in the existingCFC to expand its capacity from approximately 105,000 orders per week to approximately150,000 orders per week (estimated capital expenditure of approximately £30 million) andsubsequently to approximately 180,000 orders per week (estimated capital expenditure ofapproximately £50 million). As the majority of the existing material handling equipment in theCFC is already capable of a throughput of approximately 150,000 orders per week, the capitalexpenditure required to achieve this level for the existing CFC is relatively small compared to thecapital expenditure required to further increase the effective capacity of the CFC toapproximately 180,000 orders per week. The increase of effective capacity from 150,000 to180,000 orders per week will require additional capital expenditure across the CFC to upgradeexisting machinery and install new machinery.

• Development of new Spokes. Ocado expects to establish an average of two new Spokes peryear in the medium term at an estimated cost ranging from £1 million to £5 million (expected tobe £2.5 million on average) per Spoke. The cost of developing a new Spoke depends on itslocation, the condition of the existing site and whether Ocado acquires a freehold or leaseholdfor the Spoke.

• Expansion of the delivery vehicle fleet. Ocado expects to increase its delivery vehicle fleet inline with the number of orders per week and deliveries per van per week achieved by theBusiness.

• Continued development of IT systems.

Ocado expects to fund the planned capital expenditure with the balance of the net proceeds of the Offersof approximately £155 million, together with the undrawn debt facilities of approximately £100 million,credit lines available for asset financing of approximately £20 million and the cash flow generated by itsoperations. Ocado expects to fund the majority of the investment in the second CFC and the existing CFCthrough borrowings under the New Facility, finance leases and other forms of debt.

Ocado’s financing needs will be highly dependent on the actual cost of the second CFC and other capitalexpenditure, the timing of the start of operations at the second CFC and the success of the second CFC inoperating at designed or planned capacity. Ocado may need to raise additional capital from 2012 to thatcurrently anticipated to fund its planned capital expenditure. Any such required additional funding may notbe available to the Group on favourable terms when required, or at all.

These forward-looking statements may be affected by the factors set forth in ‘‘Risk Factors’’.

7. Contingencies and commitments

The following table sets out an analysis of the Group’s contractual obligations as at the end of P1-3 2010into their relevant maturity groups based on the remaining period at the end date of the financial period tothe contractual maturity date. The amounts reflect the carrying value and undiscounted contractual cashflows.

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As at end of P1-3 2010

Carrying Contractual Less than Between 1 Between 2 More thanvalue cash flows 1 year and 2 years and 5 years 5 years

(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)(unaudited) (unaudited)(£ million) (£ million) (£ million) (£ million) (£ million) (£ million)

Secured loans . . . . . . . . (44.3) (47.8) (24.4) (16.0) (7.4) —Unsecured loans . . . . . . (11.7) (13.0) (6.3) (4.8) (1.9) —Trade and other

payables(1) . . . . . . . . (42.3) (42.3) (42.3) — — —Operating lease

obligations(2) . . . . . . . (46.8) (46.8) (2.6) (2.3) (5.9) (36.0)Financial lease obligations (65.6) (77.4) (23.3) (21.3) (22.3) (10.4)Derivative financial

instruments . . . . . . . . (1.1) (1.1) — (1.1) — —Capital commitments(3) . . (11.1) (11.1) (11.1) — — —

Total . . . . . . . . . . . . . (222.9) (239.4) (110.0) (45.5) (37.5) (46.5)

(1) Does not include other taxation and deferred income.

(2) Minimum lease payments under non-cancellable operating leases.

(3) Contracts placed for future capital expenditure not provided in the financial statements.

8. Off balance sheet arrangements and contingent liabilities

The Group has no off balance sheet arrangements, as determined for purposes of IFRS-EU.

As part of its financing arrangements, Ocado granted Lloyds TSB Bank plc and Ranelagh NomineesLimited (an affiliate of Lloyds TSB Bank plc) warrants to subscribe for 56,112 shares in Ocado. LloydsTSB Bank plc subsequently transferred all of its warrants to Ranelagh Nominees Limited. Following thereorganisation that resulted in the Company becoming the holding company of the Group, the warrantsare now warrants to subscribe for 5,611,200 Ordinary Shares in the Company at a price of £1.80 perOrdinary Share. Subject to the Offer Price being not less than £1.90, Ranelagh Nominees Limited hasirrevocably committed to exercise its remaining warrants in full on Admission provided that it may sell theresulting 5,611,200 Ordinary Shares pursuant to the Offers.

9. Quantitative and qualitative disclosure on market risk

The Group’s operations and financing arrangements expose it to a variety of financial risks that includethe effects of changes in debt market prices, credit risks, liquidity risks and interest rates.

9.1 Liquidity

To manage the working capital needs, the Group maintains a mixture of short- and medium-term debt,including a revolving credit facility, and finance lease arrangements that are designed to ensure it hassufficient available funds for operations. In addition, the Group maintains a committed standby bankoverdraft facility of £5.0 million with Barclays Bank PLC. The Group monitors cash flow as part of itsday-to-day control procedures and the Executive Board receives cash flow projections on a monthly basisindicating the facilities available to be drawn upon as necessary.

Additional information on the Group’s contractual obligations analysed into their relevant maturity groupsis provided in section 7 of this Part IV.

9.2 Credit risk

The Group’s exposures to credit risk arise from holdings of cash and cash equivalents, trade and otherreceivables (excluding prepayments) and available for sale financial assets.

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(A) Cash and cash equivalents

The Group’s exposure to credit risk in cash and cash equivalents is managed by dealing only with banksand financial institutions which carry Moody’s ratings of Aa3/P1 for long-term and short-term deposits.The Group therefore regards the risk around cash and cash equivalents as minimal.

(B) Trade and other receivables

Trade and other receivables are, due to the nature of Ocado’s business, managed by spreading the riskover a large number of individuals with relatively small balances. Payments from customers are collectedupon delivery of an order to the customer. Payments are collected by charging the customer’s credit orbanking card on file, which is checked by the Group upon initial submission, and the funds are typicallyreceived within 7 days. A small number of card payments fail each week (less than 0.2 per cent. in P1-32010) and are followed up by the finance department.

9.3 Market risk

(A) Currency risk

The Group is exposed to currency risk in connection with its trade payables, principally arising onpurchases of plant and equipment. The Group had exposure of less than £0.1 million in respect of foreigncurrency assets and liabilities at the end of P1-3 2010. The Group expects to enter into significantpurchase commitments relating to equipment for the second CFC, among others, denominated in euro,which will increase its currency risk exposure. The Company expects to reduce this currency exposure byentering into forward currency contracts for these purchases.

(B) Interest rate risk

The Group is exposed to interest rate risk on its interest bearing borrowings. The Group’s interest ratepolicy seeks to minimise interest expense and volatility by structuring the interest rate profile into adiversified portfolio of fixed rate and floating rate liabilities.

An increase of 100 basis points (1.0 per cent.) in interest rates at the balance sheet date would havedecreased equity and profit or loss by the amounts shown below. This calculation assumes that thechange occurred at the balance sheet date and had been applied to risk exposures existing at that date.This analysis assumes that all other variables remain constant and considers the effect on financialinstruments with variable interest rates and financial instruments at fair value through profit or loss. Theanalysis is performed on the same basis for each period.

As at end of

FYE 2007 FYE 2008 FYE 2009 P1-3 2009 P1-3 2010

(unaudited)£ million £ million £ million £ million £ million

EquityGain/(loss) . . . . . . . . . . . . . . . . . (0.5) (0.5) (0.5) (0.2) (0.2)IncomeGain/(loss) . . . . . . . . . . . . . . . . . (0.5) (0.5) (0.5) (0.2) (0.2)

10. Critical accounting policies and estimates

The preparation of the Group’s historical financial information requires estimates and assumptions thataffect the application of policies and reported amounts. Estimates and assumptions are based onhistorical experience and other factors including expectations of future events that are believed to bereasonable under the circumstances. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accountingestimates are recognised in the period in which the estimate is revised if the revision affects only thatperiod or in the period of the revision and future periods if the revision affects both current and futureperiods.

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Critical accounting policies are those accounting estimates that require management to makeassumptions about matters that are uncertain at the time the estimates are made and would haveresulted in material changes to the historical financial information if different estimates, whichmanagement reasonably could have used, were made. The Group’s critical accounting policies arediscussed below. For a full discussion of the Group’s accounting policies, see Note 2 (Accountingpolicies) in the Historical Financial Information in Part V (Historical Financial Information Relating to theGroup).

10.1 Revenue recognition

Revenue is recognised at the point when the significant risks and rewards of products have been passedto the buyer and can be reliably measured. In general, this is deemed to occur when customers takedelivery of the goods and the driver of the delivery van has returned to the Spoke. Income from OcadoDelivery Pass, which enables customers to obtain virtually unlimited deliveries without paying anydelivery charges in exchange for either a fixed annual payment or monthly subscription payments, isrecognised in the period to which it relates on an accruals basis.

10.2 Intangible assets—capitalised software

Computer software is carried at cost less accumulated amortisation and any impairment loss. Externallyacquired computer software and software licences are capitalised and amortised on a straight-line basisover their useful economic lives of three to five years. Costs relating to development of computer softwarefor internal use are capitalised once all development phase recognition criteria of IAS 38 ‘‘IntangibleAssets’’ are met. When the software is available for its intended use, these costs are amortised in equalannual amounts over the estimated useful life of the software. Any impairment of computer software orlicenses is charged to operating profit in the period in which it arises.

Capitalised cost includes the labour costs associated with the Group’s own employees, based on timerecorded, to the extent that they are directly attributable to development construction costs, or where theycomprise a proportion of an IT team directly engaged in the development and installation of a softwareapplication. Management judgement is involved in determining the appropriate internal costs to capitaliseand the amounts involved.

For P1-3 2010, internal development costs capitalised were £0.9 million (FYE 2009: £4.1 million; FYE2008: £3.9 million; FYE 2007: £2.7 million) and represented approximately 71 per cent. (FYE 2009: 93per cent.; FYE 2008: 95 per cent.; FYE 2007: 81 per cent.) of expenditure on intangible assets and 16 percent. (FYE 2009: 18 per cent.; FYE 2008: 16 per cent.; FYE 2007: 10 per cent.) of total capital spendincluding property, plant and equipment.

The useful life of internally developed software is three years, based on historical experience with similarproducts as well as anticipation of future events, which may impact their life, such as changes intechnology. Historically, changes in useful lives of software have not resulted in material changes to theamortisation charge.

10.3 Depreciation of property, plant, and equipment

Property, plant and equipment represent a significant proportion of the asset base of the Group,representing 66 per cent., 72 per cent. and 72 per cent. of the total assets in FYE 2009, FYE 2008 andFYE 2007, respectively. Therefore, the estimates and assumptions made to determine their carryingvalue and related depreciation are critical to the Group’s financial position and performance. Inaccounting for property, plant and equipment, the Group must make estimates about the expected usefullives of the assets, the expected residual values of the assets and the potential for impairment based onthe fair value of the assets and the cash flows they generate.

The charge in respect of periodic depreciation is derived after determining an estimate of an asset’sexpected useful life and the expected residual value at the end of its life. Increasing an asset’s expectedlife or its residual value would result in a reduced depreciation charge in the statement of comprehensiveincome.

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The useful lives of the Group’s assets are determined by management at the time the asset is acquiredand reviewed at least annually for appropriateness. The lives are based on historical experience withsimilar assets as well as anticipation of future events, which may impact their life, such as changes intechnology.

10.4 Impairment testing

The Group does not have any assets that have an indefinite useful life and are not subject to an annualamortisation or depreciation charge. All non-financial assets are tested annually for impairment in respectof changes in residual value or remaining life. Factors that would indicate potential impairment ofproperty, plant and equipment would include, but are not limited to, significant decreases in the marketvalue of property, plant and equipment, a significant change in property, plant and equipment’s physicalcondition, a change in the operating procedures that alters the purpose for which the asset was broughtinto use, and operating or cash-flow losses associated with the use of property, plant and equipment.

The Group is required to undergo an assessment of the future viability of assets grouped at the lowestlevels for which there are separately identifiable cash flows (cash generating units). Given the Group’scurrent operating structure, the lowest level at which cash flows can reasonably be assessed is for theGroup as a whole. The Group is continuing to invest in future growth and has not yet reached a stagewhere it delivers positive post-tax earnings.

10.5 Going concern basis for the preparation of the financial information

The historical financial information has been prepared on the going concern basis, which assumes thatthe Group will continue to be able to meet its liabilities as they fall due for the foreseeable future. Thegoing concern basis relies on the receipt of £200 million of net proceeds from the Offers and the NewFacility being available to the Group. See Note 2(b) in Part V (Historical Financial Information relating tothe Group) for additional detail.

The Group maintains a mixture of long-term and short-term debt finance that is designed to ensure it hassufficient available funds for operations and its planned expansions. The Group monitors cash flow aspart of its day-to-day control procedures and management consider cash flow projections on a monthlybasis ensuring that appropriate facilities are available to be drawn upon as necessary. The Group alsoprepares detailed forward projections for future periods which are constantly updated and refined. As aconsequence, the Group is satisfied that it is able to obtain sufficient resources to continue in operation forthe foreseeable future. Accordingly, the Group continues to adopt the going concern basis in preparingthe financial statements.

This assumption has a significant effect on the Group and affects the way assets and liabilities are valued.If management were unable to justify accounting on a going concern basis, the valuation of the Group’sassets and liabilities would be affected. An impairment review would be required to be conducted and it islikely that assets would have to be measured at their net realisable value based on the sale of assets onan asset by asset basis. Liabilities would also have to be increased to take account of futurenon-cancellable operating lease commitments.

10.6 Recognition of deferred tax assets

The Group’s tax charge on ordinary activities is the sum of the total current and deferred tax charges. Thecalculation of the total tax charge necessarily involves a degree of estimation and judgement in respect ofcertain items. The final outcome of some of these items may give rise to material profit and loss and/orcash flow variances.

A deferred tax asset is recognised when it has become probable that future taxable profit will allow thedeferred tax asset to be recovered. Recognition, therefore, involves judgement regarding the prudentforecasting of future taxable profits of the business and in applying an appropriate risk adjustment factor.

10.7 Classification of leases (including sale and leaseback transactions)

The Group has a number of complex high-value lease arrangements. The Group follows the guidance ofIAS 17 to determine the classification of leases as operating or finance leases. The classification of a

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Part IV Operating and Financial Review

lease as a finance lease, as opposed to an operating lease, will change EBITDA and operating profit/(loss) as the charge made by the lessor will pass through finance charges and depreciation. Retainedearnings may also be temporarily affected depending on the relative size of the amounts apportioned tocapital repayments and depreciation. IAS 17 requires the Group to consider property leases split into theircomponent parts (i.e., land and building elements) separately. As only the buildings elements could beconsidered as a finance lease management must make a judgment, based on advice from suitableexperts, as to the relative value of the land and buildings.

Leases are classified as finance leases when the terms of the lease transfer substantially all the risks andrewards of ownership to the Group or where the substance of the transaction does not meet the criteria ofa sale and leaseback. All other leases are classified as operating leases. For property leases, the landand building elements are treated separately to determine the appropriate lease classification.

Finance leases

Assets funded through finance leases are capitalised either as property, plant and equipment, orintangible assets as appropriate and depreciated/amortised over their estimated useful lives or the leaseterm, whichever is shorter. The amount capitalised is the lower of the fair value of the asset or the presentvalue of the minimum lease payments during the lease term at the inception of the lease. The resultinglease obligations are included in liabilities net of finance charges. Finance costs on finance leases arecharged directly to the statement of comprehensive income on an effective interest rate basis.

Operating leases

Assets leased under operating leases are not recorded on the balance sheet. Rental payments arecharged directly to the income statement.

Lease incentives

Lease incentives primarily include up-front cash payments or rent-free periods. Lease incentives arecapitalised and spread over the period of the lease term.

98

7DEC200517132980

PART V

HISTORICAL FINANCIAL INFORMATION RELATING TO THE GROUP

(A) Accountants’ report on the historical financial information relating to the Group

PricewaterhouseCoopers LLP1 Embankment PlaceLondon WC2N 6RH

The DirectorsOcado Group plcTitan Court3 Bishops SquareHatfield Business ParkHatfieldAL10 9NE

Goldman Sachs InternationalPeterborough Court133 Fleet StreetLondonEC4A 2BB

J.P. Morgan Securities Ltd.125 London WallLondonEC2Y 5AJ

UBS Limited1 Finsbury AvenueLondonEC2M 2PP

6 July 2010

Dear Sirs

Ocado Group plc

We report on the financial information set out in Part (B) of this Part V (the ‘‘Historical FinancialInformation relating to the Group’’). The Historical Financial Information relating to the Group has beenprepared for inclusion in the prospectus dated 6 July 2010 (the ‘‘Prospectus’’) of Ocado Group plc (the‘‘Company’’) on the basis of the accounting policies set out in paragraph 2. This report is required byitem 20.1 of Annex I to the PD Regulation and is given for the purpose of complying with that item and forno other purpose.

We have not audited the financial information for the 12 weeks ended 22 February 2009 and accordinglydo not express an opinion thereon.

Responsibilities

The Directors of the Company are responsible for preparing the Historical Financial Information relating tothe Group in accordance with International Financial Reporting Standards as adopted by theEuropean Union.

PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC303525. The registered office of PricewaterhouseCoopers LLP is1 Embankment Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised and regulated by the Financial Services Authority for designated investment business.

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Part V Historical Financial Information relating to the Group

It is our responsibility to form an opinion on the Historical Financial Information relating to the Group andto report our opinion to you.

Save for any responsibility which we may have to those persons to whom this report is expresslyaddressed and for any responsibility arising under item 5.5.3R(2)(f) of the Prospectus Rules to anyperson as and to the extent there provided, to the fullest extent permitted by law we do not assume anyresponsibility and will not accept any liability to any other person for any loss suffered by any such otherperson as a result of, arising out of, or in connection with this report or our statement, required by andgiven solely for the purposes of complying with item 23.1 of Annex I to the PD Regulation, consenting toits inclusion in the Prospectus.

Basis of opinion

We conducted our work in accordance with the Standards for Investment Reporting issued by theAuditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevantto the amounts and disclosures in the Historical Financial Information relating to the Group. It alsoincluded an assessment of significant estimates and judgments made by those responsible for thepreparation of the Historical Financial Information relating to the Group and whether the accountingpolicies are appropriate to the Company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our work so as to obtain all the information and explanations which weconsidered necessary in order to provide us with sufficient evidence to give reasonable assurance thatthe Historical Financial Information relating to the Group is free from material misstatement whethercaused by fraud or other irregularity or error.

Our work has not been carried out in accordance with auditing standards generally accepted in the UnitedStates of America or auditing standards of the Public Company Accounting Oversight Board (UnitedStates) and accordingly should not be relied upon as if it had been carried out in accordance withthose standards.

Opinion

In our opinion, the Historical Financial Information relating to the Group gives, for the purposes of theProspectus dated 6 July 2010, a true and fair view of the state of affairs of the Company as at the datesstated and of its losses, cash flows and changes in equity for the periods then ended in accordance withInternational Financial Reporting Standards as adopted by the European Union.

Declaration

For the purposes of Prospectus Rule 5.5.3R(2)(f) we are responsible for this report as part of theProspectus and declare that we have taken all reasonable care to ensure that the information containedin this report is, to the best of our knowledge, in accordance with the facts and contains no omission likelyto affect its import. This declaration is included in the Prospectus in compliance with item 1.2 of Annex I tothe PD Regulation.

Yours faithfully

PricewaterhouseCoopers LLPChartered Accountants

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Part V Historical Financial Information relating to the Group

(B) Historical financial information relating to the Group

Consolidated statements of comprehensive income

For the For the For the For the For the52 weeks 52 weeks 52 weeks 12 weeks 12 weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

Continuing operations Notes 2007 2008 2009 2009 2010

(unaudited)£’000 £’000 £’000 £’000 £’000

Revenue . . . . . . . . . . . . . . . . 2 272,856 321,314 401,997 84,622 110,238Cost of sales . . . . . . . . . . . . . 2 (184,874) (218,515) (279,168) (58,942) (76,927)

Gross profit . . . . . . . . . . . . . . 87,982 102,799 122,829 25,680 33,311Other income . . . . . . . . . . . . . 6 612 1,808 2,641 542 1,166Distribution costs . . . . . . . . . . . 2 (93,536) (101,069) (110,331) (24,594) (28,250)

Operating profit/(loss) beforeadministrative expenses . . . . . (4,942) 3,538 15,139 1,628 6,227

Administrative expenses . . . . . . (25,148) (25,151) (29,542) (6,200) (8,107)

Operating loss . . . . . . . . . . . . 7 (30,090) (21,613) (14,403) (4,572) (1,880)Finance income . . . . . . . . . . . . 9 824 99 12 — 2Finance costs . . . . . . . . . . . . . 9 (10,888) (11,784) (11,118) (2,663) (2,085)

Loss before tax . . . . . . . . . . . (40,154) (33,298) (25,509) (7,235) (3,963)Taxation . . . . . . . . . . . . . . . . . 10 — — 2,300 — —

Loss for the periodattributable to the owners ofthe Group . . . . . . . . . . . . . . (40,154) (33,298) (23,209) (7,235) (3,963)

Total comprehensive incomefor the period attributable tothe owners of the Group . . . (40,154) (33,298) (23,209) (7,235) (3,963)

Loss per share . . . . . . . . . . . pence pence pence pence penceBasic and diluted loss per share 28 (12.12) (9.77) (6.05) (1.92) (0.99)

Non-GAAP measure: Earnings/(loss) before interest, taxation, depreciation, amortisation andimpairment (‘‘EBITDA’’)

For the For the For the For the For the52 weeks 52 weeks 52 weeks 12 weeks 12 weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

Notes 2007 2008 2009 2009 2010

(unaudited)£’000 £’000 £’000 £’000 £’000

Loss for the period attributable tothe owners of the Group . . . . (40,154) (33,298) (23,209) (7,235) (3,963)

Adjustments for:Finance income . . . . . . . . . . . . 9 (824) (99) (12) — (2)Finance costs . . . . . . . . . . . . . 9 10,888 11,784 11,118 2,663 2,085Depreciation of property, plant

and equipment . . . . . . . . . . . 12 17,621 19,820 17,865 4,048 4,301Impairment of property, plant

and equipment . . . . . . . . . . . 12 612 66 1,023 — —Amortisation expense . . . . . . . . 11 2,395 3,917 4,743 1,025 979Taxation . . . . . . . . . . . . . . . . . 10 — — (2,300) — —

Earnings/(loss) before interest,taxation, depreciation,amortisation and impairment‘‘EBITDA’’ . . . . . . . . . . . . . . (9,462) 2,190 9,228 501 3,400

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Part V Historical Financial Information relating to the Group

Consolidated balance sheets

As at As at As at As at2 December 30 November 29 November 21 February

Notes 2007 2008 2009 2010

£’000 £’000 £’000 £’000

Non-current assetsIntangible assets . . . . . . . . . . . . . . . . 11 6,818 7,038 6,684 6,941Property, plant and equipment . . . . . . . 12 89,931 90,531 90,252 90,126Deferred tax asset . . . . . . . . . . . . . . . 10 — — 2,300 2,300Available-for-sale financial asset . . . . . 13 395 395 395 395

97,144 97,964 99,631 99,762

Current assetsInventories . . . . . . . . . . . . . . . . . . . . . 14 8,300 9,107 9,213 9,494Trade and other receivables . . . . . . . . 15 9,222 12,033 14,740 15,468Cash and cash equivalents . . . . . . . . . 16 10,891 5,857 13,017 10,445

28,413 26,997 36,970 35,407

Total assets . . . . . . . . . . . . . . . . . . . 125,557 124,961 136,601 135,169

Current liabilitiesTrade and other payables . . . . . . . . . . 17 (33,232) (40,303) (47,237) (46,462)Borrowings . . . . . . . . . . . . . . . . . . . . 18 (876) (15,016) (12,087) (27,773)Convertible loan stock . . . . . . . . . . . . . 18 — (14,506) — —Obligations under finance leases . . . . . 18 (5,066) (9,989) (19,669) (19,314)

(39,174) (79,814) (78,993) (93,549)

Net current liabilities . . . . . . . . . . . . (10,761) (52,817) (42,023) (58,142)

Non-current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . . 18 (46,345) (28,429) (42,658) (28,218)Convertible loan stock . . . . . . . . . . . . . 18 (33,101) — — —Obligations under finance leases . . . . . 18 (49,688) (53,650) (45,651) (46,266)Derivative liability . . . . . . . . . . . . . . . . 23 (967) (1,079) (1,083) (1,126)Provisions . . . . . . . . . . . . . . . . . . . . . 22 (175) (197) (366) (384)

(130,276) (83,355) (89,758) (75,994)

Net liabilities . . . . . . . . . . . . . . . . . . . (43,893) (38,208) (32,150) (34,374)

EquityShare capital . . . . . . . . . . . . . . . . . . . 24 34 38 40 8,663Share premium account . . . . . . . . . . . 24 241,109 281,649 310,836 —Treasury reserve . . . . . . . . . . . . . . . . 24 — — — (47,741)Reverse acquisition reserve . . . . . . . . . 24 — — — (116,230)Convertible loan interest reserve . . . . . 20 8,150 1,139 — —Accumulated (deficit)/surplus . . . . . . . . (293,186) (321,034) (343,026) 120,934

Deficit attributable to equity holders . (43,893) (38,208) (32,150) (34,374)

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Part V Historical Financial Information relating to the Group

Consolidated statements of changes in equity

DeficitReverse Convertible Accumulated attributable

Share Share Treasury Acquisition loan interest (deficit)/ to equityNotes capital premium Reserve Reserve reserves surplus holders

£’000 £’000 £’000 £’000 £’000 £’000 £’000Balance at 4 December 2006 . . . . . . . . 32 210,897 — — 6,882 (253,213) (35,402)Loss for the period . . . . . . . . . . . . . . — — — — — (40,154) (40,154)

Total comprehensive income for theperiod . . . . . . . . . . . . . . . . . . . . — — — — — (40,154) (40,154)

Transactions with owners:Equity component on convertible loan . . . . 20 — — — — 1,268 — 1,268Issue of Ordinary shares . . . . . . . . . . . 24 2 30,212 — — — — 30,214Share-based payments charge . . . . . . . . — — — — — 181 181

Total transactions with owners . . . . . . 2 30,212 — — 1,268 181 31,663

Balance at 2 December 2007 . . . . . . . . 34 241,109 — — 8,150 (293,186) (43,893)

Balance at 3 December 2007 . . . . . . . . 34 241,109 — — 8,150 (293,186) (43,893)Loss for the period . . . . . . . . . . . . . . — — — — — (33,298) (33,298)

Total comprehensive income for theperiod . . . . . . . . . . . . . . . . . . . . — — — — — (33,298) (33,298)

Transactions with owners:Issue of Ordinary shares . . . . . . . . . . . 24 1 17,910 — — — — 17,911Issue of Convertible preference shares . . . 24 3 22,630 — — — — 22,633Transfer of equity on conversion of loan

stocks . . . . . . . . . . . . . . . . . . . . 20 — — — — (7,011) 5,389 (1,622)Share-based payments charge . . . . . . . . — — — — — 61 61

Total transactions with owners 4 40,540 — — (7,011) 5,450 38,983

Balance at 30 November 2008 . . . . . . . 38 281,649 — — 1,139 (321,034) (38,208)

Balance at 1 December 2008 . . . . . . . . 38 281,649 — — 1,139 (321,034) (38,208)Loss for the period . . . . . . . . . . . . . . — — — — — (23,209) (23,209)

Total comprehensive income for theperiod . . . . . . . . . . . . . . . . . . . . — — — — — (23,209) (23,209)

Transactions with owners:Issue of Ordinary shares . . . . . . . . . . . 24 2 30,072 — — — — 30,074Transaction costs on issue of Ordinary

shares . . . . . . . . . . . . . . . . . . . . 24 — (945) — — — — (945)Issue of Convertible preference shares . . . 24 — 60 — — — — 60Transfer of equity on conversion of loan

stock . . . . . . . . . . . . . . . . . . . . . 20 — — — — (5) 5 —Transfer of equity on repayment of loan

stock . . . . . . . . . . . . . . . . . . . . . 20 — — — — (1,134) 1,134 —Share-based payments charge . . . . . . . . — — — — — 78 78

Total transactions with owners . . . . . . 2 29,187 — — (1,139) 1,217 29,267

Balance at 29 November 2009 . . . . . . . 40 310,836 — — — (343,026) (32,150)

Balance at 30 November 2009 . . . . . . . 40 310,836 — — — (343,026) (32,150)Loss for the period . . . . . . . . . . . . . . — — — — — (3,963) (3,963)

Total comprehensive income for theperiod . . . . . . . . . . . . . . . . . . . . — — — — — (3,963) (3,963)

Transactions with owners:Issue of Ordinary shares in Ocado Limited . 24 3 49,443 (47,741) — — — 1,705Cancellation of shares in Ocado Limited . . 24 (43) — — — — 43 —Issue of ordinary and convertible

preference shares by Ocado Group plc . 24 476,509 — — (476,509) — — —Ocado Group plc capital reduction . . . . . . 24 (467,846) — — — — 467,846 —Reverse acquisition of Ocado Limited by

Ocado Group plc . . . . . . . . . . . . . . 24 — (360,279) — 360,279 — — —Share-based payments charge . . . . . . . . — — — — — 34 34

Total transactions with owners . . . . . . 8,623 (310,836) (47,741) (116,230) — 467,923 1,739

Balance at 21 February 2010 . . . . . . . . 8,663 — (47,741) (116,230) — 120,934 (34,374)

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Part V Historical Financial Information relating to the Group

Consolidated statement of cash flows

For the For the For the For the For the52 weeks 52 weeks 52 weeks 12 weeks 12 weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

Notes 2007 2008 2009 2009 2010

(unaudited)£’000 £’000 £’000 £’000 £’000

Cash flow from operatingactivities

Loss before income tax . . . . . . (40,154) (33,298) (25,509) (7,235) (3,963)

Adjustments for:—Depreciation expense . . . . . . 12 17,621 19,820 17,865 4,048 4,301—Amortisation expense . . . . . . 11 2,395 3,917 4,743 1,025 979—Impairment of property, plant

and equipment . . . . . . . . . . 12 612 66 1,023 — ——Loss on disposal of property,

plant and equipment . . . . . . . 7 — 31 33 — ——Provision for dilapidations

expense . . . . . . . . . . . . . . 22 43 22 169 18 18—Share-based payments charge 8 181 61 78 18 34—Finance costs . . . . . . . . . . . 9 10,888 11,784 11,118 2,663 2,085—Finance income . . . . . . . . . 9 (824) (99) (12) — (2)

Changes in working capital:—(Increase)/decrease in

inventories . . . . . . . . . . . . . (1,122) (807) (106) 861 (281)—(Increase)/decrease in trade

and other receivables . . . . . . 1,868 (2,811) (2,707) (1,188) (728)—Increase/(decrease) in trade

and other payables . . . . . . . (9,655) 6,637 10,135 (3,227) (765)

Net cash inflow/(outflow) fromoperations . . . . . . . . . . . . (18,147) 5,323 16,830 (3,017) 1,678

Finance costs paid . . . . . . . . . (8,063) (8,994) (12,740) (2,793) (2,104)

Net cash inflow/(outflow) fromoperating activities . . . . . . . (26,210) (3,671) 4,090 (5,810) (426)

Cash flows from investingactivities

Purchase of property, plant andequipment . . . . . . . . . . . . . (19,558) (15,744) (15,215) (5,471) (1,593)

Proceeds from sale of property,plant and equipment . . . . . . . 214 4 — — —

Purchase of intangible assets . . (3,366) (4,137) (4,389) (875) (1,220)Finance income received . . . . . 1,970 99 12 — 2

Net cash used in investingactivities . . . . . . . . . . . . . (20,740) (19,778) (19,592) (6,346) (2,811)

Cash flows from financingactivities

Proceeds from the issue ofOrdinary share capital . . . . . 24 30,214 17,911 29,129 12 1,705

Proceeds from borrowings . . . . 25,153 8,022 25,052 2,054 3,009Repayment of borrowings . . . . . (10,555) (11,120) (28,374) (602) (1,763)Proceeds from asset based

financing arrangements . . . . . 9,950 8,950 7,135 5,124 1,812Repayments of obligations under

finance leases . . . . . . . . . . (7,926) (5,348) (10,280) (1,612) (4,098)

Net cash from financingactivities . . . . . . . . . . . . . 46,836 18,415 22,662 4,976 665

Net increase/(decrease) incash and cash equivalents . (114) (5,034) 7,160 (7,180) (2,572)

Cash and cash equivalents atbeginning of period . . . . . . . 11,005 10,891 5,857 5,857 13,017

Cash and cash/(debt)equivalents at end of period 16 10,891 5,857 13,017 (1,323) 10,445

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1. General Information

The principal activity of Ocado Group plc (the ‘‘Company’’) and its subsidiaries (together, the ‘‘Group’’ orthe ‘‘Ocado Group’’) is that of retailing and distribution of groceries and consumer goods.

The financial information presented is as at and for the 52 weeks to 2 December 2007, the 52 weeks to30 November 2008, the 52 weeks to 29 November 2009, the 12 weeks to 21 February 2010 and the12 weeks to 22 February 2009 which is unaudited.

2. Accounting policies

(a) Statement of compliance

The Ocado Group historical financial information has been prepared in accordance with InternationalFinancial Reporting Standards as adopted by the European Union (‘‘IFRS-EU’’) and InternationalFinancial Reporting Interpretations Committee (‘‘IFRIC’’) interpretations and with those parts of theCompanies Act 2006 as applicable to companies reporting under IFRS-EU.

(b) Basis of preparation and development of the Ocado Group

The Company was incorporated on 8 December 2009 and on 9 February 2010 acquired the entire sharecapital of Ocado Limited. As a result of this transaction, the ultimate shareholders in Ocado Limitedreceived shares in the Company in direct proportion to their original shareholdings in Ocado Limited. On23 June 2010 the Company re-registered as a public limited company and changed its name to OcadoGroup plc.

Under IFRS 3 Revised ‘‘Business Combinations’’, the acquisition of Ocado Limited by the Company hasbeen accounted for as a reverse acquisition and the consolidated IFRS-EU financial Information of theCompany is therefore a continuation of the financial information of Ocado Limited.

As a result any financial information after 9 February 2010 represents consolidated financial informationof the Ocado Group. Prior to this date the historical financial information represents the financialinformation of the Company’s only operating subsidiary, Ocado Limited (see Note 24).

The financial information is presented in sterling, rounded to the nearest thousand (£’000) unlessotherwise stated. It has been prepared under the historical cost convention, except for financialinstruments which have been measured at fair value.

This Historical Financial Information relating to the Group set out in this Part V (B) has been prepared onthe going concern basis, which assumes that the Group will continue to be able to meet its liabilities asthey fall due for the foreseeable future. The use of the going concern basis relies on the receipt of the£200 million of net proceeds from the offers of shares (the ‘‘Offers’’) and the new bank facility (the ‘‘NewFacility’’), as discussed in Note 33, being available to the Group. The auditor’s report on the StatutoryFinancial Statements of Ocado Limited for the 52 weeks ended 29 November 2009 was unqualified butincluded an emphasis of matter relating to going concern on the basis of the uncertainty of the Group’sfuture funding, since the £200 million of net proceeds from the Offers and the ability of the Group to beable to draw down on the New Facility could not be taken into account when forming that opinion. Thatuncertainty will be resolved on the receipt by the Company of £200 million of net proceeds from the Offersand the Group being able to draw down on the New Facility.

Use of assumptions and estimates

The preparation of historical financial information in conformity with IFRS-EU requires the use ofjudgements, estimates and assumptions that affect the reported amounts of assets and liabilities at thedate of the historical financial information and the reported amounts of revenues and expenses during thereporting period. The estimates and associated assumptions are based on historical experience andvarious other factors that are believed to be reasonable under the circumstances, the results of whichform the basis of making the judgements about carrying values of assets and liabilities that are not readilyapparent from other sources. Actual results may differ from these estimates.

These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accountingestimates are recognised in the period in which the estimate is revised if the revision affects only that

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period or in the period of the revision and future periods if the revision affects both current and futureperiods. Please see note 3 for further details.

Standards, amendments and interpretations effective for 2009/10 or issued and early adopted:

Certain new and revised standards and interpretations have been published that are mandatory for theGroup’s accounting periods beginning on or after 1 January 2009 and which the Group has adopted.

• Amendments to IFRS 1 ‘First-time Adoption of IFRSs’ and IAS 27 ‘Consolidated and SeparateHistorical financial information’—Cost of an Investment of a Subsidiary, Jointly Controlled Entity orAssociate, effective for annual periods beginning on or after 1 July 2009. The revised standardrequires the effects of all transactions with non-controlling interests to be recorded in equity if there isno change in control and these transactions will no longer result in goodwill or gains and losses. Thestandard also specifies the accounting when control is lost. Any remaining interest in the entity isre-measured to fair value, and a gain or loss is recognised in profit or loss.

• Amendments to IFRS 1 ‘First-time Adoption of IFRSs’ and IAS 27 ‘Consolidated and SeparateHistorical financial information’—Cost of an Investment of a Subsidiary, Jointly Controlled Entity orAssociated, effective for annual reporting periods beginning on or after 1 January 2009.

• Amendment to IFRS 2 ‘Share-Based Payment’—Vesting Conditions and Cancellations, effective forannual periods beginning on or after 1 January 2009 deals with vesting conditions and cancellations.It clarifies that vesting conditions are service conditions and performance conditions only. Otherfeatures of share based payments would have to be included in the fair value at the grant date.

• IFRS 8 ‘Operating Segments’, effective for annual periods beginning on or after 1 January 2009. Thisnew standard replaces IAS 14 ‘Segment Reporting’ and requires segmental information to bepresented on the same basis that management uses to evaluate performance of its reportingsegments in its management reporting. The Group only uses one segment to assess performanceand so there is no effect on the Group.

• IFRIC 13 ‘Customer Loyalty Programmes’, effective for annual periods beginning on or after 1 July2008. This interpretation requires customer loyalty award credits to be accounted for as a separatecomponent of the sales transaction in which they are granted and therefore part of the fair value ofthe consideration received is allocated to the award credits and deferred over the period that theaward credits are fulfilled. The Group does not currently operate such a scheme and hence theadoption of IFRIC 13 has had no impact on the results or net assets of the Group.

• IFRIC 17 ‘Distribution of non-cash assets to owners’ effective for annual periods beginning on or after1 July 2009. This interpretation provides guidance on accounting for arrangements whereby an entitydistributes non-cash assets to shareholders either as a distribution of reserves or as dividends.IFRS 5 has also been amended to require that assets are classified as held for distribution only whenthey are available for distribution in their present condition and the distribution is highly probable. TheGroup currently has no such arrangements.

• IFRIC 18 ‘Transfers of Assets from Customers’, effective for transfers of assets from customersreceived on or after 1 July 2009.

• IFRIC 19 ‘Extinguishing Financial Liabilities with Equity Instruments’, effective for annual periodsbeginning on or after 1 July 2010. This standard clarifies the requirements of accounting for debt forequity swaps.

• Amendments to IAS 1 ‘Presentation of Historical financial information’, effective for annual periodsbeginning on or after 1 January 2009. This revised standard requires ‘‘non-owner changes in equity’’to be presented separately from ‘‘owner changes in equity’’ in the statement of comprehensiveincome.

• Amendments to IAS 1 ‘Presentation of Historical financial information’, effective for annual periodsbeginning on or after 1 January 2010. This amendment provides clarification that the potentialsettlement of a liability by the issue of equity is not relevant to its classification as current ornon-current.

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• Amendment to IAS 23 ‘Borrowing Costs’, effective for annual periods beginning on or after 1 January2009. The standard has been revised and now requires an entity to capitalise borrowing costsdirectly attributable to an acquisition, construction or production of a qualifying asset (one that takesa substantial period of time to get ready for use or sale) as part of the cost of that asset. The option ofimmediately expensing those borrowing costs has been removed.

• Amendments to IAS 39 ‘Financial Instruments’: Recognition and Measurement’ and IFRS 7‘Financial Instruments: Disclosures’, effective for annual periods beginning on or after 1 July 2008.These amendments permit the reclassification of financial assets in particular circumstances.

The accounting policies have been applied consistently by the Group to all periods presented in thehistorical financial information.

(c) Consolidation

The financial information comprises a consolidation of the financial information of Ocado Group plc andall its subsidiaries. The financial year ends of all entities in the Group are coterminus.

The financial information of subsidiaries are included in the consolidated financial information from thedate on which control over the operating and financial decisions is obtained and cease to be consolidatedfrom the date on which control is transferred out of the Group. Control exists when the Company has thepower, directly, or indirectly, to govern the financial and operating policies of an entity so as to obtaineconomic benefits from its activities.

On 9 February 2010, the Group, previously headed by Ocado Limited, underwent a reorganisation byvirtue of which Ocado Limited’s shareholders in their entirety exchanged their shares for shares in OcadoGroup plc, a newly formed company, which then became the ultimate parent company of the Group.Notwithstanding the change in the legal parent of the Group, this transaction has been accounted for as areverse acquisition and the consolidated financial information has been prepared on the basis of the newlegal parent having been acquired by the existing Group.

All inter-company balances and transactions, including recognised gains arising from inter-grouptransaction, have been eliminated in full. Unrealised losses are eliminated in the same manner asrecognised gains except to the extent that they provide evidence of impairment.

(d) Revenue

Revenue consists of income generated from online sales through the Webshop and includes charges fordelivery.

Online sales are shown net of returns, relevant marketing vouchers/offers and value added taxes.Relevant vouchers/offers include: money-off coupons, conditional spend vouchers and offers such asbuy three for the price of two.

Revenue is recognised at the point when the significant risks and rewards of products have been passedto the buyer and can be reliably measured; in general this is deemed to occur when customers takedelivery of the goods. Income from ‘Ocado Delivery Pass’, the discounted pre-pay delivery scheme, isrecognised in the period to which it relates on an accruals basis.

(e) Cost of sales

Costs of sales represent the cost to the Group of the product sold. It consists of all external costs incurredin procuring goods for resale and delivering them to the Customer Fulfilment Centre as well anyadjustments to inventories.

(f) Distribution costs

Distribution costs consist of all the costs incurred, excluding product costs, to the point of sale, usually thecustomers’ home. This includes the payroll-related expenses for the picking, dispatch and delivery ofproduct sold to the point of sale, the cost of making those deliveries, including fuel, tolls, maintenance ofvehicles, the operating costs of the properties required for the picking, dispatch and onward deliveryoperations and all associated depreciation, amortisation and impairment charges.

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Part V Historical Financial Information relating to the Group

(g) Administrative expenses

Administrative expenses consist of all advertising and marketing expenditure, the payroll-relatedexpenses of all marketing, IT and other Head Office functions, costs of annual software maintenancecontracts, property-related costs for the Head Office, all fees for professional services and depreciation,amortisation and impairment of IT equipment and fixtures and fittings.

(h) Other income

Advertising revenue, commission income received, income from other services to suppliers andsub-lease payments received are recognised in the period to which they relate on an accruals basis.

(i) Property, plant and equipment

Property, plant and equipment excluding land are stated at cost less accumulated depreciation and anyrecognised impairment loss.

Depreciation is provided at rates estimated to write off the cost of the relevant assets less their estimatedresidual values by equal annual amounts over their expected useful economic lives. Residual values andexpected useful economic lives are reviewed and adjusted if appropriate at the end of each reportingperiod.

Land is not depreciated. Depreciation on other fixed assets is calculated based on the useful economiclife indicated below:

Freehold buildings and leasehold properties 25 years, or the lease term if shorter

Fixtures and fittings 5-10 years

Plant and machinery 3-20 years(97% between 5 and 10 years)

Computer hardware 2-5 years

Motor vehicles 2-5 years

Capital work-in-progress is not depreciated until it is available for use.

Gains and losses on disposal are determined by comparing proceeds with the asset’s carrying amountand are recognised within operating profit.

(j) Intangible assets—Computer software

Computer software is carried at cost less accumulated amortisation and any recognised impairment loss.Externally acquired computer software and software licences are capitalised and amortised on astraight-line basis over their useful economic lives of three to five years. Costs relating to the developmentof computer software for internal use are capitalised once all the development phase recognition criteriaof IAS 38 ‘Intangible Assets’ are met. When the software is available for its intended use, these costs areamortised in equal annual amounts over the estimated useful life of the software. Any impairment ofcomputer software or licenses is charged to operating profit in the period in which it arises.

(k) Impairment of non-financial assets

The Group does not have any assets that have an indefinite useful life and so are not subject to an annualamortisation or depreciation charge. Assets that are subject to an annual amortisation or depreciationcharge are reviewed for impairment whenever events or changes in circumstances indicate that thecarrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fairvalue less cost to sell and value in use. For the purpose of assessing impairment, assets are grouped atthe lowest level for which there are separately identifiable cash flows (cash generating units).Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment ateach reporting date.

Given the Group’s current operating structure the lowest level at which cash flows can reasonably beassessed is for the Group as a whole. The Group is still investing in its future growth and so has not yet

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reached a stage where it delivers positive post tax earnings. The Group prepares detailed forwardprojections which are constantly updated and refined. Based on these projections the Board does notconsider that any further impairment of assets is required.

(l) Borrowing costs

Borrowing costs which are directly attributable to the acquisition or construction of qualifying assets arecapitalised. They are defined as the borrowing costs that would have been avoided if the expenditure onthe qualifying asset had not been made. All other borrowing costs are charged to finance costs, using theeffective interest rate method.

(m) Leased Assets

Leases are classified as finance leases when the terms of the lease transfer substantially all the risks andrewards of ownership to the Group. All other leases are classified as operating leases. For propertyleases, the land and building elements are treated separately to determine the appropriate leaseclassification.

• Finance leases

Assets funded through finance leases are capitalised either as property, plant and equipment, orintangible assets, as appropriate, and are depreciated/amortised over their estimated useful lives or thelease term, whichever is shorter. The amount capitalised is the lower of the fair value of the asset or thepresent value of the minimum lease payments during the lease term at the inception of the lease. Theresulting lease obligations are included in liabilities net of finance charges. Finance costs on financeleases are charged directly to the statement of comprehensive income on an effective interest rate basis.

• Operating leases

Assets leased under operating leases are not recorded on the balance sheet. Rental payments arecharged directly to the statement of comprehensive income on a straight line basis.

• Lease incentives

Lease incentives primarily include up-front cash payments or rent-free periods. Lease incentives arecapitalised and spread over the period of the lease term.

(n) Inventories

Inventories comprise goods held for resale, fuel and other consumable goods made up principally ofspares. Inventories are valued at the lower of cost and net realisable value. Goods held for resale andconsumables are initially valued on a current cost basis and adjustments are made at the financial periodend to bring this to an average cost basis. Fuel stocks are valued at calculated average cost. Costsinclude all direct expenditure and other appropriate attributable costs incurred in bringing inventories totheir present location and condition.

(o) Taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in the incomestatement, except to the extent that it relates to items recognised in other comprehensive income ordirectly in equity. In this case the tax is also recognised in other comprehensive income or directly inequity respectively.

• Current taxation

Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted orsubstantively enacted by the balance sheet date. Management periodically evaluates positions taken intax returns with respect to situations in which applicable tax regulation is subject to interpretation.It establishes provisions where appropriate on the basis of amounts expected to be paid to the taxauthorities.

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Part V Historical Financial Information relating to the Group

• Deferred taxation

Deferred tax is recognised using the balance sheet liability method, on temporary differences arisingbetween the tax base of assets and liabilities and their carrying amount in the historical financialinformation. Deferred tax is calculated at the tax rates that have been enacted or substantively enacted bythe balance sheet date and are expected to apply when the related deferred tax asset is realised or thedeferred tax liability is settled.

Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will beavailable against which the temporary differences can be utilised. The carrying amount of deferred taxassets is reviewed at each balance sheet date.

Deferred tax assets and liabilities are offset against each other when there is a legally enforceable right toset-off current taxation assets against current taxation liabilities and it is the intention to settle these on anet basis.

Deferred tax is charged or credited in the statement of comprehensive income, except when it relates toitems charged or credited directly to equity, in which case the deferred tax is also recognised in equity.

(p) Provisions

Provisions are recognised when: the Group has a present legal or constructive obligation as a result of apast event; it is probable that an outflow of resources will be required to settle the obligation; and theamount can be reliably estimated.

• Dilapidations

Provisions for dilapidations are recognised on a lease by lease basis and are measured at the presentvalue of the expenditure expected to be required to settle the obligation using a pre-tax rate that reflectscurrent market assessments of the time value of money and risks specific to the obligation. The increasein the provision due to passage of time is recognised as a finance cost.

• Onerous leases

Provisions for onerous leases are recognised if the Group believes that the unavoidable costs of meetingthe lease obligations exceed the economic benefits expected to be received under the lease.

(q) Employee benefits

• Pensions

The Group contributes to the personal pension plans of its staff through a defined contribution personalpension scheme which is administered by Standard Life. Employer contributions to the scheme arecalculated as a percentage of salary based on length of service. Contributions are charged to thestatement of comprehensive income in the period in which they arise.

• Share-based payments

Employees (including Directors) of the Group receive remuneration in the form of share-based paymenttransactions, whereby employees render services in exchange for rights over shares (‘equity-settledtransactions’).The cost of equity settled transactions with employees is measured by reference to the fairvalue at the date at which they are granted. Fair value is measured by use of the Black-Scholes pricingmodel. The expected life used in the model has been adjusted, based on management’s best estimate,for the effects of non-transferability, exercise restrictions and behavioural considerations. In valuingequity-settled transactions, no account is taken of any performance conditions.

The Group operates an equity settled Executive Share Option Scheme (‘‘ESOS’’) and a Joint ShareOwnership Scheme (‘‘JSOS’’).

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Part V Historical Financial Information relating to the Group

Equity settled share-based transactions:

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,over the years in which the performance conditions are fulfilled, ending on the date on which the relevantemployees become fully entitled to the award (‘vesting date’). The vesting period for the ESOS isthree years. If the options remain unexercised after a period of 10 years from the date of grant or theemployee leaves the Company, the options expire (subject to a limited number of exceptions). Theshares in the JSOS vest in four annual tranches with the first tranche vesting on the first anniversary of thedate of grant.

The cumulative expense recognised for equity-settled transactions at each reporting date until the vestingdate reflects the extent to which both the vesting period has expired and the number of awards, in theopinion of the directors of the Company based on the best available estimate at that date, that willultimately vest.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting isconditional upon a market condition, which are treated as vesting irrespective of whether or not themarket condition is satisfied, provided that all other performance conditions are satisfied.

Cash settled share-based transactions:

The Group has exposure in respect of cash-settled share-based payment transactions and share-basedpayment transactions with cash alternatives as defined by IFRS 2 Share-based payment only in respectof bad leaver provisions in the JSOS.

For details of the share options see Note 25.

(r) Foreign currency translation

• Functional and presentation currency

Items included in the historical financial information of each of the Group’s entities are measured usingthe currency of the primary economic environment in which the entity operates (‘the functional currency’).The consolidated financial information is presented in sterling, rounded to the nearest thousand (£’000)unless otherwise stated, which is the company’s functional and the Group’s presentation currency.

• Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchangegains or losses resulting from the settlement of such transactions and from the translation at year endexchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in theincome statement, except when deferred in equity as qualifying cash flow hedges and qualifying netinvestment hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents arepresented in the statement of comprehensive income within ‘finance income’ or ‘finance costs’. All otherforeign exchange gains and losses are presented in the statement of comprehensive income within‘Operating loss’.

Changes in the fair value of monetary securities denominated in foreign currency classified asavailable-for-sale are analysed between translation differences resulting from changes in the amortisedcost of the security and other changes in the carrying amount of the security. Translation differencesrelated to changes in amortised cost are recognised in profit or loss, and other changes in carryingamount are recognised in equity.

Translation differences on non-monetary financial assets and liabilities such as equities held at fair valuethrough profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translationdifferences on non-monetary financial assets such as equities classified as available-for-sale areincluded in the available-for-sale reserve in equity.

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Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency aretranslated into the presentation currency as follows:

• assets and liabilities for each balance sheet presented are translated at the closing rate at the date ofthat balance sheet;

• income and expenses for each income statement are translated at average exchange rates (unlessaverage is not a reasonable approximation of the cumulative effect of the rates prevailing on thetransaction dates, in which case income and expenses are translated at the rate on the dates of thetransactions); and

• all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment in foreignoperations, and of borrowings and other currency instruments designated as hedges of suchinvestments, are taken to shareholders’ equity. When a foreign operation is partially disposed of or sold,exchange differences that were recorded in equity are recognised in the income statement as part of thegain or loss on sale.

(s) Financial instruments

Financial assets and financial liabilities are recognised on the balance sheet when the Companybecomes a party to the contractual provisions of the instrument.

The Group classifies its financial instruments in the following categories:

• Available-for-sale;

• Loans and receivables;

• Other financial liabilities at amortised costs;

• Liabilities at fair value through the profit and loss.

The classification depends on the purpose for which the financial assets and liabilities were acquired.Management determines the classification of its financial instruments at initial recognition or in certaincircumstances on modification.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or notclassified in any of the other categories. They are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reporting period.Management considers that the Group’s investments fall within this category as explain below.

Investments:

Investments are classified as either held for trading or available-for-sale. There are currently noinvestments classified as held for trading.

Available-for-sale investments are held at fair value if this can be reliably measured. If the equityinstruments are not quoted in an active market and their fair value cannot be reliably measured theavailable-for-sale investment is carried at cost, less impairment.

Unless the valuation falls below its original cost, gains and losses arising from changes in fair value ofavailable-for-sale assets are recognised directly in equity. On disposal the cumulative net gain or loss istransferred to the statement of comprehensive income. Impairments and valuations below costs are alsotransferred to the statement of comprehensive income. Dividends are recognised in the statement ofcomprehensive income when the right to receive payment is established.

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Part V Historical Financial Information relating to the Group

• Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that arenot quoted in an active market. They are included in current assets, except for maturities greater than12 months after the end of the reporting period. These are classified as non-current assets. The Group’sloans and receivables comprise ‘Trade and other receivables’ and ‘Cash and cash equivalents’ in thebalance sheet.

Trade and other receivables:

Trade receivables are non-interest bearing and are recognised initially at fair value, and subsequently atamortised cost, reduced by appropriate allowances for estimated irrecoverable amounts.

Cash and cash equivalents:

Cash and cash equivalents comprise cash in hand and bank overdrafts. Bank overdrafts are repayable ondemand and form an integral part of the Group’s cash management. They are therefore included as acomponent of cash and cash equivalents.

• Financial liabilities and equity instruments

Financial liabilities and equity instruments are classified according to the substance of the contractualarrangements entered into. An equity instrument is any contract that gives a residual interest in the assetsof the Group after deducting all of its liabilities.

Trade and other payables:

Trade and other payables are non-interest bearing and are stated at amortised cost.

Interest-bearing borrowings:

Interest-bearing bank loans and overdrafts are initially recorded at fair value, net of attributabletransaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortisedcost with any difference between cost and redemption value being recognised in the statement ofcomprehensive income over the period of the borrowings on an effective interest basis. On the balancesheet, interest bearing borrowings have been subcategorised as: borrowings, convertible loan stock andobligations under finance leases.

Compound instruments:

Compound financial instruments issued by the Group comprise convertible loan stock that can beconverted to convertible preference shares at the option of the holder.

The liability component of the compound financial instrument is recognised on the date or inception ormodification at the fair value of a similar liability that does not have an equity conversion option. Theequity element is recognised as the difference between the fair value of the compound financialinstrument as a whole and the fair value of the liability component. Any directly attributable transactioncosts are allocated to the equity and liability components in proportion to their initial carrying amounts.

Subsequently, the liability component of a compound financial instrument is measured at amortised costusing the effective interest rate method.

Derivative financial instruments:

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and aresubsequently re-measured at their fair value.

Cash flow hedging:

The Group does not hold and has not held derivative instruments that qualifying for cash flow hedging andso all gains or losses are recognised immediately within the statement of comprehensive income.

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Equity instruments:

Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

(t) Impairment of financial assets

• Assets carried at amortised cost

The Group assesses whether there is objective evidence that a financial asset is impaired at the end ofeach reporting period. A financial asset is impaired and an impairment loss recognised if there is objectiveevidence of impairment as a result of a loss event that occurred after the initial recognition of the assetand the loss event has an impact on the estimated future cash flows of the financial assets that can bereliably estimated.

The criterion that the Group uses to determine that there is objective evidence of an impairment lossincludes but is not limited to:

• Financial difficulty indicators;

• Breach of contract such as missed payments;

• Fraud;

• Bankruptcy;

• Disappearance of an active market.

The amount of the loss is measured as the difference between the assets carrying amount and thepresent value of estimated future cash flows discounted at the financial assets original effective interestrate. The assets carrying value is reduced and the loss recognised in the statement of comprehensiveincome.

If, in a subsequent period, the impairment loss decreases and the decrease can be related objectively toan event occurring after the impairment was recognised the reversal of the previously recognisedimpairment loss is recognised in the statement of comprehensive income.

• Available-for-sale financial assets

Equity investments classified as available-for-sale and held at cost are reviewed annually to indentify if animpairment loss has occurred. The amount of the impairment loss is measured as the difference betweenthe carrying amount of the financial asset and the present value of estimated future cash flows discountedat the current market rate of return for a similar financial asset. Impairment losses recognised in thestatement of comprehensive income on equity investments are not reversed.

3. Critical accounting estimates and assumptions

Estimates and judgments are continually evaluated and are based on historical experience and otherfactors, including expectations of future events that are believed to be reasonable under thecircumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimateswill, by definition, seldom equal the related actual results. The estimates and assumptions that have asignificant risk of causing a material adjustment to the carrying amounts of assets and liabilities within thenext financial period are addressed below:

(a) Intangible assets—capitalised software

• Cost capitalisation

Amounts capitalised include the total cost of any external products of services and labour costs directlyattributable to development. Management judgement is involved in determining the appropriate internalcosts to capitalise and the amounts involved.

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Part V Historical Financial Information relating to the Group

• Useful life

The useful life is determined by management at the time the software is acquired and brought into useand is regularly reviewed for appropriateness. For computer software licences, the useful life representsmanagement’s view of the expected period over which the Group will receive benefits from the software,but not exceeding the licence term. For unique software products controlled and developed by the Group,the life is based on historical experience with similar products as well as anticipation of future events,which may impact their useful economic life, such as changes in technology.

(b) Property, plant and equipment

Property, plant and equipment represents a significant proportion of the asset base of the Group being66 per cent. as at 21 February 2010 (2009: 66 per cent.) (2008: 72 per cent.) (2007: 72 per cent.) of theCompany’s total assets. Therefore, the estimates and assumptions made to determine their carryingvalue and related depreciation are critical to the Group’s financial position and performance.

• Estimation of useful life

The charge in respect of periodic depreciation is derived after determining an estimate of an asset’sexpected useful life and the expected residual value at the end of its life. Increasing an asset’s expectedlife or its residual value would result in a reduced depreciation charge in the statement of comprehensiveincome.

The useful lives of the Group’s assets are determined by management at the time the asset is acquiredand reviewed at least annually for appropriateness. The lives are based on historical experience withsimilar assets as well as anticipation of future events, which may impact their life, such as changesin technology.

During the 2008 financial period the Group revised the life of certain plant and machinery, due to theincreased resilience of the CFC and greater certainty of the long-term picking solutions. For the majorityof assets revised this doubled the estimated useful life from 5 to 10 years, although a small number ofhigher value assets had their life halved from 20 years. The change was only applied from the date thedecision was ratified, and saw a decrease in the depreciation charge for the 2008 period of £852,000. Ifthe change had been backdated to the beginning of the financial period depreciation would have fallen bya further £2,389,000. If the useful lives of the assets had not been revised the depreciation charge in 2009would have been £4,914,000 (27.5 per cent.) higher.

(c) Going concern basis including its effect on the impairment of assets

The financial information has been prepared on the going concern basis, which assumes that the Groupwill continue to be able to meet its liabilities as they fall due for the foreseeable future. The going concernbasis relies on the receipt of £200 million of net proceeds from the Offers and the New Facility beingavailable to the Group.

The Group maintains a mixture of long-term and short-term debt finance that is designed to ensure theGroup has sufficient available funds for its operations and its planned expansion. The Group monitorscash flow as part of its day to day control procedures and management consider cash flow projections ona monthly basis ensuring that appropriate facilities are available to be drawn upon as necessary. TheGroup also prepares detailed forward projections for future periods which are constantly updated andrefined. As a consequence the Directors are satisfied that the Group is able to obtain sufficient resourcesto continue in operation for the foreseeable future. Accordingly, they have adopted the going concernbasis in preparing the historical financial information.

The above assumption has a profound effect on the Group as it greatly affects the way it must value itsassets and liabilities. If management were unable to justify accounting on a going concern basis, theGroup would have to completely revisit the valuation of assets and liabilities on the balance sheet. Anadditional impairment review would be required and it is likely that assets would have to be measured attheir net realisable value base on the sale of assets on an asset by asset basis. Liabilities would also haveto be increased to take account of future non-cancellable operating lease commitments, all employeeredundancies and other similar costs.

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Part V Historical Financial Information relating to the Group

Impairment of assets based on the separation of the business into cash generating units

The Group is required to undergo an assessment of the future viability of assets grouped at the lowestlevels for which there are separately identifiable cash flows (cash generating units). Given the Group’scurrent operating structure, the lowest level at which cash flows can reasonably be assessed is for theGroup as a whole. The Group is still investing in its future growth and so has not yet reached a stagewhere it delivers positive post tax earnings. Based on the future projections referred to above, the Boarddo not consider that any further impairment of assets is required.

There are a large number of assumptions and estimates involved in calculating these future projections,including management’s expectations of:

• Increase in the number of customers, and frequency of service;

• Growth of gross margin percentages;

• Growth in EBITDA;

• Timing and quantum of future capital expenditure;

• The estimation of future funding and the cost of such funding.

(d) Leases

The Group has a number of complex high value lease arrangements. The Group follows the guidance ofIAS 17 to determine the classification of leases as operating leases versus finance leases. Theclassification of a lease as a finance lease as opposed to an operating lease will change EBITDA andoperating profit/(loss) as the charge made by the lessor will pass through finance charges anddepreciation will be charged on the capitalised asset. Retained earnings may also be temporarily affecteddepending on the relative size of the amounts apportioned to capital repayments and depreciation. IAS 17requires the Group to consider property leases split into their component parts (i.e. land and buildingelements) separately. As only the buildings elements could be considered as a finance leasemanagement must make a judgement, based on advice from suitable experts, as to the relative value ofthe land and buildings.

(e) Recognition of deferred tax assets

The Group’s tax charge on ordinary activities is the sum of the total current and deferred tax charges. Thecalculation of the total tax charge necessarily involves a degree of estimation and judgement in respect ofcertain items. The final outcome of some of these items may give rise to material profit and loss and/orcash flow variances.

A deferred tax asset is recognised when it has become probable that future taxable profit will allow thedeferred tax asset to be recovered. Recognition, therefore, involves judgement regarding the prudentforecasting of future taxable profits of the business and in applying an appropriate risk adjustment factor.

At the balance sheet date management has forecast that the Group would generate future taxable profitsagainst which existing tax losses and accelerated capital allowance could be relieved. As a result theGroup has recognised a deferred tax asset for 2.4 per cent. of its available tax losses and acceleratedcapital allowance at the period end.

4. Segmental reporting

The Group’s activities consist solely of the retailing of food and groceries within the United Kingdom. It ismanaged as one entity and does not split its activities into any further regional or product subdivisions inits internal management reporting, as any such split would not provide the Group’s management with anymeaningful information. Consequently all activities relate to this one segment.

The Company is domiciled in the UK. All of the result of its revenue is from UK external customers. Allnon-current assets other than financial instruments and deferred tax assets are located in the UK.

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Part V Historical Financial Information relating to the Group

5. Gross salesFor the For the For the For the For the

52 weeks 52 weeks 52 weeks 12 weeks 12 weeksended ended ended ended ended

2 December 30 November 29 November 22 February 21 February2007 2008 2009 2009 2010

(unaudited)£’000 £’000 £’000 £’000 £’000

Revenue . . . . . . . . . . . . . . . . . . 272,856 321,314 401,997 84,622 110,238VAT . . . . . . . . . . . . . . . . . . . . . . 15,240 17,136 18,788 3,937 5,607Marketing vouchers . . . . . . . . . . . 3,350 2,547 6,493 995 1,375

Gross sales . . . . . . . . . . . . . . . 291,446 340,997 427,278 89,554 117,220

6. Other income

Other income is made up as follows:

For the For the For the For the For the52 weeks 52 weeks 52 weeks 12 weeks 12 weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

2007 2008 2009 2009 2010

(unaudited)£’000 £’000 £’000 £’000 £’000

Advertising revenue . . . . . . . . . . — 994 2,038 466 997Commission income received . . . . 185 226 233 54 24Other services provided to

suppliers . . . . . . . . . . . . . . . . . 340 584 370 22 145Sublease payments received . . . . 87 4 — — —

Other income . . . . . . . . . . . . . . 612 1,808 2,641 542 1,166

7. Operating loss

For the For the For the For the For the52 weeks 52 weeks 52 weeks 12 weeks 12 weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

Notes 2007 2008 2009 2009 2010

(unaudited)£’000 £’000 £’000 £’000 £’000

Operating loss is stated aftercharging/(crediting) thefollowing:

Cost of inventoriesrecognised as an expense 181,889 215,575 271,613 57,405 74,759

Employment costs . . . . . . . 8 55,739 66,567 78,181 17,174 20,529Amortisation expense . . . . . 11 2,395 3,917 4,743 1,025 979Depreciation of property,

plant and equipment . . . . 12 17,621 19,820 17,865 4,048 4,301Impairment of property, plant

and equipment . . . . . . . . 12 612 66 1,023 — —Loss on disposal of property,

plant and equipment . . . . — 31 33 — —(Credit)/charges relating to

the impairment ofreceivables . . . . . . . . . . . 26 (228) 198 (30) 40 40

Operating lease rentals—land and buildings . . . . . . 1,746 1,946 1,815 473 533—other leases . . . . . . . . . . 5 70 191 48 86Net foreign exchange losses . 126 56 72 (43) 38

117

Part V Historical Financial Information relating to the Group

During the period, the Group obtained the following services from its auditors:

For the For the For the For the For the52 weeks 52 weeks 52 weeks 12 weeks 12 weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

2007 2008 2009 2009 2010

(unaudited)£’000 £’000 £’000 £’000 £’000

Audit servicesFees payable to Group’s auditor for

the statutory audit of the financialstatements . . . . . . . . . . . . . . . . . 65 65 90 18 32

Non-audit servicesFees payable to the Group’s auditor

and its associate for other servicesas detailed below:

Taxation services . . . . . . . . . . . . . . 15 — — — —Other services pursuant to legislation

and compliance . . . . . . . . . . . . . . 20 — 7 — 276

100 65 97 18 308

8. Employee information

Employment costs during the financial period were as follows:

For the For the For the For the For the52 weeks 52 Weeks 52 Weeks 12 Weeks 12 Weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

Notes 2007 2008 2009 2009 2010

(unaudited)£’000 £’000 £’000 £’000 £’000

Staff costs during theperiod:

Wages and salaries . . . . . . 52,528 63,466 74,116 16,212 19,231Social security costs . . . . . . 4,989 6,072 7,015 1,600 1,880Pension costs—defined

contribution plans . . . . . . 755 884 1,067 245 259Share-based payments

expense . . . . . . . . . . . . . 181 61 78 18 34

Total employment costs . . . . 58,453 70,483 82,276 18,075 21,404Staff costs capitalised . . . . . 11 (2,714) (3,916) (4,095) (901) (875)

Total employment costexpense . . . . . . . . . . . . 55,739 66,567 78,181 17,174 20,529

Average number ofemployees (includingExecutive Directors) by Numberrole: Number Number Number (unaudited) Number

Operational staff . . . . . . . . . 2,033 2,730 3,151 3,119 3,610Support staff . . . . . . . . . . . 256 293 343 336 393

2,289 3,023 3,494 3,455 4,003

At the end of March 2007 a five year contract for the provision of third party logistics services ended. The1,214 people employed under this contract became employees of the Group under the Transfer ofUndertakings (Protection of Employment) Regulations.

The costs recognised above for the share option scheme relate to equity settled schemes only(see Note 25).

118

Part V Historical Financial Information relating to the Group

The key management comprises the Executive and Non Executive Directors. The key managementpersonal compensation is as follows:

For the For the For the For the For the52 weeks 52 Weeks 52 Weeks 12 Weeks 12 Weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

2007 2008 2009 2009 2010

(unaudited)£’000 £’000 £’000 £’000 £’000

Salaries, fees and other short-termemployee benefits . . . . . . . . . . . . 686 672 1,640 471 315

Pension costs—defined contributionplans . . . . . . . . . . . . . . . . . . . . . 28 28 75 30 15

Equity settled share-based paymentsgranted under the JSOS . . . . . . . . — — — — 6

714 700 1,715 501 336

Directors’ personal compensation increased significantly in the period due to performance criteriadependent remuneration being achieved.

The table below gives the number of share options issued under the executive share option scheme to theDirectors during the period. During the period a Director exercised 2,750 (2009: nil), (2008: nil), (2007:nil), of share options in Ocado Limited which were issued under the executive share option scheme. Theexercise prices were between £90 and £100. No other Directors have exercised any option during theperiods presented nor have there been any lapses.

For the For the For the For the For the52 weeks 52 Weeks 52 Weeks 12 Weeks 12 Weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

2007 2008 2009 2009 2010

(unaudited)Number of share options issued in the

financial period . . . . . . . . . . . . . . — — 463 — —Exercise price (£) . . . . . . . . . . . . . . — — 135 — —

The highest paid Director is as follows:

The table below gives the number of equity instruments issued under the joint share ownership scheme tothe Directors during the period.

For the For the For the For the52 weeks 52 Weeks 52 Weeks 12 Weeks For the

ended ended ended ended 12 Weeks ended2 December 30 November 29 November 22 February 21 February

2007 2008 2009 2009 2010

(unaudited)Number of jointly held shares

issued in the financial period . . . — — — — 27,524,000Hurdle price (£) . . . . . . . . . . . . . — — — — 1.73 to 2.28

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Part V Historical Financial Information relating to the Group

The highest paid Director’s compensation is as follows:

For the For the For the For the For the52 weeks 52 Weeks 52 Weeks 12 Weeks 12 Weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

2007 2008 2009 2009 2010

(unaudited)£’000 £’000 £’000 £’000 £’000

Salaries, fees and other short-termemployee benefits . . . . . . . . . . . . 171 178 618 207 91

Pension costs—defined contributionplans . . . . . . . . . . . . . . . . . . . . . 12 12 34 15 6

Equity settled share-based paymentsgranted under the JSOS . . . . . . . . — — — — 2

183 190 652 222 99

Service contracts

The four Executive Directors, Tim Steiner, Neill Abrams, Andrew Bracey and Jason Gissing have servicecontracts which can be terminated by giving Ocado Limited 12 months’ written notice or can beterminated by the Director by giving 6 months’ written notice.

If their service contracts are terminated without cause, Ocado Limited can request that they work theirnotice period, take a period of garden leave or can pay an amount in lieu of notice equal to one times basicsalary for the remainder of the notice period. These payments would be subject to deductions for tax andnational insurance. The contracts contain restrictive covenants, which continue for 12 months aftertermination. The contracts do not contain any specific provisions relating to a change of control of thebusiness.

The Executive Directors’ current service contracts became effective on the following dates:

Tim Steiner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 June 2010Jason Gissing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 June 2010Neill Abrams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 June 2010Andrew Bracey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 June 2010

Directors’ remuneration

Summary of Directors’ remuneration for the 52 weeks ended 2 December 2007

PersonalSalaries Benefits Annual Pension Total

and fees in kind Bonus Contributions for 2007

£ £ £ £ £

Neill Abrams . . . . . . . . . . . . . . 168,289 2,311 — 12,000 182,600Tom Clayton . . . . . . . . . . . . . . 24,321 — — — 24,321Jonathan Faiman . . . . . . . . . . 116,079 1,379 — — 117,458Jeremy Frampton . . . . . . . . . . — — — — —Jason Gissing . . . . . . . . . . . . . 112,696 1,771 — 8,040 122,507Robert Gorrie . . . . . . . . . . . . . 32,568 — — — 32,568Michael Grade . . . . . . . . . . . . 112,131 — — — 112,131Patrick Lewis . . . . . . . . . . . . . — — — — —Brian Lynas . . . . . . . . . . . . . . — — — — —Alistair McKay . . . . . . . . . . . . . — — — — —Jorn Rausing . . . . . . . . . . . . . — — — — —Tim Steiner . . . . . . . . . . . . . . 112,696 1,771 — 8,040 122,507David Young . . . . . . . . . . . . . — — — — —

Total for 2007 . . . . . . . . . . . . . 678,780 7,232 — 28,080 714,092

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Part V Historical Financial Information relating to the Group

Summary of Directors’ remuneration for the 52 weeks ended 30 November 2008

PersonalSalaries Benefits Annual Pension Total

and fees in kind Bonus Contributions for 2008

£ £ £ £ £

Neill Abrams . . . . . . . . . . . . . . 176,512 1,031 — 12,000 189,543Tom Clayton . . . . . . . . . . . . . . 17,567 — — — 17,567Jonathan Faiman(1) . . . . . . . . . 86,866 529 — — 87,395Jeremy Frampton . . . . . . . . . . — — — — —Jason Gissing . . . . . . . . . . . . . 120,709 898 — 8,040 129,647Robert Gorrie . . . . . . . . . . . . . 33,650 — — — 33,650Michael Grade . . . . . . . . . . . . 112,104 — — — 112,104Patrick Lewis . . . . . . . . . . . . . — — — — —Brian Lynas . . . . . . . . . . . . . . — — — — —Alistair McKay(2) . . . . . . . . . . . — — — — —Jorn Rausing . . . . . . . . . . . . . — — — — —Tim Steiner . . . . . . . . . . . . . . 120,709 898 — 8,040 129,647David Young . . . . . . . . . . . . . — — — — —

Total for 2008 . . . . . . . . . . . . . 668,117 3,356 — 28,080 699,553

(1) Non-Executive director from 1 September 2008.

(2) Resigned 11 November 2008.

Summary of Directors’ remuneration for the 52 weeks ended 29 November 2009

PersonalSalaries Benefits Annual Pension Total

and fees in kind Bonus Contributions 2009

£ £ £ £ £

Neill Abrams . . . . . . . . . . . . . . 216,913 2,313 110,416 16,500 346,142Andrew Bracey(1) . . . . . . . . . . . 23,439 246 — — 23,685Tom Clayton . . . . . . . . . . . . . . 14,267 — — — 14,267Jonathan Faiman . . . . . . . . . . — — — — —Jeremy Frampton . . . . . . . . . . — — — — —Jason Gissing . . . . . . . . . . . . . 268,144 2,634 191,208 24,630 486,616Robert Gorrie . . . . . . . . . . . . . 33,950 — — — 33,950Michael Grade . . . . . . . . . . . . 111,764 — — — 111,764Patrick Lewis(2) . . . . . . . . . . . . — — — — —Brian Lynas(3) . . . . . . . . . . . . . 19,978 — — — 19,978Jorn Rausing . . . . . . . . . . . . . — — — — —Tim Steiner . . . . . . . . . . . . . . 352,411 3,275 262,040 33,630 651,356David Young . . . . . . . . . . . . . 27,539 — — — 27,539

Total for 2009 . . . . . . . . . . . . . 1,068,405 8,468 563,664 74,760 1,715,297

(1) Appointed 3 November 2009.

(2) Appointed 21 October 2009 as non-executive Director.

(3) Resigned 10 August 2009.

The Apple Trust (of which Jorn Rausing is a beneficiary) underwrote Ocado’s last funding round inSeptember 2009 for which it was paid a fee of e387,500 under the terms of an agreement dated 1 July2009 and a variation letter dated 20 August 2009.

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Part V Historical Financial Information relating to the Group

Summary of Directors’ remuneration for the 12 weeks ending 21 February 2010

Total for Total forPersonal 12 weeks to 12 weeks to

Salaries Benefits Annual Pension 21 February 22 Februaryand fees in kind Bonus Contributions 2010 2009

(unaudited)£ £ £ £ £ £

Neill Abrams . . . . . . . . . . 51,614 568 — 3,667 55,849 73,581Andrew Bracey . . . . . . . . 64,458 678 — — 65,136 —Tom Clayton(1) . . . . . . . . — — — — — 2,329Jonathan Faiman(1) . . . . . — — — — — —Jeremy Frampton(1) . . . . . — — — — — —Jason Gissing . . . . . . . . . 64,625 678 — 4,583 69,886 156,932Robert Gorrie . . . . . . . . . 9,825 — — — 9,825 7,450Michael Grade . . . . . . . . 25,683 — — — 25,683 25,850Patrick Lewis . . . . . . . . . — — — — — —Brian Lynas . . . . . . . . . . — — — — — 6,303Jorn Rausing . . . . . . . . . — — — — — —Michael Robarts(2) . . . . . . — — — — — —Tim Steiner . . . . . . . . . . . 90,475 898 — 6,417 97,790 221,638David Young . . . . . . . . . . 6,295 — — — 6,295 6,356

Total for 12 weeks to21 February 2010 . . . . 312,975 2,822 — 14,667 330,464

Total for 12 weeks to22 February 2009(unaudited) . . . . . . . . . 238,566 1,759 230,237 29,877 500,439

(1) Tom Clayton, Jonathan Faiman and Jeremy Frampton resigned on 9 March 2010.

(2) Appointed 19 January 2010 as a non-executive Director.

In addition to his role as a Non-Executive Director, Robert Gorrie provides consultancy services to theGroup and chairs the meetings of the Ocado employee council. Robert Gorrie provides these servicesthrough Robert Gorrie Limited (of which Robert Gorrie is the sole shareholder) and it is paid a per diem feefor these services (see Note 31). These fees are included in salaries and fees above.

In addition to his role as a non-executive Director, Tom Clayton provides consultancy services to theGroup. Tom Clayton is paid a per diem fee for these services (see Note 31). These fees are included insalaries and fees above.

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Part V Historical Financial Information relating to the Group

Directors’ interests

The Directors’ beneficial interests in the Ordinary Shares and Preference Shares of the Company at thebeginning and end of the financial year or date of appointment are as stated below:

Directors’ shareholdings

Number ofOrdinaryNumber of Shares ofOrdinary Shares of 1p each in 2p each inOcado Limited Ocado Group

As at As at As at Limited as at2 December 30 November 29 November 21 February

2007 2008 2009 2010

Neill Abrams . . . . . . . . . . . . . . . . . . . . . . 4,356 4,356 4,356 435,600Andrew Bracey . . . . . . . . . . . . . . . . . . . . — — 7,500 750,000Jonathan Faiman . . . . . . . . . . . . . . . . . . . 304,376 304,376 30,000 3,000,000Jeremy Frampton . . . . . . . . . . . . . . . . . . . 2,522 2,522 2,522 252,200Jason Gissing . . . . . . . . . . . . . . . . . . . . . 96,576 96,576 96,576 9,657,600Robert Gorrie . . . . . . . . . . . . . . . . . . . . . . 13,529 13,529 13,529 1,627,900Michael Grade . . . . . . . . . . . . . . . . . . . . . 667 667 780 78,000Tim Steiner . . . . . . . . . . . . . . . . . . . . . . . 143,964 143,964 143,964 14,396,400

On 9 February 2010 the ordinary shares in Ocado Limited were exchanged for Ordinary Shares in theCompany on a 1:100 basis with a par value of 2p per Ordinary Share.

Jeremy Frampton held 5,000 Preference Shares in the Company as at 21 February 2010 (2009: 50shares in Ocado Limited), (2008: 50 in Ocado Limited), (2007: 50 in Ocado Limited). No other past orcurrent director has a direct interest in the Ordinary or Preference shares of the Company.

In addition to the above holdings:

Neill Abrams is a discretionary beneficiary of Neill Abrams 2000 Life Interest Trust which holds 1,200,800ordinary shares in the Company (2009: 12,008 ordinary shares in Ocado Limited) (2008: 12,008 ordinaryshares in Ocado Limited) (2007: 12,008 ordinary shares in Ocado Limited).

Jason Gissing is a discretionary beneficiary of The Jason Gissing Life Settlement II Trust which holds9,583,400 Ordinary Shares in the Company (2009: 95,834 ordinary shares in Ocado Limited) (2008:106,946 ordinary shares in Ocado Limited) (2007: 106,946 ordinary shares in Ocado Limited).

Tim Steiner is a discretionary beneficiary of Steiner 2008 Millennium Trust which holds 15,291,200ordinary shares in the Company (2009: 152,912 ordinary shares in Ocado Limited) (2008: 160,412ordinary shares in Ocado Limited) (2007: 160,412 ordinary shares in Ocado Limited).

Jorn Rausing is a discretionary beneficiary of the Apple Trust which holds 26,207,700 ordinary shares inthe Company (2009: 262,077 ordinary shares in Ocado Limited) (2008: 219,845 ordinary shares in OcadoLimited) (2007: 136,512 ordinary shares in Ocado Limited) and 32,872,400 preference shares in theCompany (2009: 328,724 preference shares in Ocado Limited) (2008: 328,724 preference shares inOcado Limited) (2007: 328,724 preference shares in Ocado Limited).

Caryn Abrams (wife of Neill Abrams) is a discretionary beneficiary of a trust holding 74,100 ordinaryshares in the Company (2009: 741 ordinary shares in Ocado Limited) (2008: nil ordinary shares in OcadoLimited) (2007: nil ordinary shares in Ocado Limited).

Kira Faiman (wife of Jonathan Faiman) holds 24,437,400 ordinary shares in the Company (2009: 244,374ordinary shares in Ocado Limited) (2008: nil ordinary shares in Ocado Limited) (2007: nil ordinary sharesin Ocado Limited).

Share options

On 9 February 2010 the ordinary shares and convertible preference shares in Ocado Limited wereexchanged for Ordinary Shares and Preference Shares in the Company on a 1:100 basis with a par valueof 2 pence per share.

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Part V Historical Financial Information relating to the Group

The Directors have the following options over Ordinary Shares in Ocado the Company (as at 21 February2010) and over Ordinary Shares in Ocado Limited (2007, 2008 and 2009) pursuant to the Ocado 2001Executive Share Option Scheme:

As atDate of Exercise 21 February Exercise

Issue 2007 2008 2009 Price (£) 2010 Price (£) Exercise Period

Neill Abrams . . . . . . May-02 1,750 1,750 1,750 100 175,000 1.00 07/02/05-06/02/12May-02 1,750 1,750 1,750 150 175,000 1.50 07/02/05-06/02/12Nov-03 1,000 1,000 1,000 90 100,000 0.90 30/11/06-29/11/13May-05 1,000 1,000 1,000 115 100,000 1.15 16/05/08-15/05/15

Andrew Bracey . . . . . Nov-09 — — 463 135 46,296 1.35 16/11/12-15/11/19

Jonathan Faiman . . . . May-05 2,000 2,000 2,000 115 200,000 1.15 16/05/08-15/05/15

Jason Gissing . . . . . . May-05 2,000 2,000 2,000 115 200,000 1.15 16/05/08-15/05/15

Robert Gorrie . . . . . . May-02 1,750 1,750 1,750 100 — 1.00 07/02/05-06/02/12May-02 1,750 1,750 1,750 150 175,000 1.50 07/02/05-06/02/12Nov-03 1,000 1,000 1,000 90 — 0.90 30/11/06-29/11/13

Tim Steiner . . . . . . . May-05 2,000 2,000 2,000 115 200,000 1.15 16/05/08-15/05/15

Total share options ofDirectors . . . . . . . 16,000 16,000 16,463 1,371,296

Additionally in February 2002 Tom Clayton was issued 943 options over ordinary shares at an exerciseprice of £53 outside of the Ocado 2001 Executive Share Option Scheme. These were converted intooptions over ordinary shares in the Company on 9 February 2010 on a 1:100 basis such that as at21 February 2010 he held 94,300 options with an exercise price of £0.53 (2009: 943, 2008: 943,2007: 943). These options are exercisable from 7 February 2002 to 6 February 2012. Jonathan Faiman’soptions granted under the ESOS lapsed when he retired from the Board.

In addition to the options over Ordinary Shares pursuant to the Ocado 2001 Executive Share OptionScheme detailed above, Andrew Bracey has the following options in the Company as at 21 February2010 and options in Ocado Limited as at 29 November 2009 over Preference Shares.

As atDate of Exercise 21 February Exercise

Issue 2007 2008 2009 Price (£) 2010 Price (£) Exercise Period

Andrew Bracey . . . . . Feb-02 8,867 8,867 8,867 90 886,700 0.90 04/02/02-04/02/17Jan-04 4,353 4,353 4,353 103 435,300 1.03 03/01/04-03/01/18

No other directors have options over the share capital of the Company. There are no performance criteriaattached to these options. The number and exercise price for any options granted to directors is set by theremuneration committee.

Interests in Ordinary Shares under the JSOS

Each of Neill Abrams, Andrew Bracey, Jason Gissing and Tim Steiner has the following interests inOrdinary Shares in the Company pursuant to the Joint Share Ownership Scheme. See note 25(b) formore details.

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Part V Historical Financial Information relating to the Group

as at21 February Hurdle

Date of Issue 2010 Price (£) Vesting Period

Neill Abrams . . . . . . . . . . . . . . . . 03/02/2010 1,017,200 1.73 01/01/2011-01/01/201903/02/2010 1,017,200 1.91 01/01/2012-01/01/201903/02/2010 1,017,200 2.08 01/01/2013-01/01/201903/02/2010 1,017,100 2.28 01/01/2014-01/01/2019

Andrew Bracey . . . . . . . . . . . . . . . 03/02/2010 1,675,400 1.73 01/01/2011-01/01/201903/02/2010 1,675,400 1.91 01/01/2012-01/01/201903/02/2010 1,675,400 2.08 01/01/2013-01/01/201903/02/2010 1,675,300 2.28 01/01/2014-01/01/2019

Jason Gissing . . . . . . . . . . . . . . . 03/02/2010 1,675,400 1.73 01/01/2011-01/01/201903/02/2010 1,675,400 1.91 01/01/2012-01/01/201903/02/2010 1,675,400 2.08 01/01/2013-01/01/201903/02/2010 1,675,300 2.28 01/01/2014-01/01/2019

Tim Steiner . . . . . . . . . . . . . . . . . 03/02/2010 2,513,100 1.73 01/01/2011-01/01/201903/02/2010 2,513,100 1.91 01/01/2012-01/01/201903/02/2010 2,513,100 2.08 01/01/2013-01/01/201903/02/2010 2,513,000 2.28 01/01/2014-01/01/2019

9. Finance income and costs

For the For the For the For the For the52 weeks 52 Weeks 52 Weeks 12 Weeks 12 Weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

Notes 2007 2008 2009 2009 2010

(unaudited)£’000 £’000 £’000 £’000 £’000

Bank interest receivable . . . . 824 99 5 — 2Other interest . . . . . . . . . . . — — 7 — —

Finance income . . . . . . . . 824 99 12 — 2

Interest payable on bankloans and overdrafts . . . . (64) (158) (41) (15) —

Interest on finance leases . . (3,287) (3,770) (5,009) (1,345) (1,047)Interest on borrowings . . . . . (5,327) (5,507) (5,717) (1,027) (995)Capitalised borrowing costs . 12 — 147 — — —Interest on convertible loan . 20 (2,048) (2,384) (347) (275) —Fair value movement in

derivative liability . . . . . . . (162) (112) (4) (1) (43)

Finance costs . . . . . . . . . . (10,888) (11,784) (11,118) (2,663) (2,085)

Net finance costs . . . . . . . (10,064) (11,685) (11,106) (2,663) (2,083)

125

Part V Historical Financial Information relating to the Group

10. Tax on loss on ordinary activities

For the For the For the For the For the52 weeks 52 Weeks 52 Weeks 12 Weeks 12 Weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

2007 2008 2009 2009 2010

(unaudited)£’000 £’000 £’000 £’000 £’000

Recognised in the statement ofcomprehensive income

Current tax:UK corporate tax on profits of the

period . . . . . . . . . . . . . . . . . . . . — — — — —Adjustments in respect of prior

periods . . . . . . . . . . . . . . . . . . . — — — — —

Total current tax . . . . . . . . . . . . . . — — — — —

Deferred tax:Origination and reversal of temporary

differences . . . . . . . . . . . . . . . . . — — — — —Recognition of tax losses . . . . . . . . . — — (2,300) — —

Total deferred tax . . . . . . . . . . . . . — — (2,300) — —

Income tax credit . . . . . . . . . . . . . — — (2,300) — —

Reconciliation of effective tax charge

For the For the For the For the For the52 weeks 52 Weeks 52 Weeks 12 Weeks 12 Weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

2007 2008 2009 2009 2010

(unaudited)£’000 £’000 £’000 £’000 £’000

Loss before tax . . . . . . . . . . . . . . . (40,154) (33,298) (25,509) (7,235) (3,963)Effective tax charge at the UK rate of

28% (2009: 28%) (2008: 28.71%)(2007: 30%) . . . . . . . . . . . . . . . . (12,046) (9,560) (7,143) (2,026) (1,110)

Effect of:Permanent differences . . . . . . . . . . . 521 1,034 332 (49) (44)Tax losses for which no deferred tax

asset recognised . . . . . . . . . . . . . 8,672 5,799 1,793 1,453 588Temporary differences on which no

deferred tax recognised . . . . . . . . 2,853 2,727 2,718 622 566

Income tax credit for the period . . . — — (2,300) — —

Movement in deferred tax assets

Tax losses Accelerated Sharecarry- capital based

forwards allowances payments Total

£’000 £’000 £’000 £’000At 1 December 2008 . . . . . . . . . . . . . . . . . . . . . . — — — —Tax losses recognised in period through the

statement of comprehensive income . . . . . . . . . . 2,300 — — 2,300

As at 29 November 2009 . . . . . . . . . . . . . . . . . . 2,300 — — 2,300

Tax losses recognised in period through thestatement of comprehensive income . . . . . . . . . . — — — —

As at 21 February 2010 . . . . . . . . . . . . . . . . . . . 2,300 — — 2,300

126

Part V Historical Financial Information relating to the Group

The unrecognised deferred tax asset available at the period end is analysed below:

Tax losses Acceleratedcarry- capital Share based

forwards allowances payments Total

£’000 £’000 £’000 £’000

As at 3 December 2006 . . . . . . . . . . . . . . . . 65,752 9,765 523 76,040Potential movement in the period unrecognised

through the Statement of ComprehensiveIncome . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,672 2,879 (26) 11,525

Potential movement in the period unrecognisedthrough equity . . . . . . . . . . . . . . . . . . . . . . — — 107 107

As at 2 December 2007 . . . . . . . . . . . . . . . . 74,424 12,644 604 87,672Potential movement in the period unrecognised

through the Statement of ComprehensiveIncome . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,799 2,736 (9) 8,526

Potential movement in the period unrecognisedthrough equity . . . . . . . . . . . . . . . . . . . . . . — — 58 58

Tax rate adjustment . . . . . . . . . . . . . . . . . . . . (5,106) (771) (42) (5,919)

As at 30 November 2008 . . . . . . . . . . . . . . . 75,117 14,609 611 90,337Potential movement in the period unrecognised

through the Statement of ComprehensiveIncome . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,793 2,725 (7) 4,511

Potential movement in the period unrecognisedthrough equity . . . . . . . . . . . . . . . . . . . . . . — — 177 177

As at 29 November 2009 . . . . . . . . . . . . . . . 76,910 17,334 781 95,025Potential movement in the period unrecognised

through the Statement of ComprehensiveIncome . . . . . . . . . . . . . . . . . . . . . . . . . . . 588 652 (86) 1,154

Potential movement in the period unrecognisedthrough equity . . . . . . . . . . . . . . . . . . . . . . — — (11) (11)

As at 21 February 2010 . . . . . . . . . . . . . . . . 77,498 17,986 684 96,168

11. Intangible assets—Computer software

As at As at As at As at2 December 30 November 29 November 21 February

2007 2008 2009 2010

£’000 £’000 £’000 £’000

Cost or valuationAt beginning of period . . . . . . . . . . . . . . . . . . 16,611 19,977 24,114 28,503Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 652 221 294 361Internal development costs . . . . . . . . . . . . . . . 2,714 3,916 4,095 875

At end of period . . . . . . . . . . . . . . . . . . . . . . . 19,977 24,114 28,503 29,739

Accumulated amortisationAt beginning of period . . . . . . . . . . . . . . . . . . (10,764) (13,159) (17,076) (21,819)Charge for the period . . . . . . . . . . . . . . . . . . . (2,395) (3,917) (4,743) (979)

At end of period . . . . . . . . . . . . . . . . . . . . . . . (13,159) (17,076) (21,819) (22,798)

Net book valueAt end of period . . . . . . . . . . . . . . . . . . . . . . . 6,818 7,038 6,684 6,941

127

Part V Historical Financial Information relating to the Group

Net book value of computer software held under finance leases is analysed below:

As at As at As at As at2 December 30 November 29 November 21 February

2007 2008 2009 2010

£’000 £’000 £’000 £’000

Cost or valuation . . . . . . . . . . . . . . . . . . . . . . 2,205 2,205 2,470 2,470Accumulated amortisation . . . . . . . . . . . . . . . . (1,019) (1,435) (2,113) (2,203)

Net book value . . . . . . . . . . . . . . . . . . . . . . . 1,186 770 357 267

The movement in cost or valuation includes assets of £nil (2009: £265,000) (2008: £nil) (2007: £nil)reclassified from owned assets to assets held under finance leases following asset based financingarrangements.

For the 12 week period ended 21 February 2010, internal development costs capitalised were £875,000(52 week period ended 29 November 2009: £4,095,000) (52 week period ended 30 November2008: £3,916,000) (52 week period ended 2 December 2007: £2,714,000) and representedapproximately 71% (2009: 93%) (2008: 95%) (2007: 81%) of expenditure on intangible assets and 16%(2009: 18%) (2008: 16%) (2007: 10%) of total capital spend including property, plant and equipment.

128

Part V Historical Financial Information relating to the Group

12. Property, plant and equipment

Fixtures,fittings, plant

Land and and Motorbuildings machinery vehicles Total

£’000 £’000 £’000 £’000Cost or valuationAt 4 December 2006 . . . . . . . . . . . . . . . . . . . . . . 27,404 74,266 21,483 123,153Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 19,608 3,003 22,611Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (6) (2,219) (2,225)

At 2 December 2007 . . . . . . . . . . . . . . . . . . . . . . 27,404 93,868 22,267 143,539

At 3 December 2007 . . . . . . . . . . . . . . . . . . . . . . 27,404 93,868 22,267 143,539Additions† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,053 14,165 3,303 20,521Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (50) (1,448) (1,498)

At 30 November 2008 . . . . . . . . . . . . . . . . . . . . . 30,457 107,983 24,122 162,562

At 1 December 2008 . . . . . . . . . . . . . . . . . . . . . . 30,457 107,983 24,122 162,562Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,944 8,896 4,802 18,642Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (66) (4,401) (6,286) (10,753)

At 29 November 2009 . . . . . . . . . . . . . . . . . . . . . 35,335 112,478 22,638 170,451

At 30 November 2009 . . . . . . . . . . . . . . . . . . . . . 35,335 112,478 22,638 170,451Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,625 2,550 4,175Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (1,372) (1,372)

At 21 February 2010 . . . . . . . . . . . . . . . . . . . . . . 35,335 114,103 23,816 173,254

Accumulated depreciation and impairmentAt 4 December 2006 . . . . . . . . . . . . . . . . . . . . . . (5,598) (22,229) (9,559) (37,386)Charge for the period . . . . . . . . . . . . . . . . . . . . . (1,337) (11,902) (4,382) (17,621)Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (590) (22) (612)Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 2,011 2,011

At 2 December 2007 . . . . . . . . . . . . . . . . . . . . . . (6,935) (34,721) (11,952) (53,608)

At 3 December 2007 . . . . . . . . . . . . . . . . . . . . . . (6,935) (34,721) (11,952) (53,608)Charge for the period . . . . . . . . . . . . . . . . . . . . . (1,274) (14,399) (4,147) (19,820)Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (66) — (66)Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 16 1,447 1,463

At 30 November 2008 . . . . . . . . . . . . . . . . . . . . . (8,209) (49,170) (14,652) (72,031)

At 1 December 2008 . . . . . . . . . . . . . . . . . . . . . . (8,209) (49,170) (14,652) (72,031)Charge for the period . . . . . . . . . . . . . . . . . . . . . (1,511) (12,227) (4,127) (17,865)Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . (92) (931) — (1,023)Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 4,401 6,253 10,720

At 29 November 2009 . . . . . . . . . . . . . . . . . . . . . (9,746) (57,927) (12,526) (80,199)

At 30 November 2009 . . . . . . . . . . . . . . . . . . . . . (9,746) (57,927) (12,526) (80,199)Charge for the period . . . . . . . . . . . . . . . . . . . . . (345) (2,992) (964) (4,301)Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,372 1,372

At 21 February 2010 . . . . . . . . . . . . . . . . . . . . . . (10,091) (60,919) (12,118) (83,128)

Net book value‡

At 2 December 2007 . . . . . . . . . . . . . . . . . . . . . 20,469 59,147 10,315 89,931

At 30 November 2008 . . . . . . . . . . . . . . . . . . . . 22,248 58,813 9,470 90,531

At 29 November 2009 . . . . . . . . . . . . . . . . . . . . 25,589 54,551 10,112 90,252

At 21 February 2010 . . . . . . . . . . . . . . . . . . . . . 25,244 53,184 11,698 90,126

† Additions include interest capitalised at £nil in the period to 21 February 2010 (2009: £nil) (2008: £147,000) (2007: £nil),relating to plant and machinery. The capitalisation rate used to determine the amount of finance costs capitalised during theperiod was nil as at 21 February 2010 (2009: nil) (2008: 6.8 per cent) (2007: nil).

‡ Net book value includes capitalised interest of £147,000 as at 21 February 2010 (2009: £147,000) (2008: £147,000)(2007: £nil).

129

Part V Historical Financial Information relating to the Group

The net carrying value of land and buildings comprises:

As at As at As at As at2 December 30 November 29 November 21 February

2007 2008 2009 2010

£’000 £’000 £’000 £’000

Freehold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,863 4,872 9,645 9,593Short leasehold—less than 50 years . . . . . . . . 18,606 17,376 15,944 15,651

20,469 22,248 25,589 25,244

The net book value of property, plant and equipment held under finance leases are analysed below:

Fixtures,fittings, plant

Land and and Motorbuildings machinery vehicles Total

£’000 £’000 £’000 £’000

At 2 December 2007Cost or valuation . . . . . . . . . . . . . . . . . . . . . . 25,485 38,420 21,112 85,017Accumulated depreciation and impairment . . . . (6,879) (14,635) (11,098) (32,612)

Net book value . . . . . . . . . . . . . . . . . . . . . . . 18,606 23,785 10,014 52,405

At 30 November 2008Cost or valuation . . . . . . . . . . . . . . . . . . . . . . 25,525 49,658 22,758 97,941Accumulated depreciation and impairment . . . . (8,149) (21,361) (13,646) (43,156)

Net book value . . . . . . . . . . . . . . . . . . . . . . . 17,376 28,297 9,112 54,785

At 29 November 2009Cost or valuation . . . . . . . . . . . . . . . . . . . . . . 25,459 55,869 20,872 102,200Accumulated depreciation and impairment . . . . (9,515) (26,332) (11,247) (47,094)

Net book value . . . . . . . . . . . . . . . . . . . . . . . 15,944 29,537 9,625 55,106

At 21 February 2010Cost or valuation . . . . . . . . . . . . . . . . . . . . . . 25,459 57,687 22,040 105,186Accumulated depreciation and impairment . . . . (9,808) (27,754) (10,795) (48,357)

Net book value . . . . . . . . . . . . . . . . . . . . . . . 15,651 29,933 11,245 56,829

The movement in cost or valuation includes assets of £1,812,000 (2009: £6,870,000) (2008: £8,950,000)(2007: £9,950,000) reclassified from owned assets to assets held under finance leases following assetbased financing arrangements.

During the 2008 financial period the Group revised the life of certain plant and machinery, due to theincreased resilience of the CFC and greater certainty of the long-term picking solutions. For the majorityof assets impacted by this change this doubled the estimated useful life from 5 to 10 years, although asmall number of higher value assets had their life halved from 20 years. The change was only appliedfrom the date the decision was ratified, and saw a decrease of the depreciation charge for the 2008 periodof £852,000. If the change had been backdated to the beginning of the 2008 financial period depreciationwould have fallen by a further £2,389,000. If the useful lives of the assets had not been revised in 2008 thedepreciation charge in 2009 would have increased by £4,914,000.

The impairment charge for fixtures, fittings, plant and machinery in all financial periods is in respect ofsuperseded assets written off during the period. The charge against land and buildings in 2009 was inrespect of Portacabins written off as they were no longer fit for use.

Included within tangible fixed assets is capital work-in-progress for fixtures, fittings, plant and machineryof £125,000 as at 21 February 2010 (2009: £39,000) (2008: £269,000) (2007: £9,390,000).

130

Part V Historical Financial Information relating to the Group

13. Available-for-sale financial assetAs at As at As at As at

2 December 30 November 29 November 21 February2007 2008 2009 2010

£’000 £’000 £’000 £’000

Non-currentUnlisted equity investment . . . . . . . . . . . . . . . 395 395 395 395

The unlisted equity investment comprises a 25% interest in Paneltex Limited whose registered office is atPaneltex House, Somerden Road, Hull. This stake was acquired in June 2001 at a cost of £395,000.Payment for the shares was partly in cash (£237,000) and partly in equity (1,975 Convertible preferenceshares). The Group’s 25% interest in Paneltex Limited has not been treated as an associated undertakingas the Group does not have significant influence over Paneltex. In arriving at this decision the Board hasreviewed the conditions set out in IAS 28 (‘‘Investments in Associates’’) and concluded that despite thesize of its holding the Group is unable to participate in the financial and operating policy decisions ofPaneltex due to the position of the majority shareholder as executive managing director and theinsignificant size and arm’s length nature of the relationship between the two companies.

The shares of Paneltex Limited are not quoted in an active market and their fair value cannot be reliablymeasured. As such the Group has measured its investment in Paneltex Limited at cost less impairment.

The Group does not intend to dispose of this investment in the foreseeable future. If the Group did intendto dispose of this investment then the anticipated exit route would be the sale of shares to the existingshareholder or another connected party of Paneltex Limited.

Further details of the relationship with Paneltex Limited are included in Note 31.

14. InventoriesAs at As at As at As at

2 December 30 November 29 November 21 February2007 2008 2009 2010

£’000 £’000 £’000 £’000

Goods for resale . . . . . . . . . . . . . . . . . . . . . . 7,735 8,187 8,270 8,196Consumables . . . . . . . . . . . . . . . . . . . . . . . . 565 920 943 1,298

8,300 9,107 9,213 9,494

No security has been granted over inventories.

15. Trade and other receivablesAs at As at As at As at

2 December 30 November 29 November 21 FebruaryNotes 2007 2008 2009 2010

£’000 £’000 £’000 £’000

CurrentTrade receivables . . . . . . . . . . . . . . . . 1,094 3,223 5,896 5,236Less: provision for impairment of trade

receivables . . . . . . . . . . . . . . . . . . . 26 (21) (219) (189) (229)

Net trade receivables . . . . . . . . . . . . . 1,073 3,004 5,707 5,007Other receivables . . . . . . . . . . . . . . . . 5,349 5,159 4,072 6,374Prepayments . . . . . . . . . . . . . . . . . . . 2,325 3,453 4,411 3,499Accrued income . . . . . . . . . . . . . . . . . 475 417 550 588

9,222 12,033 14,740 15,468

No security has been granted over trade and other receivables.

Other receivables include £5,216,000 as at 21 February 2010 (2009: £3,058,000) (2008: £4,021,000)(2007: £3,465,000) due from suppliers in relation to supplier funded promotional activity.

131

Part V Historical Financial Information relating to the Group

16. Cash and cash equivalentsAs at As at As at As at

2 December 30 November 29 November 21 February2007 2008 2009 2010

£’000 £’000 £’000 £’000

Cash at bank and in hand . . . . . . . . . . . . . . . 11,286 6,163 13,157 14,218Bank overdraft . . . . . . . . . . . . . . . . . . . . . . . . (395) (306) (140) (3,773)

10,891 5,857 13,017 10,445

The bank overdraft is repayable on demand and forms an integral part of the Group’s cash managementso is included as a component of cash and cash equivalents.

The Group renewed its bank overdraft facility of £5m with Barclays Bank PLC in January 2010. Thecurrent facility is due for renewal in November 2010.

17. Current liabilities—Trade and other payables

As at As at As at As at2 December 30 November 29 November 21 February

2007 2008 2009 2010

£’000 £’000 £’000 £’000

Trade payables . . . . . . . . . . . . . . . . . . . . . . . 20,142 25,900 33,839 28,127Other taxation and social security . . . . . . . . . . 2,681 4,563 3,130 3,300Accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,409 9,840 9,519 14,151Deferred income . . . . . . . . . . . . . . . . . . . . . . — — 749 884

33,232 40,303 47,237 46,462

Deferred income represents the value of delivery income received under the ‘‘Ocado Delivery Pass’’scheme allocated to future periods.

18. Loan stock, leases and borrowings

As at As at As at As at2 December 30 November 29 November 21 February

Notes 2007 2008 2009 2010

£’000 £’000 £’000 £’000

Current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . . 19 876 15,016 12,087 27,773Convertible loan stock . . . . . . . . . . . . . 20 — 14,506 — —Obligations under finance leases . . . . . 21 5,066 9,989 19,669 19,314

5,942 39,511 31,756 47,087

Non-current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . . 19 46,345 28,429 42,658 28,218Convertible loan stock . . . . . . . . . . . . . 20 33,101 — — —Obligations under finance leases . . . . . 21 49,688 53,650 45,651 46,266

129,134 82,079 88,309 74,484

Total loan stock, leases andborrowings . . . . . . . . . . . . . . . . . . 135,076 121,590 120,065 121,571

132

Part V Historical Financial Information relating to the Group

19. BorrowingsBetween one Between two

Less than year and two years and Over fiveTotal one year years five years years

£’000 £’000 £’000 £’000 £’000

As at 2 December 2007Secured loans . . . . . . . . . . . . . . 43,330 97 5,596 35,644 1,993Unsecured loans . . . . . . . . . . . . . 3,891 779 896 2,216 —

Total borrowings . . . . . . . . . . . . . 47,221 876 6,492 37,860 1,993

As at 30 November 2008Secured loans . . . . . . . . . . . . . . 39,157 12,944 10,402 15,411 400Unsecured loans . . . . . . . . . . . . . 4,288 2,072 1,031 1,185 —

Total borrowings . . . . . . . . . . . . . 43,445 15,016 11,433 16,596 400

As at 29 November 2009Secured loans . . . . . . . . . . . . . . 41,350 5,998 17,463 17,489 400Unsecured loans . . . . . . . . . . . . . 13,395 6,089 4,579 2,727 —

Total borrowings . . . . . . . . . . . . . 54,745 12,087 22,042 20,216 400

As at 21 February 2010Secured loans . . . . . . . . . . . . . . 44,311 22,295 14,969 7,047 —Unsecured loans . . . . . . . . . . . . . 11,680 5,478 4,366 1,836 —

Total borrowings . . . . . . . . . . . . . 55,991 27,773 19,335 8,883 —

Secured Loans

(i) The Group entered into a loan of £5m in September 2008 secured over certain warehouse assets,software and intellectual property, initially repayable in instalments or in full on or before September2009. Interest is charged at LIBOR plus 2.8%. The loan was extended until January 2010 on thesame terms after which date it is reviewed on a month by month basis.

(ii) The Group entered into a loan of £8m in May 2007 of which £5.6m was used to repay an existingloan. The loan is secured over certain warehouse assets. Interest was charged at Barclays BaseRate plus 2.5% and was repayable in equal quarterly instalments each quarter commencing inMay 2009 and ending in May 2014. In May 2009, after the first capital instalment was paid, theremaining capital instalments were deferred. Repayments will commence in August 2010, with equalinstalments paid quarterly ending in February 2015. The interest rate was reset to Barclays BaseRate plus 3.0%.

(iii) The Group entered into a loan of £1.5m in December 2006 which is secured on a freehold property.Interest is charged at Barclays Base Rate plus 1.5%. It is repayable in fixed quarterly instalmentsfrom March 2007 with a final payment in December 2011.

(iv) The Group entered into a loan of £1.5m in February 2009 which is secured on a freehold property.Interest is charged at LIBOR plus 2.3%. It is repayable in fixed quarterly instalments from May 2009with a final payment in February 2012.

(v) The Group entered into a loan of £20.0m in December 2004 which was extended by a further £15.0min February 2007. The loan is secured over certain warehouse assets, software and intellectualproperty. It is repayable in instalments from November 2007 to December 2011. Interest is chargedat LIBOR plus 6.0% of which 2.0% is due biannually and 4.0% is capitalised into the loan and paid atthe end of the loan term. A repayment of £10.0m was made in November 2008.

(vi) The Group entered into a loan of £2.9m in December 2009 which is secured on a freehold property.Interest is charged at LIBOR plus 3.5%. It is repayable in fixed quarterly instalments from April 2010with a final bullet payment in December 2012.

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Part V Historical Financial Information relating to the Group

Unsecured loans

(vii) The Group entered into a loan of £6.8m in April 2002, with the then landlord of the customer fulfilmentcentre. It is repayable in fixed quarterly instalments with a final payment in March 2012. Interest ischarged at 14.2% and the Group has a right to repay the loan without penalty at any time on sixmonths’ notice.

(viii) The Group entered into a Murabaha facility agreement in July 2009 to raise funds of £10.0m. It isrepayable in quarterly instalments from October 2009 to July 2012 totalling £11.3m. It has beenestimated that this will supply the bank with an overall yield of 8.0%.

(ix) In both 2009 and 2008 the Group entered into an agreement to defer the payment of its insurancepremium over 10 months. Interest was charged at 7.2%. They are repayable in fixed monthlyinstalments with final payments in July 2010 and July 2009 respectively.

20. Convertible loan stock

Between Betweenone year two years

Less than and two and five Over fiveTotal one year years years years

£’000 £’000 £’000 £’000 £’000As at 2 December 2007Convertible loan stock . . . . . . . . . . . 33,101 — 14,874 18,227 —

Total convertible loan stock . . . . . . . 33,101 — 14,874 18,227 —

As at 30 November 2008Convertible loan stock . . . . . . . . . . . 14,506 14,506 — — —

Total convertible loan stock . . . . . . . 14,506 14,506 — — —

As at 29 November 2009Convertible loan stock . . . . . . . . . . . — — — — —

Total convertible loan stock . . . . . . . — — — — —

As at 21 February 2010Convertible loan stock . . . . . . . . . . . — — — — —

Total convertible loan stock . . . . . . . — — — — —

(i) The Group issued £12.5m in ‘A’ convertible loan stock to Goldman Sachs International in March2004 which was repayable in full in March 2009 after having been extended at the option of the loanstock holder in March 2007 on payment of a premium by the loan stock holder of £8.34 per share.This entitled the loan stock holder to convert the loan stock (including capitalised interest) andaccrued interest into 132,244 Convertible preference shares at a price of £115 per share any time upto March 2009. The loan interest rate was 4% p.a. and was capitalised annually. The loan matured on17 March 2009 and Goldman Sachs International chose not to convert the loan stock to Convertiblepreference shares. The loan principal and the accrued interest outstanding were rolled up into a shortterm loan. The loan was paid off in agreed instalments between June 2009 and September 2009.

(ii) The Group issued £12.3m in ‘B’ convertible loan stock to John Lewis in January 2003 which wasrepayable in full in January 2010. The ‘B’ convertible loan stock was not interest bearing butconferred the right to subscribe for up to 145,271 Convertible preference shares at a price of £84.70per share on the occurrence of certain trigger events (including, amongst other things, an issue ofnew shares in the Group). In November 2008 the loan stock holder exercised their right to subscribefor the 145,271 Convertible preference shares.

(iii) The Group issued £8.6m in ‘C’ convertible loan stock to John Lewis in February 2004 which wasrepayable in full in February 2011. The ‘C’ convertible loan stock was not interest bearing butconferred the right to subscribe for up to 91,143 Convertible preference shares at a price of £94.49per share on the occurrence of certain trigger events (including, amongst other things, an issue ofnew shares in the Group). In November 2008 the loan stock holder exercised their right to subscribefor the 91,143 Convertible preference shares.

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Part V Historical Financial Information relating to the Group

(iv) The Group issued £1.5m in ‘A’ convertible loan stock to John Lewis in July 2005 which was repayablein full in March 2009 after having been extended at the option of the loan stock holder in March 2007on payment of a premium by the loan stock holder of £8.87 per share. This entitled the loan stockholder to convert the loan stock (including capitalised interest) and accrued interest into 14,919Convertible preference shares at a price of £115 per share any time up to March 2009. The loaninterest rate was 4% p.a. and was capitalised annually. In November 2008 the loan stock holderexercised their right to convert the loan stock and accrued interest into 14,919 Convertiblepreference shares.

(v) The Group issued £50,000 in ‘A’ convertible loan stock to a private investor in March 2004 which wasrepayable in full in March 2009 after having been extended at the option of the loan stock holder inMarch 2007 on payment of a premium by the loan stock holder of £8.34 per share. This entitled theloan stock holder to convert the loan stock (including capitalised interest) and accrued interest into529 Convertible preference shares at a price of £115 per share any time up to March 2009, The loaninterest rate was 4% p.a. and was capitalised annually. In March 2009 the loan stock holderexercised their right to convert the loan stock and accrued interest into 529 Convertible preferenceshares.

In accordance with IAS 32 the principal values of the convertible loan stock were bifurcated into theirliability and equity components. For the John Lewis ‘B’ and ‘C’ convertible loan stock this was performedat initial inception. The convertible loan stock as described in notes (i), (iv) and (v) which had extensionoptions were also bifurcated on the date of the extension, when the criteria for bifurcating the componentsinto liability and equity component parts were met.

In November 2008 John Lewis exercised their right to convert loan stock held in Convertible preferenceshares. This resulted in the transfer of the £7.0m equity component previously recognised in thecompound financial instruments reserve in respect of these being transferred into the accumulated deficitreserve. An adjustment of £1.6m was made, at the time, in respect of the unrecognised interest chargedue to these options being exercised before the maturity date.

In March 2009 on expiry of the Goldman Sachs International and the individual investor’s convertible loanstock financial instruments £1.1m previously recognised in the compound financial instrument reserve, inrespect of these, was transferred to the accumulated deficit reserve.

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Part V Historical Financial Information relating to the Group

The total convertible loan stock liability and equity components recognised in the balance sheet are asfollows:

Fair valueadjustment Carrying

Face value charged/ value of Loan Rate Totalat inception/ Equity Interest (credited) liability interest due liability and

Notes modification component capitalised as interest component to holder interest due

£’000 £’000 £’000 £’000 £’000 £’000 £’000At 4 December 2006 . . 34,967 (6,882) — 3,183 31,268 1,500 32,768Interest charge in the

period . . . . . . . . . . 9 — — — 1,431 1,431 617 2,048Interest capitalised into

the face value onmodification . . . . . . . 1,670 — — — 1,670 (1,670) —

Equity componentrecognised onmodification . . . . . . . — (1,268) — — (1,268) — (1,268)

At 2 December 2007 . . 36,637 (8,150) — 4,614 33,101 447 33.548

At 3 December 2007 . . 36,637 (8,150) — 4,614 33,101 447 33,548Interest charge in the

period . . . . . . . . . . 9 — — — 1,738 1,738 646 2,384Interest capitalised into

the liability component — — 631 — 631 (631) —Conversion of

convertible loan stock:—derecognition of

liability component . 24 (22,522) — (64) — (22,586) (47) (22,633)—equity component

release to retainedearnings . . . . . . . — 5,389 — (5,389) — — —

—unrecognisedinterest charge onearly conversion . . — 1,622 — — 1,622 — 1,622

At 30 November 2008 . 14,115 (1,139) 567 963 14,506 415 14,921

At 1 December 2008 . . 14,115 (1,139) 567 963 14,506 415 14,921Interest charge in the

period . . . . . . . . . . 9 — — — 176 176 171 347Interest capitalised into

the liability component — — 586 — 586 (586) —Conversion of

convertible loan stock:—derecognition of

liability component . 24 (55) — (5) — (60) — (60)—equity component

release to retainedearnings . . . . . . . — 5 — (5) — — —

Repayment ofconvertible loan stock:—derecognition of

liability component . (14,060) — (1,148) — (15,208) — (15,208)—equity component

release to retainedearnings . . . . . . . — 1,134 — (1,134) — — —

As at 29 November2009 . . . . . . . . . . . — — — — — — —

The interest charge for the financial period is calculated by applying an effective interest rate of 6.0% forJohn Lewis ‘B’ and John Lewis ‘C’ convertible loan stock and 9.3% for remaining convertible loans stocksto their respective liability components for the period since the convertible loans were bifurcated. Theliability component is measured at amortised cost. The difference between the carrying amount of theliability at the date of inception/modification and the amount reported in the balance sheet at the periodend represents the effective interest rate less interest accrued (un-capitalised at the period end) to thatdate.

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Part V Historical Financial Information relating to the Group

21. Finance leasesAs at As at As at As at

2 December 30 November 29 November 21 February2007 2008 2009 2010

£’000 £’000 £’000 £’000

Obligations under finance leases due:Within one year . . . . . . . . . . . . . . . . . . . . . . . 5,066 9,989 19,669 19,314Between one and two years . . . . . . . . . . . . . . 7,953 16,738 16,392 18,609Between two and five years . . . . . . . . . . . . . . 31,315 27,419 20,698 19,385After five years . . . . . . . . . . . . . . . . . . . . . . . 10,420 9,493 8,561 8,272

Total obligations under finance leases . . . . . 54,754 63,639 65,320 65,580

As at As at As at As at2 December 30 November 29 November 21 February

Notes 2007 2008 2009 2010

£’000 £’000 £’000 £’000

Minimum lease payments due:Within one year . . . . . . . . . . . . . . . . . 8,448 13,957 23,705 23,287Between one and two years . . . . . . . . 11,041 20,021 19,180 21,314Between two and five years . . . . . . . . . 36,391 31,707 23,779 22,332After five years . . . . . . . . . . . . . . . . . . 13,832 12,275 10,773 10,418

69,712 77,960 77,437 77,351Less: future finance charges . . . . . . . . (14,958) (14,321) (12,117) (11,771)

Present value of finance leaseliabilities . . . . . . . . . . . . . . . . . . . . 54,754 63,639 65,320 65,580

Disclosed as:Current . . . . . . . . . . . . . . . . . . . . . . . 18 5,066 9,989 19,669 19,314Non-current . . . . . . . . . . . . . . . . . . . . 18 49,688 53,650 45,651 46,266

54,754 63,639 65,320 65,580

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Part V Historical Financial Information relating to the Group

22. Provisions

Dilapidations Total

£’000 £’000

As at 3 December 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 175

Charged/(credited) to statement of comprehensive income

—additional provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 104

—unused amounts reversed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15) (15)

—used during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (67) (67)

As at 30 November 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 197

Charged/(credited) to statement of comprehensive income

—additional provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 212

—unused amounts reversed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) (3)

—used during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (40) (40)

As at 29 November 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366 366

Charged/(credited) to statement of comprehensive income

—additional provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 44

—unused amounts reversed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

—used during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26) (26)

As at 21 February 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384 384

The dilapidations provision is based on the future expected repair costs required to restore the leasedassets to their fair condition at the end of the lease term.

23. Derivative liability

As at As at As at As at2 December 30 November 29 November 21 February

2007 2008 2009 2010

£’000 £’000 £’000 £’000

Derivative liability designated as fair valuethrough the profit or loss—Warrant agreements . . . . . . . . . . . . . . . . 967 1,079 1,083 1,126

The Group issued to Ranelagh Nominees Limited (an affiliate of Lloyds TSB Bank plc) and to LloydsTSB Bank plc warrants to subscribe for up to 5,611,200 Ordinary shares at £1.80 per share. LloydsTSB Bank plc subsequently transferred its warrants to Ranelagh Nominees Limited. The warrantsprovide Ranelagh Nominees Limited with the opportunity to benefit in the equity upside of the Group. Thefair value of the warrants has been determined using the Black-Scholes Option Pricing Model.

Further details of the derivative financial instrument are provided in note 26.

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Part V Historical Financial Information relating to the Group

24. Share capital and reserves

Movements in called up share capital are set out below:Ocado Limited

As at 2 December As at 30 November As at 29 November2007 2008 2009

Number of Number of Number ofshares £’000 shares £’000 shares £’000

AuthorisedOrdinary shares of 1p each . . . . . . . . . . . . . . . . . 3,000,000 30 3,000,000 30 3,000,000 30Convertible preference shares of 1p each . . . . . . . . 3,000,000 30 3,000,000 30 3,000,000 30

6,000,000 60 6,000,000 60 6,000,000 60

Allotted, called up and fully paidOrdinary shares of 1p each . . . . . . . . . . . . . . . . . 1,153,186 12 1,302,690 13 1,525,757 15Convertible preference shares of 1p each . . . . . . . . 2,222,887 22 2,474,220 25 2,474,749 25

3,376,073 34 3,776,910 38 4,000,506 40

Ocado Group plcAs at 21 February

2010

Number ofshares £’000

AuthorisedOrdinary shares of 2p each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 6,000Convertible preference shares of 2p each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 6,000

6,000,000 12,000

Allotted, called up and fully paidOrdinary shares of 2p each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185,715,900 3,714Convertible preference shares of 2p each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247,474,900 4,949

Allotted, called-up, and fully paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433,190,800 8,663

Less: Ordinary shares held by the Group’s employee benefit trust . . . . . . . . . . . . . . . . . (32,476,700)

Allotted, called-up, and fully paid excluding Ordinary Shares held by the EBT Trustee . . . . . 400,714,100

On 9 February 2010 the Company acquired the entire share capital of Ocado Limited. As a result of thistransaction, the ultimate shareholders in Ocado Limited received shares in the Company in directproportion to their original shareholdings in Ocado Limited. Shareholders were issued 100 shares in theCompany for every 1 share in Ocado Limited. The shares in Ocado Group plc have a par value of 2 penceeach. Therefore as at 21 February 2010 share capital represents that of Ocado Group plc. Prior periodspresented represent that of Ocado Limited.

Convertible preference shares are only convertible in to the same number of Ordinary shares either at theoption of the holder or on the occurrence of certain trigger events including a public listing. TheConvertible preference shares rank pari passu with Ordinary shares with the exception that on return ofassets on a liquidation, reduction of capital or otherwise, the holders of the Convertible preference sharesshall be entitled in respect of their preference shares (in proportion to the number of such shares held byeach of them) in priority to all other shareholders, to be paid out of the surplus assets of the Groupremaining after payment of its liabilities, the subscription price for their preference shares together with asum equal to any arrear of dividends calculated down to the date of the return of assets.

The Ordinary Shares held by the EBT Trustee pursuant to the Joint Share Ownership Scheme are treatedas treasury shares in the Group’s consolidated balance sheet in accordance with IAS 32 ‘‘Financialinstruments: Presentation’’. These Ordinary Shares have voting rights but these have been waived by theEBT Trustee. Further details of the Joint Share Ownership Scheme are provided in Note 25.

The number of allotted, called up and fully paid shares, excluding treasury shares, at the end of eachperiod differs from that used in the loss per share calculation in Note 28 as loss per share is calculatedusing the weighted average number of ordinary shares and convertible preference shares in issue duringthe period, excluding treasury shares.

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Part V Historical Financial Information relating to the Group

Movements in called up share capital and reserves are set out below:

Convertible Convertible ReverseOrdinary preference Ordinary preference Share Treasury acquisition

Notes shares shares shares shares premium reserve reserve

(number) (number) £’000 £’000 £’000 £’000 £’000At 4 December 2006 . . 951,171 2,222,887 10 22 210,897 — —Issue of Ordinary shares 200,667 — 2 — 30,098 — —Allotted in respect of

executive shareoption scheme . . . . . 25 1,348 — — — 114 — —

At 2 December 2007 . . 1,153,186 2,222,887 12 22 241,109 — —

At 3 December 2007 . . 1,153,186 2,222,887 12 22 241,109 — —Issue of Ordinary shares 148,693 — 1 — 17,842 — —Allotted in respect of

executive shareoption scheme . . . . . 25 811 — — — 68 — —

Issue of Convertiblepreference shares . . . 20 — 251,333 — 3 22,630 — —

At 30 November 2008 . 1,302,690 2,474,220 13 25 281,649 — —

At 1 December 2008 . . 1,302,690 2,474,220 13 25 281,649 — —Issue of Ordinary shares 222,281 — 2 — 30,005 — —Ordinary shares issue

costs . . . . . . . . . . . — — — — (945) — —Allotted in respect of

executive shareoption scheme . . . . . 25 786 — — — 67 — —

Issue of Convertiblepreference shares . . . 20 — 529 — — 60 — —

At 29 November 2009 . 1,525,757 2,474,749 15 25 310,836 — —

At 30 November 2009 . 1,525,757 2,474,749 15 25 310,836 — —Allotted in respect of

executive shareoption scheme . . . . . 25 6,635 — — 731 — —

Allotted in respect ofjoint share ownershipscheme . . . . . . . . . 24(a) 324,767 — 3 — 48,712 (47,741) —

Cancellation of OcadoLimited’s shares . . . . 24(b) (1,857,159) (2,474,749) (18) (25) — — —

Issue of Ordinary andConvertiblepreference shares byOcado Group plc . . . 24(b) 185,715,900 247,474,900 204,287 272,222 — — (476,509)

Ocado Group plc capitalreduction . . . . . . . . 24(b) — — (200,573) (267,273) — — —

Reverse acquisition ofOcado Limited byOcado Group plc . . . 24(c) — — — — (360,279) — 360,279

At 21 February 2010 . . 185,715,900 247,474,900 3,714 4,949 — (47,741) (116,230)

(a) Treasury reserve

This reserve arose when the Group issued equity share capital under its Joint Share Ownership Scheme,which is held in trust by the Group’s employee benefit trust, the consideration paid is deducted from totalshareholders’ equity and classified as treasury shares on consolidation. Further details of the JointOwnership Scheme are provided in Note 25.

(b) Scheme of Arrangement and Capital Reduction

On 9 February 2010, pursuant to a Scheme of Arrangement, all of Ocado Limited’s Ordinary andPreference Shares were cancelled. Subsequently, Ocado Limited issued 100 ordinary shares to theCompany for £1 and in consideration of the cancellation of Ocado Limited’s Ordinary and PreferenceShares, the Company issued 185,715,900 Ordinary Shares and 247,474,900 Preference Shares on thebasis of 1:100 Ordinary and Preference Shares for each Ocado Limited Share held. The effect of the

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Part V Historical Financial Information relating to the Group

Scheme of Arrangement was to replicate the shareholders’ register of Ocado Limited at the Companylevel.

On 16 February 2010, pursuant to an order of the Court confirming the reduction of capital of theCompany, the Company’s share capital was reduced by decreasing the nominal value of each Ordinaryand Preference Share issued pursuant to the Scheme of Arrangement from 110 pence to 2 pence. Thiscreated distributable reserves of £467.8 million.

(c) Reverse acquisition reserve

As detailed in Notes 2(a) and 2(b), the acquisition by the Company of the entire issued share capital ofOcado Limited has been accounted for as a reverse acquisition under IFRS3R. Consequently thepreviously recognised book values and assets and liabilities have been retained and the consolidatedhistorical financial information has been presented as if the Company had always been the parentcompany of the Group.

The share capital for the period covered by the historical financial information and the comparativeperiods is stated at the nominal value of the shares issued pursuant to the share swap arrangement. Anydifferences between the nominal value of these shares and previously reported nominal values of sharesand applicable share premium issued by Ocado Limited has been transferred to the ‘reverse acquisitionreserve’.

25. Share options and other equity instruments

(a) Employee share options

On 9 February 2010 the Ordinary Shares and Convertible Preference Shares in Ocado Limited wereconverted into Ordinary Shares and Convertible Preference Shares in the Company on a 1:100 basis witha par value of 2 pence per share.

Options to subscribe for Ordinary shares have been granted, pursuant to the Group’s approved andunapproved employee share option schemes. At each respective balance sheet date the outstandingoptions were as follows:

As at As at As at Exercise As at ExerciseYear of 2 December 30 November 29 November Price 21 February Price

Issue 2007 2008 2009 (£) 2010 (£) Exercise Period

Number Number Number Number

Ocado Limited 2001 Inland Revenue . 2001 14,920 14,393 13,940 80 875,607 0.80 24/02/03-29/11/11Approved Employee . . . . . . . . . . . 2001 268 268 268 90 23,044 0.90 30/11/04-29/11/11Share Ownership Scheme . . . . . . . 2002 4,252 4,118 4,104 90 314,436 0.90 31/05/05-29/11/12

2003 2,705 2,289 2,127 90 164,927 0.90 31/05/06-29/11/132004 3,803 3,328 3,147 90 259,904 0.90 31/05/07-29/11/142005 7,978 6,977 6,599 100 513,229 1.00 31/05/08-29/11/152005 944 944 944 115 94,424 1.15 31/05/08-29/11/152006 2,420 2,088 1,918 140 172,078 1.40 31/05/09-30/05/162006 2,402 1,830 1,627 150 145,140 1.50 30/11/09-29/11/162007 9,721 7,595 6,768 150 629,863 1.50 31/05/10-29/11/172008 — 3,341 2,721 135 251,010 1.35 31/05/11-29/05/182008 — 7,428 5,661 120 493,531 1.20 30/11/11-29/11/182009 — — 3,519 120 284,357 1.20 31/05/12-30/05/192009 — — 18,100 135 1,623,229 1.35 02/11/12-29/11/19

Total approved options . . . . . . . . . 49,413 54,599 71,443 5,844,779

Ocado Limited 2001 Inland Revenue . 2001 1,188 1,188 1,094 80 70,626 0.80 01/08/03-29/11/11Non-Approved . . . . . . . . . . . . . . 2001 872 872 777 90 35,856 0.90 30/11/04-29/11/11Employee Share Ownership Scheme . 2002 1,243 1,243 1,243 90 94,533 0.90 31/05/05-29/11/12

2002 3,500 3,500 3,500 100 175,000 1.00 07/02/05-06/02/122002 3,500 3,500 3,500 150 350,000 1.50 07/02/05-06/02/122003 2,000 2,000 2,000 90 100,000 0.90 31/05/06-29/11/132005 20 20 19 100 1,900 1.00 31/05/08-29/11/152005 12,492 12,492 12,242 115 1,206,050 1.15 16/05/08-29/11/152007 508 508 508 150 50,833 1.50 31/05/10-30/05/172009 — — 9,369 120 267,500 1.20 31/05/12-30/05/192009 — — 241 135 24,074 1.35 16/11/12-15/11/19

Total unapproved . . . . . . . . . . . . 25,323 25,323 34,493 2,376,372

Total employee options . . . . . . . . . 74,736 79,922 105,936 8,221,151

141

Part V Historical Financial Information relating to the Group

Of the total employee share options above, the following options were subject to performance criteria inrelation to the average contribution by basket and EBITDA:

As at As at As at Exercise As at ExerciseYear of 2 December 30 November 29 November Price 21 February Price

Issue 2007 2008 2009 (£) 2010 (£) Exercise Period

Number Number Number Number

2005 2,913 2,913 2,913 115 276,017 1.15 31/05/08-29/11/152009 — — 9,550 120 254,000 1.20 31/05/12-30/05/19

Total options subject to performancecriteria . . . . . . . . . . . . . . . . . . . 2,913 2,913 12,463 530,017

Details of the share options outstanding during each financial period are as follows.

As at 2 December As at 30 November As at 29 November As at 21 February2007 2008 2009 2010

Number of Weighted Number of Weighted Number of Weighted Number of WeightedShare average Share average Share average Share average

Options price (£) Options price (£) Options price (£) Options price (£)

Outstanding at beginningof period . . . . . . . . . 71,658 103 74,736 108 79,922 110 10,593,611 1.15

Granted during theperiod . . . . . . . . . . . 10,928 150 11,649 125 33,164 129 — —

Forfeited—granted in theperiod . . . . . . . . . . . (699) 150 (880) 135 (1,935) 124 — —

Forfeited—granted inprior periods . . . . . . . (5,803) 121 (4,772) 129 (4,429) 126 (1,708,960) 1.04

Exercised during theperiod . . . . . . . . . . . (1,348) 85 (811) 84 (786) 85 (663,500) 1.10

Expired during theperiod . . . . . . . . . . . — — — — — — — —

Outstanding during theperiod . . . . . . . . . . . 74,736 108 79,922 110 105,936 115 8,221,151 1.17

Exercisable at the end ofthe period . . . . . . . . . 38,251 92 57,132 99 57,422 100 4,596,754 1.05

The market value of the Group’s shares was derived based on the market value of similar companies andby taking into account transactions conducted with shareholders during the period. The Share ValuationOffice of the Inland Revenue has confirmed in correspondence dated November 2009 that in respect of2009 grants £135 per share was not less than the market value of the Group’s shares. Similarconfirmation has been obtained for the share valuations at each option grant date.

In determining the fair value of the share options, the Black-Scholes Option Pricing Model was used withthe following inputs:

2007 2008 2009 2010

Weighted average share price . . . . . . . . . . £150.00 £143.40 £126.60 £1.27Weighted average exercise price . . . . . . . . £108.45 £109.63 £114.78 £1.17Expected volatility . . . . . . . . . . . . . . . . . . 0.50 0.50 0.50 0.50Weighted expected life . . . . . . . . . . . . . . . 5.28 5.18 4.19 4.19Risk-free interest rate . . . . . . . . . . . . . . . . 5.0% 5.0% 5.0% 5.0%Expected dividend yield . . . . . . . . . . . . . . 0.0% 0.0% 0.0% 0.0%

Expected volatility was determined by comparing the Group to others of a similar size or which operate insimilar markets, and adjusted to reflect the private company status. The expected life used in the modelhas been adjusted, based on management’s best estimate, for the effects of non-transferability, exerciserestrictions, and behavioural considerations. All share awards are equity settled. The charge to thestatement of comprehensive income is detailed in Note 8.

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Part V Historical Financial Information relating to the Group

(b) Joint Share Ownership Scheme

The set up of the Joint Share Ownership Scheme (‘‘JSOS’’) was approved by resolution of the board ofdirectors on 13 January 2010 following recommendations made by the Group’s remuneration committeethat a new executive incentivisation scheme be established to incentivise and retain its four ExecutiveDirectors and select members of senior management of the Group (the ‘‘Participants’’). The scheme wasapproved by shareholders by written resolution on 18 February 2010. The terms of the JSOS have beenapproved by the Group’s remuneration committee who will supervise the operation of the scheme.

Participants

Following consultation with the Group’s lawyers, financial advisers and independent executiveremuneration consultants and the board of directors’ approval, awards were granted to the ExecutiveBoard and a select group of senior management. In total they acquired interests in 32.5m Ordinary shareswith an issue price of £1.50 per share (historically the maximum share price recorded for the Group’sshares).

Nature of interests

Interests will take the form of a restricted interest in Ordinary shares in the Company (‘‘Interest’’). AnInterest permits a participant to benefit from the increase (if any) in the value of a number of Ordinaryshares in the Company (‘‘Shares’’) over which the Interest is acquired. In order to acquire an Interest, aparticipant must enter into a joint ownership agreement with the trustees of an employee benefit trustunder which the participant and the trustee jointly acquire the Shares and agree that when the Shares aresold the participant has a right to receive a proportion of the sale proceeds in so far as the value of theShares exceeds a threshold amount. For the initial Interests acquired by the Participants, there are fourtranches each with their own threshold or Hurdle Value as follows:

Hurdle % aboveTranche Value issue price

1 (2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £1.7250 152 (2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £1.9075 273 (2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £2.0829 394 (2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £2.2813 52

A participant is required to provide up front funding to the employee benefit trust equal to 2% of the issueprice on the acquisition of their interests, amounting to £0.03 per share (the ‘‘Entry Price’’).

When an Interest vests, the trustees will on request transfer shares to the participant of equal value to theparticipant’s Interest or the Shares will be sold and the trustee will account to the participant for thebalance i.e. the difference between the sale proceeds (less expenses) and the Hurdle Value.

Vesting conditions

The vesting of Interests granted to Participants are subject to a time vesting condition with one-quarter ofthe Interest in the Shares vesting on the first anniversary of acquisition, one-quarter on the secondanniversary, one-quarter on the third anniversary and the final one-quarter on the fourth anniversary. Thefair value of interests awarded under the Joint Share Ownership Scheme was determined using theBlack-Scholes Option Pricing Model. As per IFRS 2 ‘Share-based Payment’ market based vestingconditions and the share price target conditions in the Joint Share Ownership Scheme have been taken into account in establishing the fair value of the equity instruments granted. Other non-market orperformance related conditions were not taken into account in establishing the fair value of equityinstruments granted, instead these non-market vesting conditions are taken into account by adjusting thenumber of equity instruments included in the measurement of the transaction amount so that, ultimatelythe amount recognised for services received as consideration for the equity instruments granted is based

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Part V Historical Financial Information relating to the Group

on the number of equity instruments that eventually vest. The following inputs were used in the Black-Scholes Option Pricing Model:

Tranche 1 Tranche 2 Tranche 3 Tranche 4

Weighted average share price . . . . . . . . . . . . . £1.35 £1.35 £1.35 £1.35Weighted average exercise price . . . . . . . . . . . £1.73 £1.90 £2.08 £2.28Expected volatility . . . . . . . . . . . . . . . . . . . . . 0.25 0.25 0.25 0.25Weighted Expected life . . . . . . . . . . . . . . . . . . 0.91 1.91 2.91 3.91Risk-free interest rate . . . . . . . . . . . . . . . . . . . 3.5% 3.5% 3.5% 3.5%Expected dividend yield . . . . . . . . . . . . . . . . . 0.0% 0.0% 0.0% 0.0%

(c) Non-employee share options

On 9 February 2010 the ordinary shares and convertible preference shares in Ocado Limited wereconverted into Ordinary Shares and Preference Shares in the Company on a 1:100 basis with a par valueof 2 pence per share.

Options to subscribe for ordinary shares and convertible preference shares have been granted by theCompany to non-employees. At each respective balance sheet date the options granted to nonemployees at the date of their grant were as follows.

As at As at As at As atDate of 2 December 30 November 29 November Exercise 21 February Exercise

Issue 2007 2008 2009 Price (£) 2010 Price (£) Exercise Period

Number Number Number NumberNon-employee

share options . . . Feb-02 943 943 943 53 94,300 0.53 07/02/02-06/02/12Feb-02 74 74 74 90 7,400 0.90 04/02/04-03/02/14Feb-02 8,867 8,867 8,867 90 886,700 0.90 04/02/04-04/02/17Jan-04 4,353 4,353 4,353 103 435,300 1.03 03/01/04-03/01/18Apr-04 477 477 477 103 47,700 1.03 30/04/04-29/05/14

14,714 14,714 14,714 1,471,400

26. Financial instruments

The fair value of financial instruments is measured by using the following fair value hierarchy:

• Quoted priced (unadjusted) in active markets for identical assets or liabilities (level 1)

• Inputs other than quoted prices included within level 1 that are observable for the asset and liability,either directly or indirectly (level 2)

• Inputs for the assets or liability that are not based on observable market data (that is unobservableinputs) (level 3)

The Group recognises a derivative liability in respect of warrants issued. The fair values of which aredetermined using the Black-Scholes Option Pricing Model. This is categorised as level 3.

The measurement of fair values of other financial instruments is detailed in the note below.

(a) Fair value of financial instruments

Set out below is a comparison by category of carrying amounts and fair values of all financial instrumentsthat are carried in the historical financial information. The fair value of financial assets and liabilities arebased on prices available from the market on which the instruments are traded where available. The fairvalues of short-term deposits, receivables, overdrafts, payables and loans of a maturity of less than onefinancial period are assumed to approximate to their carrying values but for completeness are included inthe analysis below. The fair value of all other financial assets and liabilities have been calculated bydiscounting expected future cash flows at prevailing market interest rates. The interest rate used todiscount borrowings is based on a LIBOR plus margin measure blended for the type of security offeredand were calculated as 5.6% as at 21 February 2010 (2009: 6.4%) (2008: 8.5%) (2007: 10.3%).

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Part V Historical Financial Information relating to the Group

The carrying value of financial assets and liabilities at the end of the period:

As at 2 December As at 30 November As at 29 November As at 21 February2007 2008 2009 2010

Carrying Carrying Carrying CarryingNotes value Fair Value value Fair Value value Fair Value value Fair Value

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

AssetsCash and cash

equivalents . . . . . . 16 10,891 10,891 5,857 5,857 13,017 13,017 10,445 10,445Trade receivables . . . 15 1,073 1,073 3,004 3,004 5,707 5,707 5,007 5,007Other receivables

(incl. accruedincome) . . . . . . . . 15 5,824 5,824 5,576 5,576 4,622 4,622 6,962 6,962

Total financial assets . 17,788 17,788 14,437 14,437 23,346 23,346 22,414 22,414

LiabilitiesTrade payables . . . . 17 (20,142) (20,142) (25,900) (25,900) (33,839) (33,839) (28,127) (28,127)Accruals . . . . . . . . . 17 (10,409) (10,409) (9,840) (9,840) (9,519) (9,519) (14,151) (14,151)Borrowings . . . . . . . 19 (47,221) (47,857) (43,445) (43,797) (54,745) (55,075) (55,991) (56,159)Convertible loan

notes . . . . . . . . . . 20 (33,101) (33,453) (14,506) (15,269) — — — —Finance lease

obligations . . . . . . 21 (54,754) (54,754) (63,639) (63,639) (65,320) (65,320) (65,580) (65,580)Derivative liability . . . 23 (967) (967) (1,079) (1,079) (1,083) (1,083) (1,126) (1,126)

Total financialliabilities . . . . . . . . (166,594) (167,582) (158,409) (159,524) (164,506) (164,836) (164,975) (165,143)

(b) Credit risk

The Group’s exposures to credit risk arise from holdings of cash and cash equivalents and trade andother receivables (excluding prepayments).

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. This is shown in thetable in Note 26(a) above.

Cash and cash equivalents

The Group’s exposure to credit risk on cash and cash equivalents is managed by cash deposits onlybeing placed with banks and financial institutions which carry Moody’s ratings of Aa3/P1 for long term andshort term deposits.

Trade and other receivables

Trade and other receivables at the period end comprise mainly monies due from suppliers. Tradereceivables in respect of consumer sales are low due to the nature of the Group’s business and itseffective controls over this area. The Group has provided for doubtful receivables in respect of consumersales by reviewing the aging profile and, based on period experience, assessing the recoverability of overdue balances. The Group also provides for receivables in respect of monies due from suppliers.Management provide when there are indicators that a balance may not be recoverable.

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Part V Historical Financial Information relating to the Group

The aging of trade and other receivables (excluding prepayments) at the balance sheet date was:

As at 2 December As at 30 November As at 29 November As at 21 February2007 2008 2009 2010

Notes Gross Impairment Gross Impairment Gross Impairment Gross Impairment

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Not past due . . . . 6,359 — 7,634 — 7,807 — 9,156 —Past due

0-3 months . . . . 365 (8) 773 (46) 2,395 (47) 2,165 (53)Past due

3-6 months . . . . 145 (8) 207 (50) 115 (26) 663 (34)Past due over

6 months . . . . . 49 (5) 185 (123) 201 (116) 214 (142)

15 6,918 (21) 8,799 (219) 10,518 (189) 12,198 (229)

There were no unimpaired balances at the period end where the Group had renegotiated the terms of thetrade receivables (2009: £nil) (2008: £nil) (2007: £nil).

Movements in the provision for impairment of trade and other receivables are as follows:

As at As at As at As at2 December 30 November 29 November 21 February

Notes 2007 2008 2009 2010

£’000 £’000 £’000 £’000

At the beginning of the period . . . . . . (249) (21) (219) (189)Provision for receivables impairment . (20) (199) (115) (59)Uncollectible amounts written off . . . . 83 1 114 —Recoveries of amounts previously

provided . . . . . . . . . . . . . . . . . . . . 165 — 31 19

At the end of the period . . . . . . . . . . 15 (21) (219) (189) (229)

The provisions account for trade receivables is used to record impairment losses unless the Group issatisfied that no recovery of the amount owing is possible; at that point the amounts consideredirrecoverable are written off against the trade receivables directly.

(c) Liquidity risk

The Group maintains a mixture of short and medium term debt and lease finance arrangements that aredesigned to ensure the Group has sufficient available funds to finance its operations. In addition theGroup maintains a committed standby bank overdraft facility of £5m as at 21 February 2010 (2009: £5m)(2008: £5m) (2007: £5m). The Group monitors cash flow as part of its day to day control procedures andthe Board considers cash flow projections on a monthly basis ensuring that appropriate facilities areavailable to be drawn upon as necessary. For further details see Note 27.

146

Part V Historical Financial Information relating to the Group

The table below analysis the Group’s non-derivative financial liabilities into their relevant maturity groupsbased on the remaining period at the financial period end dates to the contractual maturity date. Theamounts disclosed in the table are the carry value and undiscounted contractual cash flows.

MoreCarrying Contractual 1 year or than

2 December 2007 Notes value cash flows less 1-2 years 2-5 years 5 years

£’000 £’000 £’000 £’000 £’000 £’000

Non-derivative financialliabilities

Trade payables . . . . . . . 17 (20,142) (20,142) (20,142) — — —Accruals . . . . . . . . . . . . 17 (10,409) (10,409) (10,409) — — —Secured loans . . . . . . . . 19 (43,330) (60,301) (4,595) (9,022) (44,564) (2,120)Unsecured loans . . . . . . 19 (3,891) (5,169) (1,292) (1,292) (2,585) —Convertible loan notes . . 20 (33,101) (35,230) — (17,003) (18,227) —Finance lease

obligations . . . . . . . . . 21 (54,754) (69,712) (8,448) (11,041) (36,391) (13,832)

(165,627) (200,963) (44,886) (38,358) (101,767) (15,952)

MoreCarrying Contractual 1 year or than

30 November 2008 Notes value cash flows less 1-2 years 2-5 years 5 years

£’000 £’000 £’000 £’000 £’000 £’000

Non-derivative financialliabilities

Trade payables . . . . . . . 17 (25,900) (25,900) (25,900) — — —Accruals . . . . . . . . . . . . 17 (9,840) (9,840) (9,840) — — —Secured loans . . . . . . . . 19 (39,157) (48,722) (17,123) (12,173) (19,022) (404)Unsecured loans . . . . . . 19 (4,288) (5,053) (2,468) (1,293) (1,292) —Convertible loan notes . . 20 (14,506) (15,269) (15,269) — — —Finance lease

obligations . . . . . . . . . 21 (63,639) (77,960) (13,957) (20,021) (31,707) (12,275)

(157,330) (182,744) (84,557) (33,487) (52,021) (12,679)

MoreCarrying Contractual 1 year or than

29 November 2009 Notes value cash flows less 1-2 years 2-5 years 5 years

£’000 £’000 £’000 £’000 £’000 £’000

Non-derivative financialliabilities

Trade payables . . . . . . . 17 (33,839) (33,839) (33,839) — — —Accruals . . . . . . . . . . . . 17 (9,519) (9,519) (9,519) — — —Secured loans . . . . . . . . 19 (41,350) (45,185) (7,517) (19,428) (17,837) (403)Unsecured loans . . . . . . 19 (13,395) (14,959) (7,047) (5,075) (2,837) —Finance lease

obligations . . . . . . . . . 21 (65,320) (77,437) (23,705) (19,180) (23,779) (10,773)

(163,423) (180,939) (81,627) (43,683) (44,453) (11,176)

MoreCarrying Contractual 1 year or than

21 February 2010 Notes value cash flows less 1-2 years 2-5 years 5 years

£’000 £’000 £’000 £’000 £’000 £’000

Non-derivative financialliabilities

Trade payables . . . . . . . 17 (28,127) (28,127) (28,127) — — —Accruals . . . . . . . . . . . . 17 (14,151) (14,151) (14,151) — — —Secured loans . . . . . . . . 19 (44,311) (47,810) (24,369) (15,998) (7,443) —Unsecured loans . . . . . . . 19 (11,680) (12,952) (6,309) (4,752) (1,891) —Finance lease obligations 21 (65,580) (77,351) (23,287) (21,314) (22,332) (10,418)

(163,849) (180,391) (96,243) (42,064) (31,666) (10,418)

147

Part V Historical Financial Information relating to the Group

Currency risk

The Group only has foreign currency transactions in relation to its trade payables, principally arising onpurchases of plant and equipment. The Group’s exposure to currency risk is as follows:

As at As at As at As at2 December 30 November 29 November 21 February

2007 2008 2009 2010

£’000 £’000 £’000 £’000

Trade payables at the period end:Euros . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,423 901 41 15US dollar . . . . . . . . . . . . . . . . . . . . . . . . . . — — 2 —Swedish krona . . . . . . . . . . . . . . . . . . . . . . — — — 5

1,423 901 43 20

Due to the Group’s minimal exposure to currency risk no sensitivity analysis has been performed.

Interest rate risk

The Group is exposed to interest rate risk on its interest bearing borrowings. The Group’s interest ratepolicy seeks to minimise interest expense and volatility by structuring the interest rate profile into adiversified portfolio of fixed rate and floating rate liabilities.

At the balance sheet date the interest rate profile of the Group’s interest bearing financial instrumentswas:

As at As at As at As at2 December 30 November 29 November 21 February

Notes 2007 2008 2009 2010

£’000 £’000 £’000 £’000

Fixed rate financial instrumentsFinancial liabilities . . . . . . . . . . . . . . 18 (91,746) (82,433) (78,715) (77,260)Variable rate instrumentsFinancial assets . . . . . . . . . . . . . . . 16 10,891 5,857 13,017 10,445Financial liabilities . . . . . . . . . . . . . . 18 (43,330) (39,157) (41,350) (44,311)

Sensitivity analysis

An increase of 100 basis points (1.0%) in interest rates at the balance sheet date would have decreasedequity and profit or loss by the amounts shown below. This calculation assumes that the change occurredat the balance sheet date and had been applied to risk exposures existing at that date. This analysisassumes that all other variables remain constant and considers the effect on financial instruments withvariable interest rates and financial instruments at fair value through profit or loss.

As at As at As at As at2 December 30 November 29 November 21 February

2007 2008 2009 2010

£’000 £’000 £’000 £’000

EquityGain/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . (454) (489) (492) (152)IncomeGain/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . (454) (489) (492) (152)

148

Part V Historical Financial Information relating to the Group

(e) Financial instruments by category

The Group has categorised its financial instruments as follows:

LiabilitiesOther at fair

financial valueliabilities at through the

Available- Loans and amortised profit andNotes for-sale receivables cost loss Total

£’000 £’000 £’000 £’000 £’000As at 2 December 2007Assets as per balance sheetCash and cash equivalents . . . . . . . 16 — 10,891 — — 10,891Trade and other receivables

(excluding prepayments) . . . . . . . . 15 — 6,897 — — 6,897Available for-sale financial assets . . . 13 395 — — — 395

Total . . . . . . . . . . . . . . . . . . . . . . 395 17,788 — — 18,183

Liabilities as per balance sheetTrade payables . . . . . . . . . . . . . . . 17 — — 20,142 — 20,142Accruals . . . . . . . . . . . . . . . . . . . . 17 — — 10,409 — 10,409Borrowings . . . . . . . . . . . . . . . . . . 19 — — 47,221 — 47,221Convertible loan stock . . . . . . . . . . . 20 — — 33,101 — 33,101Financial lease liabilities . . . . . . . . . 21 — — 54,754 — 54,754Derivative liability . . . . . . . . . . . . . . 23 — — — 967 967

Total . . . . . . . . . . . . . . . . . . . . . . — — 165,627 967 166,594

LiabilitiesOther at fair

financial valueliabilities at through the

Available- Loans and amortised profit andNotes for-sale receivables cost loss Total

£’000 £’000 £’000 £’000 £’000As at 30 November 2008Assets as per balance sheetCash and cash equivalents . . . . . . . 16 — 5,857 — — 5,857Trade and other receivables

(excluding prepayments) . . . . . . . . 15 — 8,580 — — 8,580Available for-sale financial assets . . . 13 395 — — — 395

Total . . . . . . . . . . . . . . . . . . . . . . 395 14,437 — — 14,832

Liabilities as per balance sheetTrade payables . . . . . . . . . . . . . . . 17 — — 25,900 — 25,900Accruals . . . . . . . . . . . . . . . . . . . . 17 — — 9,840 — 9,840Borrowings . . . . . . . . . . . . . . . . . . 19 — — 43,445 — 43,445Convertible loan stock . . . . . . . . . . . 20 — — 14,506 — 14,506Financial lease liabilities . . . . . . . . . 21 — — 63,639 — 63,639Derivative liability . . . . . . . . . . . . . . 23 — — — 1,079 1,079

Total . . . . . . . . . . . . . . . . . . . . . . — — 157,330 1,079 158,409

149

Part V Historical Financial Information relating to the Group

LiabilitiesOther at fair

financial valueliabilities at through the

Available Loans and amortised profit andNotes for-sale receivables cost loss Total

£’000 £’000 £’000 £’000 £’000As at 29 November 2009Assets as per balance sheetCash and cash equivalents . . . . . . . 16 — 13,017 — — 13,017Trade and other receivables

(excluding prepayments) . . . . . . . . 15 — 10,329 — — 10,329Available for sale financial assets . . . 13 395 — — — 395

Total . . . . . . . . . . . . . . . . . . . . . . 395 23,346 — — 23,741

Liabilities as per balance sheetTrade payables . . . . . . . . . . . . . . . 17 — — 33,839 — 33,839Accruals . . . . . . . . . . . . . . . . . . . . 17 — — 9,519 — 9,519Borrowings . . . . . . . . . . . . . . . . . . 19 — — 54,745 — 54,745Finance lease liabilities . . . . . . . . . . 21 — — 65,320 — 65,320Derivative liability . . . . . . . . . . . . . . 23 — — — 1,083 1,083

Total . . . . . . . . . . . . . . . . . . . . . . — — 163,423 1,083 164,506

LiabilitiesOther at fair

financial valueliabilities at through the

Available Loans and amortised profit andNotes for sale receivables cost loss Total

£’000 £’000 £’000 £’000 £’000As at 21 February 2010Assets as per balance sheetCash and cash equivalents . . . . . . . 16 — 10,445 — — 10,445Trade and other receivables

(excluding prepayments) . . . . . . . . 15 — 11,969 — — 11,969Available for sale financial assets . . . 13 395 — — — 395

Total . . . . . . . . . . . . . . . . . . . . . . 395 22,414 — — 22,809

Liabilities as per balance sheetTrade payables . . . . . . . . . . . . . . . 17 — — 28,127 — 28,127Accruals . . . . . . . . . . . . . . . . . . . . 17 — — 14,151 — 14,151Borrowings . . . . . . . . . . . . . . . . . . 19 — — 55,991 — 55,991Finance lease liabilities . . . . . . . . . . 21 — — 65,580 — 65,580Derivative liability . . . . . . . . . . . . . . 23 — — — 1,126 1,126

Total . . . . . . . . . . . . . . . . . . . . . . — — 163,849 1,126 164,975

27. Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and marketconfidence and to sustain future development of the business. The Group is currently dependent on thecontinuing support of its lending banks for its current working capital facilities. The Board’s objectives areto keep borrowings within existing facilities and to negotiate and obtain additional resources required tofund the Company’s working capital requirements for the foreseeable future.

The Board closely manages its trading capital, which it defines as its net assets plus net debt. Net debt iscalculated as total debt (finance leases, convertible loan stock and borrowings as shown in the balancesheet), less cash and cash equivalents. The Group has performance based loan covenants in place overcertain borrowings. Management monitor the performance targets on a periodic basis considering actualand forecast results. Management ensure constant communication with all its lenders and those lenderswith covenants have indicated their satisfaction with the progress of the Group. The main areas of capitalmanagement revolve around the management of the components of working capital including monitoringstock turn, age of stock, age of debtors, debtor days, creditor days, balance sheet re-forecasting, period

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Part V Historical Financial Information relating to the Group

projected loss, weekly cash flow forecasts and daily cash balances. Major investment decisions arebased on reviewing the expected future cash flows and all major capital expenditure requires approvalfrom the Board. There were no major changes in the Group’s approach to capital management during theperiod.

The Group’s performance in remaining within its borrowing facilities, including standby overdraft facilitiesand at the period ends as measured by the headroom available is as follows:

As at As at As at As at2 December 30 November 29 November 21 February

Notes 2007 2008 2009 2010

£’000 £’000 £’000 £’000

Total facilities available . . . . . . . . . . 154,681 131,684 137,775 137,798Facilities drawn down . . . . . . . . . . . 18 (135,076) (121,590) (120,065) (121,571)

Undrawn facilities at end of period . . 19,605 10,094 17,710 16,227Cash and cash equivalents gross of

drawn overdraft facility . . . . . . . . . 16 11,286 6,163 13,157 14,218

Total undrawn facilities and cashavailable at the end of the period . 30,891 16,257 30,867 30,445

28. Loss per share

(a) Basic

Basic loss per share is calculated by dividing the loss attributable to equity holders by the weightedaverage number of Ordinary shares and Convertible preference shares in issue during the periodexcluding Ordinary shares purchased by the Group and held as treasury shares, adjusted to reflect theconversion of the Ordinary shares and the Convertible preference shares in Ocado Limited to Ordinaryshares and Convertible preference shares in the Company on a 1:100 basis on 9 February 2010. The lossfor the period is equally attributable to the shareholders of Ordinary shares and Convertible preferenceshares. For more information see Note 24.

All operations are continuing for the financial periods presented.

For the For the For the For the For the52 weeks 52 weeks 52 weeks 12 weeks 12 weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

2007 2008 2009 2009 2010

(Unaudited)Number Number Number Number Number

000s 000s 000s 000s 000sIssued ordinary shares and preference

shares at beginning of period . . . . . 317,406 337,607 377,691 377,691 400,051Effect of share options exercised in

the period . . . . . . . . . . . . . . . . . 83 53 47 6 229Effect of shares issued in the period . . 13,874 3,077 5,619 — —

Weighted average number of sharesat the end of the period . . . . . . . . 331,363 340,737 383,357 377,697 400,280

£’000 £’000 £’000 £’000 £’000

Loss attributable to shareholder . . . . . (40,154) (33,298) (23,209) (7,235) (3,963)

pence pence pence pence pence

Basic loss per share . . . . . . . . . . . . (12.12) (9.77) (6.05) (1.92) (0.99)

(b) Diluted

Diluted loss per share is calculated by adjusting the weighted average number of Ordinary shares andConvertible preference shares outstanding to assume conversion of all dilutive potential shares, adjustedto reflect the conversion of the Ordinary shares and the Convertible preference shares in Ocado Limitedto Ordinary shares and Convertible preference shares on a 1:100 basis on 9 February 2010. The Grouphas four categories of potentially dilutive shares: convertible loan stock, share options, shares heldpursuant to the JSOS and warrants.

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Part V Historical Financial Information relating to the Group

There was no difference in the weighted average number of shares used for basic and diluted loss pershare as the effect of all potentially dilutive shares outstanding was anti-dilutive.

29. Subsidiary

Ocado Holdings Limited is a 100 per cent. owned subsidiary of Ocado Group plc. It was incorporated inthe UK on 5 February 2010 with registration number 07148670.

Ocado Limited is a 100 per cent. owned subsidiary of Ocado Holdings Limited. It is incorporated in the UKwith registration number 3875000.

Ocado Information Technology Limited is a 100 per cent. owned subsidiary of Ocado Holdings Limited. Itwas incorporated in Ireland on 19 January 2010 with a registration number 479792.

On 21 January 2010 Ocado Limited granted Ocado Information Technology Limited a license to use theGroup’s intellectual property outside of the UK, and in consideration Ocado Information TechnologyLimited issued a promissory note which was settled by the issue of 5,075,840 ordinary shares of 1 Euroeach.

Jalapeno Partners Limited is a 100 per cent. owned subsidiary of Ocado Limited. It is incorporated in theUK with registration number 4204963. It is a dormant Company as defined by section 250 of theCompanies Act 2006 Section 250. The only balances in the accounts of Jalapeno Partners are sharecapital of £1 and an inter-company creditor of £1.

30. Commitments

Capital commitments

Contracts placed for future capital expenditure not provided in the historical financial information are asfollows:

As at As at As at As at2 December 30 November 29 November 21 February

2007 2008 2009 2010

£’000 £’000 £’000 £’000

Property, plant and equipment . . . . . . . . . . . 7,270 6,481 5,636 11,116Intangible assets . . . . . . . . . . . . . . . . . . . . — 49 — 26

Total capital expenditure committed at end ofperiod . . . . . . . . . . . . . . . . . . . . . . . . . . 7,270 6,530 5,636 11,142

Operating lease commitments

The Group leases a number of offices, facilities and equipment under non-cancellable operating leases.The leases have varying terms, escalation clauses and renewal rights:

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

As at As at As at As at2 December 30 November 29 November 21 February

2007 2008 2009 2010

£’000 £’000 £’000 £’000

Amounts payables:Within one year . . . . . . . . . . . . . . . . . . . . . 2,114 2,151 2,535 2,595Within two to five years . . . . . . . . . . . . . . . 6,507 6,041 8,399 8,153After five years . . . . . . . . . . . . . . . . . . . . . 10,224 36,683 36,392 36,039

Total commitment . . . . . . . . . . . . . . . . . . . 18,845 44,875 47,326 46,787

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Part V Historical Financial Information relating to the Group

31. Related party transactions

Key management personnel

Only the Executive and Non-Executive Directors are deemed to be key management personnel. It is theBoard who have responsibility for planning, directing and controlling the activities of the Group. Keymanagement personnel compensation is disclosed in Note 8.

Other related party transactions with key management made during the period are as follows:

For the For the For the For the For the52 weeks 52 weeks 52 weeks 12 weeks 12 weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

2007 2008 2009 2009 2010

(unaudited)£’000 £’000 £’000 £’000 £’000

Purchase of goods—company of aclose family member of anExecutive Director . . . . . . . . . . . . 62 196 116 86 —

Purchase of professional services—Non-Executive Directors . . . . . . . . 57 51 48 10 13

119 247 164 96 13

All transactions are on an arm’s length basis and no financial period end balances have arisen as a resultof these transactions.

At the end of the financial period key management owed the Group £2,000 as at 21 February 2010 (2009:£4,000) (2008: £42,000) (2007: £11,000) in respect of personal expenses incurred on the company creditcard that were reimbursed in the normal course of business. These balances were repaid after thefinancial period end. In 2007 the Chairman owed the Group £100,000 which arose shortly before theperiod end due to him exercising the right in his contract to purchase 667 Ordinary shares at their marketvalue of £100,000. The purchase price was outstanding at the financial period end but was paidsubsequent to the financial period end.

There were no other material transactions or balances between the Group and its key managementpersonnel or members of their close family.

153

Part V Historical Financial Information relating to the Group

Major shareholders

Prior to November 2008 John Lewis plc was a 28 per cent. shareholder in Ocado Limited. During that timethe Group acquired goods for resale and professional services from affiliates of John Lewis plc andcharged affiliates in connection with other services. These transactions and the period end balancesarising from these transactions are given below. In November 2008 the John Lewis Partnership PensionTrust Limited acquired from John Lewis plc the investment in Ocado Limited. The John Lewis PartnershipPension Trust Limited is the corporate trustee of the John Lewis Trust for Pensions, of which John Lewisplc is the principal employer, accordingly John Lewis plc and Waitrose no longer meet the criteria of arelated party.

For the For the52 weeks 52 weeks

ended ended2 December 30 November

2007 2008

£’000 £’000

Sales of services—John Lewis and affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 226

185 226

Professional Services—Waitrose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,301 1,111—John Lewis and affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 231Goods for Resale—Waitrose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,174 40,505

36,686 41,847

Amounts receivable at the period end—Waitrose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,479—John Lewis and affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418

3,897

Amounts payable at the period end—Waitrose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,612—John Lewis and affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

5,633

Since 2002 John Lewis plc has acted as guarantor for the obligations of the Group under a lease for theHatfield site. The maximum liability of John Lewis plc under the guarantee is £6.75m. The Group paysJohn Lewis plc a fee of £150,000 per annum in consideration for the guarantee being provided inaccordance with the terms of an agreement entered into in September 2005. This is included inprofessional services above.

John Lewis plc previously held three financial instruments in the Group, which formed part of the Group’sborrowings and details are given in Note 20.

An associated entity of S. N. Roditi (who as at 21 February 2010 held 10.4 per cent. of the Company’sissued share capital), underwrote Ocado’s last funding round in September 2009, for which it was paid afee of £387,500 pursuant to the terms of the agreement dated 1 July 2009 and variation letter dated20 August 2009.

The Apple Trust, of which Jorn Rausing is a beneficiary (who at 21 February 2010 held 13.63 per cent. ofthe Company’s issued share capital), underwrote Ocado’s last funding round in September 2009, forwhich it was paid a fee of £387,500 pursuant to the terms of the agreement dated 1 July 2009 andvariation letter dated 20 August 2009.

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Part V Historical Financial Information relating to the Group

In March 2007 John Lewis plc exercised the option to extend the conversion of the £1.5m (£1.6mincluding capitalised interest) until March 2009 for a premium totalling £122,000. In November 2008John Lewis plc converted all convertible loan stock (including capitalised and accrued interest to thatdate) for a total of 251,333 Convertible preference shares. The transactions are given below:

For the For the52 weeks 52 weeks

ended ended2 December 30 November

2007 2008

£’000 £’000

Convertible loan stock issued and accrued interest—‘A’ loan stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,586 ——‘B’ loan stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,305 ——‘C’ loan stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,613 —

Total owed at the beginning of the period . . . . . . . . . . . . . . . . . . . . . . . 22,504 —Interest charged at 4% on ‘A’ convertible loan stock . . . . . . . . . . . . . . . 63 —

Total owed at the period end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,567 —

Split—Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 ——Capitalised loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,521 —

Investment

The following transactions were carried out with Paneltex Ltd, further details of the investment in PaneltexLimited are provided in Note 13 to this historical financial information.

For the For the For the For the For the52 weeks 52 weeks 52 weeks 12 weeks 12 weeks

ended ended ended ended ended2 December 30 November 29 November 22 February 21 February

2007 2008 2009 2009 2010

(Unaudited)£’000 £’000 £’000 £’000 £’000

Purchase of goods—Plant and machinery . . . . 133 3 289 13 11—Consumables . . . . . . . . . 165 160 160 34 27

Total purchase of goods . . . . . 298 163 449 47 38

Amounts payable at the periodend . . . . . . . . . . . . . . . . . . 66 7 19 16 11

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Part V Historical Financial Information relating to the Group

32. Analysis of net debt

(a) Net debt

As at As at As at As at2 December 30 November 29 November 21 February

Notes 2007 2008 2009 2010

£’000 £’000 £’000 £’000

Current assetsCash and cash equivalents . . . . . . . 16 10,891 5,857 13,017 10,445

10,891 5,857 13,017 10,445

Current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . 18 (876) (15,016) (12,087) (27,773)Convertible loan stock . . . . . . . . . . . 18 — (14,506) — —Obligations under finance leases . . . 18 (5,066) (9,989) (19,669) (19,314)

(5,942) (39,511) (31,756) (47,087)

Non current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . 18 (46,345) (28,429) (42,658) (28,218)Convertible loan stock . . . . . . . . . . . 18 (33,101) — — —Obligations under finance leases . . . 18 (49,688) (53,650) (45,651) (46,266)

(129,134) (82,079) (88,309) (74,484)

Total net debt . . . . . . . . . . . . . . . . (124,185) (115,733) (107,048) (111,126)

Net debt is calculated as total debt (finance leases, convertible loan stock and borrowings as shown onthe balance sheet), less cash and cash equivalents.

(b) Reconciliation of net cash flow to movement in net debt

As at As at As at As at2 December 30 November 29 November 21 February

Notes 2007 2008 2009 2010

£’000 £’000 £’000 £’000

Net increase/(decrease) in cash andcash equivalents . . . . . . . . . . . . . (114) (5,034) 7,160 (2,572)

Net cash outflow/(inflow) from debtand lease financing . . . . . . . . . . . (16,622) (504) 6,467 1,040

Non-cash movements:—Exercise of convertible loan notes

to equity . . . . . . . . . . . . . . . . . . . 20 — 22,633 60 ——Fair value movements on

convertible loan notes . . . . . . . . . (163) (3,360) (176) ——Assets acquired under finance

lease . . . . . . . . . . . . . . . . . . . . . (5,335) (5,283) (4,826) (2,546)

Decrease/(increase) in net debt inthe period . . . . . . . . . . . . . . . . . (22,234) 8,452 8,685 (4,078)

Opening net debt . . . . . . . . . . . . . . (101,951) (124,185) (115,733) (107,048)

Closing net debt . . . . . . . . . . . . . . (124,185) (115,733) (107,048) (111,126)

33. Post balance sheet events

In March 2010 the Chairman and Non-Executive Directors resigned as Directors of the Ocado Limited. InMarch 2010 the Chairman and certain of the Non-Executive Directors were appointed to the Board ofOcado Group Limited.

In May 2010 the Company repaid a loan of £5m secured over certain warehouse assets, software andintellectual property that was renewable on a month by month basis.

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Part V Historical Financial Information relating to the Group

In May 2010 the Company agreed a new loan facility for £7.5m from an existing lender which is repayableover 3 years in equal annual instalments. Interest is charged at LIBOR plus 5%. In addition the Companyagreed a new revolving credit facility for £7.5m from the same lender. These facilities are secured overcertain warehouse assets, software and intellectual property.

In May 2010 the Company signed a new 10 year agreement with Waitrose giving the Company the right tocontinue to sell Waitrose goods and use Waitrose brands on its website and vans as it has had since2000.

In May 2010 the Company agreed an extension of £3.4m to a credit facility with an existing lender forvehicle finance leasing.

In June 2010 the Company agreed a £15m credit facility with a new lender for vehicle finance leasing.

On 23 June 2010 Ocado Group Limited re-registered as a public company and changed its name from‘‘Ocado Group Limited’’ to ‘‘Ocado Group plc’’.

On 24 June 2010 Ocado Group plc announced its intention to list on the London Stock Exchange.

On 5 July 2010 the Company entered into a facility agreement (the ‘‘New Facility’’) between, amongstothers, Barclays Bank PLC, HSBC Bank plc and Lloyds TSB Bank plc. The lenders have agreed to makeavailable £100m to the Company under the New Facility. All amounts borrowed under the New Facilityshall be applied towards the acquisition of certain land, buildings, fixtures and tangible movable property.The New Facility has an accordion feature which allows for the amount available under it to be increasedup to £130m, subject to lenders (existing or additional) agreeing to make available the additionalamounts. First utilisation under the New Facility is conditional on certain customary conditions precedentand on Admission.

157

PART VI

UNAUDITED PRO FORMA FINANCIAL INFORMATION

(A) Unaudited pro forma statement of net assets

The unaudited pro forma statement of net assets set out below has been prepared to illustrate the effectof the Offers on the Group’s net assets as if the Offers had taken place on 16 May 2010. This unauditedpro forma statement of net assets has been prepared for illustrative purposes only and, because of itsnature, addresses a hypothetical situation and, therefore, does not represent the Group’s actual financialposition or results. The unaudited pro forma statement of net assets is compiled on the basis set outbelow from the IFRS-EU consolidated balance sheet of the Company as at 16 May 2010, as set out inPart VII (Unaudited Interim Financial Information relating to the Group for the 24 weeks ended 16 May2010). It may not, therefore, give a true picture of the Group’s financial position or results nor is itindicative of the results that may, or may not, be expected to be achieved in the future. The pro formafinancial information has been prepared on the basis set out in the notes below and in accordance withAnnex II to the Prospectus Directive Regulation.

UnauditedAdjustments pro forma

As at 16 May IPO total2010 proceeds (Notes 3

(Note 1) (Note 2) and 4)

£ million £ million £ million

Non current assetsIntangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 — 7.2Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . 90.5 — 90.5Deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 — 2.3Available-for-sale financial assets . . . . . . . . . . . . . . . . . . 0.4 — 0.4

Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . 100.4 — 100.4

Current assetsInventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1 — 9.1Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . 15.3 — 15.3Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . 10.0 200.0 210.0

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.4 200.0 234.4

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134.8 200.0 334.8

Current liabilitiesTrade and other payables . . . . . . . . . . . . . . . . . . . . . . . . (49.9) — (49.9)Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27.6) — (27.6)Obligations under finance leases . . . . . . . . . . . . . . . . . . . (19.7) — (19.7)

(97.2) — (97.2)

Net current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . (62.9) — (62.9)

Non-current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27.0) — (27.0)Obligations under finance leases . . . . . . . . . . . . . . . . . . . (45.9) — (45.9)Derivative liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.1) 1.1 —Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.4) — (0.4)

(74.4) 1.1 (73.3)

Net (liabilities)/assets . . . . . . . . . . . . . . . . . . . . . . . . . . (36.9) 201.1 164.2

(1) The financial information has been extracted, without material adjustments, from the financial information set out in Part VII(Unaudited Interim Financial Information relating to the Group for the 24 weeks ended 16 May 2010) prepared in accordancewith IFRS-EU.

(2) IPO proceeds: adjustment to reflect the net proceeds of the Offers receivable by the Group, of £200 million, being grossproceeds (including cash received on the exercise of 5,611,200 warrants on Admission by Ranelagh Nominees Limited at£1.80 per share) of £215 million less estimated fees and expenses of £15 million (exclusive of VAT). The £1.1 millionderivative liability as at 16 May 2010 represents the fair value of these warrants which reverses when these warrants areexercised on IPO.

(3) This IFRS pro forma statement of net assets does not constitute financial statements within the meaning of section 434 of theCompanies Act 2006.

(4) The unaudited pro forma statement of net assets does not reflect any trading or other transactions undertaken by the Groupsince 16 May 2010.

158

7DEC200517132980

Part VI Unaudited Pro Forma Financial Information

(B) Accountants’ report on unaudited pro forma statement of net assets

PricewaterhouseCoopers LLP1 Embankment PlaceLondon WC2N 6RH

The DirectorsOcado Group plcTitan Court3 Bishops SquareHatfield Business ParkHatfieldAL10 9NE

Goldman Sachs InternationalPeterborough Court133 Fleet StreetLondonEC4A 2BB

J.P. Morgan Securities Ltd.125 London WallLondonEC2Y 5AJ

UBS Limited1 Finsbury AvenueLondonEC2M 2PP

6 July 2010

Dear Sirs

Ocado Group plc (the ‘‘Company’’)

We report on the unaudited pro forma statement of net assets (the ‘‘Pro forma financial information’’)set out in Part (A) of this Part VI of the Company’s prospectus dated 6 July 2010 (the ‘‘Prospectus’’)which has been prepared on the basis described in the notes to the Pro forma financial information, forillustrative purposes only, to provide information about how the Offer might have affected the financialinformation presented on the basis of the accounting policies adopted by the Company in preparing theunaudited financial information for the period ended 16 May 2010. This report is required by item 20.2 ofAnnex I to the PD Regulation and is given for the purpose of complying with that PD Regulation and for noother purpose.

Responsibilities

It is the responsibility of the directors of the Company to prepare the Pro forma financial information inaccordance with item 20.2 of Annex I to the PD Regulation.

It is our responsibility to form an opinion, as required by item 7 of Annex II to the PD Regulation as to theproper compilation of the Pro forma financial information and to report our opinion to you.

PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC303525. The registered office of PricewaterhouseCoopers LLP is1 Embankment Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised and regulated by the Financial Services Authority for designated investment business.

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Part VI Unaudited Pro Forma Financial Information

In providing this opinion we are not updating or refreshing any reports or opinions previously made by uson any financial information used in the compilation of the Pro forma financial information, nor do weaccept responsibility for such reports or opinions beyond that owed to those to whom those reports oropinions were addressed by us at the dates of their issue.

Save for any responsibility which we may have to those persons to whom this report is expresslyaddressed and for any responsibility arising under item 5.5.3R(2)(f) of the Prospectus Rules to anyperson as and to the extent there provided, to the fullest extent permitted by law we do not assume anyresponsibility and will not accept any liability to any other person for any loss suffered by any such otherperson as a result of, arising out of, or in connection with this report or our statement, required by andgiven solely for the purposes of complying with item 23.1 of Annex I to the PD Regulation, consenting toits inclusion in the Prospectus.

Basis of opinion

We conducted our work in accordance with the Standards for Investment Reporting issued by theAuditing Practices Board in the United Kingdom. The work that we performed for the purpose of makingthis report, which involved no independent examination of any of the underlying financial information,consisted primarily of comparing the unadjusted financial information with the source documents,considering the evidence supporting the adjustments and discussing the Pro forma financial informationwith the directors of the Company.

We planned and performed our work so as to obtain the information and explanations we considerednecessary in order to provide us with reasonable assurance that the Pro forma financial information hasbeen properly compiled on the basis stated and that such basis is consistent with the accounting policiesof the Company.

Our work has not been carried out in accordance with auditing standards or other standards and practicesgenerally accepted in the United States of America or auditing standards of the Public CompanyAccounting Oversight Board (United States) and accordingly should not be relied upon as if it had beencarried out in accordance with those standards and practices.

Opinion

In our opinion:

(A) the Pro forma financial information has been properly compiled on the basis stated; and

(B) such basis is consistent with the accounting policies of the Company.

Declaration

For the purposes of Prospectus Rule 5.5.3 R(2)(f), we are responsible for this report as part of theProspectus and we declare that we have taken all reasonable care to ensure that the informationcontained in this report is, to the best of our knowledge, in accordance with the facts and contains noomission likely to affect its import. This declaration is included in the Prospectus in compliance withItem 1.2 of Annex I to the PD Regulation.

Yours faithfully

PricewaterhouseCoopers LLPChartered Accountants

160

PART VII

UNAUDITED INTERIM FINANCIAL INFORMATION RELATING TO THE GROUP FOR THE24 WEEKS ENDED 16 MAY 2010

Consolidated statement of comprehensive income for the 24 weeks ended 16 May 2010

24 weeks 24 weeksended ended

16 May 17 MayNotes 2010 2009

(unaudited) (unaudited)£’000 £’000

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230,331 178,337Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (159,662) (123,784)

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,669 54,553Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,887 736Distribution costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (58,692) (49,438)

Operating profit before administrative expenses . . . . . . . . . . . 13,864 5,851Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,590) (13,216)

Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,726) (7,365)Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3 3Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 (3,987) (5,313)

Loss before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,710) (12,675)Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Loss for the period attributable to the owners of theCompany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,710) (12,675)

Loss per share pence penceBasic and diluted loss per share . . . . . . . . . . . . . . . . . . . . . . . . 12 (1.68) (3.36)

All operations are continuing.

Non-GAAP measure: Earnings/(loss) before interest taxation, depreciation, amortisation andimpairment (EBITDA)

24 weeks 24 weeksended ended

16 May 17 MayNotes 2010 2009

(unaudited) (unaudited)£’000 £’000

Loss for the period attributable to the owners of the Company . . . (6,710) (12,675)Adjustments for:Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 (3) (3)Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3,987 5,313Depreciation of property, plant and equipment . . . . . . . . . . . . . . . 9 8,713 8,121Amortisation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2,005 2,091

Earnings/(loss) before interest taxation, depreciation,amortisation and impairment (‘‘EBITDA’’) . . . . . . . . . . . . . . . 7,992 2,847

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Part VII Unaudited Interim Financial Information relating to the Group for the 24 weeks ended16 May 2010

Consolidated balance sheet as at 16 May 2010

16 May 29 NovemberNotes 2010 2009

(unaudited)£’000 £’000

Non-current assetsIntangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 7,247 6,684Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . 9 90,466 90,252Deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,300 2,300Available-for-sale financial asset . . . . . . . . . . . . . . . . . . . . . . . . 395 395

100,408 99,631

Current assetsInventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,149 9,213Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,256 14,740Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,965 13,017

34,370 36,970

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134,778 136,601

Current liabilitiesTrade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (49,936) (47,237)Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 (27,564) (12,087)Obligations under finance leases . . . . . . . . . . . . . . . . . . . . . . . . 10 (19,735) (19,669)

(97,235) (78,993)

Net current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (62,865) (42,023)

Non-current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 (27,013) (42,658)Obligations under finance leases . . . . . . . . . . . . . . . . . . . . . . . . 10 (45,872) (45,651)Derivative liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,126) (1,083)Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (430) (366)

(74,441) (89,758)

Net liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (36,898) (32,150)

EquityShare capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 8,666 40Share premium account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 167 310,836Treasury reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 (47,741) —Reverse acquisition reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 (116,230) —Retained earnings/(accumulated deficit) . . . . . . . . . . . . . . . . . . . 118,240 (343,026)

Deficit attributable to equity holders . . . . . . . . . . . . . . . . . . . (36,898) (32,150)

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Part VII Unaudited Interim Financial Information relating to the Group for the 24 weeks ended16 May 2010

Consolidated statement of changes in equity for the 24 weeks ended 16 May 2010

DeficitReverse Convertible Accumulated attributable

Share Share Treasury Acquisition loan interest (deficit)/ to equitycapital premium Reserve Reserve reserves surplus holders

£’000 £’000 £’000 £’000 £’000 £’000 £’000

Balance at 1 December 2008 . . . . . . . 38 281,649 — — 1,139 (321,034) (38,208)Loss for the period . . . . . . . . . . . . . . — — — — — (23,209) (23,209)

Total comprehensive income for theperiod . . . . . . . . . . . . . . . . . . . . — — — — — (23,209) (23,209)

Transactions with owners:Issue of Ordinary shares . . . . . . . . . . 2 30,072 — — — — 30,074Transaction costs on issue of Ordinary

shares . . . . . . . . . . . . . . . . . . . . — (945) — — — — (945)Issue of Convertible preference shares . . — 60 — — — — 60Transfer of equity on conversion of loan

stock . . . . . . . . . . . . . . . . . . . . . — — — — (5) 5 —Transfer of equity on repayment of loan

stock . . . . . . . . . . . . . . . . . . . . . — — — — (1,134) 1,134 —Share-based payments charge . . . . . . . — — — — — 78 78

Total transactions with owners . . . . . 2 29,187 — — (1,139) 1,217 29,267

Balance at 29 November 2009 . . . . . . 40 310,836 — — — (343,026) (32,150)

Balance at 30 November 2009 . . . . . . 40 310,836 — — — (343,026) (32,150)Loss for the period . . . . . . . . . . . . . . — — — — — (6,710) (6,710)

Total comprehensive income for theperiod . . . . . . . . . . . . . . . . . . . . — — — — — (6,710) (6,710)

Transactions with owners:Issue of Ordinary shares in Ocado

Limited . . . . . . . . . . . . . . . . . . . . 3 49,443 (47,741) — — — 1,705Cancellation of Shares in Ocado Limited . (43) — — — — 43 —Issue of ordinary and convertible

preference shares by Ocado Group plc 476,509 — — (476,509) — — —Ocado Group plc capital reduction . . . . (467,846) — — — — 467,846 —Reverse acquisition of Ocado Limited by

Ocado Group plc . . . . . . . . . . . . . . — (360,279) — 360,279 — — —Issue of Ordinary shares in Ocado Group

plc . . . . . . . . . . . . . . . . . . . . . . . 3 167 — — — — 170Share-based payments charge . . . . . . . — — — — — 87 87

Total transactions with owners . . . . . 8,626 (310,669) (47,741) (116,230) — 467,976 1,962

Balance at 16 May 2010 (unaudited) . . 8,666 167 (47,741) (116,230) — 118,240 (36,898)

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Consolidated statement of cash flows for the 24 weeks ended 16 May 2010

24 weeks 24 weeksended ended

16 May 17 MayNotes 2010 2009

(unaudited) (unaudited)£’000 £’000

Cash flow from operating activitiesLoss before income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,710) (12,675)Adjustments for:—Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 8,713 8,121—Amortisation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2,005 2,091—Provision for dilapidations expense . . . . . . . . . . . . . . . . . . . . . 64 34—Share-based payments charge . . . . . . . . . . . . . . . . . . . . . . . . 87 36—Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3,987 5,313—Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 (3) (3)Changes in working capital:—Decrease in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 1,497—Increase in trade and other receivables . . . . . . . . . . . . . . . . . . (516) (2,138)—Increase in trade and other payables . . . . . . . . . . . . . . . . . . . . 2,722 5,051

Net cash inflow from operations . . . . . . . . . . . . . . . . . . . . . . . 10,413 7,327Finance costs paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,300) (6,768)

Net cash inflow from operating activities . . . . . . . . . . . . . . . . 6,113 559

Cash flows from investing activitiesPurchase of property, plant and equipment . . . . . . . . . . . . . . . . . (3,440) (8,145)Purchase of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . (2,568) (2,011)Finance income received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . (6,005) (10,153)

Cash flows from financing activitiesProceeds from the issue of Ordinary share capital . . . . . . . . . . . . 11 1,875 50Proceeds from borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,429 12,359Repayment of borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,597) (1,077)Proceeds from asset based financing arrangements . . . . . . . . . . . 2,046 6,994Repayments of obligations under finance leases . . . . . . . . . . . . . (6,913) (3,945)

Net cash from financing activities . . . . . . . . . . . . . . . . . . . . . . (3,160) 14,381

Net (decrease)/increase in cash and cash equivalents . . . . . . . (3,052) 4,787Cash and cash equivalents at beginning of period . . . . . . . . . . . . 13,017 5,857

Cash and cash equivalents at end of period . . . . . . . . . . . . . . 9,965 10,644

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Notes to the consolidated interim financial information

1. General information

Ocado Group plc (hereafter ‘the Company’) is incorporated and domiciled in the United Kingdom(Registration number 07098618). On 23 June 2010 the Company was re-registered as a public limitedcompany and changed its name to Ocado Group plc. The address of its registered office is Titan Court, 3Bishops Square, Hatfield Business Park, Hatfield, Hertfordshire, AL10 9NE. The financial informationcomprises the results of Ocado Group plc and its subsidiaries (hereafter ‘the Group’) (see Note 2(b)).

The financial information herein does not amount to full statutory accounts within the meaning ofSection 434 of the Companies Act 2006.

The financial period represents the 24 weeks ending 16 May 2010 (prior period 24 weeks ending 17 May2009).

2. Basis of preparation and development of Ocado Group plc

(a) Statement of compliance

This financial information is the unaudited condensed consolidated interim financial information(hereafter ‘the Interim Financial Information’) of the Group. The Interim Financial Information has beenprepared in accordance with IAS 34 ‘Interim Financial Reporting’ and should be read in conjunction withthe Annual Report and Financial Statements of Ocado Limited for the 52 weeks ended 29 November2009 which have been filed with the Registrar of Companies. The auditor’s report on the financialstatements of Ocado Limited for the 52 weeks ended 29 November 2009 was unqualified but included anemphasis of matter relating to going concern on the basis of the uncertainty of the Group’s future funding.That uncertainty will be resolved on the receipt by the Company of £200 million of net proceeds from theoffers of shares (the ‘‘Offers’’) and the Group being able to draw down on the new bank facilities (the ‘‘NewFacility’’), (see Note 15).

(b) Development of Ocado Group plc

The Company was incorporated on 8 December 2009 and on 9 February 2010 acquired the entire sharecapital of Ocado Limited. As a result of this transaction, the ultimate shareholders in Ocado Limitedreceived shares in the Company in direct proportion to their original shareholdings in Ocado Limited. On23 June 2010 the Company was re-registered as a public limited company and changed its name toOcado Group plc.

Under IFRS 3R ‘‘Business Combinations’’, the acquisition of Ocado Limited by the Company has beenaccounted for as a reverse acquisition and the consolidated IFRS financial information of the Company istherefore a continuation of the financial information of Ocado Limited.

As a result any financial information after 9 February 2010 represents consolidated financial informationof the Group. Prior to this date the historical financial information represents the financial information ofthe Company’s only operating subsidiary, Ocado Limited (see Note 11).

The financial information is presented in sterling, rounded to the nearest thousand (£’000) unlessotherwise stated. It has been prepared under the historical cost convention, except for financialinstruments that have been measured at fair value.

The financial information has been prepared on the going concern basis, which assumes that the Groupwill continue to be able to meet its liabilities as they fall due for the foreseeable future. The going concernbasis relies on the receipt of £200 million of net proceeds from the Offers and the New Facility beingavailable to the Group.

3. Accounting policies

Except as described below, the accounting policies applied are consistent with those of the AnnualReport and Financial Statements of Ocado Limited for the 52 week period ending 29 November 2009. Set

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out below are additional accounting policies that did not apply as at 29 November 2009 but apply to thisInterim Financial Information.

(a) Basis of consolidation

The consolidated financial information includes the financial information of all subsidiaries. The financialyear ends of all entities in the Group are coterminous.

The financial information of subsidiaries are included in the consolidated financial information from thedate on which control over the operating and financial decisions is obtained and cease to be consolidatedfrom the date on which control is transferred out of the Group. Control exists when the Company has thepower, directly, or indirectly, to govern the financial and operating policies of an entity so as to obtaineconomic benefits from its activities.

On 9 February 2010, the Group, previously headed by Ocado Limited, underwent a re-organisation byvirtue of which Ocado Limited’s shareholders in their entirety exchanged their shares for shares in theCompany, which was a newly formed company and which then became the ultimate parent company ofthe Group. Notwithstanding the change in the legal parent of the Group, this transaction has beenaccounted for a reverse acquisition and the consolidated financial information is prepared on the basis ofthe new legal parent having been acquired by the existing Group.

All inter-company balances and transactions, including recognised gains arising from inter-grouptransactions, have been eliminated in full. Unrealised losses are eliminated in the same manner asrecognised gains except to the extent that they provide evidence of impairment.

(b) Foreign currency translation

• Functional and presentation currency

Items included in the financial information of each of the group’s entities are measured using the currencyof the primary economic environment in which the entity operates (‘the functional currency’). Theconsolidated financial information is presented in sterling, rounded to the nearest thousand (£’000)unless otherwise stated, which is the Company’s functional and the Group’s presentation currency.

• Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchangegains or losses resulting from the settlement of such transactions and from the translation at year endexchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in theincome statement, except when deferred in equity as qualifying cash flow hedges and qualifying netinvestment hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents arepresented in the income statement within ‘finance income’ or ‘finance costs’. All other foreign exchangegains and losses are presented in the income statement within ‘Operating loss’.

Changes in the fair value of monetary securities denominated in foreign currency classified asavailable-for-sale are analysed between translation differences resulting from changes in the amortisedcost of the security and other changes in the carrying amount of the security. Translation differencesrelated to changes in amortised cost are recognised in profit or loss, and other changes in carryingamount are recognised in equity.

Translation differences on non-monetary financial assets and liabilities such as equities held at fair valuethrough profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translationdifferences on non-monetary financial assets such as equities classified as available-for-sale areincluded in the available-for-sale reserve in equity.

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• Group companies

The results and financial position of all the group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency aretranslated into the presentation currency as follows:

(a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date ofthat balance sheet;

(b) income and expenses for each income statement are translated at average exchange rates (unlessaverage is not a reasonable approximation of the cumulative effect of the rates prevailing on thetransaction dates, in which case income and expenses are translated at the rate on the dates of thetransactions); and

(c) all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment in foreignoperations, and of borrowings and other currency instruments designated as hedges of suchinvestments, are taken to shareholders’ equity. When a foreign operation is partially disposed of or sold,exchange differences that were recorded in equity are recognised in the income statement as part of thegain or loss on sale.

(c) Employee benefits

Share-based payments

Employees (including Directors) of the Group receive remuneration in the form of share-based paymenttransactions, whereby employees render services in exchange for rights over shares (‘equity-settledtransactions’).The cost of equity settled transactions with employees is measured by reference to the fairvalue at the date at which they are granted. Fair value is measured by use of the Black-Scholes pricingmodel. The expected life used in the model has been adjusted, based on management’s best estimate,for the effects of non-transferability, exercise restrictions, and behavioural considerations. In valuingequity-settled transactions, no account is taken of any performance conditions.

The Group operates an equity settled employee share option scheme (the Ocado 2001 Executive ShareOption Scheme or ‘‘ESOS’’) and a Joint Share Ownership Scheme (‘‘JSOS’’).

• Equity settled share-based transactions:

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,over the years in which the performance conditions are fulfilled, ending on the date on which the relevantemployees become fully entitled to the award (‘‘vesting date’’). The vesting period for the ESOS isthree years. If the options remain unexercised after a period of 10 years from the date of grant or theemployee leaves the Company, the options expire (subject to a limited number of exceptions). Theshares in the JSOS vest in four annual tranches with the first tranche vesting on the first anniversary of thedate of grant.

The cumulative expense recognised for equity-settled transactions at each reporting date until the vestingdate reflects the extent to which both the vesting period has expired and the number of awards, in theopinion of the directors of the Company based on the best available estimate at that date that willultimately vest.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting isconditional upon a market condition, which are treated as vesting irrespective of whether or not themarket condition is satisfied, provided that all other performance conditions are satisfied.

• Cash settled share-based transactions:

The Group has exposure in respect of cash-settled share-based payment transactions and share-basedpayment transactions with cash alternatives as defined by IFRS 2 ‘Share-based Payment’ only in respectof the bad leaver provisions of the JSOS.

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4. Significant accounting policies

The accounting policies applied by the Group in this condensed consolidated interim financial informationare consistent with those set out in the Ocado Limited Annual report and financial statements for the52 weeks ended 29 November 2009.

In preparing the condensed consolidated interim financial information, management is required to makeaccounting assumptions and estimates. The assumptions and estimation methods were consistent withthose applied to the Ocado Limited Annual report and financial statements for the 52 weeks ended29 November 2009.

5. Segmental reporting

IFRS 8 ‘Operating Segments’ requires that segments should be reported on the same basis as theinternal reporting information that is provided to the chief operating decision-maker. The Group’s chiefoperating decision-maker has been identified as the chief executive officer (‘‘CEO’’). The Directorsconsider there to be one business segment, being that of retailing and distribution of groceries andconsumer goods. The Group’s main activity is supermarket retailing and the CEO’s focus is on theperformance and growth of this activity. Internal reports reviewed regularly by the CEO provideinformation to allow the chief operating decision-maker to allocate resources and make decisions aboutthe operations. The internal reporting focuses on the operations of the Group as a whole and does notidentify individual operating segments. Consequently all activities relate to this one segment.

6. Gross sales

24 weeks 24 weeksended ended

16 May 2010 17 May 2009

(unaudited) (unaudited)£’000 £’000

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230,331 178,337VAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,869 8,185Marketing vouchers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,432 2,597

Gross sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245,632 189,119

7. Finance income and costs

24 weeks 24 weeksended ended

16 May 2010 17 May 2009

(unaudited) (unaudited)£’000 £’000

Bank interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 —Other interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 3

Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3

Interest payable on bank loans and overdrafts . . . . . . . . . . . . . . . . . . . . (3) (29)Interest on finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,084) (2,429)Interest on borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,857) (2,506)Interest on convertible loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (347)Fair value movement in derivative liability . . . . . . . . . . . . . . . . . . . . . . . . (43) (2)

Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,987) (5,313)

Net finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,984) (5,310)

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Part VII Unaudited Interim Financial Information relating to the Group for the 24 weeks ended16 May 2010

8. Intangible assets—Computer software

29 November16 May 2010 2009

(unaudited)£’000 £’000

Cost or valuationAt beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,503 24,114Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 470 294Internal development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,098 4,095

At end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,071 28,503

Accumulated amortisationAt beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21,819) (17,076)Charge for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,005) (4,743)

At end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,824) (21,819)

Net book valueAt end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,247 6,684

9. Property, plant and equipment

Fixtures,fittings,

Land and plant and Motorbuildings machinery vehicles Total

£’000 £’000 £’000 £’000

Cost or valuationAt 1 December 2008 . . . . . . . . . . . . . . . . . . . 30,457 107,983 24,122 162,562Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,944 8,896 4,802 18,642Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . (66) (4,401) (6,286) (10,753)

At 29 November 2009 . . . . . . . . . . . . . . . . . . 35,335 112,478 22,638 170,451Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 3,749 5,145 8,927Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (2,389) (2,389)

At 16 May 2010 (unaudited) . . . . . . . . . . . . . . 35,368 116,227 25,394 176,989

Accumulated depreciation and impairmentAt 1 December 2008 . . . . . . . . . . . . . . . . . . . (8,209) (49,170) (14,652) (72,031)Charge for the period . . . . . . . . . . . . . . . . . . . (1,511) (12,227) (4,127) (17,865)Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . (92) (931) — (1,023)Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 4,401 6,253 10,720

At 29 November 2009 . . . . . . . . . . . . . . . . . . (9,746) (57,927) (12,526) (80,199)Charge for the period . . . . . . . . . . . . . . . . . . . (689) (5,996) (2,028) (8,713)Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 2,389 2,389

At 16 May 2010 (unaudited) . . . . . . . . . . . . . . (10,435) (63,923) (12,165) (86,523)

Net book valueAt 29 November 2009 . . . . . . . . . . . . . . . . . . 25,589 54,551 10,112 90,252

At 16 May 2010 (unaudited) . . . . . . . . . . . . . . 24,933 52,304 13,229 90,466

Capital commitments contracted, but not provided for by the Group, amounted to £11,420,000 as at16 May 2010 (unaudited) (29 November 2009: £5,636,000).

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10. Finance leases and borrowings

29 November16 May 2010 2009

(unaudited)£’000 £’000

Current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,564 12,087Obligations under finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,735 19,669

47,299 31,756

Non-current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,013 42,658Obligations under finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,872 45,651

72,885 88,309

Total finance leases and borrowings . . . . . . . . . . . . . . . . . . . . . . . 120,184 120,065

(unaudited)£’000

Opening amount as at 30 November 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,065Proceeds from borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,429Repayment of borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,597)Proceeds from asset based financing arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . 2,046Assets acquired under finance lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,154Repayments of obligations under finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,913)

Closing amount as at 16 May 2010 (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,184

In January 2010 the Group entered into a loan of £2.9m which is secured on a freehold property. Interestis charged at LIBOR plus 3.5%. It is repayable in fixed quarterly instalments from April 2010 with a finalbullet payment in January 2013.

11. Share capital and reserves

The movements in the called up share capital are set out below:

Ocado Limited29 November 2009

Number ofshares £’000

AuthorisedOrdinary shares of 1p each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 30Convertible preference shares of 1p each . . . . . . . . . . . . . . . . . . . . . . 3,000,000 30

6,000,000 60

Allotted, called up and fully paidOrdinary shares of 1p each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,525,757 15Convertible preference shares of 1p each . . . . . . . . . . . . . . . . . . . . . . 2,474,749 25

4,000,506 40

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Part VII Unaudited Interim Financial Information relating to the Group for the 24 weeks ended16 May 2010

Ocado Group plcAs at 16 May 2010

(unaudited)Number of

shares £’000

AuthorisedOrdinary shares of 2p each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000,000 6,000Convertible preference shares of 2p each . . . . . . . . . . . . . . . . . . . . . . 300,000,000 6,000

600,000,000 12,000

Allotted, called up and fully paidOrdinary shares of 2p each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185,874,125 3,717Convertible preference shares of 2p each . . . . . . . . . . . . . . . . . . . . . . 247,474,900 4,949

Allotted, called up and fully paid . . . . . . . . . . . . . . . . . . . . . . . . . . 433,349,025 8,666

Less: Ordinary shares of 2p each held by the Group’s employee benefittrust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32,476,700)

Allotted, called up and fully paid, excluding Ordinary shares held by theGroup’s employee benefit trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,872,325

On 9 February 2010 the Company acquired the entire share capital of Ocado Limited. As a result of thistransaction, the ultimate shareholders in Ocado Limited received shares in the Company in directproportion to their original shareholdings in Ocado Limited. Shareholders were issued 100 shares in theCompany for every 1 share in Ocado Limited. The shares in the Company have a par value of 2 penceeach. Therefore as at 16 May 2010 share capital represents that of the Company. Prior periods presentedrepresent the share capital of Ocado Limited.

Convertible preference shares are only convertible in to the same number of Ordinary shares either at theoption of the holder or on the occurrence of certain trigger events including a public listing. TheConvertible preference shares rank pari passu with Ordinary shares with the exception that on return ofassets on a liquidation, reduction of capital or otherwise, the holders of the Convertible preference sharesshall be entitled in respect of their preference shares (in proportion to the number of such shares held byeach of them) in priority to all other shareholders, to be paid out of the surplus assets of the Companyremaining after payment of its liabilities, the subscription price for their preference shares together with asum equal to any arrear of dividends declared calculated down to the date of the return of assets.

The Ordinary Shares held by the EBT Trustee pursuant to the Joint Share Ownership Scheme (‘‘JSOS’’)are treated as treasury shares in the Group’s consolidated balance sheet in accordance with IAS 32‘‘Financial instruments: Presentation’’. These shares have voting rights but these have been waived bythe EBT Trustee. The set-up of the JSOS was approved by resolution of the board of Directors on13 January 2010 and approved by Shareholders by written resolution on 18 February 2010. Awards to theExecutive Directors and a select group of senior management were made through the acquisition of32.5 million Ordinary Shares with an issue price of £1.50 per share, as set out above.

The number of allotted, called up and fully paid shares, excluding treasury shares, at the end of eachperiod differs from that used in the loss per share calculation in Note 12 as loss per share is calculatedusing the weighted average number of ordinary shares and convertible preference shares in issue duringthe period, excluding treasury shares.

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The movements in the called up share capital and reserves are set out below:

Convertible Convertible ReverseOrdinary preference Ordinary preference Share Treasury acquisition

Notes shares shares shares shares premium reserve reserve

number number £’000 £’000 £’000 £’000 £’000At 29 November 2009 . 1,525,757 2,474,749 15 25 310,836 — —Allotted in respect of the

employee share optionscheme . . . . . . . . . . 6,635 — — — 731 — —

Allotted in respect of thejoint share ownershipscheme . . . . . . . . . . 11(a) 324,767 — 3 — 48,712 (47,741) —

Cancellation of OcadoLimited shares . . . . . 11(b) (1,857,159) (2,474,749) (18) (25) — — —

Issue of ordinary andconvertible preferenceshares by OcadoGroup Limited . . . . . . 185,715,900 247,474,900 204,287 272,222 — — (476,509)

Capital reduction by theCompany . . . . . . . . . — — (200,573) (267,273) — — —

Reverse acquisition ofOcado Limited by theCompany . . . . . . . . . 11(c) — — — — (360,279) — 360,279

Allotted in respect of theemployee share optionscheme . . . . . . . . . . 158,225 — 3 — 167 — —

Balance at 16 May2010 (unaudited) . . . 185,874,125 247,474,900 3,717 4,949 167 (47,741) (116,230)

(a) Treasury reserve

This reserve arose when the Company issued equity share capital under its Joint Share Ownership Scheme, which are held intrust by the Group’s Employee Benefit Trust. The consideration paid is deducted from total shareholders’ equity and classifiedas treasury shares on consolidation.

(b) Scheme of Arrangement and Capital Reduction

On 9 February 2010, pursuant to a Scheme of Arrangement, all of Ocado Limited’s Ordinary and Preference Shares werecancelled. Subsequently, Ocado Limited issued 100 ordinary shares to the Company for £1 and in consideration of thecancellation of Ocado Limited’s Ordinary and Preference Shares, the Company issued 185,715,900 Ordinary Shares and247,474,900 Preference Shares on the basis of 1:100 Ordinary and Preference Shares for each Ocado Limited Share held.The effect of the Scheme of Arrangement was to replicate the shareholders’ register of Ocado Limited at the Company level.

On 16 February 2010, pursuant to an order of the Court confirming the reduction of capital of the Company, the Company’sshare capital was reduced by decreasing the nominal value of each Ordinary and Preference Share issued pursuant to theScheme of Arrangement from 110 pence to 2 pence. This created distributable reserves of £467.8 million.

(c) Reverse acquisition reserve

As detailed in Notes 2(a) and 2(b) to the Interim Financial Information, the acquisition by the Company of the entire issuedshare capital of Ocado Limited has been accounted for as a reverse acquisition under IFRS3R. Consequently the previouslyrecognised book values and assets and liabilities have been retained and the consolidated interim financial information havebeen presented as if the Company had always been the parent company of the Group.

The share capital for the period covered by the Interim Financial Information and the comparative periods is stated at thenominal value of the shares issued pursuant to the share swap arrangement. Any difference between the nominal value ofthese shares and previously reported nominal values of shares and applicable share premium issued by Ocado Limited hasbeen transferred to the ‘reverse acquisition reserve’.

12. Loss per share

(a) Basic

Basic loss per share is calculated by dividing the loss attributable to equity holders by the weightedaverage number of Ordinary shares and Convertible preference shares in issue during the periodexcluding Ordinary shares purchased by the Group and held as treasury shares, adjusted to reflect the

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Part VII Unaudited Interim Financial Information relating to the Group for the 24 weeks ended16 May 2010

conversion of the Ordinary shares and the Convertible preference shares from Ocado Limited to theCompany on a 1:100 basis on 9 February 2010. The loss for the period is equally attributable to theshareholders of Ordinary shares and Convertible preference share. For more information see Note 11.

All operations are continuing for the financial periods presented.

24 weeks 24 weeksended ended

16 May 2010 17 May 2009

(unaudited) (unaudited)Number Number(’000s) (’000s)

Issued Ordinary shares and Convertible preference shares at beginning ofperiod . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,051 377,691

Effect of share options exercised in the period . . . . . . . . . . . . . . . . . . . . 510 28Effect of shares issued in the period . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Weighted average number of shares at the end of the period . . . . . . . . . . 400,561 377,719

£’000 £’000

Loss attributable to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,710) (12,675)

pence pence

Basic loss per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.68) (3.36)

(b) Diluted

Diluted loss per share is calculated by adjusting the weighted average number of Ordinary shares andConvertible preference shares outstanding to assume conversion of all dilutive potential shares, adjustedto reflect the conversion of the Ordinary shares and the Convertible preference shares from OcadoLimited to the Company on a 1:100 basis on 9 February 2010. The Company has three categories ofpotentially dilutive shares: share options, share held pursuant to the JSOS and warrants.

There was no difference in the weighted average number of shares used for basic and diluted loss pershare as the effect of all potentially dilutive shares outstanding was anti-dilutive.

13. Related party transactions

Key management personnel

Only the Executive and Non-Executive Directors are deemed to be key management personnel. It is theBoard who have responsibility for planning, directing and controlling the activities of the Group. The keymanagement personal compensation is follows:

24 weeks 24 weeksended ended

16 May 2010 17 May 2009

(unaudited) (unaudited)£’000 £’000

Salaries, fees and other short-term employee benefits . . . . . . . . . . . . . . . 635 696Pension costs—defined contribution plans . . . . . . . . . . . . . . . . . . . . . . . 29 42Equity settled share based payments granted under the joint share

ownership scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 —

664 738

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Part VII Unaudited Interim Financial Information relating to the Group for the 24 weeks ended16 May 2010

Other related party transactions with key management made during the period are as follows:

24 weeks 24 weeksended ended

16 May 2010 17 May 2009

(unaudited) (unaudited)£’000 £’000

Purchase of goods—company of a close family member of an Executive Director . . . . . . . . . — 86Purchase of professional services—Non-Executive Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 18

13 104

All transactions are on an arms length basis and no financial period end balances have arisen as a resultof these transactions.

At the end of the financial period key management owed the Group £5,000 (unaudited) (17 May 2009:£4,000 (unaudited)) (29 November 2009: £4,000) in respect of personal expenses incurred on thecompany credit card that were reimbursed in the normal course of business. These balances were repaidafter the financial period end.

There were no other material transactions or balances between the Group and its key managementpersonnel or members of their close family.

Investment

The Group holds a 25% interest in Paneltex Limited whose registered office is at Paneltex House,Somerden Road, Hull. This stake was acquired in June 2001 at a cost of £395,000. Payment for theshares was partly in cash (£237,000) and partly in equity (1,975 Convertible preference shares). TheGroup’s 25% interest in Paneltex Limited has not been treated as an associated undertaking as theCompany does not have significant influence over Paneltex Limited.

The following transactions were carried out with Paneltex Ltd:

24 weeks 24 weeksended ended

16 May 2010 17 May 2009

(unaudited) (unaudited)£’000 £’000

Purchase of goods—Plant and machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 13—Consumables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 69

Total purchase of goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 82

Amounts payable at the period end . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 —

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Part VII Unaudited Interim Financial Information relating to the Group for the 24 weeks ended16 May 2010

14. Analysis of net debt

(a) Net debt

29 November16 May 2010 2009

(unaudited)£’000 £’000

Current assetsCash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,965 13,017

9,965 13,017

Current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27,564) (12,087)Obligations under finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,735) (19,669)

(47,299) (31,756)

Non current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27,013) (42,658)Obligations under finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (45,872) (45,651)

(72,885) (88,309)

Total net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (110,219) (107,048)

(b) Reconciliation of net cash flow to movement in net debt

52 weeks24 weeks 24 weeks ended

ended ended 29 November16 May 2010 17 May 2009 2009

(unaudited) (unaudited)£’000 £’000 £’000

Net increase/(decrease) in cash and cash equivalents . . . . . (3,052) 4,787 7,160Net cash outflow/(inflow) from debt and lease financing . . . . 5,035 (14,331) 6,467Non-cash movements:

—Exercise of convertible loan notes to equity . . . . . . . . . — 60 60—Fair value movements on convertible loan notes . . . . . . — (176) (176)—Assets acquired under finance lease . . . . . . . . . . . . . . (5,154) (1,861) (4,826)

Decrease/(increase) in net debt in the period . . . . . . . . . (3,171) (11,521) 8,685Opening net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (107,048) (115,733) (115,733)

Closing net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (110,219) (127,254) (107,048)

15. Events occurring after the reporting period

In May 2010 the Company repaid a loan of £5m secured over certain warehouse assets, software andintellectual property that was renewable on a month by month basis.

In May 2010 the Company agreed a new loan facility for £7.5m from an existing lender which is repayableover 3 years in equal annual instalments. Interest is charged at LIBOR plus 5%. In addition the Companyagreed a new revolving credit facility for £7.5m from the same lender. These facilities are secured overcertain warehouse assets, software and intellectual property.

In May 2010 the Company signed a new 10 year agreement with Waitrose giving the Company the right tocontinue to sell Waitrose goods and use Waitrose brands on its website and vans as it has had since2000.

In May 2010 the Company agreed an extension of £3.4m to a credit facility with an existing lender forvehicle finance leasing.

In June 2010 the Company agreed a £15m credit facility with a new lender for vehicle finance leasing.

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Part VII Unaudited Interim Financial Information relating to the Group for the 24 weeks ended16 May 2010

In 23 June 2010 Ocado Group Limited re-registered as a public company and changed its name from‘‘Ocado Group Limited’’ to ‘‘Ocado Group plc’’. The Company continues to operate the same businessand operations as it did immediately prior to the implementation of the Scheme.

On 24 June 2010 Ocado Group plc announced its intention to list on the London Stock Exchange.

On 5 July 2010 the Company entered into a facility agreement (the ‘‘New Facility’’) between, amongstothers, Barclays Bank PLC, HSBC Bank plc and Lloyds TSB Bank plc. The lenders have agreed to makeavailable £100m to the Company under the New Facility. All amounts borrowed under the New Facilityshall be applied towards the acquisition of certain land, buildings, fixtures and tangible movable property.The New Facility has an accordion feature which allows for the amount available under it to be increasedup to £130m, subject to lenders (existing or additional) agreeing to make available the additionalamounts. First utilisation under the New Facility is conditional on certain customary conditions precedentand on Admission.

Principal risks and uncertainties

Risk is an inherent part of doing business. The board has overall responsibility for the management of theprincipal risks and internal control of the Group. The principal risks and uncertainties set out in OcadoLimited’s Annual Report and Financial Statements for the 52 week period ended 29 November 2009remain the same for this interim financial information. Those risks and uncertainties can be summarisedas follows:

• Business continuity and disaster recovery

• Reliance on Waitrose

• Competition

• Health and safety

• Fraud

• Regulatory environment

• Ongoing financing

Statement of Directors’ responsibility

The Directors confirm that, to the best of their knowledge, this condensed consolidated Interim FinancialInformation relating to the Group for the 24 weeks ended 16 May 2010 has been prepared in accordancewith IAS 34 as adopted by the European Union. The Group Interim Financial Information includes a fairreview of the information required by DTR 4.2.7R and DTR 4.2.8R under the Disclosure andTransparency Rules.

176

PART VIII

CAPITALISATION AND INDEBTEDNESS STATEMENT

The following tables set out the capitalisation and indebtedness of the Group as at 16 May 2010. Theinformation below has been extracted without material adjustment from the unaudited interim financialinformation for the 24 weeks ended 16 May 2010 included in Part VII (Unaudited Interim FinancialInformation relating to the Group for the 24 weeks ended 16 May 2010).

Capitalisation and indebtedness(1)(2) £ million

Current debtGuaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Secured(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (42.4)Unguaranteed/unsecured(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.9)

Total current debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (47.3)

Non-current debt (excluding current portion of the long term debt) . . . . . . . . . . . .Guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Secured(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (67.8)Unguaranteed/unsecured(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5.1)

Total non-current debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (72.9)

EquityShare capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7Share premium account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.2Other reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (164.0)Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118.2

Total capitalisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (36.9)

(1) This statement of indebtedness has been prepared under IFRS using policies which are consistent with those used inpreparing the Historical Financial Information of the Group set out in Part V.

(2) The Group’s debt is shown net of unamortised issue costs.

(3) The Group’s secured debt includes secured bank loans which are secured over certain warehouse assets, software andintellectual property and certain freehold properties together with its finance leases which are secured on the assets to whichthey relate.

(4) Unguaranteed/unsecured debt relates to the Group’s Murabaha facility agreement with the Bank of London and the MiddleEast plc, the Arlington Properties Development Ltd loan, and its unsecured credit agreement with Premium Credit in relation tothe deferral of the payment of its insurance premiums.

The following table sets out the unaudited net indebtedness of the Group as at 16 May 2010.(1)

£ million

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1

Liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1

Current financial debtCurrent bank debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.1)Current portion of non current debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27.6)Other current financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19.7)

Current financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (48.4)

Net current financial indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (37.3)

Non-current financial indebtednessNon-current bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27.0)Other non-current financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (45.9)

Non current financial indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (72.9)

Net financial indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (110.2)

(1) The Group has no indirect or contingent indebtedness as at 16 May 2010.

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INFORMATION ABOUT THE OFFERS

1. Reasons for the Offers and use of proceeds

For the reasons for the Offers and the use of proceeds, please see section 5 of Part I (Information aboutthe Company).

2. Summary structure of the Offers

The Offers comprise:

• the Institutional Offer, being an offer to institutional investors in the UK, the United States, the EU andelsewhere; and

• the Customer and Employee Offer, being an offer to Eligible Customers and Eligible Employees.

The Customer and Employee Offer will comprise approximately 15 per cent. of the total number ofOrdinary Shares comprised in the Offers, although the Company reserves the right to adjust the sizedepending on actual demand.

The Ordinary Shares which are the subject of the Offers comprise:

• approximately £205 million of New Ordinary Shares to be issued by the Company, raising primaryproceeds net of fees and expenses (but including cash received on the exercise of warrants andoptions) of £200 million. If the Offer Price is set at the mid-point in the Price Range, this will result inapproximately 86,273,616 New Ordinary Shares being issued pursuant to the Offers and up tofurther 10,134,074 New Ordinary Shares potentially to be issued to Selling Optionholders pursuantto the exercise of options or warrants; and

• up to 155,216,316 Ordinary Shares that may be sold by the Selling Shareholders pursuant to theOffers. This figure also assumes that each Major Selling Shareholder sells the maximum number ofOrdinary Shares he has indicated he may sell, each Minor Selling Shareholder sells all of hisOrdinary Shares and each Selling Optionholder sells all of the Ordinary Shares which will be issuedto him if he exercises all of his options.

If the Company is not able to agree pricing or is unable to raise net proceeds of £200 million, Admissionwill not occur. The Underwriting and Selling Shareholders’ Agreements are conditional on Admission.

The selling intentions of Major Selling Shareholders are non-binding. That means that although a MajorSelling Shareholder may not sell any more Ordinary Shares pursuant to the Offers than noted below, hemay decide, in his absolute discretion to sell fewer or none. In addition, the Company has provided afacility through which Minor Selling Shareholders and Selling Optionholders may sell some or all of theirOrdinary Shares pursuant to the Offers. However, as at the date of this document, the Company does notknow the extent to which such persons will sell any such Ordinary Shares pursuant to the Offers.

The number of Existing Shares held and the maximum number each of the Major Selling Shareholdershas indicated he may sell is set out below. The total number of Existing Shares held by all Minor SellingShareholders is shown below. This is the maximum number of Existing Shares which the Minor SellingShareholders may offer to sell pursuant to the Offers. As at the date of this document, the Company doesnot know with certainty the extent to which other such persons will sell any or all such Ordinary Sharespursuant to the Offers. However, the Company has received non-binding indications from Minor SellingShareholders holding 28,861,700 Existing Shares, in aggregate, that they do not intend to sell anyExisting Shares pursuant to the Offers.

The total number of New Ordinary Shares which may be issued to Selling Optionholders and sold on theirbehalf pursuant to the Offers is shown below. Subject to the Offer Price being not less than £1.90,Ranelagh Nominees Limited has irrevocably committed to exercise certain warrants held by it providedthat it may sell the resulting 5,611,200 New Ordinary Shares issued to it or its nominee pursuant to theOffers. As at the date of this document, the Company does not know whether any other SellingOptionholder will exercise any of his or its exercisable options or warrants, or, if he or it does so, whetherany such Selling Optionholder will sell any Ordinary Shares issued as a result pursuant to the Offers.

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Number of MaximumOrdinary number of

Shares and OrdinaryPreference Shares which

Selling Shareholder Shares held(1) may be sold(1)

John Lewis Pension Fund, the business address of which isPartnership House, Carlisle Place, London, SW1P 1BX . . . . . . . . 114,642,300 57,321,150

UBS Holdings Cayman Limited, the business address of which isUBS House, 227 Elgin Avenue, PO Box 852, Grand Cayman,Cayman Islands(5), (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,263,500 36,263,500

Arthur Seligman as Trustee of the Steiner Trust 2008 MillenniumTrust c/o Arthur Seligman, Lennox Paton, P.O. BOX N4875,Nassau, Bahamas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,291,200 2,000,000

Trident Trust Co (BVI) Limited as Trustee of the Jason Gissing LifeSettlement II, the business address of which is Trident Chambers,Wickham Cay, P.O. BOX 146, Road Town, Tortola, VG-1110,British Virgin Islands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,583,400 1,924,100

Jonathan Faiman c/o Tempest Capital AG, Schulhausstrasse 12,8002 Zurich, Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000

Apollo Nominees Ltd. on behalf of the Minor SellingShareholders(2), (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,705,242 62,705,242

Apollo Nominees Ltd. on behalf of the Selling Optionholders(2), (4) . . . 10,134,074 10,134,074

(1) All Preference Shares in existence will convert into Ordinary Shares immediately before Admission on a one for one basis.

(2) Apollo Nominees Ltd.’s business address is 1 Finsbury Avenue, London EC2M 2PP.

(3) If a Minor Selling Shareholder decides to sell any Ordinary Shares pursuant to the Offers he or it will transfer legal title to (butretain the entire beneficial interest in) his or its Ordinary Shares to Apollo Nominees Ltd. with effect from the date of Admissionin order for Apollo Nominees Ltd. to sell such Ordinary Shares on his or its behalf as part of the Offers.

(4) Prior to the date of Admission, if a Selling Optionholder (including Ranelagh Nominees Limited) decides to exercise his or itsoptions or warrants and sell the Ordinary Shares issued as a result pursuant to the Offers, such Ordinary Shares will be issuedto Apollo Nominees Ltd. with effect from the date of Admission as nominee for such Selling Optionholders in order for ApolloNominees Ltd. to sell such Ordinary Shares on his or its behalf as part of the Offers.

(5) Comprised in the Ordinary Shares that UBS Holdings Cayman Limited may sell are up to 18,131,750 Ordinary Shares that itmay sell pursuant to the Over-allotment Arrangements to the extent that they are not sold in the Offers.

(6) UBS AG, an affiliate of UBS Holdings Cayman Limited, is a Minor Selling Shareholder. It has stated that it will sell its entireshareholding of 2,980,100 Preference Shares, provided that the Offer Price is set above the lowest point in the Price Range.

The Ordinary Shares offered pursuant to the Offers will rank pari passu in all respects with all of the otherOrdinary Shares in issue and will carry the right to receive all dividends and other distributions declared,made or paid on the Ordinary Shares after Admission.

3. Price and size of the Offers

The price payable per Ordinary Share under the Institutional Offer and the Customer and is expected tobe announced on or around 21 July 2010.

The Pricing Statement will be published in printed form and available free of charge at the registeredoffice of the Company and at the offices of the JGCs. In addition, the Pricing Statement will be publishedin electronic form and available on the Offer Website.

It is expected that the Offer Price will be in the range of 200 pence to 275 pence per Ordinary Share butthe Offer Price eventually determined may be within, above or below this indicative range. If the PriceRange changes prior to announcement of the final Offer Price, the Company would not envisage makingan announcement until determination of the Offer Price, unless required to do so by law or regulation.Among the factors which may be considered in determining the Offer Price are the prevailing marketconditions, the level and nature of demand for Ordinary Shares under the Offers, the prices bid to acquireOrdinary Shares under the Institutional Offer and the objective of encouraging the development of anorderly after-market in the Ordinary Shares. Accordingly, the Offer Price will not necessarily be thehighest price at which all of the Ordinary Shares subject to the Offers could be sold.

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The Ordinary Shares that are the subject of the Offers will together comprise 50 per cent. of the issuedshare capital of the Company on Admission. This percentage assumes that the Offer Price is at themid-point of the Price Range, the Company raises £200 million after costs and expenses (but includingcash received on the exercise of warrants and options) and each Selling Shareholder sells the maximumnumber of Existing Shares he or it has indicated he may sell. The percentage is calculated disregarding32,476,700 Existing Shares issued to the EBT Trustee pursuant to the JSOS.

4. Allocation under the Offers

The allocation of Ordinary Shares between the Institutional Offer and the Customer and Employee Offerwill be determined at the Company’s discretion, in consultation with the JGCs. A number of factors will beconsidered in determining the basis of allocation, including the level and nature of demand for OrdinaryShares in the Offers and the objective of encouraging the development of an orderly and liquid after-market in the Ordinary Shares.

Applicants may be allocated Ordinary Shares having a value which is less than the sum applied for. Ifapplications in respect of the Customer and Employee Offer are greater than the portion of the Offersallocated to the Customer and Employee Offer, the amount an Eligible Customer has offered to investmay be scaled down or balloted or both. Valid applications from Eligible Employees will be allocated infull.

The rights attaching to the Ordinary Shares will be uniform in all respects and the Ordinary Shares willform a single class for all purposes. The rights attaching to Ordinary Shares are described in section 5 ofPart XIII (Additional Information).

5. Application procedure

5.1 The Institutional Offer

The JGCs will solicit bids from prospective institutional investors (in the UK, the US, the EU andelsewhere) to subscribe for or purchase Ordinary Shares in the Institutional Offer. Prospective investorswill be required to specify the number of Ordinary Shares which they would be prepared to acquire orsubscribe for either at prices specified by them or at the Offer Price eventually determined by theCompany. This process is known as ‘‘book building’’. Prospective investors will be required to submit bidsfor Ordinary Shares in the Institutional Offer on 20 July 2010, although this may be extended at thediscretion of the JGCs (with the agreement of the Company).

5.2 The Customer and Employee Offer

This section should be read in conjunction with the terms and conditions set out in Part X (Terms andConditions of the Customer and Employee Offer).

The Company is offering Eligible Customers and Eligible Employees the opportunity to subscribe for orpurchase Ordinary Shares in the Customer and Employee Offer at the Offer Price. Eligible Customersand Eligible Employees who wish to apply for Ordinary Shares in the Customer and Employee Offershould download this document from the Offer Website and read this document and then complete andsubmit the Customer and Employee Offer Application Form on the Offer Website, together with theirpayment details as soon as possible. The latest time for receipt of applications in the Customer andEmployee Offer is 11.59 p.m. (London time) on 18 July 2010. Applications may not be made by post.

Applications for Ordinary Shares must be based on the monetary amount which applicants wish to investin Ordinary Shares, rather than on a number of Ordinary Shares. The minimum application amount underthe Customer and Employee Offer is £500 for Eligible Employees and £1,000 for Eligible Customers. Themaximum limit on the monetary amount that any applicant may apply to invest in the Customer andEmployee Offer is £12,000. The amount for which an Eligible Customer offers to invest may, however, bescaled down or balloted or both as described above.

The basis of allocation for applications will be determined by the Company in consultation with the JGCs.All applications under the Customer and Employee Offer will be made on the terms and conditions ofapplication set out in Part X (Terms and Conditions of the Customer and Employee Offer) and Part XI(Terms and Conditions of the Ocado Share Account). If no part of an application is accepted no amountwill be debited from the applicant. If an application is accepted in part, an amount in respect of the

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successful application will be debited from the applicant. If more is debited from an applicant than isrequired to pay for the Ordinary Shares allocated to that applicant, the excess amount will be returned tothe applicant, unless the excess amount is less than £5.00 in which case it will be returned to theCompany and donated to charity.

Persons under the age of 18 may not apply for Ordinary Shares in the Customer and Employee Offer.

Applicants who have any questions about how to complete their Customer and Employee OfferApplication Form should visit the Offer Website. If this does not provide the answer to their question, theyshould contact the Ocado IPO Helpline, the telephone number for which is 0800 141 2954. There will beno charge for calls from UK landlines. Lines are open from 9 a.m. to 5.30 p.m. Monday to Friday exceptUK bank holidays. The Ocado IPO Helpline cannot provide advice on the merits of an investment inOrdinary Shares nor give any financial, legal or tax advice.

All applicants who successfully apply for Ordinary Shares in the Customer and Employee Offer willinitially be required to hold their Ordinary Shares in the Ocado Share Account, which the Directors believeto be a convenient way of holding Ordinary Shares.

6. Withdrawal rights

If the Company is required to publish a supplementary prospectus, applicants who have applied to investin Ordinary Shares in the Offers shall have at least two clear Business Days following the publication ofthe supplementary prospectus within which to withdraw their application in its entirety. If the application isnot withdrawn within the stipulated period, any application for Ordinary Shares in the Offers will remainvalid and binding. If a supplementary prospectus is published, applicants will be sent an email notifyingthem and explaining to them how they may withdraw their applications; such withdrawals will be effectedby email only. Details of how to withdraw an application will also be available if a supplementaryprospectus is published on the Offer Website or at the offices of the Registrar (Capita Registrars Limited,The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU) and the registered office of theCompany.

Any supplementary prospectus will not be automatically distributed to applicants but will be published onthe Offer Website and will be available in printed form free of charge at the registered office of theCompany and at the offices of the JGCs.

7. Over-allotment and stabilisation

In connection with the Offers, the Stabilising Manager (or any of its agents) may (but will be under noobligation to), to the extent permitted by law, over-allot or effect other transactions with a view tosupporting the market price of the Ordinary Shares at a level higher than that which might otherwiseprevail in the open market. The Stabilising Manager is not required to enter into such transactions andsuch transactions may be effected on any securities market, over-the-counter market, stock exchange orotherwise. Such stabilising transactions, if commenced, may be discontinued at any time and may only betaken during the period beginning on the commencement of conditional dealings of the Ordinary Shareson the London Stock Exchange and ending 30 days thereafter. However, there is no obligation on theStabilising Manager or any of its agents to effect stabilising transactions and there is no assurance thatstabilising transactions will be undertaken. In no event will measures be taken to stabilise the market priceof the Ordinary Shares above the Offer Price. Save as required by law or regulation, neither theStabilising Manager nor any of its agents intends to disclose the extent of any over-allotments orstabilisation transactions under the Offers.

In connection with the Offers, the Stabilising Manager may, for stabilisation purposes, over-allot OrdinaryShares up to a maximum of 10 per cent. of the total number of Ordinary Shares comprised in the Offers(assuming no exercise of the Over-allotment Option). The Stabilising Manager will be able to borrow anequivalent number of Ordinary Shares under the Stock Lending Agreement in order, amongst otherthings to settle over-allotments (if any) at Admission. For the purposes of allowing the Stabilising Managerto redeliver equivalent securities under the Stock Lending Agreement (to the extent that it is unable to doso using Ordinary Shares acquired by it for the purposes of stabilisation), the Stabilising Manager hasentered into the Over-allotment Option with UBS Holdings Cayman Limited, pursuant to which it maypurchase or nominate purchasers for Ordinary Shares (‘‘Over-allotment Shares’’) up to the lower of

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10 per cent. of the total number of Ordinary Shares comprised in the Offers or up to approximately18.1 million Ordinary Shares at the Offer Price. The Over-allotment Option may be exercised in whole orin part from time to time and on one or more occasions, upon notice by the Stabilising Manager at anytime during the period beginning on the commencement of conditional dealings and ending 30 daysthereafter. The Over-allotment Shares made available pursuant to the Over-allotment Option will be soldat the Offer Price on the same terms and conditions as, and will rank pari passu with, the Ordinary Shares,including for all dividends and other distributions declared, made or paid on the Ordinary Shares afterAdmission and will form a single class for all purposes with the Ordinary Shares.

8. Listing, dealing and settlement

Application will be made to the FSA, in its capacity as the UK Listing Authority, for all of the OrdinaryShares (including the 32,476,700 Ordinary Shares held by the EBT Trustee pursuant to the JSOS) to beadmitted to the premium listing segment of the Official List and application will be made to the mainmarket of the London Stock Exchange for those Ordinary Shares to be admitted to trading on the LondonStock Exchange. It is expected that admission to the Official List will become effective, and dealings willcommence on the London Stock Exchange, on 26 July 2010.

Each investor in the Institutional Offer will be required to undertake to pay the Offer Price for the OrdinaryShares sold to it in such manner as shall be directed by the JGCs. Each investor in the Customer andEmployee Offer will be required to undertake to pay the amount specified by that investor on its Customerand Employee Offer Application Form or such lesser amount following any scaling back of theirapplication. The Final Articles will permit the holding of Ordinary Shares under the CREST system.CREST is a paperless settlement system allowing securities to be transferred from one person’s CRESTaccount to another’s without the need to use share certificates or written instruments of transfer.Application will be made for the Ordinary Shares to be admitted to CREST with effect from Admission.Accordingly, settlement of transactions in the Ordinary Shares following Admission may take place withinthe CREST system if any Shareholder so wishes. CREST is a voluntary system and holders of OrdinaryShares who wish to receive and retain share certificates will be able to do so. An investor applying forOrdinary Shares in the Institutional Offer may, however, elect to receive shares in uncertificated form ifsuch investor is a system-member (as defined in the CREST Regulations) in relation to CREST.

Applicants in the Customer and Employee Offer should note that, except in the circumstances describedbelow, dealings in the Ordinary Shares will commence prior to Share Account Statements being madeavailable online.

It is intended that Share Account Statements will be made available online to persons entitled thereto by4 August 2010. Unless and until Admission occurs the Share Account Statement will be of no value.

Settlement of the issue and sale of Ordinary Shares in the Offers is intended to take place on thesettlement date, which will be the day of Admission.

9. Underwriting arrangements

The Underwriting and Selling Shareholders’ Agreements were entered into on 6 July 2010. A fulldescription of them and the Stock Lending Agreement is set out in section 17.4 of Part XIII (AdditionalInformation).

10. Lock-up arrangements

Pursuant to the terms of the Underwriting and Selling Shareholders’ Agreements and certain stand-alonelock-up deeds of the same date, the following arrangements are in place:

The Company

Pursuant to the Underwriting Agreement, the Company has undertaken with each of the Underwritersthat, for a period ending 180 days after the date of the Pricing Statement (the ‘‘Company Lock-upPeriod’’), it will not, and will procure that none of its affiliates (as defined in the Underwriting Agreement)will:

• directly or indirectly, issue, offer, lend, sell, contract to sell or issue, grant any option, right or warrantto subscribe or purchase or allow any encumbrance (as defined in the Underwriting Agreement) to be

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created over or otherwise dispose of, directly or indirectly, any Ordinary Shares (or any securitiesconvertible into or exchangeable for Ordinary Shares or which carry rights to subscribe or purchaseOrdinary Shares) or any interest (within the meaning of section 820 of the Companies Act) in anyOrdinary Shares or enter into any transaction with the same economic effect as, or agree to do, anyof such things (the ‘‘Company Lock-up Actions’’); or

• publicly announce any intention to do any of such things,

in each case without the prior written consent of the JGCs, on behalf of themselves and the otherUnderwriters, provided that this undertaking shall not apply in respect of: (i) the issue of New OrdinaryShares pursuant to the Offers; (ii) Ordinary Shares to be issued upon exercise of warrants or options topurchase or subscribe for Ordinary Shares, or upon conversion of securities convertible into OrdinaryShares, in each case, outstanding on the date of the Underwriting Agreement; (iii) shares to be issued toother members of the Group; and (iv) the grant, in accordance with normal practice, or exercise of optionsfrom time to time under the Company’s share option and incentive schemes in existence on the date ofAdmission and described in section 11 of Part XIII (Additional Information). For the first 45 days of theCompany Lock-up Period, the JGCs may withhold their consent to any of the Company Lock-up Actionsat their sole discretion. From day 46 to day 180 (inclusive) of the Company Lock-up Period, the JGCs’consent to such Actions shall not be unreasonably withheld or delayed.

Directors

Pursuant to the Underwriting Agreement, each of the Directors has undertaken with the Underwriters that,for a period ending 365 days after the date of the Underwriting Agreement, he will not, and will procurethat none of his connected persons (as defined in the Underwriting Agreement) or persons acting on hisor their behalf will:

• directly or indirectly, offer, lend, sell, contract to sell, grant any option, right or warrant to purchase orallow any encumbrance (as defined in the Underwriting Agreement) to be created over or otherwisedispose of, directly or indirectly, any Ordinary Shares (or any securities convertible into orexchangeable for Ordinary Shares or which carry rights to subscribe or purchase Ordinary Shares)or any interest (within the meaning of section 820 of the Companies Act) in any Ordinary Shares orenter into any transaction with the same economic effect as, or agree to do, any of such things; or

• deposit any Ordinary Shares (or any securities convertible into or exchangeable for Ordinary Sharesor which carry rights to subscribe or purchase Ordinary Shares) in any depositary receipt facility; or

• publicly announce any intention to do any of such things,

in each case without the prior written consent of the JGCs, on behalf of themselves and the otherUnderwriters, provided that this undertaking shall not apply in respect of: (i) Ordinary Shares issued tohim (or his connected persons) upon the exercise of options to purchase or subscribe for Ordinary Sharesoutstanding on the date of the Underwriting Agreement; (ii) the exercise of options from time to time underthe Company’s share option and incentive schemes in existence on the date of Admission and describedin section 11 of Part XIII (Additional Information); (iii) the granting of an encumbrance (as defined in theUnderwriting Agreement) over the deposit of Ordinary Shares in a margin account (as defined in theUnderwriting Agreement) by a Director (or his connected persons) after the date of Admission, providedthat, in the event of a margin call or default on the margin account, the Director (or his connected persons)will not settle that margin call or default by selling or permitting the sale of the Ordinary Shares (orotherwise breaching the undertaking described above); (iv) Ordinary Shares sold by such Director (or hisconnected persons) in the Offers (or as otherwise agreed by the JGCs); and (v) Ordinary Sharespurchased in the market by a Director (or his connected persons) after Admission.

These undertakings do not prohibit the Directors, or any of their connected persons (as defined in theUnderwriting Agreement), from:

• accepting a general offer (a ‘‘Take-over Offer’’) made to all the holders of the issued and allottedshares of the Company for the time being (other than shares held or contracted to be acquired by theofferor or its associates within the meaning of section 988 of the Companies Act) made in

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accordance with the City Code on Takeovers and Mergers on terms which treat all such holder alikeand which has:

(i) become or been declared unconditional in all respects; or

(ii) been recommended for acceptance by the directors for the time being of the Company;

• executing and delivering an irrevocable commitment or undertaking to accept a Take-over Offer(without any further agreement to transfer or dispose of any shares in the Company or any interesttherein);

• selling or otherwise disposing of Ordinary Shares pursuant to any offer by the Company to purchaseits own Ordinary Shares which is made on identical terms to all holders of Ordinary Shares in theCompany;

• transferring or disposing of Ordinary Shares pursuant to a scheme of reconstruction undersection 110 of the Insolvency Act 1986 or pursuant to a compromise or arrangement between theCompany and its creditors or any class of them or between the Company and its members or anyclass of them which is agreed to by the creditors or members and (where required) sanctioned by thecourt under Part 26 of the Companies Act;

• taking up or disposing of any rights granted in respect of a rights issue or other pre-emptive shareoffering by the Company;

• voting on (and any disposal directly or indirectly arising in respect of) a scheme of arrangement oranalogous procedure in respect of the Ordinary Share capital of the Company;

• disposing of Ordinary Shares in accordance with any order made by a court of competent jurisdictionor required by law or to or by personal representatives of a Director who dies; or

• effecting any transfer to any connected person (as defined in section 252 of the Companies Act onthe basis that this exception shall apply to the connected person of a Director as if he were a director)of the relevant Director (or his connected persons), provided that in each case prior to making suchtransfer, the relevant transferee gives an undertaking to the Underwriters on substantially the sameterms to that described above.

Selling Shareholders

Pursuant to the Selling Shareholders’ Agreement, each of the Major Selling Shareholders has severallyundertaken with the Underwriters that, for a period ending 180 days after the date of the SellingShareholders’ Agreement, he or it will not, and will procure that none of his or its connected persons (asdefined in the Selling Shareholders’ Agreement) or persons acting on his, its or their behalf will:

• directly or indirectly, offer, lend, sell, contract to sell, or grant any option, right or warrant to purchaseor allow any encumbrance (as defined in the Selling Shareholders’ Agreement) to be created over orotherwise dispose of, directly or indirectly, any Ordinary Shares (or any securities convertible into orexchangeable for Ordinary Shares or which carry rights to subscribe or purchase Ordinary Shares)or any interest (within the meaning of section 820 of the Companies Act) in any Ordinary Shares orenter into any transaction with the same economic effect as, or agree to do, any of such things; or

• deposit any Ordinary Shares (or any securities convertible into or exchangeable for Ordinary Sharesor which carry rights to subscribe or purchase Ordinary Shares) in any depositary receipt facility; or

• publicly announce any intention to do any of such things,

in each case without the prior written consent of the JGCs, on behalf of themselves and the otherUnderwriters, provided that this undertaking shall not apply in respect of: (i) Ordinary Shares issued aMajor Selling Shareholder (or his or its connected persons) upon the exercise of options to purchase orsubscribe for Ordinary Shares outstanding on the date of the Selling Shareholders’ Agreement; (ii) theexercise of options from time to time under the Company’s share option and incentive schemes inexistence on the date of Admission and described section 11 of Part XIII (Additional Information); (iii) thegranting of an encumbrance (as defined in the Selling Shareholders’ Agreement) over the deposit ofOrdinary Shares in a margin account (as defined in the Selling Shareholders’ Agreement) by a SellingShareholder (or his connected persons) after the date of Admission, provided that, in the event of a

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margin call or default on the margin account, the Selling Shareholder (or his connected persons) will notsettle that margin call or default by selling or permitting the sale of the Ordinary Shares (or otherwisebreaching the undertaking described above); (iv) Ordinary Shares sold by a Major Selling Shareholder (orhis or its connected persons) in the Offers and/or under the Over-allotment Arrangements (or asotherwise agreed by the JGCs); and (v) Ordinary Shares purchased in the market by a Major SellingShareholder (or his or its connected persons) after Admission (other than any Ordinary Shares purchasedpursuant to the Over-allotment Arrangements).

These undertakings do not prohibit the Lock-up Selling Shareholders, or any of their connected persons(as defined in the Selling Shareholders’ Agreement), from:

• accepting a Take-over Offer;

• executing and delivering an irrevocable commitment or undertaking to accept a Take-over Offer;

• selling or otherwise disposing of Ordinary Shares pursuant to any offer by the Company to purchaseits own Ordinary Shares which is made on identical terms to all holders of Ordinary Shares in theCompany;

• transferring or disposing of Ordinary Shares pursuant to a scheme of reconstruction undersection 110 of the Insolvency Act 1986 or pursuant to a compromise or arrangement between theCompany and its creditors or any class of them or between the Company and its members or anyclass of them which is agreed to by the creditors or members and (where required) sanctioned by thecourt under Part 26 of the Companies Act;

• taking up or disposing of any rights granted in respect of a rights issue or other pre-emptive shareoffering by the Company;

• voting on (and any disposal directly or indirectly arising in respect of) a scheme of arrangement oranalogous procedure in respect of the Ordinary Share capital of the Company;

• disposing of Ordinary Shares in accordance with any order made by a court of competent jurisdictionor required by law or to or by personal representatives of a Lock-up Selling Shareholder who dies; or

• effecting any transfer of Ordinary Shares to any person with whom the Major Selling Shareholder (orhis connected persons) is connected (the question of whether any such person is so connectedfalling to be determined for this purpose in accordance with the provisions of section 839 of theIncome and Corporation Taxes Act 1988 and/or section 252 of the Companies Act and, in the lattercase, on the basis this exception shall apply to each Major Selling Shareholder (or his or itsconnected persons) as if he (or it) were a director) or any transfer of Ordinary Shares in which onlylegal, but not the beneficial, interest in the Ordinary Shares is transferred, provided that, in eachcase, prior to any such transfer, the relevant transferee has given an undertaking to the Underwriterson substantially the same terms to that described above.

Other Shareholders

Pursuant to certain stand-alone lock-up deeds entered into on the same date as the Selling Shareholders’Agreement, Spencer Nicholas Roditi, the Apple Trust, Mingulay Holdings Limited, Rovida HoldingsLimited, Sayro Ventures Limited and Trident Nominees (Guernsey) Limited and certain other personswho have, or may come to have, interests in Ordinary Shares, who together hold (as at 5 July 2010, thelatest practicable date prior to the publication of this document) approximately 37 per cent. of the issuedshare capital of the Company, have each given undertakings in favour of the Company and theUnderwriters on identical terms to those given by the Lock-up Selling Shareholders and which are subjectto the same exceptions.

11. Costs and expenses

The total costs and expenses of, and incidental to, the Offers which are to be borne by the Company areestimated to amount to £15 million (excluding any amounts in respect of VAT) (assuming the Companypays the discretionary part of the Underwriters’ commission referred to in section 17.4 of Part XIII(Additional Information) and the discretionary elements of its other advisers’ fees). Each SellingShareholder will bear the amount of any stamp duty or SDRT chargeable on the sale of his OrdinaryShares and his pro rata share of any selling commissions.

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12. Employee share schemes

Eligible Employees will also be entitled to participate in the Customer and Employee Offer irrespective oftheir participation in any of the employee share schemes operated by the Group.

13. Holding and dealing in Ordinary Shares

It is a condition of participating in the Customer and Employee Offer that all successful applicants agree,on allocation, to hold their Ordinary Shares in the Ocado Share Account.

The Ocado Share Account, a Company-sponsored nominee arrangement, provides a convenient way ofholding Ordinary Shares, which removes the need to have a share certificate which has to be kept safeand secure. In addition, individuals’ names will not appear on the Company’s shareholder register, whichis a public register, so their details remain confidential. Instead, the Ordinary Shares will be held on behalfof those individuals in the name of the Share Nominee. The Ocado Share Account has been set upexclusively for persons who hold Ordinary Shares in the Company and hold those Ordinary Shareselectronically in a system managed and administered by the Registrar.

Persons holding Ordinary Shares in the Ocado Share Account:

• have the right to receive the annual and other financial information that is sent to the shareholders ofany company should they wish to receive it, and are entitled to attend, speak and vote on a show ofhands and on a poll at general meetings of the Company;

• will receive Share Account Statements showing the number of Ordinary Shares held on theanniversary of them becoming a member and each anniversary thereafter; and

• are entitled to leave the Ocado Share Account at any time and obtain a share certificate instead orhave their Ordinary Shares transferred into another nominee arrangement or deposit account.However, there will be an administration charge for removing Ordinary Shares from the Ocado ShareAccount. Share Account Statements are valuable documents and should be looked after carefully. Ifa Share Account Statement or share certificate is lost, damaged or defaced, a charge may be madefor its replacement.

14. Interests of the Underwriters in the Offers

Certain of the Underwriters have the following interests in the Offers:

• Goldman Sachs International holds 870,300 Ordinary Shares and 3,333,300 Preference Shares;

• Michael Sherwood, who is Co-Chief Executive of Goldman Sachs International, holds 166,700Preference Shares;

• UBS Holdings Cayman Limited, an affiliate of UBS Limited holds 13,600 Ordinary Shares and36,249,900 Preference Shares. UBS Holdings Cayman Limited has provided a non-bindingindication that it may sell up to its entire holding pursuant to the Offers and the Over-allotmentArrangements, (it being the provider of the Over-allotment Option);

• UBS AG, an affiliate of UBS Limited, holds 2,980,100 Preference Shares. Subject to the Offer Pricebeing set not lower than the bottom of the Price Range, UBS AG has committed to sell its entireholding pursuant to the Offers;

• Ranelagh Nominees Limited, an affiliate of Lloyds TSB Bank plc, holds warrants over5,611,200 Ordinary Shares. Subject to the Offer Price being not less than £1.90, it has irrevocablycommitted to exercise prior to Admission provided that it may sell the resulting 5,611,200 NewOrdinary Shares issued to it or its nominee pursuant to the Offers; and

• Lloyds TSB Bank plc holds 17,800 Preference Shares which it may sell pursuant to the Offers.

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PART X

TERMS AND CONDITIONS OF THE CUSTOMER AND EMPLOYEE OFFER

This Part X contains the terms and conditions of the Customer and Employee Offer, pursuant to whichterms Eligible Employees and Eligible Customers may apply to buy Ordinary Shares in the Customer andEmployee Offer.

Introduction

1. For the purposes of these terms and conditions only, references to ‘‘you’’ are to the person applyingonline to buy Ordinary Shares in the Customer and Employee Offer using the Customer andEmployee Offer Application Form.

2. If you apply for Ordinary Shares in the Customer and Employee Offer you will be agreeing with theCompany, the Directors, the Banks and the Receiving Agent to the terms and conditions set outbelow.

Offer to purchase Ordinary Shares

3. Applications must be made online on a Customer and Employee Offer Application Form. Bycompleting and submitting a Customer and Employee Offer Application Form, you, as the applicant:

a. offer to acquire at the Offer Price the maximum number of Ordinary Shares (rounded down tothe nearest whole Ordinary Share) that may be acquired with the amount that you have specifiedin your Customer and Employee Offer Application Form as the amount which you wish to invest(or any smaller amount in respect of which your application to acquire Ordinary Shares in theCustomer and Employee Offer is accepted), subject to the provisions of the Prospectus, theseterms and conditions, the terms of the Customer and Employee Offer Application Form, thePricing Statement, any supplementary prospectus and the Final Articles;

b. agree that your application to acquire Ordinary Shares in the Customer and Employee Offermust be for a minimum investment in Ordinary Shares of £500 (if you are an Eligible Employee)or £1,000 (if you are an Eligible Customer) at the Offer Price and for a maximum investment inOrdinary Shares of £12,000 at the Offer Price;

c. agree that there is no minimum allocation of Ordinary Shares for Eligible Customers in theCustomer and Employee Offer and that, in the event your application is scaled back, you maynot receive the full value of Ordinary Shares you applied to invest in and you may receive noOrdinary Shares;

d. agree that the Ordinary Shares allocated to you will be held in the Ocado Share Account and youauthorise the Company to send you a statement of entitlement by email, at your risk, to youremail address as set out in the Customer and Employee Offer Application Form submitted byyou online and to ensure that the Share Nominee, as nominee for you, is placed on the registerof members of the Company in respect of the Ordinary Shares for which your application isaccepted;

e. in consideration of the Company, the Directors, the Banks and the Receiving Agent agreeingthat they will not, prior to the date of Admission (or such later date as the Company and the JGCsmay agree), sell to any person or assist in the sale to any person of any of the Ordinary Sharescomprised in the Offers other than by means of the procedures referred to in the Prospectus andas a collateral contract between you, the Company, the Directors, the Banks and the ReceivingAgent which will become binding on you on the online submission by you of your Customer andEmployee Offer Application Form, you:

i. agree that, subject to any statutory rights of withdrawal, your application may not berevoked or withdrawn by you until after 31 August 2010 in the event that Admission has nottaken place by that date;

ii. undertake to pay the Offer Price for the Ordinary Shares (which is payable in full and shallbe debited from your bank account via your debit card when requested by the Company) inrespect of which your application is accepted and acknowledge and agree that such

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amount may be debited from your bank account up to 4 Business Days before the OrdinaryShares allocated to you are credited to the Ocado Share Account;

iii. warrant that your payment, the details of which you will provide on your Customer andEmployee Offer Application Form, will be honoured on first presentation and agree that, ifsuch remittance is not so honoured, notwithstanding that the Share Nominee may havebeen entered on the register of members of the Company (as nominee for you) madeavailable online, neither you nor the Share Nominee will be entitled to a Share AccountStatement in respect of the Ordinary Shares applied for or to enjoy or receive any rights,dividend, distribution or other payment in respect of such Ordinary Shares unless and untilyou make payment in cleared funds for such Ordinary Shares and such payment isaccepted by the Receiving Agent (which acceptance shall be in its absolute discretion andon the basis that you indemnify the Company, the Directors, the Receiving Agent and theJGCs and each other Bank against all costs, damages, losses, expenses and liabilitiesarising out of, or in connection with, the failure of your remittance to be honoured on firstpresentation);

iv. agree that, at any time prior to unconditional acceptance by the Receiving Agent of suchlate payment pursuant to sub-paragraph 3(e)(iii) above, the Receiving Agent may (onbehalf of the Company, the Directors and the Banks and without prejudice to any otherrights) terminate the agreement (if any) to allocate such Ordinary Shares to the ShareNominee (as nominee for you) without liability to you and may reallocate the OrdinaryShares to some other person, in which case you will not be entitled to any refund orpayment in respect of such Ordinary Shares and, in the event of termination, any OrdinaryShares which have been issued to you will be sold as soon as is reasonably practicable(and for which purpose you hereby irrevocably authorise the Company, or any personappointed by it for this purpose, to execute on your behalf any instrument of transfer whichmay be necessary to effect such sale) and consent to the proceeds of such sale being paidto and retained by the Company and you will pay the Receiving Agent (on behalf of itself,the Company, the Directors and the JGCs (on behalf of themselves and the other Banks)),on demand, such amount as may be necessary to compensate the Receiving Agent, theCompany, the Directors and the JGCs (on behalf of themselves and the other Banks) forany losses, costs and expenses incurred or expected to be incurred as a result of theremittance not being honoured on first presentation or as a result of termination of theagreement. Any decision by the Receiving Agent to accept payment shall be withoutprejudice to the decision of the Company to accept the whole or any part of your applicationas described in paragraph 8 below;

v. agree that any Share Account Statement to which you may become entitled may not bemade available online pending clearance of your remittance or pending investigation of anysuspected breach of any of the warranties contained in paragraph 13 below;

vi. agree, on request by any of the Receiving Agent, the Company, the Directors and the JGCson behalf of themselves and the other Banks, to disclose promptly in writing to suchrequesting person such information as they may request in connection with your applicationand authorise the Receiving Agent, the Company, the Directors and the JGCs to discloseany information relating to your application which they may consider appropriate;

vii. agree that any Share Account Statement in respect of any Ordinary Shares to which theShare Nominee may become entitled may not be made available online pending clearanceof your remittance, investigation of any suspected breach of these terms and conditions andany verification of identity which is, or which the Receiving Agent, the Company or the JGCson behalf of themselves and the other Banks consider may be, required for the purposes ofthe Money Laundering Regulations 2007;

viii. agree that, if evidence of identity satisfactory to the Company, the Directors, the JGCs onbehalf of themselves and the other Banks and the Receiving Agent is not provided to theReceiving Agent on or before 11.59 p.m. (London time) on 18 July 2010 (or such later dateas the Company and the JGCs (on behalf of themselves and the other Banks) may agree),

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the Company, the Directors, the Receiving Agent or the JGCs (on behalf of themselves andthe other Banks) may terminate your contract of allocation and, in such case, an amountmay be debited from your bank account via your debit card by the Company (or its agents)as compensation for breach of contract and you agree that, in such event, you will have noclaim against any Bank, the Receiving Agent, the Directors, the Company or any of theirrespective officers, agents or employees in respect of the amount so debited by theCompany (or its agents) or otherwise in connection therewith;

ix. agree that your Customer and Employee Offer Application Form is addressed to theCompany, the Directors, the Receiving Agent and the JGCs (on behalf of themselves andthe other Banks);

x. agree that you are not engaged in nor applying on behalf of a person engaged in, or whomyou know or have reason to believe is engaged in, money laundering;

xi. agree that any future communications sent by the Company to you in your capacity as ashareholder of the Company will be in the English language and in electronic form to theemail address supplied in your application. Your consent to receiving all communications inelectronic form may be revoked at any time and will not affect your right to receive adocument or information in hard copy in accordance with section 1145 of the CompaniesAct;

xii. agree that the Company has absolute discretion in determining whether or not you qualifyas an Eligible Customer or an Eligible Employee, as the case may be;

xiii. agree that the Company, the Directors and the JGCs (on behalf of themselves and the otherBanks) reserve jointly the right to alter any arrangements in connection with the Customerand Employee Offer (including the timetable and terms and conditions of application); and

xiv. agree that the contract arising from acceptance of all or part of your application under theCustomer and Employee Offer will be, or will be deemed to be, entered into by you, theCompany, the Directors, the Banks and the Receiving Agent on these terms and conditions(subject to paragraph 3(xii) above) and that any changes, additions or alterations made byyou will have no effect.

4. If your Customer and Employee Offer Application Form is not completed correctly or is submittedafter 11.59 p.m. (London time) on 18 July 2010, or if the payment details supplied with it are incorrector invalid, it is liable to be rejected. In these circumstances, the Company’s decision whether to rejector treat your application as valid shall be final and binding on you. None of the Company, theDirectors, the Banks, the Receiving Agent nor any of their respective officers, agents or employeeswill accept any liability for any such decision and no claim will be made against any such persons inrespect of your non-receipt of Ordinary Shares, or for any loss resulting from the above.

5. Any application may be rejected in whole or in part by the Company in its absolute discretion.

6. The Company and its agents reserve the right to treat as valid any application not complying fully withthese terms and conditions or not in all respects completed and submitted in accordance with theinstructions on the Customer and Employee Offer Application Form. The Company and its agentsreserve the right to waive in whole or in part any of the provisions of these terms and conditions,either generally or in respect of one or more applications. In these circumstances, the decision of theCompany as to whether to treat the application as valid and how to construe, amend or complete itshall be final. You will not, however, be treated as having offered to invest a higher amount than isindicated in your Customer and Employee Offer Application Form.

Acceptance of your offer

7. The Company may accept your application if your application is submitted and validated (or treatedas valid, processed and not rejected) either:

a. by notifying, publishing or announcing the final Offer Price, size of the Offers and the basis ofallocation (in which case the acceptance will be on that basis); or

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b. by notifying acceptance to the Receiving Agent.

8. The acceptance may (at the absolute discretion of the Company, in consultation with the JGCs (onbehalf of themselves and the other Banks)) be of the whole or any part of your application and theamount you have offered to invest may be scaled down or balloted or both if you are an EligibleCustomer. Valid applications from Eligible Employees will be allocated in full. The basis of allocationfor applications from Eligible Customers will be determined by the Company, in consultation with theJGCs (on behalf of themselves and the other Banks). The Company, in consultation with the JGCs(on behalf of themselves and the other Banks) reserves the right to scale down or ballot (or both)applications from Eligible Customers as it, in its absolute discretion, considers appropriate.Accordingly, if you are an Eligible Customer you may not receive the full value of Ordinary Sharesyou applied to invest in and you may receive no Ordinary Shares.

Condition

9. The contract arising from acceptance of applications (in whole or in part) in the Customer andEmployee Offer will be entered into by you (if you are a successful applicant) and the Company.Under this contract, you will be required to acquire the Ordinary Shares at the Offer Price. Thiscontract will be conditional upon the Underwriting and Selling Shareholder Agreements becomingwholly unconditional and not having been terminated before Admission, and Admission becomingeffective on or before 31 August 2010 (or such later date as the Company and the Receiving Agentmay agree with the JGCs (on behalf of themselves and the other Banks).

10. Subject to applicable law, you will not be entitled to exercise any remedy of rescission for innocentmisrepresentation (including pre-contractual representations) at any time after acceptance. Thisdoes not affect any other rights you may have, including, for the avoidance of doubt, any statutorywithdrawal rights.

Return of application monies

11. In the event of a high volume of applications and before allocations are announced, the ReceivingAgent may debit from your bank account via your debit card an amount up to the full amount that youhave specified in your Customer and Employee Offer Application Form. In such circumstances, if anyapplication is not accepted in whole or is accepted in part only or if any contract created byacceptance does not become unconditional, your bank account will be refunded via your debit card.In the meantime, application monies will be retained by the Receiving Agent in an accountdesignated for the purpose of the Customer and Employee Offer to which no interest is credited. Theproceeds of this payment will be held pending acceptance and, if the application is accepted and theconditions of the Customer and Employee Offer as set out in paragraphs 9 and 10 above aresatisfied, will be applied in discharging the total amount due for the Ordinary Shares allocated to you.No fractional entitlements to Ordinary Shares will be allocated and refunds will not be made foramounts below £5, and any such amounts shall be donated to a charity or charities of the Company’schoice.

Applications

12. The number of Ordinary Shares to be allocated in the Customer and Employee Offer will be at theabsolute discretion of the Company in consultation with the JGCs (on behalf of themselves and theother Banks). The Company has absolute discretion to decide in any individual case whether theconditions of eligibility for the Customer and Employee Offer have been satisfied. To participate inthe Customer and Employee Offer, individuals must complete a Customer and Employee OfferApplication Form online. No person may apply jointly with others in the Customer and EmployeeOffer.

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Warranties

13. By completing and submitting a Customer and Employee Offer Application Form, you:

a. confirm that, in making an application, you are not making the application on behalf of any otherperson and you are not relying on any information or representation other than as is contained inthe Prospectus, the Pricing Statement and any supplementary prospectus;

b. agree that none of the Company, the Banks, the Receiving Agent, any Selling Shareholder, theDirectors or any employee of or person acting on behalf of them or any person responsiblesolely or jointly for the Prospectus, the Pricing Statement and/or any supplementary prospectus,or any part of any of them, shall have any liability for any such information or representation(excluding for fraudulent misrepresentation);

c. agree that you have read and understood the Prospectus and you agree to be bound by theseterms and conditions and the terms and conditions of your Customer and Employee OfferApplication Form;

d. acknowledge that any investment decision you take in relation to the Ordinary Shares should bebased on consideration of the Prospectus;

e. agree that, having had the opportunity to obtain and read the Prospectus, the Pricing Statementand any supplementary prospectus, you shall be deemed to have noted all information andrepresentations (including all matters identified in the Risk Factors section of the Prospectus)contained in the Prospectus, the Pricing Statement and/or any supplementary prospectus;

f. agree that no person is authorised in connection with the Offers to give any information or makeany representation other than as contained in the Prospectus, the Pricing Statement and anysupplementary prospectus and, if given or made, any information or representation must not berelied upon as having been authorised by the Banks, the Company, the Directors or any otherperson;

g. agree to the fullest extent permitted by applicable law that you waive any right you may haveunder any law or regulation, other than English law or regulation, to bring an action or claim inany jurisdiction, other than in England, against any person in relation to any and all information,representations, statements or omissions contained in the Prospectus, Pricing Statementand/or any supplementary prospectus or in relation to your application in this Customer andEmployee Offer;

h. confirm that you have reviewed the restrictions contained in paragraph 15 below and warrant, tothe extent relevant, that you comply or have complied with the provisions of that paragraphbelow;

i. warrant that you are not a person who is under 18 on the date of your application;

j. agree that all documents in connection with the Customer and Employee Offer may be sent toyou by post or email (at the Company’s absolute discretion) at your postal or email address setout in your Customer and Employee Offer Application Form and that any such documents will besent at your own risk;

k. warrant that (i) you are eligible to participate in the Customer and Employee Offer as an EligibleCustomer resident in the UK or an Eligible Employee resident in the UK or the Republic ofIreland and (ii), subject as hereinafter provided, the Customer and Employee Offer ApplicationForm is completed and submitted online solely for and on behalf of the applicant and not directlyor indirectly, in whole or in part, for or on behalf of any other person;

l. warrant and undertake that you are not applying as, or as nominee or agent for, a person who isor may be a person mentioned in any of sections 67, 70, 93 or 96 of the Finance Act 1986(concerning depositary receipts and clearance services);

m. warrant that you are not a person or other entity in the United States and that the Customer andEmployee Offer was not made to you (or persons for whom you are acting on anon-discretionary basis) in or into the United States whether through viewing the Offer Website

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from the United States or by the receipt of an email regarding the Customer and Employee Offer,the Prospectus or any related offering documents in the United States or otherwise, and that youare offering to acquire Ordinary Shares in the Customer and Employee Offer from outside theUnited States and not for the account or benefit, on a non-discretionary basis, of a person in theUnited States or with a view to the offer, sale or delivery, directly or indirectly, of the OrdinaryShares to any person in the United States;

n. warrant and undertake that you are not engaged in nor applying on behalf of a person engagedin, or whom you know or have reason to believe is engaged in, money laundering; and

o. agree that any material downloaded from the Offer Website, in relation to the Customer andEmployee Offer, is done at your own risk and that you will be solely responsible for any damageor loss of data that results from the download of any material.

Money laundering

14. You agree that, in order to ensure compliance with any applicable money laundering regulations(including, without limitation, the Money Laundering Regulations 2007), the Receiving Agent may, atits absolute discretion, require verification of identity from any person completing a Customer andEmployee Offer Application Form. Failure to provide the necessary evidence of identity may result inapplication(s) being rejected or delays in the despatch of documents.

Overseas investors

15. No person (other than an Eligible Employee resident in the Republic of Ireland) receiving a copy ofthe Prospectus or accessing the Offer Website in any territory outside the UK may treat the same asconstituting an invitation or offer to him nor should he in any event apply online using the Customerand Employee Offer Application Form. None of the contents of the Offer Website or the Prospectushas been submitted to the clearance procedures of any authorities other than the UK ListingAuthority, as the competent authority in the UK. Any application made by an Eligible Customeroutside the UK will be rejected. Any application made by an Eligible Employee outside the UK or theRepublic of Ireland will be rejected.

General

16. To the fullest extent permitted by law, any liability for representations, warranties and conditions,express or implied and whether statutory or otherwise (including, without limitation, precontractualrepresentations but excluding any fraudulent misrepresentations) are expressly excluded in relationto the Ordinary Shares and the Offers, by the Company, the Directors, each Selling Shareholder, theBanks and the Receiving Agent.

17. Save where otherwise stated or where the context otherwise requires, terms used in these terms andconditions are as defined in the Prospectus (as supplemented by any supplementary prospectusissued by the Company in relation to the Offers and the Pricing Statement).

18. The rights and remedies of the Company, the Directors, the Selling Shareholders, the ReceivingAgent and the Banks under these terms and conditions are in addition to any rights and remedieswhich would otherwise be available to any of them, and the exercise or partial exercise of any one willnot prevent the exercise of others or full exercise.

19. The Company (with the consent of the JGCs (on behalf of themselves and the other Banks))reserves the right to delay the closing time of the Customer and Employee Offer from 11.59 p.m.(London time) on 18 July 2010 by giving notice through a Regulatory Information Service. In thisevent, the revised closing time will be published in such manner as the Company in its absolutediscretion determines subject, and having regard, to the requirements of the UK Listing Authority.

20. The Company may terminate the Offers without any obligation to you whatsoever at any time prior toAdmission. If such right is exercised, the Offers will lapse and no money will be debited from youraccount.

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21. If a supplementary prospectus is published by the Company in relation to the Offers, you will have aperiod of at least two clear Business Days within which you may withdraw your application to buyOrdinary Shares in the Customer and Employee Offer. If a supplementary prospectus is published,you will be sent an email notifying you of this fact and setting out how to withdraw your applicationshould you wish to. Such withdrawals will be effected by email only. Any supplementary prospectuswill be made available (along with information as to how you can withdraw your application) in thesame manner in which the Prospectus is being made available, including at the following places:

a. on the Offer Website;

b. at the registered office of the Company (Titan Court, 3 Bishops Square, Hatfield Business Park,Hatfield, Hertfordshire AL10 9NE); and

c. at the offices of the Receiving Agent (The Registry, 34 Beckenham Road, Beckenham, KentBR3 4TU).

If you do not notify the Company of your intention to withdraw in the required manner within thestipulated period your application to buy Ordinary Shares in the Customer and Employee Offer willremain valid and binding upon you.

22. Your Share Account Statement will be made available online on or before 4 August 2010. If you donot receive notification of your Share Account Statement being available online on or before 4 August2010, you should contact the Registrar. Once the Registrar is satisfied as to such a request, they willarrange for you to be sent a replacement Share Account Statement free of charge. If at any point yourequire a replacement Share Account Statement, you should contact the Registrar, who will arrangefor you to be sent a replacement Share Account Statement at a small cost.

23. You agree that all applications, acceptances of applications and contracts resulting from them underthe Customer and Employee Offer shall be exclusively governed by and construed in accordancewith English law and that you irrevocably submit to the exclusive jurisdiction of the English courts andagree that nothing shall limit the right of the Banks, the Directors, the Receiving Agent or theCompany to bring any action, suit or proceedings arising out of or in connection with any suchapplication, acceptances or contracts in any other manner permitted by law or in any court ofcompetent jurisdiction.

24. You authorise the Banks and their agents, on your behalf, to make any appropriate returns to HMRCin relation to stamp duty or stamp duty reserve tax (‘‘SDRT’’) (if any) on any contract arising onacceptance of your application and in relation to stamp duty or SDRT (if any) payable on any transferof Ordinary Shares as a result of such contract.

25. You agree and acknowledge that:

a. the Banks do not act for you and will not treat you as their customer by virtue of an applicationbeing accepted under the Customer and Employee Offer and you agree that the Banks will notbe responsible for providing to you the protections afforded to their customers and that theBanks do not owe you any duties or responsibilities concerning the price of the Ordinary Sharesor concerning the suitability of the Ordinary Shares for you as an investment or (save asexpressly set out in these terms and conditions) otherwise in connection with the Offers or anytransaction, arrangement or other matter referred to in the Prospectus; and

b. the Banks and any of their respective affiliates may have engaged in transactions with, andprovided various investment banking, financial advisory and other services for, the Companyand certain of the Selling Shareholders, for which they received customary fees. The Banks andany of their respective affiliates may provide such services to the Company and the SellingShareholders and any of their respective affiliates in the future.

26. You authorise the Company or the Receiving Agent and/or their agents to do all things necessary toeffect registration into your name (or the name of the Share Nominee) (as applicable) of any OrdinaryShares acquired by you and authorise any representative of the Company or the Receiving Agent toexecute and/or complete any document of title required therefor.

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27. Only persons applying for Ordinary Shares under the Offers may rely on the information andrepresentations contained in the Prospectus, the Pricing Statement and/or any supplementaryprospectus and, to the fullest extent permitted by law, any liability for the Prospectus, the PricingStatement and/or any supplementary prospectus to any other person is hereby excluded by theCompany, the Directors, any Selling Shareholder and the Banks and any person responsible solelyor jointly for the Prospectus, the Pricing Statement and any supplementary prospectus or any part ofany such document.

28. The dates and times referred to in these terms and conditions are based on the expectation thatAdmission will occur on 26 July 2010 and may be altered by the Company in its absolute discretion(in consultation with the JGCs (on behalf of themselves and the other Banks)) where the Companyconsiders it necessary to do so.

29. You consent to:

a. holding your Ordinary Shares in the Ocado Share Account in accordance with the terms andconditions set out in Part XI (Terms and Conditions of the Ocado Share Account); and

b. the terms and conditions of the Offer Website.

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PART XI

TERMS AND CONDITIONS OF THE OCADO SHARE ACCOUNT

The Nominee Service is a convenient way to hold shares in a Company without needing sharecertificates. Your shares are held by Capita IRG Trustees Limited on trust for you. You will remainthe beneficial owner of your shares and will still be able to benefit from shareholder rights, asdescribed in this document.

This Part XI sets out all the terms and conditions (‘‘Terms and Conditions’’) of the NomineeService provided by Capita IRG Trustees Limited (‘‘CIRGT’’). It replaces any previous terms andconditions which you may have received. These Terms and Conditions together with your signedApplication Form or Form of Acknowledgement constitute an agreement which is legally bindingon CIRGT and you.

For your own benefit and protection you should read these Terms and Conditions carefully. If youdo not understand any point please ask for further information.

Please note that you may remove all or part of your Shares from the Nominee Service at any time.The procedure to follow is set out in clause 19.

These Terms and Conditions will only take effect following the scaling and allocation of shares byOcado Group plc, when the underlying Shares are delivered to the Nominee.

The Nominee Service is administered by CIRGT, or any successor administrator that may be appointed.CIRGT is authorised and regulated by the Financial Services Authority (‘‘FSA’’) and is entered on the FSAregister with registration number 184113. Further information may be obtained from the FSA’s Registerby visiting the FSA’s website http://www.fsa.gov.uk/register or by contacting the FSA on 0845 606 1234.The FSA’s current address is 25 The North Colonnade, Canary Wharf, London E14 5HS.

The main business of CIRGT is the provision of nominee, administration and trustee services. Enquiriesabout the Nominee Service, or these Terms and Conditions, should be addressed to CIRGT either bypost to Capita IRG Trustees Limited, Nominee Service, The Registry, 34 Beckenham Road, Beckenham,Kent BR3 4TU or by e-mail to: custodymgt@capitaregistrars.com

TERMS AND CONDITIONS

1. Definitions and interpretation

1.1 In these Terms and Conditions only the following words and expressions have the meanings andinterpretation set out below:

‘‘Affiliated Company’’ means a company in the same group of companies as CIRGT;

‘‘Agreement’’ means the legally binding agreement between us and you,incorporating these Terms and Conditions;

‘‘Applicable Regulations’’ means all the statutory and other rules (including FSA Rulesand FSMA), regulations and provisions in force from time totime, applicable to us or to the provision of the NomineeService, including the rules, principles and codes of practicestipulated by any regulatory authority to which we are subject;

‘‘Application Form’’ means an application form to be completed by a personrequesting to become a Member;

‘‘Business Day’’ means any day which is not a Saturday or Sunday and on whichthe banks are open for business in London and in any other citywhere the Shares are listed;

‘‘Company’’ means the corporate client of CIRGT whose Shares you elect tohold through the Nominee Service;

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‘‘CIRGT’’ means Capita IRG Trustees Limited, a company registered inEngland with registration number 2729260 and its registeredoffice as above, which is authorised and regulated by theFinancial Services Authority and is entered on the FSA registerwith registration number 184113;

‘‘CREST’’ the computer based system operated by Euroclear UK &Ireland Limited (a subsidiary of Euroclear SA) for the transfer ofuncertificated securities;

‘‘FSA’’ means the Financial Services Authority;

‘‘FSMA’’ means the Financial Services and Markets Act 2000 (asamended from time to time);

‘‘FSA Rules’’ means principles, guidance and rules issued by the FSA fromtime to time;

‘‘Investor Code’’ means the unique reference number given to every NomineeAccount;

‘‘Nominee’’ means Capita IRG Trustees (Nominees) Limited (a wholly-owned subsidiary of CIRGT). Where Shares are not held byCapita IRG Trustees (Nominees) Limited, they will be held byCIRGT in a suitably designated account or by any othernominee appointed from time to time by CIRGT;

‘‘Nominee Account’’ means the client account, which we open for each Member, inorder for that Member to have access to the Nominee Service;

‘‘Nominee Register’’ the register of beneficial holders of Shares held through theNominee Service maintained by CIRGT showing, amongstother things, the name, address and number of Shares held onyour behalf together with similar details in respect of every otherMember;

‘‘Nominee Service’’ means the share nominee custody service as described inthese Terms and Conditions;

‘‘Prospectus’’ means the prospectus published by Ocado Group plc in respectof the initial public offering of the Shares;

‘‘Representative’’ means a person who is authorised to act on your behalf inrelation to your Nominee Account and who has provided us withsuch proof of their authority to act, as we may reasonablyrequire. Proof may include but shall not be limited to a dulyexecuted Power of Attorney, Court of Protection Order andGrant of Representation;

‘‘Share’’ means the shares or other securities of the Company held or tobe held on your behalf through the Nominee Service;

‘‘Specified Event’’ means any of the events listed in clause 21.1;

‘‘we/us’’ means Capita IRG Trustees Limited and, where relevant, theNominee, or any successor company appointed to replace us;and

‘‘you’’ or ‘‘Member’’ the person(s) on whose behalf we are holding the Shares or, ifappropriate, your Representative(s) and ‘‘your’’ and ‘‘yourself’’shall be construed accordingly.

1.2 The headings to the clauses are for convenience only and shall not affect the interpretation orconstruction of these Terms and Conditions. References to ‘‘clauses’’ are references to clauses ofthese Terms and Conditions.

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1.3 Reference to any statute or statutory provision includes a reference to that statute or statutoryprovision as from time to time amended extended or re-enacted and FSA Rules as amended fromtime to time.

1.4 Any phrase introduced by the terms including, include, in particular, for example or any similarexpression shall be construed as illustrative and shall not limit the sense of the words precedingthose terms.

1.5 Terms not otherwise defined in these Terms and Conditions shall have the same meaning given tothem as in the Prospectus.

2. How to join the Nominee Service

2.1 Who is eligible to become a Member

(a) The Nominee Service is only available to individuals (including Representatives) over theage of 18, who are resident in the United Kingdom (excluding the Channel Islands and Isleof Man) or the Republic of Ireland; or

(b) Any individual over the age of 18 located in a relevant jurisdiction, other than those specifiedin 2.1(a), as agreed between CIRGT and the Company, in which case you must satisfyyourself that under your local law you are eligible to participate in the Nominee Service.

2.2 How to become a Member

(a) You will become a Member of the Nominee Service if you make a successful application forOrdinary Shares under the Customer and Employee Offer. You will also become a Memberof the Nominee Service if you (i) hold, as at 24 June 2010, vested options issued under theOcado 2001 Executive Share Option Scheme; and (ii) elect to hold in the Nominee Service,any Shares not sold on your behalf to meet the costs and expenses of the exercise of suchoptions.

(b) If such application or election is successful, you agree to be bound by these Terms andConditions.

(c) If we agree to hold your Shares in the Nominee Service, we will open a Nominee Account inyour name. When the Nominee Account is opened for you, you will be provided with anInvestor Code. You are responsible for keeping your account details secure and you mustnot disclose details to any other person (who is not your Representative).

(d) As the Nominee Service includes regulated activities, in accordance with the requirementsof the FSA Rules, we are required first, to classify our customers and secondly, to notify ourcustomers as to the client category in which we have classified them. For the purposes ofthe FSA Rules, we are classifying you as a ‘Retail Client’. These Terms and Conditions, theCustomer and Employee Offer Application Form and any other Application Form will, for thepurposes of satisfying the FSA Rules, be regarded as the Client Agreement.

(e) The Nominee Services are provided by us to you and not the Company. We are not actingas agent for the Company in providing the Nominee Service although we have beenrequested to provide a nominee service to Members by the Company. We are not acting asprincipal in relation to any transactions with you.

2.3 Verification of Identity and Account Opening

(a) To comply with Applicable Regulations (including compliance with the UK MoneyLaundering Regulations), we are required to verify the identity of our customers. Youauthorise us to make credit reference, identity (including searching the electoral roll), fraudand other such searches (including the use of any electronic database(s)) and enquiriesthat may be necessary for these purposes of opening the Nominee Account with us. Thecredit reference agency may check the details you supply against any particulars on anydatabase (public or otherwise) to which they have access. They may also use your details inthe future to assist other companies for verification purposes. You also authorise us to

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undertake further similar searches at regular intervals. A record of the search will beretained. You may also be required to provide additional information.

(b) You may be required to provide additional information such as a recent (i.e. not older thanthree months) original council tax bill, utility bill or bank statement. In such instances, havingmade a record of this information, we will return such documents to you.

(c) Account opening and registration is always at our discretion. We may therefore refuse toopen the Nominee Account for you without informing you of our reasons for doing so andyou agree that we will have no liability to you for any loss you may incur if we decide not toopen a Nominee Account in your name.

2.4 Joint holdings

(a) Shares held jointly must be held in a joint Nominee Account. We will open joint NomineeAccounts for up to four joint holders, and all references in these Terms and Conditions to‘‘you’’ or a ‘‘Member’’ apply to each joint holder individually, except where the contextotherwise requires.

(b) We will only accept transfer instructions completed by or on behalf of all the joint holders.

(c) Each joint holder agrees that:

(i) all obligations, undertakings and agreements on our part are given to the jointholders taken together and not separately to each of them; and

(ii) all obligations, undertakings, agreements and liabilities arising out of or pursuant tothese Terms and Conditions constitute joint and several obligations of each jointholder.

3. How the Nominee Service works

3.1 We will hold your Shares in the name of the Nominee in uncertificated form on your behalf astrustee subject to the provisions of the Company’s Articles of Association and any other documentgoverning the terms on which the Shares are issued or transferred. Although we will therefore bethe legal owner of the Shares, you will remain the beneficial owner of the Shares which means that,subject to our legal obligations, we will treat the Shares as if they belonged to you.

3.2 The Shares will be registered in the name of the Nominee and we will hold the Shares as youdirect. Neither CIRGT nor the Nominee will have or claim any interest in your Shares except underclauses 10.6, 18.5 and 21.2 of these Terms and Conditions or under any separate arrangementwhich you may have with CIRGT. CIRGT will be responsible to you for any acts or omissions of theNominee in connection with your Shares.

3.3 We will maintain the Nominee Register. In connection with your holding of Shares, you agree toprovide promptly any information which the Company is entitled to request from the Nominee inrespect of those Shares registered in the Nominee’s name (for example, this may includeinformation required to satisfy nationality declaration requirements or the disclosure of informationrelating to beneficial ownership of the Company’s share capital).

3.4 You can obtain the appropriate forms to transfer Shares or to provide us with instructions by writingto Capita IRG Trustees Limited, Nominee Service, The Registry, 34 Beckenham Road,Beckenham, Kent, BR3 4TU, or, by emailing custodymgt@capitaregistrars.com. You should statethe name of the Company and quote your Investor Code. Except where otherwise stated in theseTerms and Conditions, we will only act on written instructions which contain your Investor Code.Your Investor Code is shown on your personal statement which will be sent to you by us inaccordance with clause 9.

3.5 We will only accept transfers of Shares into the name of the Nominee and to be held in yourNominee Account if there is no change of beneficial owner in the Shares being transferred and allapplicable stamp duty and/or stamp duty reserve tax has been paid.

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3.6 You may instruct us to hold your Shares in the name of another person (provided they are over18 years of age and eligible) by issuing written instructions on the appropriate form stating thatsuch a transfer is by way of a gift to another person (for example, a family member). The proposedrecipient must complete the Application Form to indicate his or her agreement to the Terms andConditions. You should seek independent tax advice if you are in any doubt as to the tax treatmentof such a gift. Other than pursuant to such an instruction, you cannot transfer your Shares toanother person in the Nominee Service.

3.7 Except for any transfer pursuant to clause 3.6, if you wish to transfer your Shares you must firsteither:

(a) ask for your Shares to be transferred into your own name in certificated form; or

(b) instruct us to transfer your Shares to a third party in CREST (for example, a broker throughwhich you wish to sell) if this option is available.

We will arrange for this on receipt of your written instruction to do so on the appropriate form andpayment of any applicable charges (including stamp duty and/or stamp duty reserve tax). If youask for your Shares to be transferred into your name, they will be registered in your name on themain register of shareholders of the Company and a share certificate will be issued to you inaccordance with the relevant provisions of its Articles of Association. If all your Shares aretransferred into your name or to a third party in CREST, this means that you will leave the NomineeService.

3.8 All movements of Shares, which may include sales, purchases and transfers to and from theNominee Account are subject to any applicable rules of the London Stock Exchange plc or othermarket on which the transaction is effected.

3.9 You may not cancel or change any instructions in relation to a transfer of Shares once they havebeen sent to us. We may refuse to act on instructions from you:

(a) which are not given on the correct form or given on a form that has been incorrectlycompleted;

(b) which are not given in writing or are incomplete; or

(c) if we believe that complying with such instructions would breach the FSMA, the FSA Rulesor any other applicable legal requirement.

We may also delay acting on your instructions if we reasonably feel that it is necessary (i) to obtainadditional information from you to comply with any legal or regulatory requirement (includingcompliance with the UK Money Laundering Regulations) or (ii) to investigate any concerns we mayhave as to the validity of your instructions. Where further enquiries are required, you authorise usto make credit reference, identity (including searching the electoral roll and any other electoraldatabases), fraud and other enquiries that we reasonably deem necessary for these purposes. Weaccept no liability for any financial loss arising from such a delay. Instructions that are not acceptedwill be returned to you, where appropriate.

3.10 Instructions to transfer are acknowledged by the issue of a statement. Any other instructions willonly be acknowledged by us acting on them and are not otherwise acknowledged.

4. Our service

4.1 We will not conduct investment business with you on our premises or in person. We offer theNominee Service, only in relation to the Shares in the Company on these terms. Unless otherwiseagreed in writing, there are no restrictions on the markets or types of investment in which we maycarry on business on your behalf.

4.2 We will deal with you on an execution-only basis at all times. This means that our servicesare limited to the execution of your instructions. We shall not provide you with any adviceon the merits or suitability of you holding your Shares or deciding to have your Shares heldthrough the Nominee Service, or any transaction contemplated by these Terms andConditions.

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4.3 We will never provide you with any investment, trading, tax or financial advice or any investmentmanagement services. Nothing in these Terms and Conditions should be taken as arecommendation to buy, sell or hold shares in any company. You should rely on your ownjudgment when deciding whether or not to enter into any transaction contemplated by thisAgreement or seek any advice or assistance you may need from an appropriateindependent professional adviser.

4.4 CIRGT provides only a Nominee Service to you in relation to the Company’s Shares, whichare traded on a regulated market. CIRGT will not assess the suitability of the instrument orthe service provided or offered to you. As a result, the FSA rules on assessing suitability donot apply. Therefore, we will not assess whether:

(a) the relevant product or service meets your investment objectives;

(b) you would be able financially to bear the risk of any loss that the product or service maycause; or

(c) you have the necessary knowledge and experience to understand the risks involved.

CIRGT is also not required to assess the appropriateness for you of the Nominee Service or anytransaction connected to the Nominee Service.

5. Communications between you and us

5.1 General

(a) You may give us instructions by email, via a designated web portal (where the Companyhas agreed to this service) or by post. All communications between you and us, pursuant tothese Terms and Conditions, must be in English.

(b) Except as otherwise stated in these Terms and Conditions, all communications sent by youunder these Terms and Conditions must be given in writing and sent to:

Capita IRG Trustees Limited, Nominee ServiceThe Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU

(c) You should quote:

• the name of the Company whose Shares you hold through the Nominee Service;

• your full name; and

• your Investor Code (which can be found on your personal statement)

in all communications with us relating to your Nominee Account. You should quote yourInvestor Code in all communications with us relating to your Nominee Account (for exampleany change of address or instructions about receipt of dividends).

(d) We do not have to establish the authority of anyone quoting or using your Investor Codeprovided that we have acted with all due care in accepting those instructions. We shall notbe liable for forged or fraudulent instructions. If you are aware or suspect that your InvestorCode is no longer confidential then you should contact us as soon as possible.

(e) You will be responsible for all instructions in respect of transactions contemplated by theseTerms and Conditions and for the accuracy of all information given to us.

5.2 Representatives

(a) You may also appoint a Representative in writing to give us instructions on your behalf. Youmay change your Representative or cancel the appointment of your Representative bywritten notice to us, but we shall not be bound by any such variation until we have actuallyreceived your written notice and obtained such proof of his authority to act as we mayreasonably require. Proof may include but shall not be limited to a duly executed Power ofAttorney, Court of Protection Order and Grant of Representation.

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(b) We shall be entitled to act upon the instructions of your Representative unless and until wehave been sent written notice by you that their authority has been revoked. We shall beentitled to act upon any instructions or orders transmitted using your Investor Code. Youagree that all instructions received from your Representative shall be treated as yourinstructions and you accept full responsibility in respect of any instruction or any error in anyinstruction given by you or a Representative.

5.3 Communications with you

(a) You authorise us to communicate with you by letter or email, unless specifically requestedotherwise by you in writing.

(b) All communications sent by us will be sent to your last address as recorded on the NomineeRegister or sent by electronic means to your last email address notified to us.Communications sent to you by post will be treated as received by you on the secondBusiness Day following the day they were sent in the case of an address in the UnitedKingdom, or on the fifth Business Day following the day they were sent in the case of anaddress outside of the United Kingdom. It is the responsibility of any joint holder who hasbeen sent the communication or payment to inform and account to the other joint holders.

(c) You are responsible for keeping your details on the Nominee Register up-to-date, bynotifying us in writing of any change of name, address, bank account details, telephonenumber or email address and providing us with the supporting documentation whererequired (e.g. in the case of a change of name, the deed poll or marriage certificate).

(d) Any documents or cheques sent to you by us and any documents or cheques sent by you tous will be sent at your risk and we accept no liability prior to receipt by us of any document orcheque or, where relevant, after despatch of any document or cheque to you.

6. Company meetings

6.1 We will send you information about shareholder meetings of the Company every time we receivenotice that a shareholder meeting is being convened. We will also provide an instruction form(‘‘Form of Instruction’’) and you will be to able use this to instruct the Nominee how to cast votes inrespect of the Shares held in your Nominee Account on any poll called at the meeting. In suchcase, we must have received the relevant instructions from you on a correctly completed formbefore the deadline notified to you on the relevant form. In the absence of your instructions, novotes will be exercised in respect of your Shares.

6.2 Depending on the Articles of Association of the Company, you may also be able to instruct theNominee to appoint yourself or another person of your choice, including the chairman of themeeting, as your proxy in respect of the Shares held in the Nominee Account. This will enable youor the proxy to attend and vote on a poll and, provided this is possible legally and is permitted bythe Articles of Association of the Company, on a show of hands.

6.3 Please note that the procedures described in this clause 6 will be subject to any matters regardingvoting, attendance at meetings etc provided for in the Company’s Articles of Association and anypolicy decisions implemented by the Company in respect of the conduct of general meetings.

6.4 Except as provided for in this clause 6 and when you provide instructions to us, we shall have noduty or responsibility to attend shareholders’ meetings on your behalf or to vote in respect of yourShares.

7. Information from the company

7.1 We will ensure that, any copies of summary financial statements and interim accounts sent by theCompany to its registered shareholders and received by CIRGT are also sent to you (or madeavailable to you electronically unless you specifically request otherwise).

7.2 If you wish to receive a copy of the full annual report and accounts of the Company, you shouldnotify us in writing.

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7.3 All other documents issued by the Company to registered holders generally will be forwarded by usto Members, at or around the same time as registered holders electronically unless you specificallyrequest otherwise.

8. Dividends, payments and corporate actions

8.1 Subject to clause 8.4, we will on your behalf claim and receive cash dividends and otherentitlements accruing on your Shares. Cash dividends and other entitlements will be distributed toMembers as soon as reasonably practicable after receipt by us from the Company, by means ofcheque or, at our discretion, electronic payment. Bank fees in respect of electronic payment ortelegraphic transfer shall be charged to the Member’s account. Payments will be made in thecurrency in which dividends are normally paid in accordance with the Company’s dividend policyfrom time to time.

8.2 If required to do so to comply with any legal or regulatory requirements, we may deduct or withholdfor such purposes sums on account of tax and pay the net amount to you.

8.3 If a payment made to you in respect of your Shares is returned to us and after reasonable enquirywe cannot find your current address, we will not send you another payment until you notify us inwriting of your new address.

8.4 If the Company offers its shareholders (including any Members) the right to choose to receivefurther Shares instead of a cash dividend pursuant to the terms of a dividend reinvestment planand if you wish to participate in the plan and validly elect to receive further Shares, we will ensurethat we receive the relevant Shares and hold them on your behalf in the Nominee Account and anycash residue that arises will be held by us in accordance with clause 11.

8.5 In the event of a takeover, a capital reorganisation, conversion or other corporate action relating tothe Company, we will endeavour to notify you promptly and implement any instructions you give usprovided that the Company gives us adequate notice of the proposals and also that we receiveyour instructions in good time so as to allow us to take appropriate action (however we will not beliable if, for any reason, any notification by us does not reach you in time). We will however not beobliged to do anything in such an event unless the Company gives us adequate notice and wereceive written instructions from you in reasonable time to allow us to take action in respect of theShares held in your Nominee Account.

8.6 We will not accept a takeover offer or other offer for any of the Shares held in your NomineeAccount in the absence of your instructions except where your Shares are compulsorily acquired.In the event of a compulsory acquisition, we will accept the basic terms of the acquisition on yourbehalf, but will not exercise choices or elections, in the absence of your specific instructionsreceived before relevant deadline.

8.7 Where the Company issues offer documents in respect of an optional corporate action (forexample, a tender offer, rights issue, placing and open offer, merger, scheme of arrangement oramalgamation or reconstruction) we are not obliged to forward such documents to you. Whereappropriate you should contact the Company directly to obtain offer documents.

8.8 We will not be responsible for taking any corporate action in respect of the Shares held in yourNominee Account and may allow the event to lapse if your instructions:

(a) are not received by us by the stated time;

(b) are incomplete or given by a third party who does not have the relevant authority; or

(c) require payment on your behalf and you have insufficient funds in your Nominee Account.

8.9 Unless we receive instructions to the contrary, you authorise us to take all actions describedbelow:

8.9.1 make payments to ourselves or others for properly incurred expenses in handling yourShares (for example costs of translation of foreign documents, foreign currency conversionor bank charges) or other matters relating to our duties under these Terms and Conditions;

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8.9.2 receive and collect all income with respect to Shares and to credit cash receipts to yourNominee Account;

8.9.3 execute in your name such ownership and other certificates as may be required to obtainthe payment of income from the Shares;

8.9.4 pay or cause to be paid from your Nominee Account any and all taxes, levies orwithholdings imposed on the Shares by any governmental authority in connection withcustody of and transactions in such Shares;

8.9.5 use reasonable efforts to promptly reclaim any foreign withholding tax relating to theShares; and

8.9.6 make payments to ourselves for our reasonable fees if we are required by any ApplicableRegulation to carry out additional services to those set out in these Terms and Conditions.

9. Statements

9.1 You will receive an opening balance statement on joining the Nominee Service showing thenumber of Shares you have. Further statements will be sent to you at least once a year (usually, atthe same time as the Company’s Annual Report and Accounts is despatched to shareholders),together with details of the composition of your Nominee Account as at the end of the periodcovered by the statement. You will also receive a statement after a change in the number of yourShares showing your new balance. If you sell or transfer all of your Shares or in the event that theNominee Service ceases to be provided to you for any reason, a closing statement will be issued toyou. These statements are provided free of charge. If you require an interim statement or duplicatestatement of your holding in writing, we may make a charge to supply it (see clause 10.1).

9.2 It is your responsibility to check any statement which you receive from us. If you have any query orconcern in relation to the matters disclosed in the statement you must contact us as soon aspossible but, in any event, within two months of receipt of the statement. We shall correct anymistaken credits or debits to the records maintained for your Nominee Account and will notify youof any changes relevant to you.

9.3 If we have sent documents to your address on two separate occasions and they have beenreturned and, after making all reasonable enquiries, we cannot find your current address, we willnot send any more documentation to you until you provide us with your correct address.

10. Charges, expenses and payments

10.1 There is no initial charge for becoming a Member of the Nominee Service. We may make chargesin respect of other operations, for example, the transfer of Shares and the issue of duplicatedocumentation. Duplicate documentation includes duplicate dividend warrants and duplicateannual statements.

10.2 A copy of our charges are set out at the end of these Terms and Conditions and additional copiesmay be obtained on request by writing to Capita IRG Trustees Limited, Nominee Service, TheRegistry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.

10.3 Our charges are subject to review and modification from time to time in the future for the followingreasons:

10.3.1 to reflect reasonable changes in the way we provide the Service to you;

10.3.2 as a result of new services which we may make available to you;

10.3.3 where reasonably required as a result of changes in market conditions or market practice;

10.3.4 to take account of changes or anticipated changes to, or to comply better with, applicablelaws or the interpretation of those laws, regulatory requirements, industry guidance orcodes of practice that we follow, or the way that we are regulated;

10.3.5 to reflect a decision or recommendation of a court, ombudsman, regulator or similar bodywhich is relevant to us or to the Service; or

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10.3.6 to take account of, in a proportionate manner, the cost to us of providing the Service.

10.4 We will give you at least 30 days’ prior notice of any increase in our charges payable by you. If youare unhappy with such increase, you may cancel your agreement with us at any time withoutcharge within 30 days’ of our sending you the notice of such increase.

10.5 In addition to the above charges, you will be charged Value Added Tax (VAT) on any fees andcharges payable by you (for example, broker’s fees).

10.6 In addition to our fees and charges, you are responsible for paying any stamp duty and/or stampduty reserve tax applicable to share transactions, VAT, other duties and taxes in respect of yourShares, where applicable. You should note that there may be other taxes or costs that may existthat are not paid through us or imposed by us.

10.7 You may make any payments due to us under this Agreement as follows:

(a) by authorising us to deduct the charges from your Nominee Account or annual dividends, ifany by indicating this on the Customer and Employee Offer Application Form orsubsequently to us in writing; or

(b) if no such authority is provided under (a) above, you may pay by personal cheque crossedand made payable to ‘Capita IRG Trustees Limited’, drawn on a United Kingdom bank orbuilding society account.

10.8 If any payment is not received by us on the due date for payment then, without limitation of anyother rights which we may have, we will be entitled to charge interest on the overdue amount (bothbefore and after judgment) at the rate of 1 per cent. above the sterling base rate from time to time ofour main UK bank from the due date until the actual date of payment.

10.9 Subject to clause 10.8 and 21.2 below, we and our agents will not have any lien (right to keeppossession of) or claim security interest in your Shares.

10.10 We do however reserve the right to sell any of your Shares or connected rights and to retain thevalue of the amount which at any time is due and payable to us in respect of the provision of theNominee Service. In these circumstances, you authorise us to execute any stock transfer form orother document or give any instruction necessary to give effect to any such sale and, by appointingus to provide the Nominee Service under these Terms and Conditions, you acknowledge anddeclare that in these circumstances we shall have a legal charge over your Shares and your rightsand interests in or in relation to your Nominee Account. If you owe us money in respect of theprovision of the Nominee Service, we reserve the right not to act on instructions from you until youhave paid us in full.

11. Client money

11.1 We will treat all money, including dividend payments and other entitlements of a similar nature,awaiting distribution to you as client money in accordance with the requirements of the FSA Ruleson client money. Your money will be segregated from our own funds. We will hold all money held insterling in a client bank account in the United Kingdom, with an approved bank in the UnitedKingdom. Client Money in a foreign currency will be held in a client bank accountdenominated in the relevant foreign currency with an approved bank in the UnitedKingdom. No interest shall be payable to you in respect of such client money. The money willnot be used by us in any transactions other than as specified in these Terms and Conditions.

11.2 Please note that, whilst the cash balance for each Member will be recorded separately, it will bepooled with the funds of other Members. Where a pooling event occurs, such as a default byCIRGT or the Nominee or their bankers, you will not have a claim against a specific sum of moneyin a specific account; your claim would be against the client money pool, held by us in general. Thefunds may then be distributed on a pro rata basis to all Members which could result in eachMember receiving less back than that which is held on their behalf before such an event.

11.3 You agree that we may from time to time transfer your money to an intermediate broker, asettlement agent, an exchange or a clearing house located in the United Kingdom or in a

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jurisdiction outside the United Kingdom to pay sums due in respect of transactions effected with orthrough such persons on your behalf. Where your money is transferred to an intermediate broker,a settlement agent, an exchange or a clearing house located outside the United Kingdom, the legaland regulatory requirements applying to them will be different from that of the United Kingdom and,in the event of their failure, this money may be treated in a different manner from that which wouldapply if the money was held by an intermediate broker, settlement agent, an exchange or aclearing house in the United Kingdom. We shall not be liable for any failure whatsoever, andhowever caused, by such persons to return your money which is held by them unless it wascaused by our fraud, wilful default, negligence or breach of the FSA Rules or FSMA.

11.4 You agree that any balance due to you which is unclaimed after six years will cease to be treatedas Client Money, as defined under the FSA Rules, and we shall be entitled to remove any suchbalance from your Nominee Account and retain it subject to us having taken reasonable steps tolocate you and to give you at least 28 days from the date of notification to make a claim. Weundertake to make good any valid claim which may subsequently be made against any balancesretained in this way and reserve the right to request such evidence as we feel reasonablynecessary to confirm the identity of the person claiming these funds in order to validate any claimprior to settlement in respect of funds so removed from the Client Money account. We will not beliable for any losses or claims for interest whatsoever in respect of such amounts unless suchlosses or claims were caused by our fraud, wilful default, negligence or breach of the FSA Rules orFSMA.

12. Fractional benefits

Due to us holding your investments in the Nominee Account on a pooled basis, additional amountsmay arise that would not otherwise have occurred had such investments been registered in yourown name, (for example, following certain corporate actions). You consent that we shall determinein our sole discretion, having regard to the size of the balance and the number of participants,whether we shall distribute the balance to you or retain the balance for our own account.Consequently, you may not be entitled to these additional amounts.

13. Pooling

While details of your Shares are recorded in your Nominee Account, we will pool your Shares withother customers’ Shares and as a result individual entitlements may not be identifiable by separatecertificates or other physical documents of title or equivalent electronic record. In the event of anunreconcilable shortfall following any default by a custodian appointed by us, you may not receiveyour full entitlement and any shortfall may be shared by all persons in proportion to their originalholdings in the pool.

14. Risks

14.1 There are risks involved in investing in and holding Shares. As we only provide a NomineeService, we take no responsibility for the decision of a Member to buy, sell, hold or exerciserights in relation to Shares. A share is a portion of the capital stock of a company whichtypically entitles the holder to vote at general meetings, receive income in the form ofdividends and to share in the surplus assets of the company in the event of winding up.

14.2 The market information relating to the past performance of Shares is not an indication totheir future performance. The value of Shares or income from them may go down as well asup. As Shares are valued from second to second, their bid and offer value fluctuates,sometimes widely. The value of Shares may rise or fall due to the volatility of world markets,interest rates and capital values or, for Shares held in overseas markets, due to changes inthe exchange rate in the currency in which the investments are denominated. You may notnecessarily get back the amount you invested.

14.3 Instructions given by you or on your behalf constitute a binding contract and cannot beamended or cancelled after they have been given.

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14.4 Taxes may affect the net value of your investments and income received from them. Levelsand bases of, and relief from, taxation depend on the individual circumstances of eachcustomer and are subject to change as UK tax legislation may change from time to time. Aswe only provide a Nominee Service, we do not accept any responsibility for tax advice.

14.5 There are risks involved in the transactions in Shares with which we may be involved. In thecase that your money is transferred to an intermediate broker, a settlement agent, anexchange or clearing house located outside the United Kingdom, your money might not beas well protected as would be the case if held by a bank or other financial institution in theUnited Kingdom.

15. Compliance with applicable regulations

15.1 The Terms and Conditions and all transactions between you and us are subject to ApplicableRegulations. If there is any conflict between these Terms and Conditions and any ApplicableRegulations, the Applicable Regulations will prevail to the extent necessary to avoid the conflict.Nothing in these Terms and Conditions will exclude or restrict any obligations which we have toyou under the Applicable Regulations.

15.2 We may refrain from doing anything which could or might, in our reasonable opinion, be contrary toany Applicable Regulations which would or might otherwise in our reasonable opinion render usliable to any person. We may do anything which, in our reasonable opinion, is necessary to complywith any such Applicable Regulations or to avoid any such liability.

15.3 CIRGT is authorised and regulated by the FSA to provide the Nominee Service in the UnitedKingdom and nothing in these Terms and Conditions requires or implies that such serviceswill be provided in any territory in which CIRGT is not appropriately authorised.

16. Representations and warranties

16.1 By applying to become a Member, you warrant and represent to us that:

(a) all information that you supply to us is complete, true, accurate and not misleading in anymaterial respect;

(b) you enter into this Agreement and any transactions contemplated by this Agreement asprincipal and not as another person’s agent or representative;

(c) you are not under any legal disability with respect to, and are not subject to any law orregulation which prevents your performance of, this Agreement and any transactionscontemplated by this Agreement;

(d) you are the legal and beneficial owner of all property provided by you to us under thisAgreement and you are entitled to pass to us full legal ownership of such property, free fromall liens, charges and encumbrances whatsoever and you will not create any securityinterest of any kind over such property;

(e) you have obtained all necessary consents and have the authority to enter into thisAgreement and any transaction contemplated by this Agreement; and

(f) you are in compliance with all Applicable Regulations to which you are subject including,without limitation, all tax laws and regulations, exchange control requirements andregistration requirements.

16.2 The above warranties and representations shall be deemed to be repeated each time you provideus with instructions or enter into any transaction contemplated by this Agreement.

16.3 You undertake that, throughout the duration of this Agreement, you will promptly notify usof any change to the details supplied by you or any change or anticipated change in yourfinancial circumstances (including any actual or threatened litigation) which may affect thebasis upon which we undertake business with you.

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17. Crest and other clearing systems

17.1 Neither CIRGT nor the Nominee accepts responsibility for any delays or liabilities suffered by youas a result of the operation, failure or suspension of the CREST System, the insolvency or otherdefault of Euroclear UK and Ireland Limited or of any participants in the CREST System or anyother clearing system used by us or the failure by any CREST settlement bank to make, receive,credit or debit any payment. Neither CIRGT nor the Nominee accept responsibility for any delaysand liabilities suffered by you as a result of the suspension or removal of the sponsor by CREST asa CREST sponsor, unless the suspension or removal is due to negligence, wilful default or fraudon the part of CIRGT or the Nominee.

17.2 You will pay our reasonable costs or liabilities incurred in connection with an instruction to transferyour Shares (whether or not involving Euroclear UK and Ireland Limited) that cannot be completedfor any reason caused by you. You undertake to notify us if you know of any person (e.g. a bank)who has the right to prevent you from transferring your Shares.

17.3 Where an overseas Company’s Shares are held in uncertificated form by a clearing house, otherthan Euroclear UK and Ireland Limited, the legal and regulatory regime applying to such a clearinghouse may be different to that of the United Kingdom. In such a case, you agree that CIRGT’s andthe Nominee’s liabilities in respect of the activities of the overseas clearing house will be limited tothe extent as set out in section 17.1.

17.4 If we arrange your Shares to be held in one or more jurisdictions outside of the United Kingdom,there may be different settlement, legal and regulatory requirements in overseas jurisdictions fromthose applying in the United Kingdom and there may be different practices for the separateidentification of the Shares.

18. Limitation of liability and indemnity

18.1 We will take all reasonable care and skill in the set up and administration of the Nominee Service.

18.2 If we cannot provide the Nominee Service due to circumstances beyond our reasonable control(for example, because of failure of computer systems or telecommunications links or overridingemergency procedures, postal delays, flood, fire, storm, labour disputes, accident, vandalism,malicious damage, war or terrorism, failure of third parties to carry out their obligations, thesuspension of trading by any exchange or clearing house, the acts of governmental or regulatoryauthority (including changes to Applicable Regulations), the absence of, or inaccuracy in anyinformation provided to us by you or on your behalf) we will, where possible, take such reasonablesteps as we can to provide the Nominee Service as soon as possible following any delay or failure.

18.3 Subject to this clause 18, our liability to you for providing the Nominee Service is limited to anylosses directly associated with the act or omission that gave rise to the liability. We will not be liablefor any damage or loss suffered by you which we could not reasonably have foreseen (for examplethe loss of an alternative investment opportunity or any tax benefit).

18.4 Neither CIRGT nor the Nominee is acting as agent for the Company and they accept noresponsibility for the Company’s acts and omissions, including any decision by the Company tosuspend or terminate the Nominee Service.

18.5 Neither CIRGT nor the Nominee will be required to expend or risk its own funds or otherwise incurany financial liability in the performance of any of its duties or in the exercise of any of its rights orpowers under these Terms and Conditions. If, notwithstanding this provision, either CIRGT or theNominee does so, CIRGT will be entitled upon notice to you to make such deductions from theShares or any income or capital arising from them or to sell all or any of the Shares and make suchdeductions from the proceeds of sale as may be required to reimburse any loss or liability suffered.

18.6 We will not be responsible for any acts or omissions of the Company, or any broker, settlementagent, depository, clearing or settlement agent or system.

18.7 We may employ agents and delegates on such terms as we think fit to carry out any part of ourobligations or discretions in connection with the Nominee Service and, save as otherwise provided

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in these Terms and Conditions, we shall be liable for the acts and omissions of such agents anddelegates as if they were our acts or omissions.

18.8 Nothing in this Agreement shall exclude or limit:

(a) our liability for death or personal injury resulting from the negligence caused by us or theNominee; or

(b) liability for any losses or expenses (including loss of Shares) suffered by you as a directresult of the negligence, wilful default or fraud of either CIRGT or the Nominee; or

(c) any other liability which cannot be excluded or limited by law, including FSA Rules andFSMA.

19. Termination

By you:

19.1 You may remove all or part of your Shares from the Nominee Service at any time by notifying us onthe appropriate form at the address provided in clause 5.1(b). Your instructions will take immediateeffect on receipt but will not cancel or amend any instructions you have already sent to us.

19.2 If you remove all of your Shares from the Nominee Service, your Agreement with us on theseTerms and Conditions will terminate. If we cease to hold Shares for you, you will need to enter intoa new agreement if, at a later date, you acquire Shares which are to be held through the NomineeService.

19.3 Removing all or part of your Shares from the Nominee Service will not affect any of your rights orobligations arising prior to the date of such removal or which arise in consequence of such removalor which relate to our provision of the Nominee Service to you and all such rights and obligationsshall continue to be subject to the Terms and Conditions prevailing at the time of the removal. Youwill be required to pay any charges that are reasonably incurred for transferring Shares from theNominee Service (see also clause 10.2), but will not be required to make any additional payment tous in respect of the termination of your Agreement with us.

19.4 The Nominee Service will automatically terminate if you die. If we receive adequate proof of yourdeath and:

(a) you are the only person registered on the Nominee Register in respect of Shares we hold,we will follow the instructions of your personal representative (appointed pursuant to a grantof probate, letters of administration or other legally effective appointment (or overseasequivalent)); or

(b) Shares are registered on the Nominee Register as a joint holding by you and one or moreother Members, we will hold such Shares only in the name of such other Member(s) andonly take instruction from such other Member(s) and this Agreement between you and usshall remain in force, but only between us and the other Member(s).

By us:

19.5 We may withdraw the Nominee Service from you and terminate our Agreement with you on notless than 30 days’ written notice if, in our opinion, you are in material breach of these Terms andConditions or the Nominee is unable to comply with any obligations to which it may be subject inrespect of your Shares under the Company’s Articles of Association or under any applicable lawsor regulations.

19.6 The provision of the Nominee Service is at the discretion of the Company. If the agreementbetween the Company and CIRGT for the provision of the Nominee Service terminates, ourAgreement with you will automatically terminate and we will notify you of this in writing.

19.7 Subject to the fees in the fee Schedule, no penalty will be payable by either party on termination ofthese Terms and Conditions. On termination by either party and after the relevant notice period,we will arrange for your Shares to be transferred into your name on the register of shareholders as

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soon as practicable and shall with immediate effect (but subject to clause 19.8) cease to processinstructions from you. You will be sent a share certificate by the Company in respect of yourholding of Shares. We may deduct all amounts due to us before transferring to you any creditbalances on your Nominee Account.

19.8 Termination of your Agreement with us will be without prejudice to the completion of transactionsalready initiated. All transactions in progress will be executed in accordance with your instructionsand such transactions will be subject to our current charges (see clause 10).

20. Conflicts of interest

20.1 You acknowledge and agree that when we (or our agents or delegates) enter into a transaction foryou, we may:

(a) share charges with our Affiliated Company and other third parties, or receive and retainremuneration from them in respect of transactions carried out on your behalf. Details of anysuch remuneration or sharing arrangements are available to you on request;

(b) be acting as agent or making arrangements for you on your instructions in relation totransactions in which we are also acting for other customers; or

(c) be in a position where we have some other material interest in relation to the transaction.

20.2 In accordance with FSA Rules, CIRGT has in place arrangements, which may be updated fromtime to time, to manage conflicts of interest that arise between itself and its clients or between itsclients. CIRGT will deal with potential conflicts of interest in accordance with its Conflicts ofInterests Policy which provides that it will identify and manage conflicts of interest to ensure fairtreatment of all clients and ensure that it acts in the client’s best interests. If it is not possible tomanage or avoid a potential conflict of interest then CIRGT may seek to disclose the generalnature and/or sources of conflict to you before undertaking business for you. CIRGT will providefull details of the Conflicts of Interest Policy upon receipt of a written request from you.

21. Default

21.1 We may in our absolute discretion refuse to accept any further orders or instructions from youand/or terminate this Agreement upon any of the following Specified Events:

(a) you do not perform your obligations to us under this Agreement or any transactioncontemplated by this Agreement;

(b) any warranty or representation made by you as set out at clause 16 is or becomesincomplete, untrue, inaccurate or misleading;

(c) a bankruptcy petition is presented to the Court in respect of you;

(d) any regulator of our business or its rules so requires; or

(e) we reasonably believe that any of the circumstances set out in 21.1.(a) to 21.1(d) above arelikely to happen and we reasonably believe that such action would be necessary ordesirable to protect our position.

21.2 Upon the happening of a Specified Event and without prejudice to CIRGT’s other rights, wemay at our discretion, without notice:

(a) refuse to perform or reverse any outstanding transaction between us;

(b) sell any of your investments or other assets held by us (the time, place and method of anysale and the price shall be at our discretion and we shall inform you of the outcome of thesale);

(c) buy in investments, bring any claim for damages or exercise any other right which we mayhave at law or otherwise or take any other action which appears appropriate to avoid orreduce our risk of loss; and/or

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(d) combine, close or consolidate all or any of your accounts with us or any of our AffiliatedCompanies and off-set any and all amounts owed to, or by, us or any of our AffiliatedCompanies in such manner as we may reasonably determine.

21.3 You will bear any costs or associated costs of sale and for reasonable costs, losses,damages or expenses (including without limitation any legal fees) incurred or suffered byus as a direct consequence of a Specified Event or our taking any action as a consequenceof such Specified Event.

22. Protection of information

22.1 The Data Protection Act 1998 provides protection to individuals by governing, amongst otherthings, the way in which personal information is held and used. Individuals are also afforded rightsof access to such information held about them.

22.2 CIRGT hereby warrants that it will comply with its notification obligations under the Data Protection(Notification and Notification Fees) Regulations 2000 and that it will protect your personalinformation in accordance with the principles of the Data Protection Act 1998.

22.3 By becoming a Member of the Nominee Service, you agree that we may:

(a) keep personal details which you or others have provided to us, and any information weknow from running your account on a database, and use such information to carry out theNominee Service described in these Terms and Conditions and to deal with your enquiriesand requests connected with the Nominee Service; and

(b) may disclose information concerning you to the Company, the Nominee, the company’sregistrar, Euroclear UK and Ireland Limited (if entitled to such information) all of which maydisclose the information to regulatory, tax or governmental authorities as appropriate; toany person with legal, administrative or regulatory power over us in respect of the NomineeService; to the broker, or Affiliated Companies who are involved in carrying out functionsrelated to the Nominee Service administration including such Affiliated Companies whichare outside of the EEA in countries (including India) which do not have similar protections inplace regarding your personal information and its use. However, we are committed toprotecting the confidentiality and security of information we collect about you and we willensure that such transfers are made in accordance with the requirements of the DataProtection Act 1998.

22.4 You agree that the purposes for which we may process your personal information may beamended from time to time to include other uses or disclosures of personal information subject tous notifying you of such amendment.

22.5 Under the Data Protection Act 1998, you are entitled, on payment of a fee (of £10 currently), to acopy of the information we hold about you. If you believe that any information held about you isincorrect or incomplete, you may request it to be completed or corrected. Please address anyrequests for information under this clause to the Data Protection Officer, Capita IRG TrusteesLimited, Nominee Service, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU andquoting your full name and address, the name of the Company and your Investor Code which maybe found on your personal statement.

22.6 By using the Nominee Service you agree that information relating to you may be disclosed to otherAffiliated Companies so that you may be told about any products or services which might be ofinterest to you. You may request that information is not used for this purpose by writing to the DataProtection Officer, Capita IRG Trustees Limited, Nominee Service, The Registry, 34 BeckenhamRoad, Beckenham, Kent, BR3 4TU and quoting your full name and address, the name of theCompany and your Investor Code which may be found on your personal statement.

23. Tape recording of conversations and record keeping

23.1 You agree that we may:

(a) record all telephone conversations between you and us; and

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(b) use such recordings, or transcripts from such recordings, as evidence in any dispute oranticipated dispute between you and us.

23.2 Recordings or transcripts made by us may be destroyed under our normal practice (usually, butnot necessarily, two (2) calendar months from the date of the conversation). We may delivercopies or transcripts of such recordings to any court or regulatory body.

23.3 We strongly recommend that you keep your own records of all communications between you andus (such as instructions and orders) including details of the times, dates and nature of yourinstructions as these details will be important if there is a dispute between you and us.

24. Complaints and compensation scheme

24.1 If you think that you have reason to make a complaint please write in the first instance to:

Capita IRG Trustees LimitedNominee ServiceThe Registry34 Beckenham Road,Beckenham,Kent,BR3 4TU.

Your complaint will be fully investigated and a full resolution sought. Our complaints procedure isavailable upon request, but a copy will be provided automatically to you in the event of a complaintbeing received.

24.2 If you are unhappy or dissatisfied with our handling or findings in relation to your dispute orcomplaint you may be eligible to refer the matter to the Financial Ombudsman Service for furtherinvestigation at: Financial Ombudsman Service, South Quay Plaza,183 Marsh Wall, LondonE14 9SR.

24.3 We reserve the right to take any action necessary, which is the subject of a dispute or complaintnotified to us, for the purpose of limiting the amounts involved in such dispute or complaint. We willinform you if we exercise this right, which shall be without prejudice to either your rights andremedies or our rights and remedies. Any action taken by us pursuant to this clause 24.3 will not bedeemed to be an admission on our part.

24.4 CIRGT is a member of the Financial Services Compensation Scheme (‘‘Scheme’’). If we cannotmeet our obligations you may be entitled to compensation from the Scheme. This depends on thetype of business and the circumstances of the claim. Most types of investment business arecovered for 100% of the first £50,000 (a maximum of £50,000) as at the date of these Terms andConditions. The amounts of compensation may be changed from time to time and you shouldcheck your entitlement with the Scheme. Further information about compensation arrangements isavailable from the Scheme. You can contact the Scheme by calling their Helpline on 0207 8927300, logging onto their website at www.fscs.org.uk or writing to the Financial ServicesCompensation Scheme, 7th Floor, Lloyds Chambers, 1 Portsoken Street, London E1 8BN. Youmay request further information concerning the conditions governing compensation and theformalities which must be completed to obtain compensation by writing to Capita IRG TrusteesLimited, Nominee Service, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU or byemail to: custodymgt@capitaregistrars.com.

25. Transfer of the nominee service

We may transfer our duties to any other company at the request of the Company. If the newcompany writes to you confirming that it will undertake all of our duties, we will cease to have anyduties and obligations in relation to the Service.

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26. Variation/replacement of these terms and conditions

26.1 We may change these terms and conditions in the future for the following reasons:

26.1.1 to reflect reasonable changes in the way we provide the Service to you;

26.1.2 as a result of new services which we may make available to you;

26.1.3 to take account of any corporate restructuring within the Capita group of companies;

26.1.4 where reasonably required as a result of changes in market conditions or market practice;

26.1.5 to take account of changes or anticipated changes to, or to comply better with, applicablelaws or the interpretation of those laws, regulatory requirements, industry guidance orcodes of practice that we follow, or the way that we are regulated;

26.1.6 to reflect a decision or recommendation of a court, ombudsman, regulator or similar bodywhich is relevant to us or to the Service;

26.1.7 to reflect changes in the Bank of England base rate, other specified market rates orindices or tax rates;

26.1.8 to rectify errors, inaccuracies or ambiguities;

26.1.9 to reflect alterations in the scope and nature of the Nominee Service provided to youunder these Terms and Conditions resulting from the alterations made to our agreementwith the Company or our system capabilities or administration procedures;

26.1.10 to prevent misuse of the Service;

26.1.11 to take account of, in a proportionate manner, the cost to us of providing the Service;

26.1.12 to prevent fraud or to enhance the security of the Service; or

26.1.13 to make these Conditions easier to understand, fairer to you, or to correct mistakes.

26.2 We will give you at least 30 days’ prior notice of any change to these Terms and Conditions that isto your disadvantage. You may cancel your agreement with us at any time without charge within30 days of our sending you notice of such change. If you do not cancel your agreement with uswithin this 30 day period then you will be deemed to have been accepted such change.

26.3 We may, as mentioned in clause 10.3, review and notify you of revised charging rates from time totime.

26.4 If you have received our written notice and do not agree with the proposed changes, you mayterminate our Agreement at any time without charge (see clause 19 above). Any change will bedeemed to have been accepted by you if you have already instructed us to trade on your behalfafter the change has taken effect.

27. General

27.1 We will not take notice of any trust affecting the Shares whether express, implied or constructive.

27.2 No conduct or delay on our part shall be taken as a waiver or variation of any rights which we mayhave unless we waive or vary a particular right in writing. No waiver or variation on a particularoccasion will operate as a waiver or variation of our rights in respect of any other matter.

27.3 If any of the provisions of these Terms and Conditions is held invalid, illegal or unenforceable forany reason, such provision shall be severed and the remainder of the provisions in these Termsand Conditions shall continue in full force and effect as if they had been executed with the invalidprovision eliminated.

27.4 The Nominee has the right to enforce these Terms and Conditions in accordance with theprovisions of the Contracts (Rights of Third Parties) Act 1999. Except for the Nominee, nothing inthese Terms and Conditions shall confer or is intended to confer on any third party any benefit orthe right to enforce any terms contained herein for the purposes of the Contracts (Rights of ThirdParties) Act 1999.

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27.5 This Agreement is subject to English law and you submit to the exclusive jurisdiction of the Englishcourts.

Fee Schedule (as at the date of this document)

• Certificate withdrawals into own name—£11.75

• Transfer to another CREST account—£11.75

• Duplicate Cheque value between £30 and £100—£12.75

• Duplicate Cheque value over £100—£16.00

• Duplicate Tax Voucher—£17.00

• Each additional Tax Voucher—£3.00

• Duplicate Statement—£11.75

• Small Estates (value of shares between £100 and £15,000) (Administration fee)—£37.50 plusindemnity £37.75

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TAXATION

1. United Kingdom taxation

The following statements do not constitute tax advice and are intended only as a general guide to currentUK law and HMRC published practice (which are both subject to change at any time, possibly withretrospective effect). They relate only to certain limited aspects of the UK taxation treatment of holders ofthe Ordinary Shares and are intended to apply only, except to the extent stated below, to persons who areresident and, if individuals, ordinarily resident in the UK for UK tax purposes, and who are absolutebeneficial owners of the Ordinary Shares (otherwise than through an Individual Savings Account or a SelfInvested Personal Pension) and who hold them as investments (and not as securities to be realised in thecourse of a trade). They may not apply to certain Shareholders, such as dealers in securities, insurancecompanies and collective investment schemes, Shareholders who are exempt from taxation andShareholders who have (or are deemed to have) acquired their Ordinary Shares by virtue of an office oremployment. Such persons may be subject to special rules. Any person who is in any doubt as to their taxposition, or who is subject to taxation in any jurisdiction other than the UK, should consult their ownprofessional adviser without delay.

1.1 Taxation of chargeable gains

Shareholders who are individuals, trustees or personal representatives of deceased persons

A disposal of Ordinary Shares may give rise to a chargeable gain (or allowable loss) for the purposes ofUK capital gains tax, depending on the circumstances and subject to any available exemption or relief.

On 22 June 2010, the UK Government announced its intention to change the rate at which capital gainstax is charged for individuals, trustees and personal representatives (which, absent such change, wouldbe a flat rate of 18 per cent.). The following two paragraphs are based on the Company’s understanding ofwhat is proposed in the Budget delivered on 22 June 2010 and the Finance Bill printed on 28 June 2010.

For individuals, capital gains tax will be charged at 18 per cent. where the total chargeable gains (save forany chargeable gains actually arising before 23 June 2010) and, generally, total taxable income arising ina tax year, after all allowable deductions (including losses, the income tax personal allowance and thecapital gains tax annual exempt amount, which is currently £10,100), are less than the upper limit of theincome tax basic rate band (which is currently £37,400). Subject to the following paragraph, to the extentthat any chargeable gains (or part of any chargeable gains) arising in a tax year exceed the upper limit ofthe income tax basic rate band when aggregated with any such income (in the manner referred to above),capital gains tax will be charged at 28 per cent. For trustees and personal representatives of deceasedpersons, it is intended that capital gains tax will be charged at a flat rate of 28 per cent.

Chargeable gains arising in the current tax year before 23 June 2010 will continue to be liable to capitalgains tax at 18 per cent and will not be taken into account in determining the rate at which gains arisingafter that date should be charged. In working out the capital gains tax payable in the current tax year,taxpayers will generally be able to deduct losses and the annual exempt amount in the way whichminimises the capital gains tax due.

Corporate Shareholders

Where a Shareholder is within the charge to corporation tax, a disposal of Ordinary Shares may give riseto a chargeable gain (or allowable loss) for the purposes of UK corporation tax, depending on thecircumstances and subject to any available exemption or relief. Corporation tax is charged on chargeablegains at the rate applicable to that company. Indexation allowance may reduce the amount of chargeablegain that is subject to corporation tax but may not create or increase any allowable loss.

Non-UK Resident Shareholders

A Shareholder who is an individual and who is only temporarily resident outside the UK for UK taxpurposes at the date of a disposal of the Ordinary Shares may be liable to UK tax on chargeable gains onbecoming resident or ordinarily resident in the United Kingdom again, in respect of disposals made whilehe was temporarily resident outside the United Kingdom, subject to any available exemption or relief.

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A Shareholder who is neither resident nor, in the case of an individual, ordinarily resident in the UnitedKingdom (and is not temporarily resident outside the UK) will not be liable for UK tax on chargeable gainsrealised on a disposal of Ordinary Shares unless such Shareholder carries on:

• (in the case of a Shareholder who is an individual) a trade, profession or vocation in the UK through abranch or agency and the Ordinary Shares either have been used in or for the purposes of the trade,profession or vocation, or have been used or held for the purposes of the branch or agency, oracquired for use by or for the purposes of the branch or agency; or

• (in the case of a Shareholder which is a company) a trade in the UK through a permanentestablishment and the Ordinary Shares either have been used in or for the purposes of the tradecarried on through the permanent establishment, or, have been used or held for the purposes of thepermanent establishment or acquired for use by or for the purposes of the permanent establishment.

1.2 Stamp Duty and SDRT

The comments in this section relating to stamp duty and SDRT apply whether or not a Shareholder isresident or ordinarily resident in the UK.

Issue of Ordinary Shares and sale of Existing Shares

Except in relation to the issue of Ordinary Shares to persons providing clearance services or issuingdepositary receipts (or, in either case, their nominee or agent), referred to below, no stamp duty or SDRTwill generally arise on the issue of Ordinary Shares.

Notwithstanding that stamp duty or SDRT may technically be payable by Investors on the sale to them bySelling Shareholders of Existing Shares, separate arrangements have been made, and Investors otherthan persons providing clearance services or issuing depositary receipts (or, in either case, their nomineeor agent) should have no liability in this regard.

Subject to certain exemptions, a charge to stamp duty or SDRT will arise on the transfer of OrdinaryShares to particular persons providing a clearance service, their nominees or agents, or to an issuer ofdepositary receipts, its nominee or agent. The rate of stamp duty or SDRT, as the case may be, in suchcircumstances will generally be 1.5 per cent. of the amount or value of the consideration for the transferor, in some circumstances, the value of the Ordinary Shares concerned, in the case of stamp dutyrounded up, if necessary, to the nearest multiple of £5.

Under applicable legislation, there would also be a 1.5 per cent. SDRT charge on the issue of OrdinaryShares to persons providing clearance services or issuing depositary receipts (or, in either case, theirnominee or agent). However, in October 2009 the European Court of Justice held that such a charge onthe issue of shares to a clearance service is contrary to Council Directive 69/335/EEC. HMRC haveaccepted that no such charge can be imposed where the clearance service is located in the EU. HMRChave also confirmed that they will not seek to levy a 1.5 per cent. SDRT charge on an issue of shares to adepositary receipt issuer located within the EU. HMRC do not, however, agree that the reasoning of theEuropean Court of Justice extends to the issue of shares to a clearance service or a depositary receiptissuer located outside the EU and maintain that a 1.5 per cent. SDRT charge on the issue price of theshares should apply in those circumstances. It is recommended that, should this charge arise andShareholders be responsible for it, they consult their own professional adviser without delay.

There are certain exemptions with the aim of preventing a double charge arising when shares in respectof which there has already been a 1.5 per cent. stamp duty or SDRT charge move between clearanceservices, between depositary receipt issuers, or from one to the other (in either direction). Where sharesenter an EU clearance service or depositary receipt scheme without charge, in accordance with therecent ruling by the European Court of Justice, a subsequent transfer of those shares to a clearanceservice or depositary receipt issuer located outside the EU will not, however, benefit from thoseexemptions.

Subsequent dealings in Ordinary Shares

Any subsequent dealings in Ordinary Shares will generally be subject to stamp duty or SDRT in thenormal way. An instrument effecting the transfer on sale of Ordinary Shares will generally be liable to

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stamp duty at the rate of 0.5 per cent. (rounded up to the nearest multiple of £5) of the amount or value ofthe consideration payable. An unconditional agreement to transfer such shares will generally be liable toSDRT at the rate of 0.5 per cent. of the amount or value of the consideration payable, but such liability willbe cancelled, or a right to a repayment (generally, with interest) in respect of the payment of such SDRTliability will arise, if the agreement is completed by a duly stamped transfer within six years of theagreement having become unconditional. Stamp duty and SDRT are normally the liability of thepurchaser.

No stamp duty or SDRT will arise on a transfer of Ordinary Shares into the CREST system provided that,in the case of SDRT, the transfer is not for money or money’s worth. Paperless transfers of OrdinaryShares within CREST are liable to SDRT (at a rate of 0.5 per cent. of the amount or value of theconsideration payable) rather than stamp duty, and SDRT on relevant transactions settled within thesystem or reported through it for regulatory purposes will be collected by CREST.

It should be noted that certain categories of person, including specified market intermediaries, are entitledto an exemption from stamp duty and SDRT in respect of purchases of securities in specifiedcircumstances.

Certain other persons, being mainly persons providing clearance services or issuing depositary receipts(or, in either case, their nominee or agent), may be liable to account for stamp duty or SDRT at a higherrate of 1.5 per cent. on securities issued or transferred to them. See above for the position with respect toissues and transfers to such persons.

1.3 Taxation of dividends

General

There is no UK withholding tax on dividends.

Individual Shareholders within the charge to UK Income Tax

When the Company pays a dividend to a Shareholder who is an individual resident (for tax purposes) inthe UK, the Shareholder will be entitled to a tax credit equal to one-ninth of the dividend received. Thedividend received plus the related tax credit (the ‘‘gross dividend’’) will be part of the Shareholder’s totalincome for UK income tax purposes and will be regarded as the top slice of that income. However, incalculating the Shareholder’s liability to income tax in respect of the gross dividend, the tax credit (whichequates to 10 per cent. of the gross dividend) is set off against the tax chargeable on the gross dividend.

Basic Rate Taxpayers

In the case of a Shareholder who is liable to income tax at the basic rate, the Shareholder will be subject totax on the gross dividend at the rate of 10 per cent. The tax credit will, in consequence, satisfy in full theShareholder’s liability to income tax on the gross dividend.

Higher Rate Taxpayers

In the case of a Shareholder who is liable to income tax at the higher rate, the Shareholder will be subjectto tax on the gross dividend at the rate of 32.5 per cent., to the extent that the gross dividend falls abovethe threshold for the higher rate of income tax but below the threshold for the additional rate of income taxwhen it is treated (as mentioned above) as the top slice of the Shareholder’s income. This means that thetax credit will satisfy only part of the Shareholder’s liability to income tax on the gross dividend, so that theShareholder will have to account for income tax equal to 22.5 per cent. of the gross dividend (whichequates to 25 per cent. of the dividend received). For example, a dividend of £90 from the Companywould represent a gross dividend of £100 (after the addition of the tax credit of £10 (being one-ninth of£90)) and the Shareholder would be required to account for income tax of £22.50 on the dividend, being£32.50 (i.e. 32.5 per cent. of £100) less £10 (the amount of the tax credit).

Additional Rate Taxpayers

In the case of a Shareholder who is liable to income tax at the additional rate, the Shareholder will besubject to tax on the gross dividend at the rate of 42.5 per cent., to the extent that the gross dividend falls

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above the threshold for the additional rate of income tax when it is treated (as mentioned above) as thetop slice of the Shareholder’s income. This means that the tax credit will satisfy only part of theShareholder’s liability to income tax on the gross dividend, so that the Shareholder will have to account forincome tax equal to 32.5 per cent. of the gross dividend (which equates to approximately 36.1 per cent. ofthe dividend received). For example, a dividend of £90 from the Company would represent a grossdividend of £100 (after the addition of the tax credit of £10 (being one-ninth of £90)) and the Shareholderwould be required to account for income tax of £32.50 on the dividend, being £42.50 (i.e. 42.5 per cent. of£100) less £10 (the amount of the tax credit).

Corporate Shareholders within the charge to UK Corporation Tax

Shareholders within the charge to UK corporation tax which are ‘‘small companies’’ (for the purposes ofUK taxation of dividends) will not generally expect to be subject to tax on dividends from the Company.

Other Shareholders within the charge to UK corporation tax will not be subject to tax on dividends(including dividends from the Company) so long as the dividends fall within an exempt class and certainconditions are met. In general, dividends paid on shares that are ‘‘ordinary share capital’’ for UK taxpurposes and are not redeemable, and dividends paid to a person holding less than 10 per cent. of theissued share capital of the payer (or any class of that share capital) are examples of dividends that fallwithin an exempt class.

No Payment of Tax Credit

A Shareholder (whether an individual or a company) who is not liable to tax on dividends from theCompany will not be entitled to claim payment of the tax credit in respect of those dividends.

Non-Residents

The right of a Shareholder who is not resident (for tax purposes) in the UK to a tax credit in respect of adividend received from the Company and to claim payment of any part of that tax credit will depend on theexistence and terms of any double taxation convention between the UK and the country in which theholder is resident, although generally no such payment will be available.

Distributions following a reduction in share capital

On 22 June 2010, the UK Government issued draft legislation which is intended to make it clear thatdistributions made out of reserves arising from a reduction in capital by a UK company are subject to thesame rules described for dividends above. The draft legislation is expected to be enacted this year.

2. United States taxation

This disclosure is limited to the US federal tax issues addressed herein. Additional issues mayexist that are not addressed in this disclosure and that could affect the US federal tax treatment ofthe Ordinary Shares. This tax disclosure was written in connection with the promotion ormarketing of the Ordinary Shares by the Company and it cannot be used by any person for thepurpose of avoiding penalties that may be asserted against the person under the InternalRevenue Code of 1986, as amended (the ‘‘Code’’). Shareholders should seek their own advicebased on their particular circumstances from an independent tax adviser.

The following is a description of certain US federal income tax consequences to the US Shareholdersdescribed below of owning and disposing of Ordinary Shares, but it does not purport to be acomprehensive description of all tax considerations that may be relevant to a particular person’s decisionto acquire the Ordinary Shares. This discussion applies only to a US Shareholder who owns OrdinaryShares as capital assets for tax purposes. In addition, it does not describe all of the tax consequencesthat may be relevant in light of the US Shareholder’s particular circumstances, including alternativeminimum tax consequences and tax consequences applicable to US Shareholders subject to specialrules, such as:

• certain financial institutions;

• dealers or traders in securities who use a mark-to-market method of tax accounting;

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• persons holding Ordinary Shares as part of a hedging transaction, straddle, wash sale, conversiontransaction or integrated transaction or persons entering into a constructive sale with respect to theOrdinary Shares;

• persons whose functional currency for US federal income tax purposes is not the US dollar;

• entities classified as partnerships for US federal income tax purposes;

• tax-exempt entities, including ‘‘individual retirement accounts’’ or ‘‘Roth IRAs’’;

• persons who own or are deemed to own 10 per cent. or more of the Company by value or of theCompany’s voting shares; or

• persons holding Ordinary Shares in connection with a trade or business conducted outside of theUnited States.

If an entity that is classified as a partnership for US federal income tax purposes holds Ordinary Shares,the US federal income tax treatment of a partner will generally depend on the status of the partner and theactivities of the partnership. Partnerships holding Ordinary Shares and partners in such partnershipsshould consult their tax advisers as to the particular US federal income tax consequences of holding anddisposing of the Ordinary Shares.

This discussion is based on the Code, administrative pronouncements, judicial decisions, final, temporaryand proposed US Treasury regulations, all as of the date hereof, any of which is subject to change,possibly with retroactive effect.

A ‘‘US Shareholder’’ is a person who, for US federal income tax purposes, is a beneficial owner ofOrdinary Shares and is:

• a citizen or resident of the United States;

• a corporation, or other entity taxable as a corporation, created or organised in or under the laws of theUnited States, any state therein or the District of Columbia; or

• an estate or trust the income of which is subject to US federal income taxation regardless of itssource.

US Shareholders should consult their tax advisers concerning the US federal, state, local and non-US taxconsequences of owning and disposing of Ordinary Shares in their particular circumstances.

This discussion assumes that the Company is not, and will not become, a passive foreign investmentcompany, as described below.

Taxation of distributions

Distributions paid on Ordinary Shares, other than certain pro rata distributions of Ordinary Shares, will betreated as dividends to the extent paid out of the Company’s current or accumulated earnings and profits(as determined under US federal income tax principles). Because the Company does not maintaincalculations of its earnings and profits under US federal income tax principles, it is expected thatdistributions generally will be reported to US Shareholders as dividends. Subject to applicable limitations,dividends paid to certain non-corporate US Shareholders in taxable years beginning before 1 January2011 may be taxable at favourable rates, up to a maximum rate of 15 per cent. US Shareholders shouldconsult their tax advisers regarding the availability of the reduced tax rate on dividends in their particularcircumstances. Dividends will be treated as foreign-source dividend income to US Shareholders and willnot be eligible for the dividends-received deduction generally available to US corporations under theCode. Dividends will be included in a US Shareholder’s income on the date of the US Shareholder’sreceipt of the dividend. The amount of any dividend paid in pounds sterling will be the US dollar amountcalculated by reference to the exchange rate in effect on the date of receipt, regardless of whether thepayment is in fact converted into US dollars. If the dividend is converted into US dollars on the date ofreceipt, a US Shareholder should not be required to recognise foreign currency gain or loss in respect ofthe dividend income. A US Shareholder may have foreign currency gain or loss if the dividend isconverted into US dollars after the date of receipt. Foreign currency income or losses generally will be

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treated as ordinary income or losses to such US Shareholder and generally will be income or losses fromsources within the United States.

Sale or other disposition of Ordinary Shares

For US federal income tax purposes, gain or loss realised on the sale or other disposition of OrdinaryShares will be capital gain or loss, and will be long-term capital gain or loss if the US Shareholder held theOrdinary Shares for more than one year. The amount of the gain or loss will equal the difference betweenthe US Shareholder’s tax basis in the shares disposed of and the amount realised on the disposition, ineach case as determined in US dollars. This gain or loss will generally be US-source gain or loss forforeign tax credit purposes.

Passive foreign investment company rules

The Company does not believe that it was a passive foreign investment company (a ‘‘PFIC’’) for USfederal income tax purposes for its most recent taxable year and does not expect to become a PFIC in theforeseeable future. However, since PFIC status depends on the composition of the Company’s incomeand assets and the market value of its assets from time to time, which in turn may be determined in part byreference to the market price of the Ordinary Shares, there can be no assurance that the Company willnot be a PFIC for any taxable year. In general, a non-US corporation will be considered a PFIC for anytaxable year in which (i) 75 per cent. or more of its gross income consists of passive income or (ii) 50 percent. or more of the average quarterly value of its assets consists of assets that produce, or are held forthe production of, passive income. For purposes of the above calculations, a non-US corporation thatdirectly or indirectly owns at least 25 per cent. by value of the shares of another corporation is treated as ifit held its proportionate share of the assets of the other corporation and received directly its proportionateshare of the income of the other corporation. Passive income generally includes dividends, interest, rents,royalties and capital gains.

If the Company were a PFIC for any taxable year during which a US Shareholder held Ordinary Shares,gains recognised by a US Shareholder on a sale or other disposition (including certain pledges) ofOrdinary Shares would be allocated rateably over the US Shareholder’s holding period for the OrdinaryShares. The amounts allocated to the taxable year of the sale or other disposition and to any year beforethe Company became a PFIC would be taxed as ordinary income. The amount allocated to each othertaxable year would be subject to tax at the highest rate in effect for individuals or corporations, asappropriate, for that taxable year, and an interest charge would be imposed on the amount of such tax.Further, to the extent that any distribution received by a US Shareholder on its Ordinary Shares exceeds125 per cent. of the average of the annual distributions on the Ordinary Shares received during thepreceding three years or the US Shareholder’s holding period, whichever is shorter, that distributionwould be subject to taxation in the same manner as gains, described immediately above. Certainelections may be available that would result in alternative treatments (such as mark-to-market treatment)of the Ordinary Shares. US Shareholders should consult their tax advisers to determine whether any ofthese elections would be available and, if so, what the consequences of the alternative treatments wouldbe in their particular circumstances. In addition, if the Company were a PFIC, the 15 per cent. dividendrate discussed above with respect to dividends paid to certain non-corporate US Shareholders would notapply.

Information reporting and backup withholding

Payments of dividends and sales proceeds that are made within the United States or through certainUS-related financial intermediaries generally are subject to information reporting, and may be subject tobackup withholding, unless (i) the US Shareholder is an exempt recipient, or (ii) in the case of backupwithholding, the US Shareholder provides a correct taxpayer identification number and certifies that it isnot subject to backup withholding. The amount of any backup withholding from a payment to a USShareholder will be allowed as a credit against the holder’s US federal income tax liability and may entitleit to a refund, provided that the required information is furnished to the Internal Revenue Service in atimely fashion.

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ADDITIONAL INFORMATION

1. Persons responsible

The Directors, whose names appear on page 32, and the Company accept responsibility for theinformation contained in this document. To the best of the knowledge of the Directors and the Company(who have taken all reasonable care to ensure that such is the case), the information contained in thisdocument is in accordance with the facts and does not omit anything likely to affect the import of suchinformation.

2. Incorporation and activity of the Company

The Company was incorporated and registered in England and Wales under the Companies Act as aprivate company limited by shares on 8 December 2009 with the name ‘‘Ocado Group Limited’’ and theregistered number 7098618. The principal legislation under which the Company operates is theCompanies Act and regulations made thereunder.

On 23 June 2010, by members’ written resolutions:

(A) the Company resolved to be re-registered as a public limited company;

(B) the Company resolved to change its name from ‘‘Ocado Group Limited’’ to ‘‘Ocado Group plc’’;

(C) the Company adopted the Articles in substitution for the Old Articles; and

(D) the Company resolved that, subject to, and with effect upon Admission, the Final Articles beadopted in substitution for the Articles.

The Company is domiciled in the UK with its registered and head office at Titan Court, 3 Bishops Square,Hatfield Business Park, Hatfield, Hertfordshire AL10 9NE. Its telephone number is +44 (0)1707 228000.

The Company has, since 9 February 2010, been the holding company of the Group and Ocado, theoperating company of the Group, is a wholly-owned subsidiary of the Company.

3. Share capital of the Company

3.1 Incorporation

The Company was incorporated with one ordinary share of 110 pence which was subscribed for (nil paid)by the subscriber to the memorandum of association of the Company, Trusec Limited.

On 10 December 2009, the subscriber share in the capital of the Company held by Trusec Limited wastransferred to Neill Abrams, a current Director of the Company and Neill Abrams extinguished the liabilityto pay £1.10 for the share.

By member’s written resolutions passed on 19 December 2009:

(A) the Company adopted the Old Articles; and

(B) the subscriber share in the capital of the Company was reclassified as a Subscriber Ordinary Share.

3.2 Resolutions to give effect to the Scheme

Also on 19 December 2009, it was resolved by written resolutions that:

(A) subject to and conditional on the Scheme becoming effective, the Directors be generally andunconditionally authorised to exercise all the powers of the Company to allot shares in the Companyand to grant rights for or to convert security into shares in the Company:

(i) up to an aggregate nominal amount of £450,000,000 as required for the purposes of theScheme;

(ii) up to an aggregate nominal amount of £19,390,140 as required for the purposes ofarrangements requiring the Company to satisfy the entitlements of optionholders,warrantholders and participants in the ESOS who had entitlements to Ordinary Shares and/orPreference Shares following implementation of the Scheme; and

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(iii) up to an aggregate nominal amount of £244,409,000 (representing the equivalent subsistingauthority in Ocado as at the date of the resolution),

for a period expiring (unless previously revoked or varied by the Company in general meeting) fiveyears from the date of the resolution, save that, in each case, the Company may before such expirymake an offer or agreement which would or might require shares in the Company to be allotted orrights to subscribe for or convert security into shares to be granted after such expiry and the Boardmay allot shares or grant rights to subscribe for or convert security into shares in pursuance of suchan offer or agreement as if the authority conferred by the resolution had not expired;

(B) subject to and conditional on the Scheme becoming effective and the passing of the resolutiondescribed in paragraph (A) above, the Directors be empowered, pursuant to section 571 of theCompanies Act 2006, to allot equity securities (as defined in section 560 of the Companies Act) forcash pursuant to the authority conferred by the resolution described in paragraph (A) above and/orwhere such allotment constitutes an allotment of equity securities by virtue of section 560(2)(b) ofthe Companies Act, as if section 561(1) of the Companies Act did not apply to any such allotment,provided that this power shall be limited to:

(i) the allotment of equity securities in connection with a rights issue, open offer or any otherpre-emptive offer in favour of holders of Ordinary Shares and/or Preference Shares inproportion (as nearly as may be practicable) to their respective holdings of such shares, butsubject in each case to such exclusion or other arrangements as the Directors may deemnecessary or expedient to deal with fractional entitlements or legal or practical problemsarising in any overseas territory, the requirements of any regulatory body or stock exchange orany other matter whatsoever; and

(ii) otherwise than pursuant to sub-paragraph (i) above up to an aggregate nominal amount of£244,409,000 (representing the equivalent subsisting authority in Ocado at the date of theresolution),

and shall expire five years from the date of the resolution, save that the Company may before suchexpiry make an offer or agreement which would or might require equity securities to be allotted aftersuch expiry and the Board may allot equity securities in pursuance of such an offer or agreement asif the power conferred by the resolution had not expired; and

(C) subject to and conditional upon:

(a) the Ordinary Shares and the Preference Shares required to be allotted and issued by theCompany pursuant to the Scheme, by which the Company would be bound, having beenallotted and issued and registered in the names of the persons entitled to such OrdinaryShares and/or Preference Shares in the Company’s register of members;

(b) in respect of sub-paragraph (ii) below only, implementation of the Scheme involving thecancellation of the entire issued share capital of Ocado and the subsequent issue of shares inOcado to the Company; and

(c) the Scheme becoming effective and fully implemented,

the share capital of the Company be reduced by:

(i) cancelling paid up share capital to the extent of 108 pence on each Ordinary Share and eachPreference Share in the capital of the Company issued pursuant to the Scheme and reducingthe nominal value of each such Ordinary Share and each such Preference Share from110 pence to 2 pence; and

(ii) cancelling and extinguishing the Subscriber Ordinary Share.

3.3 The Scheme

On the Scheme effective date, being 9 February 2010, pursuant to the Scheme, all of the Ocado LimitedOrdinary Shares and the Ocado Limited Preference Shares held at the Scheme record time, being 6pmon 8 February 2010, were cancelled and, forthwith, Ocado issued 100 Ocado Limited Ordinary Shares tothe Company for £1 in aggregate, credited as fully paid, and, in consideration of the cancellation of the

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Ocado Limited Ordinary Shares and the Ocado Limited Preference Shares and the issue of 100 OcadoLimited Ordinary Shares to the Company, the Company issued, in aggregate, 185,715,900 OrdinaryShares and 247,474,900 Preference Shares to holders of such Ocado Limited Ordinary Shares and/orOcado Limited Preference Shares (as applicable) at the Scheme record time, credited as fully paid, onthe basis of one hundred Ordinary Shares and/or one hundred Preference Shares for each OcadoLimited Ordinary Share and/or Ocado Limited Preference Share held (as applicable). The effect of theScheme was therefore to replicate the shareholders’ register of Ocado at the level of the Company.Details of the Company’s Major Shareholders are set out in section 8 of this Part XIII.

On 16 February 2010, pursuant to an order of the Court confirming the reduction of capital of theCompany which was registered by the Registrar of Companies on that date, the Company’s share capitalwas reduced by decreasing the nominal value of each Ordinary Share and each Preference Share issuedpursuant to the Scheme from 110 pence to 2 pence. As part of the same reduction of capital, theSubscriber Ordinary Share was cancelled and extinguished.

3.4 The Preference Shares

The Preference Shares have certain conversion rights under the Articles. The holders of the PreferenceShares are entitled at any time and from time to time to convert any of the Preference Shares held bythem into the same number of Ordinary Shares. All of the Preference Shares shall automatically convertinto the same number of Ordinary Shares on Admission and the Ordinary Shares resulting from theexercise of such a conversion shall, as from the date of conversion, rank pari passu in all respects with theexisting Ordinary Shares in the capital of the Company.

3.5 Total issued share capital

As at 5 July 2010, the latest practicable date prior to the publication of this document, the share capital ofthe Company was £8,670,916, comprising 186,070,920 Ordinary Shares of 2 pence each (of which32,476,700 were held by the EBT Trustee pursuant to the JSOS) and 247,474,900 Preference Shares of2 pence each.

3.6 Corporate steps taken prior to the publication of this document

By written resolutions of the Company’s shareholders passed on 23 June 2010, it was resolved that:

(A) subject to and conditional upon (in the case of the authorities described in paragaphs (ii) to (iv)below) Admission, the Board be generally and unconditionally authorised, in substitution for (witheffect from Admission) all subsisting authorities, to exercise all powers of the Company to allotshares in the Company and to grant rights to subscribe for or to convert any security into shares inthe Company:

(i) up to an aggregate nominal amount of £5,000,000 in connection with the Offers;

(ii) up to an aggregate nominal amount of £50,000 as required for the purposes of arrangementsrequiring the Company to satisfy the entitlements of non-employee optionholders who haveentitlements to Ordinary Shares following Admission;

(iii) up to an aggregate nominal amount of £6,666,666 (such amount to be reduced by the nominalamount of any shares in the Company allotted or rights to subscribe for or to convert anysecurity into shares in the Company granted under sub-paragraph (iv) below in excess of suchsum); and

(iv) comprising equity securities (as defined in section 560(1) of the Companies Act) up to anaggregate nominal amount of £13,333,333 (such amount to be reduced by any allotments ofany shares in the Company or grants of rights to subscribe for or to convert any security intoshares in the Company made under sub-paragraph (iii) above) in connection with an offer byway of a rights issue:

(a) to holders of Ordinary Shares in proportion (as nearly as may be practicable) to theirexisting holdings; and

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(b) to holders of other equity securities as required by the rights of those securities or as theBoard otherwise considers necessary,

and so that the Board may impose any limits or restrictions and make any arrangements whichit considers necessary or appropriate to deal with treasury shares, fractional entitlements,record dates, legal, regulatory or practical problems in, or under the laws of, any territory orany other matter,

such authorities to apply until the end of the next annual general meeting of the Company (or, ifearlier, until the close of business on 19 September 2011) but, in each case, during this period theCompany may make offers and enter into agreements which would, or might, require shares to beallotted or rights to subscribe for or convert securities into shares to be granted after the authorityends and the Board may allot shares or grant rights to subscribe for or convert securities into sharesin the Company under any such offer or agreement as if the authority had not ended;

(B) subject to and conditional upon the passing of the resolution described in section 3.6(A) above, theBoard be given power, in substitution for all subsisting powers, to allot equity securities (as definedin the Companies Act) for cash under the authority given by the resolution described insection 3.6(A) above and/or to sell Ordinary Shares held by the Company as treasury shares forcash as if section 561 of the Companies Act did not apply to any such allotment or sale, such powerto be limited:

(i) to the allotment of equity securities up to an aggregate nominal amount of £5 million inconnection with the Offers;

(ii) to the allotment of equity securities and sale of treasury shares for cash in connection with anoffer of, or invitation to apply for, equity securities (but in the case of the authority grantedunder paragraph (iv) of the resolution described at section 3.6(A) above, by way of a rightsissue only):

(a) to holders of Ordinary Shares in proportion (as nearly as may be practicable) to theirexisting holdings; and

(b) to holders of other equity securities, as required by the rights of those securities, or as theBoard otherwise considers necessary as permitted by the rights of those securities,

and so that the Board may impose any limits or restrictions and make any arrangements whichit considers necessary or appropriate to deal with treasury shares, fractional entitlements,record dates, legal, regulatory or practical problems in, or under the laws of, any territory orany other matter; and

(iii) in the case of the authority granted under sub-paragraph (iii) of the resolution described atsection 3.6(A) above and/or in the case of any sale of treasury shares for cash, to the allotment(otherwise than under paragraph (ii) above) of equity securities or sale of treasury shares up toa nominal amount of £1 million,

such power to apply until the end of the next annual general meeting of the Company (or, if earlier,until the close of business on 19 September 2011 but, in each case, during this period the Companymay make offers, and enter into agreements, which would, or might, require equity securities to beallotted (and treasury shares to be sold) after the power ends and the Board may allot equitysecurities (and sell treasury shares) under any such offer or agreement as if the power had notended; and

(C) subject to and conditional upon Admission, the Company be authorised for the purposes ofsection 701 of the Companies Act to make one or more market purchases (as defined insection 693(4) of the Companies Act) of its Ordinary Shares, such power to be limited:

(i) to a maximum number of 100,000,000 Ordinary Shares;

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(ii) by the condition that the minimum price which may be paid for an Ordinary Share is 2 penceand the maximum price which may be paid for an Ordinary Share is the highest of:

(a) an amount equal to 5 per cent. above the average market value of an Ordinary Share forthe five Business Days immediately preceding the day on which that Ordinary Share iscontracted to be purchased; and

(b) the higher of the price of the last independent trade and the highest current independentbid on the trading venues where the purchase is carried out,

in each case, exclusive of expenses;

such power to apply until the end of the next annual general meeting of the Company (or, if earlier,19 September 2011) but in each case so that the Company may enter into a contract to purchaseOrdinary Shares which will or may be completed or executed wholly or partly after the power endsand the Company may purchase Ordinary Shares pursuant to any such contract as if the power hadnot ended.

The Directors undertake that, to the extent that the authority conferred under sub-paragraph (iii) ofthe resolution described in section 3.6(A) above is in respect of an aggregate nominal amount whichexceeds the aggregate of (a) the aggregate nominal amount of the Company’s issued ordinaryshare capital immediately following Admission (the ‘‘Admission Capital’’) and (b) one-third of theAdmission Capital, they will not exercise that authority in respect of such excess.

The Directors undertake that, to the extent that the authority conferred under sub-paragraph (iv) ofthe resolution described in section 3.6(A) above is in respect of an aggregate nominal amount whichexceeds the aggregate of (a) the aggregate nominal amount of the Admission Capital and(b) two-thirds of the Admission Capital, they will not exercise that authority in respect of suchexcess.

The Directors undertake to limit the exercise of the power conferred by the resolution described insection 3.6(B) above, as limited by sub-paragraph (iii) of that paragraph, to an aggregate nominalamount which is not more than the aggregate of (a) the aggregate nominal amount of the AdmissionCapital and (b) 5 per cent. of the Admission Capital.

The Directors undertake that, to the extent that the authority conferred by the resolution referred toin section 3.6(C) above is in respect of an aggregate number of shares which exceeds theaggregate of (a) the aggregate number of Ordinary Shares in issue immediately followingAdmission (the ‘‘Aggregate Number’’) and (b) 10 per cent. of the Aggregate Number, they will notexercise that authority in respect of such excess.

3.7 Confirmations

At the date of this document (and save as disclosed in sections 3, 9.3, 11, 12 and 17.4 of this Part XIII):

(A) no share or loan capital of the Company has, since the incorporation of the Company, been issuedor agreed to be issued, or is now proposed to be issued, fully or partly paid, either for cash or for aconsideration other than cash, to any person;

(B) no commission, discounts, brokerages or other special terms have been granted by the Company inconnection with the issue or sale of any share or loan capital; and

(C) no share or loan capital of the Company is under option or agreed, conditionally or unconditionally,to be put under option.

All of the Offer Shares have been marketed and will be available to the public in the UK.

Under the Final Articles and, in the case of the New Ordinary Shares, following their being issued, theOrdinary Shares will be in registered form and capable of being held in Certificated and Uncertificatedform. No temporary documents of title have been or will be issued in respect of the Ordinary Shares. TheOrdinary Shares will rank pari passu for dividends.

As at 5 July 2010, being the last practicable date prior to the date of this document, the Company held notreasury shares (as defined in the Companies Act 2006). However, the 32,476,700 Existing Shares held

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by the EBT Trustee pursuant to the JSOS are treated as treasury shares in the Group’s consolidatedbalance sheet in accordance with IAS 32 ‘‘Financial Instruments: Presentation’’. No Ordinary Shareshave been issued other than fully paid.

Immediately following Admission, the Company’s share capital is expected to be as follows:

Number of Ordinary Shares expected to be in issue immediately followingAdmission(1),(2) 497,476,810

(1) Assumes that the Offer Price is set at the mid-point of the Price Range. This figure excludes the 32,476,700 Ordinary Sharesheld by the EBT Trustee pursuant to the JSOS.

(2) Assumes that all Selling Optionholders exercise their exercisable options.

Further information about the Ordinary Shares and the rights attaching to them is set out in sections 4and 5 below, and further information on dealing arrangements and CREST is set out in section 21.

4. Information about the Ordinary Shares

4.1 Description of the type and class of securities being offered

The Ordinary Shares have a nominal value of 2 pence each. Following the Offers, the Company will haveone class of Ordinary Shares, the rights of which are set out in the Final Articles, a summary of which isset out in section 5 of this Part XIII.

When admitted to trading, the ISIN of the Ordinary Shares will be GB00B3MBS747.

The Existing Shares are, and the New Ordinary Shares will be, credited as fully paid and free from allliens, equities, charges, encumbrances and other interests. The Existing Shares rank, and the NewOrdinary Shares will rank, in full for all dividends and distributions on Ordinary Shares of the Companydeclared, made or paid after their issue.

4.2 Legislation under which the Ordinary Shares are created

The Existing Shares have been, and the New Ordinary Shares will be, created under the Companies Act.

4.3 Listing

Application will be made to the UK Listing Authority for all of the Ordinary Shares to be admitted to thepremium listing segment of the Official List. Application will also be made to the London Stock Exchangefor the Ordinary Shares to be admitted to trading on its main market for listed securities. It is expected thatAdmission will become effective and that dealings in the Ordinary Shares will commence on the LondonStock Exchange by no later than 8.00 a.m. on 26 July 2010.

Listing of the Ordinary Shares is not being sought on any stock exchange other than the London StockExchange. Conditional dealings in the Ordinary Shares (on a ‘‘when issued’’ basis) are expected tocommence on 21 July 2010. It is expected that Admission will become effective and that unconditionaldealings in the Ordinary Shares will commence at 8.00 a.m. (London time) on 26 July 2010. Dealings onthe London Stock Exchange before Admission will only be settled if Admission takes place. All dealingsbefore the commencement of unconditional dealings will be of no effect if Admission does not take placeand such dealings will be at the sole risk of the parties concerned.

4.4 Form and currency of the Ordinary Shares

The Ordinary Shares will be in registered form and will be capable of being held in Certificated andUncertificated form. The Registrar of the Company is Capita Registrars Limited of The Registry,34 Beckenham Road, Beckenham, Kent BR3 4TU.

Title to the Certificated Ordinary Shares (if any) will be evidenced by entry in the register of members ofthe Company and title to Uncertificated Ordinary Shares will be evidenced by entry in the operatorregister maintained by Euroclear UK (which will form part of the register of members of the Company).

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No share certificates will be issued in respect of the Ordinary Shares in Uncertificated form. If any suchshares are converted to be held in Certificated form, share certificates will be issued in respect of thoseshares in accordance with applicable legislation.

The Ordinary Shares are denominated in pounds sterling.

4.5 Rights attached to the Ordinary Shares

Each New Ordinary Share will, when issued and fully paid, rank pari passu in all respects with eachExisting Share and will have the same rights (including voting and dividend rights and rights on a return ofcapital) and restrictions as each Existing Share, as set out in the Final Articles.

Subject to the provisions of the Companies Act, any equity securities issued by the Company for cashmust first be offered to Shareholders in proportion to their holdings of Ordinary Shares. The CompaniesActs and the Listing Rules allow for the disapplication of pre-emption rights which may be waived by aspecial resolution of the Shareholders, either generally or specifically, for a maximum period notexceeding five years.

Except in relation to dividends which have been declared and rights on a liquidation of the Company, theShareholders have no rights to share in the profits of the Company.

The Ordinary Shares are not redeemable. However, the Company may purchase or contract to purchaseany of the Ordinary Shares on or off-market, subject to the Companies Act and the requirements of theListing Rules. The Company may purchase Ordinary Shares only out of distributable reserves or theproceeds of a new issue of shares made for the purpose of funding the repurchase.

Further details of the rights attached to the Ordinary Shares in relation to attendance and voting at generalmeetings, entitlements on a winding-up of the Company and transferability of shares are set out insection 5 of this Part XIII.

Further details of the voting and dividend rights attaching to Ordinary Shares issued pursuant to the JSOSare set out in section 11.3 of this Part XIII.

4.6 Authorities relating to the New Ordinary Shares

Please refer to section 3 of this Part XIII for a description of the authorities in place relating to the OrdinaryShares.

4.7 Description of restrictions on free transferability

Save as set out below and in section 11.3 of this Part XIII, the Ordinary Shares will be freely transferable.

The Company may, under the Companies Act, send out statutory notices to those it knows or hasreasonable cause to believe have an interest in its shares, asking for details of those who have an interestand the extent of their interest in a particular holding of shares. When a person receives a statutory noticeand fails to provide any information required by the notice within the time specified in it, the Company canapply to the court for an order directing, among other things, that any transfer of shares which are thesubject of the statutory notice is void.

4.8 Taxation

Certain information on taxation in the UK and the United States with regard to the Offers is set out inPart XII (Taxation). The information contained in Part XII (Taxation) is intended only as a general guide tothe current tax position in the UK and the United States for the Shareholders described therein.Prospective Shareholders should consult their own tax advisers regarding the tax treatment of theownership and disposition of Ordinary Shares in light of their own circumstances. ProspectiveShareholders who are in any doubt as to their tax position or who are subject to tax in any otherjurisdiction should consult an appropriate professional adviser immediately.

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4.9 Mandatory bids, squeeze-out and sell-out rules relating to the Ordinary Shares

Please refer to section 6 of this Part XIII for information relating to mandatory bids, squeeze-out andsell-out rules which are relevant to holders of Ordinary Shares.

5. Summary of the Final Articles

The Final Articles, which were adopted on 23 June 2010 subject to and with effect upon Admission,contain (amongst others) provisions to the following effect.

5.1 Unrestricted objects

The objects of the Company are unrestricted.

5.2 Limited Liability

The liability of the Company’s members is limited to any unpaid amount on the shares in the Companyheld by them.

5.3 Change of Name

The Final Articles allow the Company to change its name by resolution of the Directors. This is in additionto the Company’s statutory ability to change its name by special resolution under the Companies Act.

5.4 Share rights

Subject to applicable statutes (in this section the ‘‘Companies Acts’’), any resolution passed by theCompany under the Companies Acts and other Shareholders’ rights, shares may be issued with suchrights and restrictions as the Company may by ordinary resolution decide, or (if there is no such resolutionor so far as it does not make specific provision) as the Board may decide. These rights and restrictions willapply as if they were set out in the Final Articles. Redeemable shares may be issued. The Directors candecide on the terms and conditons and the manner of redemption of any redeemable shares. Theseterms and conditons will apply as if they were set out in the Final Articles. Subject to the Final Articles, theCompanies Acts and other Shareholders’ rights, the shares in the Company are at the disposal of theBoard.

5.5 Voting rights

Shareholders will be entitled to vote at a general meeting or class meeting whether on a show of hands ora poll, as provided in the Companies Acts. The Companies Act 2006 provides that:

(A) on a show of hands every member present in person has one vote and every proxy present who hasbeen duly appointed by one or more members will have one vote, except that a proxy has one votefor and one vote against if the proxy has been duly appointed by more than one member and theproxy has been instructed by one or more members to vote for and by one or more other membersto vote against. For this purpose the Final Articles provide that, where a proxy is given discretion asto how to vote on a show of hands, this will be treated as an instruction by the relevant Shareholderto vote in the way that the proxy decides to exercise that discretion; and

(B) on a poll every member has one vote per share held by him and he may vote in person or by one ormore proxies. Where he appoints more than one proxy, the proxies appointed by him taken togethershall not have more extensive voting rights than he could exercise in person.

This is subject to any rights or restrictions which are given to any shares or on which shares are held.

If more than one joint Shareholder votes (including voting by proxy), the only vote which will count is thevote of the person whose name is listed before the other voters on the register for the share.

5.6 Restrictions

No Shareholder shall be entitled to vote at any general meeting or class meeting in respect of any shareheld by him if any call or other sum then payable by him in respect of that share remains unpaid or if a

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member has been served with a restriction notice (as defined in the Final Articles) after failure to providethe Company with information concerning interests in those shares required to be provided under theCompanies Acts.

5.7 Dividends and other distributions

The Company may by ordinary resolution from time to time declare dividends not exceeding the amountrecommended by the Board. Subject to the Companies Acts, the Board may pay interim dividends, andalso any fixed rate dividend, whenever the financial position of the Company, in the opinion of the Board,justifies its payment. If the Board acts in good faith, it is not liable to holders of shares with preferred or paripassu rights for losses arising from the payment of interim or fixed dividends on other shares.

The Board may withhold payment of all or any part of any dividends or other monies payable in respect ofthe Company’s shares from a person with a 0.25 per cent. interest (as defined in the Final Articles) if sucha person has been served with a restriction notice (as defined in the Final Articles) after failure to providethe Company with information concerning interests in those shares required to be provided under theCompanies Acts.

Except insofar as the rights attaching to, or the terms of issue of, any share otherwise provide, alldividends shall be apportioned and paid pro rata according to the amounts paid up on the share duringany portion of the period in respect of which the dividend is paid. Except as set out above, dividends maybe declared or paid in any currency.

The Board may if authorised by an ordinary resolution of the Company offer ordinary Shareholders(excluding any member holding shares as treasury shares) in respect of any dividend the right to elect toreceive ordinary shares by way of scrip dividend instead of cash.

Any dividend unclaimed after a period of 12 years from the date when it was declared or became due forpayment shall be forfeited and revert to the Company.

The Company may stop sending cheques, warrants or similar financial instruments in payment ofdividends by post in respect of any shares or may cease to employ any other means of payment, includingpayment by means of a relevant system, for dividends if either (i) at least two consecutive payments haveremained uncashed or are returned undelivered or that means of payment has failed or (ii) one paymentremains uncashed or is returned undelivered or that means of payment has failed and reasonableenquiries have failed to establish any new postal address or account of the holder. The Company mayresume sending dividend cheques, warrants or similar financial instruments or employing that means ofpayment if the holder requests such resumption in writing.

5.8 Variation of rights

Subject to the Companies Acts, rights attached to any class of shares may be varied with the writtenconsent of the holders of not less than three-fourths in nominal value of the issued shares of that class(calculated excluding any shares held as treasury shares), or with the sanction of a special resolutionpassed at a separate general meeting of the holders of those shares. At every such separate generalmeeting (except an adjourned meeting) the quorum shall be two persons holding or representing by proxynot less than one-third in nominal value of the issued shares of the class (calculated excluding any sharesheld as treasury shares).

The rights conferred upon the holders of any shares shall not, unless otherwise expressly provided in therights attaching to those shares, be deemed to be varied by the creation or issue of further shares rankingpari passu with them.

5.9 Transfer of shares

The shares are in registered form. Any shares in the Company may be held in Uncertificated form and,subject to the Final Articles, title to Uncertificated shares may be transferred by means of a relevantsystem. Provisions of the Final Articles do not apply to any Uncertificated shares to the extent that suchprovisions are inconsistent with the holding of shares in Uncertificated form or with the transfer of sharesby means of a relevant system.

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Subject to the restrictions contained in the Final Articles described in this section 5.9, any member maytransfer all or any of his Certificated shares by an instrument of transfer in any usual form or in any otherform which the Board may approve. The instrument of transfer must be signed by or on behalf of thetransferor and (in the case of a partly paid share) the transferee.

The transferor of a share is deemed to remain the holder until the transferee’s name is entered in theregister.

The Board can decline to register any transfer of any share which is not a fully paid share. The Board mayalso decline to register a transfer of a Certificated share unless the instrument of transfer:

(A) is duly stamped or certified or otherwise shown to the satisfaction of the Board to be exempt fromstamp duty and is accompanied by the relevant share certificate or such other evidence of the rightto transfer as the Board may reasonably require;

(B) is in respect of only one class of share; and

(C) if to joint transferees, is in favour of not more than four such transferees.

Registration of a transfer of an Uncertificated share may be refused in the circumstances set out in theuncertificated securities rules (as defined in the Final Articles) and where, in the case of a transfer to jointholders, the number of joint holders to whom the Uncertificated share is to be transferred exceeds four.

The Board may decline to register a transfer of any of the Company’s Certificated shares by a person witha 0.25 per cent. interest (as defined in the Final Articles) if such a person has been served with arestriction notice (as defined in the Final Articles) after failure to provide the Company with informationconcerning interests in those shares required to be provided under the Companies Acts, unless thetransfer is shown to the Board to be pursuant to an arm’s length sale (as defined in the Final Articles).

5.10 Sub-division of share capital

Any resolution authorising the Company to sub-divide any of its shares can provide that, as between theholders of the divided shares, different rights and restrictions of a kind which the Company can apply tonew shares can apply to different dividend shares.

5.11 General meetings

The Final Articles rely on the Companies Act provisions dealing with the calling of general meetings. TheCompanies Act provides that a general meeting (other than an adjourned meeting) must be called bynotice of at least 21 days in the case of an annual general meeting and at least 14 days in any other case.Notice of a general meeting must be given in hard copy form, in electronic form, or by means of a websiteand must be sent to every member and every Director. It must state the time and date and the place of themeeting and the general nature of the business to be dealt with at the meeting. A notice calling an annualgeneral meeting must state that the meeting is an annual general meeting.

Each Director shall be entitled to attend and speak at any general meeting. The chairman of the meetingmay invite any person to attend and speak at any general meeting where he considers that this will assistin the deliberations of the meeting.

5.12 Directors

(A) Number of Directors

The Directors shall be not less than two and not more than 15 in number. The Company may by ordinaryresolution vary the minimum and/or maximum number of Directors.

(B) Directors’ shareholding qualification

A Director shall not be required to hold any shares in the Company.

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(C) Appointment of Directors

Directors may be appointed by the Company by ordinary resolution or by the Board. A Director appointedby the Board holds office only until the next following annual general meeting of the Company and is theneligible for re-appointment.

The Board or any committee authorised by the Board may from time to time appoint one or more Directorsto hold any employment or executive office for such period and on such terms as they may determine andmay also revoke or terminate any such appointment.

(D) Retirement of Directors

At every annual general meeting of the Company, each Director shall retire from office and may offerhimself for re-appointment by the members.

(E) Removal of Directors by special resolution

The Company may by special resolution remove any Director before the expiration of his period of office.

(F) Vacation of office

The office of a Director shall be vacated if:

(i) he resigns or offers to resign and the Board resolve to accept such offer;

(ii) his resignation is requested by all of the other Directors and all of the other Directors are notless than three in number;

(iii) he is or has been suffering from mental or physical ill-health and the Board resolves that hisoffice be vacated;

(iv) he is absent without the permission of the Board from meetings of the Board (whether or not analternate Director appointed by him attends) for six consecutive months and the Boardresolves that his office is vacated;

(v) he becomes bankrupt or compounds with his creditors generally;

(vi) he is prohibited by law from being a Director;

(vii) he ceases to be a Director by virtue of the Companies Acts; or

(viii) he is removed from office pursuant to the Final Articles.

If the office of a Director is vacated for any reason, he must cease to be a member of any committee orsub-committee of the Board.

(G) Alternate Directors

Any Director may appoint any person to be his alternate and may at his discretion remove such analternate Director. If the alternate Director is not already a Director, the appointment, unless previouslyapproved by the Board, shall have effect only upon and subject to being so approved.

(H) Proceedings of the Board

Subject to the provisions of the Final Articles, the Board may meet for the despatch of business, adjournand otherwise regulate its meetings as it thinks fit. The quorum necessary for the transaction of thebusiness of the Board may be fixed by the Board and, unless so fixed at any other number, shall be two. Ameeting of the Board at which a quorum is present shall be competent to exercise all the powers,authorities and discretions vested in or exercisable by the Board.

The Board may appoint a Director to be the chairman or a deputy chairman and may at any time removehim from that office. Questions arising at any meeting of the Board shall be determined by a majority ofvotes. In the case of an equality of votes the chairman of the meeting shall have a second or casting vote.

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All or any of the members of the Board may participate in a meeting of the Board by means of aconference telephone or any communication equipment which allows all persons participating in themeeting to speak to and hear each other. A person so participating shall be deemed to be present at themeeting and shall be entitled to vote and to be counted in the quorum.

The Board may delegate any of its powers, authorities and discretions (with power to sub-delegate) to anycommittee, consisting of such person or persons as it thinks fit, provided that the majority of persons onany committee or sub-committee must be Directors. The meetings and proceedings of any committeeconsisting of two or more members shall be governed by the provisions contained in the Final Articles forregulating the meetings and proceedings of the Board so far as the same are applicable and are notsuperseded by any regulations imposed by the Board.

(I) Remuneration of Directors

Each of the Directors shall be paid a fee at such rate as may from time to time be determined by theBoard, but the aggregate of all such fees so paid to the Directors shall not exceed £1,000,000 per annumor such higher amount as may from time to time be decided by ordinary resolution of the Company. AnyDirector who is appointed to any executive office shall be entitled to receive such remuneration (whetherby way of salary, commission, participation in profits or otherwise) as the Board or any committeeauthorised by the Board may decide, either in addition to or in lieu of his remuneration as a Director. Inaddition, any Director who performs services which in the opinion of the Board or any committeeauthorised by the Board go beyond the ordinary duties of a Director, may be paid such extra remunerationas the Board or any committee authorised by the Board may determine. Each Director may be paid hisreasonable travelling, hotel and incidental expenses of attending and returning from meetings of theBoard, or committees of the Board or of the Company or any other meeting which as a Director he isentitled to attend, and shall be paid all other costs and expenses properly and reasonably incurred by himin the conduct of the Company’s business or in the discharge of his duties as a Director. The Companymay also fund a Director’s or former Director’s expenditure and that of a Director or former Director of anyholding company of the Company for the purposes permitted under the Companies Acts and may doanything to enable a Director or former Director or a Director or former Director of any holding company ofthe Company to avoid incurring such expenditure as provided in the Companies Acts.

(J) Pensions and gratuities for Directors

The Board or any committee authorised by the Board may exercise the powers of the Company to providebenefits by the payment of gratuities or pensions or by insurance or in any other manner for any Directoror former Director or his relations, dependants or persons connected to him, but no benefits (except thoseprovided for by the Final Articles) may be granted to or in respect of a Director or former Director who hasnot been employed by or held an executive office or place of profit under the Company or any of itssubsidiary undertakings or their respective predecessors in business without the approval of an ordinaryresolution of the Company.

(K) Directors’ interests

The Board may, subject to the provisions of the Final Articles, authorise any matter which wouldotherwise involve a Director breaching his duty under the Companies Acts to avoid conflicts of interest.Where the Board gives authority in relation to a conflict of interest, or where any of the situationsdescribed in (i) to (v) below applies in relation to a Director, the Board may (a) require the relevant Directorto be excluded from the receipt of information, the participation in discussion and/or the making ofdecisions related to the conflict of interest or situation; (b) impose upon the relevant Director such otherterms for the purpose of dealing with the conflict of interest or situation as it may determine; and(c) provide that the relevant Director will not be obliged to disclose information obtained otherwise thanthrough his position as a Director of the Company and that is confidential to a third party or to use or applythe information in relation to the Company’s affairs, where to do so would amount to a breach of thatconfidence. The Board may revoke or vary such authority at any time.

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Subject to the provisions of the Companies Acts, and provided he has declared the nature and extent ofhis interest to the Board as required by the Companies Acts, a Director may:

(i) be party to, or otherwise interested in, any contract with the Company or in which the Companyhas a direct or indirect interest;

(ii) hold any other office or place of profit with the Company (except that of auditor) in conjunctionwith his office of Director for such period and upon such terms, including remuneration, as theBoard may decide;

(iii) act by himself or through a firm with which he is associated in a professional capacity for theCompany or any other company in which the Company may be interested (otherwise than asauditor);

(iv) be or become a Director or other officer of, or employed by or otherwise be interested in anyholding company or subsidiary company of the Company or any other company in which theCompany may be interested; and

(v) be or become a Director of any other company in which the Company does not have aninterest and which cannot reasonably be regarded as giving rise to a conflict of interest at thetime of his appointment as a Director of that other company.

A Director shall not, by reason of his office be liable to account to the Company or its members for anybenefit realised by reason of having an interest permitted as described above or by reason of having aconflict of interest authorised by the Board and no contract shall be liable to be avoided on the grounds ofa Director having any such interest.

(L) Restrictions on voting

No Director may vote on or be counted in the quorum in relation to any resolution of the Board concerninghis own appointment, or the settlement or variation of the terms or the termination of his own appointment,as the holder of any office or place of profit with the Company or any other company in which theCompany is interested save to the extent permitted specifically in the Final Articles.

Subject to certain exceptions set out in the Final Articles, no Director may vote on, or be counted in aquorum in relation to, any resolution of the Board in respect of any contract in which he has an interestand, if he does so, his vote shall not be counted.

Subject to the Companies Acts, the Company may by ordinary resolution suspend or relax to any extentthe provisions relating to Directors’ interests or the restrictions on voting or ratify any transaction not dulyauthorised by reason of a contravention of such provisions.

(M) Borrowing powers

Subject to the Final Articles, the Companies Acts and any directions given by the Company by specialresolution, the business of the Company will be managed by the Board who may exercise all the powersof the Company, whether relating to the management of the business of the Company or not. In particular,the Board may exercise all the powers of the Company to borrow money, to guarantee, to indemnify, tomortgage or charge any of its undertaking, property, assets (present and future) and uncalled capital andto issue debentures and other securities and to give security for any debt, liability or obligation of theCompany or of any third party. The Board must restrict the borrowings of the Company and exercise allvoting and other rights or powers of control exercisable by the Company in relation to its subsidiaryundertakings so as to secure that the aggregate principal amount of all borrowings (as defined in the FinalArticles) of the group (as defined in the Final Articles) (exclusive of borrowings owing by one member ofthe group to another) does not exceed, or would as a result of such borrowing exceed, a sum equal to£750,000,000. However, the Shareholders may pass an ordinary resolution allowing borrowings toexceed such limit.

(N) Indemnity of Directors

To the extent permitted by the Companies Acts, the Company may indemnify any Director or formerDirector of the Company or any associated company against any liability and the Company has enteredinto a deed of indemnity with each of the Directors. In addition, the Company may purchase and maintainfor any Director or former Director of the Company or any associated company insurance against anyliability.

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5.13 Methods of service

Any notice, document (including a share certificate or a Share Account Statement) or other informationmay be served on or sent or supplied to any Shareholder by the Company personally, by post, by meansof a relevant system, by sending or supplying it in electronic form to an address notified by theShareholder to the Company for that purpose, where appropriate, by making it available on a website andnotifying the Shareholder of its availability, or by any other means authorised in writing by theShareholder.

The Company has served notice on its existing Shareholders of its intention to communicate with themvia the Website and has sought their acceptance to communicate with them by way of other electronicmeans.

A successful applicant under the Customer and Employee Offer will have consented to receiving allcommunications from the Company in electronic form to the email address supplied on the Customer andEmployee Offer Application Form. Such consent may be revoked at any time and will not affect aShareholder’s right to receive a document or information in hard copy in accordance with section 1145 ofthe Companies Act.

6. Mandatory bids and compulsory acquisition rules relating to Ordinary Shares

Other than as provided by the Takeover Code and Chapter 28 of the Companies Act, there are no rules orprovisions relating to mandatory bids and/or squeeze-out and sell-out rules relating to the Company.

6.1 Mandatory bid

The Takeover Code applies to the Company. Under the Takeover Code, if an acquisition of interests inshares were to increase the aggregate holding of the acquirer and its concert parties to interests in sharescarrying 30 per cent. or more of the voting rights in the Company, the acquirer and, depending oncircumstances, its concert parties would be required (except with the consent of the Panel on Takeoversand Mergers) to make a cash offer for the outstanding shares in the Company at a price not less than thehighest price paid for interests in shares by the acquirer or its concert parties during the previous12 months. This requirement would also be triggered by any acquisition of interests in shares by a personholding (together with its concert parties) shares carrying between 30 per cent. and 50 per cent. of thevoting rights in the Company if the effect of such acquisition were to increase that person’s percentage ofthe total voting rights in the Company.

6.2 Squeeze-out

Under the Companies Act, if an offeror were to make an offer to acquire all of the shares in the Companynot already owned by it and were to acquire 90 per cent. of the shares to which such offer related it couldthen compulsorily acquire the remaining 10 per cent. The offeror would do so by sending a notice tooutstanding members telling them that it will compulsorily acquire their shares and then, six weeks later, itwould deliver a transfer of the outstanding shares in its favour to the Company which would execute thetransfers on behalf of the relevant members, and pay the consideration to the Company which would holdthe consideration on trust for outstanding members. The consideration offered to the members whoseshares are compulsorily acquired under this procedure must, in general, be the same as theconsideration that was available under the original offer unless a member can show that the offer valueis unfair.

6.3 Sell-out

The Companies Act also gives minority members a right to be bought out in certain circumstances by anofferor who has made a takeover offer. If a takeover offer related to all the shares in the Company and, atany time before the end of the period within which the Offers could be accepted, the offeror held or hadagreed to acquire not less than 90 per cent. of the shares, any holder of shares to which the offer relatedwho had not accepted the offer could by a written communication to the offeror require it to acquire thoseshares. The offeror would be required to give any member notice of his/her right to be bought out withinone month of that right arising. The offeror may impose a time limit on the rights of minority members to bebought out, but that period cannot end less than three months after the end of the acceptance period or, if

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later, three months from the date on which notice is served on members notifying them of their sell-outrights. If a member exercises his/her rights, the offeror is entitled and bound to acquire those shares onthe terms of the offer or on such other terms as may be agreed.

7. Organisational Structure

The Group comprises the Company and its subsidiary undertakings. The Company has the followingsubsidiaries, all of which are directly or indirectly 100 per cent. owned by it:

Company name Place of incorporation Principal activity

Ocado Holdings Limited England and Wales Intermediate holding company

Ocado Limited England and Wales Principal operating company ofthe Group

Ocado Information Technology Limited The Republic of Ireland Ownership and licensing ofOcado intellectual property foruse outside the UK

Jalapeno Partners Limited England and Wales Dormant

The Company owns directly the entire issued share capital of Ocado Holdings Limited which holds theentire issued share capital of Ocado and Ocado Information Technology Limited.

The Company and Ocado Holdings Limited are holding companies. Ocado is the operating company ofthe Group and holds the intellectual property necessary to operate the Business in the UK. OcadoInformation Technology Limited holds the intellectual property rights to operate the Business outside theUK; if the Group were to operate the Business or otherwise licence its technology outside the UK, therelevant operating company would licence these rights from Ocado Information Technology Limited.

Ocado has one wholly owned subsidiary, Jalapeno Partners Limited, which is dormant. In addition,Ocado holds 25 per cent. of the issued share capital of Paneltex Limited, which is incorporated in Englandand Wales. The principal activity of Paneltex Limited is engineering (including the customisation of theGroup’s vans).

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8. Major Shareholders

As at 5 July 2010 (the latest practicable date prior to the publication of this document) and insofar as isknown to the Company, the following persons are, directly or indirectly, interested in 3 per cent. or more ofthe issued share capital of the Company, and will have the following interests immediately afterAdmission:

Percentage ofissued share

Percentage of capitalissued share immediatelycapital as at following

Shareholder Shareholding(1) 5 July 2010 Admission(2)

John Lewis Pension Fund(3) . . . . . . . . . . . . . . . . . . 114,642,300 26.44% 10.82%

The Apple Trust(4) . . . . . . . . . . . . . . . . . . . . . . . . . 59,080,100 13.63% 11.15%

S. N. Roditi and associated holdings . . . . . . . . . . . . 45,230,900 10.43% 8.53%

UBS Holdings Cayman Limited and UBS AG . . . . . . 39,243,600 9.05% 3.42%

Appleby Trust (Jersey) Limited (as trustee of theemployee benefit trust established for thepurposes of the JSOS)(5) . . . . . . . . . . . . . . . . . . . 32,476,700 7.49% 6.13%

Tim Steiner and the Steiner 2008 Millennium Trust(6) 29,687,600 6.85% 5.22%

Kira Faiman and Jonathan Faiman(7) . . . . . . . . . . . . 27,437,400 6.33% 4.61%

Jason Gissing and The Jason Gissing LifeSettlement II(8) . . . . . . . . . . . . . . . . . . . . . . . . . . 19,241,000 4.44% 3.27%

(1) This figure is an aggregate of the number of Ordinary Shares and the Preference Shares held by each Shareholder as at5 July 2010 for comparative purposes. On Admission all Preference Shares will convert on a one for one basis into OrdinaryShares and the Company will have a single class of shares.

(2) The percentage of issued share capital immediately following Admission assumes that the Company issues 86,273,616 NewOrdinary Shares pursuant to the Offers (which itself assumes that the Offer Price is set at the mid-point in the Price Rangeand the exercise of options and warrants prior to Admission), and that each Major Shareholder which is a Major SellingShareholder sells the maximum number of Existing Shares in the Offers which he or it has indicated, on a non-binding basis,it may sell. The Apple Trust, S.N. Roditi and associated holdings and Appleby Trust (Jersey) Limited (as trustsee for theemployee benefit trust established for the purposes of the JSOS are not selling any Existing Shares pursuant to the Offers.The percentage includes those shares held by the EBT Trustee—see footnote (5) below.

(3) Patrick Lewis is a pensioner of the John Lewis Partnership Trust for Pensions. Patrick Lewis and Michael Robarts aredirectors of the John Lewis Pension Fund.

(4) Jorn Rausing and his immediate family are the beneficiaries of the Apple Trust. Its trustees are Pascal Picci and David Way.On 21 June 2010 the trustees of the Apple Trust entered into a contract for the transfer of the Ordinary Shares held by them toHamilton Trust Company Limited, the trustee of the Apple II Trust. The beneficiaries of the Apple II Trust are the same as thebeneficiaries of the Apple Trust. Completion of the transfer will take place on 5 April 2011 unless the parties decide otherwise.The Apple II Trust will be locked-up to the same extent as the Apple Trust.

(5) Appleby Trust (Jersey) Limited is the EBT Trustee. The Ordinary Shares held by it are treated as treasury shares in theGroup’s consolidated balance sheet and are, in certain places in this document, excluded from the calculations of theCompany’s issued share capital.

(6) On 21 June 2010 Tim Steiner entered into contracts for the transfer of 14,000,000 Ordinary Shares in aggregate held in hisname to his father, in consideration of £100 and 97 per cent. of the market value of the Ordinary Shares on completion (whichamount may be paid over three years). Completion is due to take place on 30 June 2013 or such other date as the partiesmay agree. Tim Steiner will retain a beneficial interest in the transferring Ordinary Shares until completion. Tim Steiner’sfather’s interest in these shares will be locked-up to the same extent as Tim’s own interests.

(7) On the day this document was published Kira Faiman entered into a contract for the transfer of 24,437,400 Ordinary Sharesheld in her name to Walker Fund Services Limited as trustee of the Tempest Trust, a trust of which she is the beneficiary. Theconsideration payable per Ordinary Share by the Tempest Trust was the bottom of the Price Range and completion is thesame day. Walker Fund Services Limited’s interests in these shares will be locked-up to the same extent as Kira’s owninterests.

(8) On 21 June 2010 Jason Gissing entered into five contracts for the transfer of 1,840,000 Ordinary Shares (9,200,000 OrdinaryShares in aggregate) held in his name to his mother, in consideration, per contract, of £100 and 98 per cent. of the market

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value of the Ordinary Shares transferred on completion (which amount may be paid over five years). Completion is due totake place on 30 June 2013 or such other date as the parties may agree. Jason Gissing will retain a beneficial interest in thetransferring Ordinary Shares until completion. Jason Gissing’s mother’s interest in these shares will be locked-up to the sameextent as Jason’s own interests.

As at 5 July 2010 (the latest practicable date prior to the publication of this document) and immediatelyafter Admission:

(A) the Company is not aware of any persons who, directly or indirectly, jointly or severally, will exerciseor could exercise control over the Company; and

(B) none of the Major Shareholders has or will have different voting rights.

Certain of the Banks have interests in the Company. Please refer to ‘‘the Joint Global Co-ordinators,Co-Book Runners and Co-Lead Managers’’ on page 29 above for details.

9. Directors

9.1 Other directorships and partnerships

The details of those companies and partnerships outside the Group of which the Directors are currentlydirectors or partners, or have been directors or partners at any time during the previous five years prior tothe date of this document, are as follows:

Current directorships Previous directorships Date of resignation/Name of Director and partnerships and partnerships company’s dissolution

Michael Grade Society of Stars AKL Technologies Limited (resigned 23/3/09)Pinewood Shepperton PLC Society of Stars (Events) Limited (resigned 12/3/09)National Angels Limited Carnage and Gold Limited (dissolved 7/3/09)Lymington Charter Limited Bushwacker Productions Limited (dissolved 25/7/05)James Grant Group Limited The David Lean Bafta (resigned 3/12/09)The Gradelinnit Company Limited FoundationTudor Films LLP ITV PLC (resigned 31/12/09)Ingenious Film Partners 2 LLP Charlton Athletic PLC (resigned 25/9/09)Phoenix Film Partners LLP AKL Technologies Limited (resigned 23/3/09)

Hemscott Limited (resigned 25/9/06)Studiolink Limited (resigned 5/5/06)Pinewood Studios Limited (resigned 13/2/06)

David Grigson Creston PLC Reuters Group PLC (resigned 31/7/08)Standard Life PLC The Carphone Warehouse (resigned 31/03/10)Z 2010 Limited Group PLC49 Wellington Street (Management) Nations Healthcare (Burton) (resigned 13/4/09)Limited LimitedDolma Development Fund Nations Healthcare (North (resigned 13/4/09)

Bradford) LimitedNations Healthcare (Nottingham) (resigned 13/4/09)LimitedNations Healthcare Limited (resigned 13/4/09)

Tim Steiner — Natural Farming Limited (a (resigned 19/8/09)Jersey company)

Neill Abrams — Returnshare Property (resigned 14/11/05)Management LimitedSkyline Balloons Limited (dissolved 28/5/05

following insolvency)

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Current directorships Previous directorships Date of resignation/Name of Director and partnerships and partnerships company’s dissolution

Andrew Bracey — Mars Bidco Limited (resigned 2/12/07)Mars Holdings Limited (resigned 2/12/07)Mars Issuer Limited (resigned 2/12/07)Mars UK Holdco Limited (resigned 2/12/07)Domum Properties Limited (dissolved 4/4/06)Compton Manor Shoot Limited (dissolved 21/2/06)Violet Acquisitions Limited (resigned 20/3/06)Violet Equityco Limited (resigned 20/3/06)Violet Opholdco Limited (resigned 20/3/06)Violet Pikco Limited (resigned 20/3/06)Violet S Propco Limited (resigned 20/3/06)Violet Seniorco Limited (resigned 20/3/06)

Jason Gissing — —

Ruth Anderson The Gynaecology Cancer Research KPMG LLP (resigned 3/4/09)Fund (The Eve Appeal)The Royal ParksThe Duke of Edinburgh’s Award

Robert Gorrie Hornsey Town Hall Creative Trust —Robert Gorrie Limited

Jorn Rausing Tetra Laval Group —Alfa Laval ABDeLaval Holdings AB

David Young The Soil Association Limited —

Patrick Lewis John Lewis Partnership plc J.H. Birtwistle & Company (resigned 14/9/07)John Lewis Pension Fund LimitedMargrange Investments Limited (now called LUPFAWJHB

Limited)Stead, McAlpine & Company (resigned 14/9/07)Limited(now called LUPFAWSMALimited)

Michael Robarts John Lewis Pension Fund — —PF Consultants 2009 Limited

As well as being a Director of the Company, Patrick Lewis is also a director of John Lewis Partnership plc.Waitrose is an indirect wholly-owned subsidiary of John Lewis Partnership plc and, as described in thisdocument, is the Group’s key supplier and also a competitor. Other than Patrick Lewis, no Director hasany actual or potential conflicts of interest between any of his duties to the Company and his privateinterests and/or other duties.

9.2 Confirmations

As at the date of this document, no Director has during the last five years:

(A) any convictions in relation to fraudulent offences;

(B) been associated with any bankruptcies, receiverships or liquidations acting in the capacity of any ofthe positions set out against the name of the Director in section 9.1 of this Part XIII;

(C) been subject to any official public incrimination and/or sanctions by any statutory or regulatoryauthorities (including designated professional bodies); or

(D) been disqualified by a court from acting as a member of the administrative management orsupervisory bodies of an issuer or from acting in the management or conduct of the affairs of anyissuer.

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9.3 Interests of Directors in Ordinary Shares

Interests in shares in the Company

Set out below are the direct and indirect interests of the Directors in the issued share capital of theCompany (including interests in the issued share capital of the Company held in discretionery trusts andShares in which the Directors have only certain beneficial interests) as at 5 July 2010, being the latestpracticable date prior to the publication of this document, and as they are expected to be on Admission:

Interests of the Directors in the issued Interests of the Directors in the issuedshare capital of the Company as at share capital of the Company

5 July 2010(1) immediately following Admission(2)

Percentage of Percentage ofissued share issued sharecapital of the capital of the

Director Shareholding(1) Company Shareholding Company

Michael Grade(3) . . . . . . . 78,000 0.02% 120,105 0.02%David Grigson . . . . . . . . . — — — —Tim Steiner(4) . . . . . . . . . 29,687,600 6.85% 27,687,600 5.22%Neill Abrams(5) . . . . . . . . 1,710,500 0.39% 1,210,500 0.23%Andrew Bracey . . . . . . . . 750,000 0.17% 750,000 0.14%Jason Gissing(6) . . . . . . . . 19,241,000 4.44% 17,316,900 3.27%Ruth Anderson . . . . . . . . — — — —Robert Gorrie(7) . . . . . . . . 1,627,900 0.38% 627,900 0.12%Jorn Rausing(8) . . . . . . . . 59,080,100 13.63% 59,080,100 11.15%David Young . . . . . . . . . . — — — —Patrick Lewis(9) . . . . . . . . — — — —Michael Robarts(10) . . . . . — — — —

Total . . . . . . . . . . . . . . . 112,175,100 25.87% 106,793,105 20.15%

(1) This figure is an aggregate of the number of Ordinary Shares and the Preference Shares held by each Director as at 5 July2010 for comparative purposes. On Admission all Preference Shares will convert on a one for one basis into Ordinary Sharesand the Company will have a single class of shares, the Ordinary Shares. This figure includes the 32,476,000 OrdinaryShares held by the EBT Trustee pursuant to the JSOS.

(2) This percentage assumes that the Company issues 86,273,616 New Ordinary Shares pursuant to the Offers (which itselfassumes that the Offer Price is set at the mid-point in the Price Range) and the exercise of options and warrants prior toAdmission, and the figure and the percentage assume that each Director which is a Major Selling Shareholder sells themaximum number of Existing Shares in the Offer which he has indicated, on a non-binding basis, he may sell. This figureincludes the 32,476,700 Ordinary Shares held by the EBT Trustee pursuant to the JSOS.

(3) Michael Grade is entitled to a single bonus of £100,000 payable on Admission which he has elected to receive in OrdinaryShares at the Offer Price in accordance with the terms of his letter of appointment. Assuming that the Offer Price is set at themid-point in the Price Range, this would mean that he would receive 42,105 Ordinary Shares.

(4) On 21 June 2010 Tim Steiner entered into contracts for the transfer of 14,000,000 Ordinary Shares in aggregate held in hisname to his father, in consideration of £100 and 97 per cent. of the market value of the Ordinary Shares on completion (whichamount may be paid over three years). Completion is due to take place on 30 June 2013 or such other date as the partiesmay agree. Tim Steiner will retain a beneficial interest in the transferring Ordinary Shares until completion. Tim Steiner’sfather’s interests in such shares shall be locked-up to the same extent as Tim’s own interests.

(5) On 22 June 2010 Neill Abrams transferred 75,000 Ordinary Shares held in his name to his wife by way of a gift. He retains nobeneficial interest in these shares. He also entered into three contracts on 22 June 2010. Each contract was for the transfer of100,000 Ordinary Shares held in his name to his wife, as bare trustee, for each of his three children, in consideration of £100and 97 per cent. of the market value of the Ordinary Shares on completion (which amount may be paid over five years).Completion is due to take place on 30 June 2013 or such other date as the parties may agree. Neill Abrams will retain abeneficial interest in the transferring Ordinary Shares until completion. Neill’s wife’s and children’s interests in such shareswill be locked-up to the same extent as Neill’s own interests.

(6) On 21 June 2010 Jason Gissing entered into five contracts for the transfer of 1,840,000 Ordinary Shares (9,200,000 OrdinaryShares in aggregate) held in his name to his mother, in consideration, per contract, of £100 and 98 per cent. of the marketvalue of the Ordinary Shares transferred on completion (which amount may be paid over five years). Completion is due totake place on 30 June 2013 or such other date as the parties may agree. Jason Gissing will retain a beneficial interest in thetransferring Ordinary Shares until completion. Jason Gissing’s mother’s interests in such shares will be locked-up to thesame extent as Jason’s own interests.

(7) On 22 June 2010 Robert Gorrie entered into two contracts each for the transfer of 500,000 Ordinary Shares held in his nameto his wife, as bare trustee for each of his two children, in consideration of £100 and 97 per cent. of the market value of the

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Ordinary Shares on completion (which amount may be paid over five years). Completion is due to take place on Admission orsuch other date as the parties may agree. Robert Gorrie will retain a beneficial interest in the transferring Ordinary Sharesuntil completion. Robert Gorrie’s children’s interests in such shares will be locked-up to the same extent as Robert’s owninterests.

(8) Jorn Rausing and his immediate family are beneficiaries of the Apple Trust which is a Major Shareholder. The trustees of theApple Trust are Pascal Picci and David Way. On 21 June 2010 the trustees of the Apple Trust entered into a contract for thetransfer of the Ordinary Shares held by them to Hamilton Trust Company Limited, the trustee of the Apple II Trust. Thebeneficiaries of the Apple II Trust are the same as the beneficiaries of the Apple Trust. Completion of the transfer will takeplace on 5 April 2011 unless the parties decide otherwise. The Apple II Trust will be locked-up to the same extent as theApple Trust.

(9) Patrick Lewis is a pensioner of the John Lewis Trust for Pensions and a director of John Lewis Pension Fund which is a MajorShareholder.

(10) Michael Robarts is a director of the John Lewis Pension Fund which is a Major Shareholder.

Options over Ordinary Shares

Each of Tim Steiner, Neill Abrams, Andrew Bracey, Jason Gissing and Robert Gorrie has, as at 5 July2010 (being the latest practicable date prior to the publication of this document), the following optionsover Ordinary Shares pursuant to the ESOS:

Number ofoptions over

Ordinary Option priceDirector Date of issue Shares (£) Exercise/vesting period

Tim Steiner . . . . . . . . . . . . . May 2005 200,000 1.15 16 May 2008–15 May 2015

Neill Abrams . . . . . . . . . . . . . May 2002 175,000 1.00 7 February 2005–6 February 2012

May 2002 175,000 1.50 7 February 2005–6 February 2012

November 2003 100,000 0.90 30 November 2006–29 November 2013

May 2005 100,000 1.15 16 May 2008–15 May 2015

Andrew Bracey . . . . . . . . . . . November 2009 46,296 1.35 16 November 2012–15 November 2019

Jason Gissing . . . . . . . . . . . . May 2005 200,000 1.15 16 May 2008–15 May 2015

Robert Gorrie . . . . . . . . . . . . May 2002 175,000 1.50 7 February 2005–6 February 2012

In addition to the options over Ordinary Shares pursuant to the ESOS detailed above, Andrew Bracey hasthe following options over Ordinary Shares:

Number ofoptions over

Ordinary Option priceDirector Date of issue Shares (£) Exercise/vesting period

Andrew Bracey . . . . . . . . . . 4 February 2002 886,700 0.90 4 February 2002–4 February 2017

3 January 2004 435,300 1.03 3 January 2004–3 January 2018

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Interests in Ordinary Shares under the JSOS

Each of Tim Steiner, Jason Gissing, Neill Abrams and Andrew Bracey has, as at 5 July 2010 (being thelatest practicable date prior to the publication of this document), the following interests in Ordinary Sharespursuant to the JSOS:

Vesting on Vesting on Vesting on Vesting on1 January 1 January 1 January 1 January

2011 2012 2013 2014 Total

Tim Steiner . . . . . . . . . . . . 2,513,100 2,513,100 2,513,100 2,513,000 10,052,300Neill Abrams . . . . . . . . . . . 1,017,200 1,017,200 1,017,200 1,017,100 4,068,700Andrew Bracey . . . . . . . . . 1,675,400 1,675,400 1,675,400 1,675,300 6,701,500Jason Gissing . . . . . . . . . . 1,675,400 1,675,400 1,675,400 1,675,300 6,701,500

General

Save as set out above, no Director has any interests (beneficial or non-beneficial) in the share capital ofthe Company. Save as set out above, no Director holds an interest in any other securities of theCompany.

9.4 Transactions with Directors

Save as described below, none of the Directors:

• has or has had any interest in any transaction which is or was unusual in its nature or conditions orsignificant to the Business which was effected by any member of the Group during the current orimmediately preceding financial year, or which was effected during an earlier financial year andremains in any respect outstanding or unperformed; and

• has or had a beneficial interest in any contract to which any member of the Group was a party duringthe current or immediately preceding financial year.

Robert Gorrie provides consultancy services to the Group and chairs the meetings of the Ocadoemployee council. Robert Gorrie provides these services through Robert Gorrie Limited (of which RobertGorrie is the sole shareholder) and it is paid a per diem fee for these services.

The Apple Trust (of which Jorn Rausing is a beneficiary) underwrote Ocado’s last funding round inSeptember 2009, for which it was paid a fee of £387,500 under the terms of an agreement dated 1 July2009 and a side letter dated 20 August 2009. Payment of that fee was set off against the subscriptionamount payable by the Apple Trust for the shares it subscribed for in that funding round.

There are no outstanding loans or guarantees granted or provided by any member of the Group for thebenefit of any of the Directors.

9.5 Executive Directors’ service contracts, remuneration and emoluments

Ocado has entered into service contracts with each of the Executive Directors for the provision of servicesto the Group. Each of the contracts was entered into on 22 June 2010. The terms of these contracts,together with the dates on which each Executive Director joined Ocado and the Company, are set outbelow:

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Notice Noticeperiods by periods by

Date of appointment Date of appointment Company DirectorDirector by the Company by Ocado Unexpired term (months) (months) (months)

Tim Steiner 9 March 2010 13 April 2000 Continuous employment 12 6until terminated by eitherparty. Ends automaticallyon retirement age of 65.

Neill Abrams 10 December 2009 8 September 2000 Continuous employment 12 6until terminated by eitherparty. Ends automaticallyon retirement age of 65.

Andrew Bracey 10 December 2009 3 November 2009 Continuous employment 12 6until terminated by eitherparty. Ends automaticallyon retirement age of 65.

Jason Gissing 9 March 2010 2 February 2000 Continuous employment 12 6until terminated by eitherparty. Ends automaticallyon retirement age of 65.

The remuneration (including salary and other benefits and any contingent or deferred compensation)payable by Ocado to the Directors for services in all capacities to Ocado by any person in FYE 2009 areset out below.

Basic salary Benefits in Pension 2009Director or fees Bonus kind contributions Total

Tim Steiner . . . . . . . £352,411 £262,040 £3,275 £33,630 £651,356Neill Abrams . . . . . . £216,913 £110,416 £2,313 £16,500 £346,142Andrew Bracey . . . . £23,439 — £246 — £23,685Jason Gissing . . . . . £268,144 £191,208 £2,634 £24,630 £486,616

* Andrew Bracey was appointed to the Board of Ocado on 3 November 2009. His annual salary is £250,000. He was not paidany cash bonuses in FYE 2009.

9.6 Non-executive Directors’ letters of appointment and fees

The Chairman and the non-executive Directors do not have service contracts and are appointed by letterof appointment, the details of which are set out in the table below:

Date ofDate of appointment to appointment to Current Notice Current

the board of Ocado the Board Term period age

Michael Grade . . . . . . . . 15 September 2006 9 March 2010 3 years 6 months 67David Grigson . . . . . . . . . 3 February 2010 9 March 2010 3 years 1 month 55Ruth Anderson . . . . . . . . — 9 March 2010 3 years 1 month 56Robert Gorrie(1) . . . . . . . . 1 April 2000 9 March 2010 3 years 1 month 51Jorn Rausing . . . . . . . . . 13 March 2003 9 March 2010 3 years 1 month 50David Young . . . . . . . . . . 13 October 2000 9 March 2010 3 years 1 month 68Patrick Lewis(2) . . . . . . . . 21 October 2009 9 March 2010 3 years 1 month 44Michael Robarts(2) . . . . . . 19 January 2010 9 March 2010 3 years 1 month 65

(1) From April 2000 to April 2006, Robert Gorrie was the logistics director of Ocado. On 1 May 2006 he became a non-executiveDirector. In addition to his role as a non-executive Director, Robert Gorrie provides consultancy services to the Group andchairs the meetings of the Ocado employee council. Robert Gorrie provides these services through Robert Gorrie Limited (ofwhich Robert Gorrie is the sole shareholder) and is paid a per diem fee for these services. These fees are included inadditional remuneration above.

(2) Patrick Lewis and Michael Robarts were appointed by John Lewis Pension Fund pursuant to its right to appoint two directorsunder the shareholders’ agreement that, from 2000, governed the relationship between Ocado and its shareholders (andwhich expires on Admission).

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Details of the fees and other remuneration payable annually to each of the non-executive Directors forFYE 2009 are set out below:

Additionalremuneration

(annualBasic annual unless FYEsalary/fees specified) 2009 Total

Michael Grade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £111,764 — £111,764Robert Gorrie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £15,000 £18,950 £33,950Jorn Rausing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —David Young . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £27,539 — £27,539Patrick Lewis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Michael Robarts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —

In addition to his role as a non-executive Director, Robert Gorrie provides consulting services to theGroup and chairs the meetings of the Ocado employee council. Robert Gorrie provides these servicesthrough Robert Gorrie Limited (of which Robert Gorrie is the Sole Shareholder) and is paid a per diem feefor these services. These fees are included in additional remuneration above.

Michael Grade is entitled to a single bonus of £100,000 payable on Admission which he has elected toreceive in Ordinary Shares at the Offer Price in accordance with the terms of his letter of appointment.

Ruth Anderson and David Grigson were appointed after the end of FYE 2009.

As at Admission, the non-executive Directors receive the following annual fees from the Company:

• Michael Grade: £100,000;

• David Grigson: £55,000, plus £6,500 for chairing the nomination committee;

• Ruth Anderson: £40,000, plus £10,000 for chairing the audit committee;

• Robert Gorrie: £40,000;

• Jorn Rausing: £40,000;

• David Young: £40,000, plus £8,000 for chairing the remuneration committee;

• Patrick Lewis: £40,000; and

• Michael Robarts: £40,000.

9.7 Recent share dealings by Directors

Ocado’s last funding round took place in September 2009, at which both the Fidelity Investment Fund(‘‘Fidelity’’) and Generation IM Climate Solutions Fund, L.P. (‘‘Generation’’) acquired shares in Ocado.This funding round ascribed an enterprise value to Ocado of approximately £650 million. Immediatelyafter this funding round, a discretionary trust of which Jason Gissing is a beneficiary sold shares toseveral other shareholders (including Fidelity, Generation and the John Lewis Pension Fund) and adiscretionary trust of which Tim Steiner is a beneficiary sold shares to Andrew Bracey. All shares wereissued and transfers made at the same share price.

9.8 John Lewis Pension Fund right to appoint a director

Pursuant to an agreement dated 6 July 2010 with the Company, the John Lewis Pension Fund hasagreed to procure that Patrick Lewis will immediately offer his resignation from the Board:

• if at any time the John Lewis Pension Fund’s holding of Ordinary Shares falls below 10 per cent. ofthe issued Ordinary Share capital of the Company (disregarding, for these purposes, OrdinaryShares issued to the EBT Trustee for so long as the same have not vested); or

• if he ceases to be a trustee or director of the John Lewis Pension Fund unless, at or before such timehe also ceases or had ceased to have any office, employment or consultancy arrangement with anymember of the John Lewis group.

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Under the terms of the same agreement, if Patrick Lewis were to leave the Board then, provided the JohnLewis Pension Fund continues to hold 10 per cent. or more of the issued Ordinary Share capital of theCompany (disregarding, for these purposes, Ordinary Shares issued to the EBT Trustee for so long asthe same have not vested), the John Lewis Pension Fund shall have the right:

• if Patrick Lewis’ departure occurs during the period ending 18 months from the date of Admission, toappoint a replacement director to the Board provided the Board gives its consent to suchappointment (such consent not to be unreasonably withheld or delayed); and

• if Patrick Lewis’ departure occurs after the period ending 18 months from the date of Admission, tonominate a replacement director. The nomination committee of the Company is obliged to considersuch nomination in good faith, but may approve or reject the proposed nomination in its discretion.

10. Related party transactions

Save as disclosed in section 9.4 of this Part XIII and in the financial information set out in the related partytransactions note (note 31) to the historical financial information of the Group for FYE 2007, FYE 2008,FYE 2009 and P1-3 2010 contained in Part V (Historical Financial Information relating to the Group) andthe equivalent note (note 13) to the unaudited financial information for the Group for P1-6 2010 containedin Part VII (Unaudited Interim Financial Information relating to the Group for the 24 weeks ended 16 May2010), Ocado entered into no transactions with related parties during FYE 2007, FYE 2008, FYE 2009and P1-6 2010.

For the period between 16 May 2010 and the date of this document, the Group entered into the followingrelated party transactions:

Key management personnel

2 July 2010

£000s

Purchase of professional services-Non-Executive Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

4

All transactions are on an arm’s length basis and no financial period end balances have arisen as a resultof these transactions.

At 2 July 2010 key management owed the Company £1,000 in respect of personal expenses incurred onthe company credit card that were reimbursed in the normal course of business.

Investment

2 July 2010

£000s

Purchase of goods—Plant and machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0—Consumables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Total purchase of goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Amounts payable at the period end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

11. Share plans and employee incentive schemes

The Group currently operates two employee share incentive schemes, both of which will continue tooperate after Admission. These are the Ocado 2001 Executive Share Option Scheme (the ‘‘ESOS’’) andthe Joint Share Ownership Scheme (the ‘‘JSOS’’).

The Company intends to operate an additional all-employee share scheme, the Ocado SharesaveScheme, after listing, subject to HMRC approval.

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11.1 The Ocado 2001 Executive Share Option Scheme

Subject to HMRC approval, the Company intends to amend the rules of the ESOS so that followingAdmission they will operate as set out below.

Status

The ESOS is a company share option scheme approved by HMRC. Options may also be granted underthe terms of a schedule, which is not so approved. The ESOS was established by Ocado in 2001.

Prior to the Scheme, Ocado granted options over shares in Ocado to eligible employees (which inpractice was all employees in the Group). In conjunction with the Scheme, the ESOS rules were amendedto permit the existing option holders to exchange their options over shares in Ocado for options overOrdinary Shares in the Company.

Under the ESOS, Ocado or the trustees of an employee trust may grant options over shares in theCompany to eligible employees. The eligible employees to whom options are granted and the terms ofsuch options will be determined by the directors of Ocado or the trustees.

Eligibility

The employees who are eligible to participate in the ESOS are all Ocado’s Executive Directors andemployees, including the employees of Ocado’s subsidiaries. Directors and employees may notparticipate if, in the period of 12 months before grant of the option, they had a material interest (broadlyowning or controlling 25 per cent. of its share capital) in Ocado or a company which owns or controlsOcado and that company was a close company.

Options are not transferable and will lapse if the option holder purports to transfer, charge or alienate theoption.

The Board has resolved that options will not be granted to Directors under the ESOS without first settingappropriate performance targets.

Exercise price

The exercise price of options may not be less than the market value of the Company’s shares on the dateof grant. If the trustees or the directors of Ocado have determined that the exercise of an option will besatisfied by the issue of Ordinary Shares, the exercise price may also not be less than the nominal valueof Ordinary Shares.

Limitations on grant

The ESOS is subject to limits so that no more than 10 per cent. of the issued ordinary share capital of theCompany may be placed under option or issued under any employee share scheme in any ten yearperiod and no more than 5 per cent. of the issued ordinary share capital of the Company may be placedunder option or issued under any discretionary employee share scheme in any ten year period. For thispurpose a discretionary scheme is one in which those taking part are senior employees and directorschosen at the discretion of the body administering the scheme. Ordinary Shares issued or placed underoption prior to Admission are disregarded.

Options may not be granted under the ESOS to any employee if, as a result, the aggregate market valueof shares granted to him and subject to outstanding options under the ESOS or any otherHMRC-approved share option scheme (other than a savings-related share option scheme) establishedby Ocado or an associated company, would exceed £30,000 (or such other limit as may be specified inthe tax legislation).

Except in exceptional circumstances, options may only be granted in the six weeks following anannouncement of the Company’s results to the London Stock Exchange. Options may not be grantedafter 30 June 2020.

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Ability to exercise

The directors of Ocado or trustees may impose a performance target and any further conditiondetermined to be appropriate on the exercise of an option. Any performance target must generally bemeasured over a period of at least three years. The directors or trustees may substitute, vary or waive anyperformance target if they consider that the target is no longer appropriate in such manner as isreasonable in the circumstances and produces a fairer measure of performance and is neither materiallymore nor less difficult to satisfy.

There are currently no options granted which are subject to performance targets that have not yet beenmet.

Options may be exercised from the date of grant, subject to any performance target being satisfied.Options will lapse on the earlier of the tenth anniversary of grant, the Ocado directors determining that aperformance target can no longer be satisfied or the option holder ceasing to be an employee. Optionsmay be exercised in whole or in part.

Where, in relation to an option granted after Admission, Ocado or any member of the Group is liable toaccount for tax or social security, the option holder must pay an amount sufficient to discharge the liabilityor he will be taken to have authorised the disposal of such number of shares as he is entitled to onexercise as is necessary to meet the amount due. The grantor may determine that the exercise of anoption is conditional on the payment of employer’s national insurance contributions by the option holder inrespect of the exercise.

Leaving service

If an option holder dies before the tenth anniversary of grant, his personal representative may exercise hisoptions at any time in the 12 month period following his death, subject to any performance target beingsatisfied. If not so exercised, the options lapse.

If an option holder ceases to be employed before the tenth anniversary of grant by reason of ill-health,injury, disability, redundancy, retirement at the age under which he is bound to retire under his contract ofemployment, early retirement with agreement of Ocado or the business in which he is engaged ceasing tobe part of the Ocado group, the option holder may exercise the option during whichever is the longer of12 months after cessation of employment, 42 months after date of grant of the option and (in the case ofoptions granted before Admission) 42 months after the last time the option holder exercised an option soas to qualify for tax relief, subject to any performance target being satisfied. If not so exercised, the optionshall lapse immediately. The directors or trustees may determine that an option holder who ceases to beemployed for any other reason may also exercise the option within such period.

In the case of options granted after Admission, options will only become exercisable in respect of aproportion of the shares subject to the option, determined by the amount of the performance period whichhas expired on cessation of employment.

Change of control

If there is a change of control of the Company as a result of a general offer to acquire shares or a personacquiring over 50 per cent. of the Company’s issued ordinary share capital, all options may be exercisedat any time during the period of six months beginning with the time of change of control, subject to anyperformance target being satisfied. If not so exercised, the options lapse unless the directors or trusteesdetermine otherwise.

If there is a compulsory acquisition of shares in the Company, all options may be exercised at any timeduring the period beginning with the date a notice is served to compulsorily acquire shares and endingseven clear days before the date on which entitlement to serve such a notice ceases, subject to anyperformance target being satisfied. If not so exercised, the options lapse when entitlement to serve thenotice ceases.

If a person proposes to obtain control of the Company through a compromise or arrangement approvedby the court, all options may be exercised during the period beginning with the court meeting of theCompany’s members and ending on the earlier of six months thereafter and seven clear days before thecourt sanctions the compromise or arrangement. Exercise is subject to the compromise or arrangement

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becoming effective and any performance target being satisfied. Options not so exercised lapse if thecompromise or arrangement becomes effective.

In the case of options granted after Admission, options will only become exercisable in respect of aproportion of the shares subject to the option, determined by the amount of the performance period whichhas expired on change of control.

If a company acquires control of the Company, an option holder may by agreement with that companyrelease his option in whole or in part consideration of the grant to him of a new equivalent option relating tothe shares in the acquiring company or a company which has control over the acquiring company. Theperiod allowed for doing so is (depending on whether the acquiring company makes a general offer for theCompany shares, compulsorily acquires the Company or obtains the Company through a compromise orarrangement) either six months beginning with the time of change of control, the period during which theacquiring company remains bound to compulsorily acquire shares or six months beginning with the timethe court sanctions the compromise or arrangement. The directors of Ocado may determine that anoption holder will be deemed to have agreed to the release of his option in return for a new equivalentoption if there is a scheme of arrangement under which a company obtains control of the Company, theoption holder does not object to the exchange of his option and HMRC agrees to the exchange in relationto the particular transaction.

Winding up

If notice is given of voluntary winding up of the Company, all options may be exercised during the periodbeginning with the date the notice is given and ending seven clear days before the resolution is passed ordefeated. Exercise is conditional on the resolution being passed and any performance target beingsatisfied. If the resolution is passed, all options not so exercised lapse.

In the case of options granted after Admission, options will only become exercisable in respect of aproportion of the shares subject to the option, determined by the amount of the performance period whichhas expired on notice being given of the resolution for winding up.

Adjustments

Ocado may adjust options following any variation in the Company’s share capital, includingcapitalisations or rights issues. Any such adjustment will require the consent of HMRC.

Amendments

Ocado may amend the rules of the ESOS, except that an amendment shall not have effect until it hasbeen approved by HMRC. An amendment may not adversely affect the rights of an existing option holderexcept where the amendment has been approved by a class meeting of the existing option holders.Shareholder approval is required for any amendment to the provisions dealing with eligibility, individual orscheme limits, terms of options, adjustment of options or changing and ending the ESOS where theamendment is to the advantage of employees.

Notwithstanding the restrictions listed above, amendments may be made to take account of changes inthe law or keep or get favourable tax/regulatory treatment. Ocado may make minor amendments to easeadministration of the ESOS or correct clerical errors.

Non-HMRC Approved Schedule

The terms of the schedule are broadly the same as those of the tax-approved part of the ESOS, subject tothe following principal differences:

Certain restrictions on operation of the ESOS, required to be included by HMRC in a tax approved plan,do not apply. In particular options may be granted to employees of the Company or any of its subsidiaries.Other than in exceptional circumstances, an option may not be granted to an individual if the result wouldbe that the aggregate market value of the shares subject to options granted to him in any financial year ofthe Company under the ESOS would exceed three times the individual’s pay.

If an option holder dies before the tenth anniversary of grant, his personal representative may exercise hisoption in the three-year period following his death but no later than 10 years after the date of grant.

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11.2 The Ocado Sharesave Scheme (the ‘‘Sharesave Scheme’’)

The Sharesave Scheme was approved by a written resolution of the Shareholders on 23 June 2010.

Status

The Sharesave Scheme is a savings-related share option plan which is intended to be approved byHMRC.

Under the Sharesave Scheme, the Company or the trustees of an employee trust may grant options overshares in the Company to eligible employees. All eligible employees must be invited to participate in theSharesave Scheme each time the Sharesave Scheme is operated. To obtain an option an eligibleemployee must agree to save a fixed monthly amount for three, five or seven years with an approvedsavings institution. The amount saved will determine the number of shares over which the option isgranted.

Eligibility

The employees who are eligible to participate in the Sharesave Scheme are all the Company and itssubsidiaries’ employees, and those directors who are required to work for the Company or any of itssubsidiaries for at least 25 hours per week, provided that the employee/director’s earnings are generalearnings to which section 15 of the Income Tax (Earnings and Pensions) Act (‘‘ITEPA’’) 2003 applies andthe employee/director is ordinarily resident in the UK. The employee/director must have been anemployee/director at all times during the period of five years ending on the grant date (or such shorterperiod as the Board may determine).

The Board may also allow any other employee of the Company or its subsidiaries to participate in theSharesave Scheme.

Options are non transferable and will lapse if the participant transfers the option or creates any interest inthe option in favour of a third party, or if a bankruptcy order is made in respect of him.

Exercise price

The exercise price of options may not be less than 80 per cent of the average market values of theCompany’s shares for the five days before the date selected by the board of the Company (provided thisdate is not earlier than the most recent date that the Company announced its results to the StockExchange or the 30th day before the grant date). In the case of an option to subscribe for shares, theexercise price may not be less than the nominal value of the Company’s shares on the grant date.

Options must be granted within 30 days of the first of the dealing days used to calculate the exercise price.This period may be extended to 42 days if applications must be scaled down.

Limitations on grant

The Sharesave Scheme is subject to limits so that no more than 10 per cent. of the Company’s equityshare capital may be placed under option or allocated under any employee share scheme in any ten yearperiod. No account will be taken of shares allocated or remaining to be allocated in respect of options orawards granted prior to Admission. If applications are received for more shares than are availablebecause of this limit (or any other limit chosen by the board of the Company) then applications must bescaled down. If the applications, after scaling down, are still for more shares than are available, the boardof the Company may decide that no options will be granted or options will be granted to applicants chosenby lot.

The monthly contribution which an eligible employee may pay under his savings contract may not exceedthe maximum allowed by paragraph 25 of Schedule 3 to the ITEPA 2003, currently £250 (or such lowermaximum as the Board may decide), or be less than the minimum monthly contribution allowed under asavings contract at that time, currently £5 (or such higher amount, which may not exceed £10, as theBoard may decide).

Except in exceptional circumstances, invitations to participate in the Sharesave Scheme may only beissued during the six weeks following HMRC approval of the Sharesave Scheme, the period starting three

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weeks before and ending six weeks after the Company announces its results to the London StockExchange and the 90 days following the date on which the Ordinary Shares are first admitted to trading onthe London Stock Exchange.

No options may be granted under the Sharesave Scheme after 30 June 2020.

Ability to exercise

Options may be exercised at any time in the period of six months starting with the maturity date (which willbe three, five or seven years from the date of grant). If not exercised within this period, the option willlapse. If a participant continues to hold employment with the Company or any of its subsidiaries afterreaching the age of 65, he may exercise his option in the six-month period starting with the day after hereaches the age of 65.

Options may be exercised in whole or in part. If exercised in part an option will lapse in respect of thebalance.

Exercise date

Unless a later date is agreed between the Company and the participant, the exercise date of an option willbe the earlier of the second dealing day after the date on which notice of exercise is received and the dateon which the board of the Company approves exercise of the option. The board of the Company may limitthe number of exercise dates but there must be at least two in every month.

Leaving service

A participant’s option will generally lapse when he is no longer an employee or director of the Company orany of its subsidiaries.

If a participant’s employment ends for a permitted reason (injury, disability, redundancy, retirement onreaching age 60 or the age at which he is bound to retire under his employment contract, the business inwhich he is engaged ceasing to be part of the Company’s group or any other reason in relation to optionswhich he has held for over three years at the date his employment ends, except his misconduct,impropriety or death), he may exercise his option in the period of six months starting on the day after hisemployment ends. If not so exercised his option will lapse unless he dies during that period.

If a participant dies before the maturity date, his personal representatives may exercise his option in theperiod of 12 months starting on the day after his death. If a participant dies on or within six months afterthe maturity date, his personal representatives may exercise his option in the period of 12 months startingon the maturity date. If not so exercised the option will lapse. The personal representatives of a participantmay not however exercise his option unless he was employed by the Company or any of its subsidiarieswhen he died or he died during a period when he was allowed under the rules to exercise his option.

Change of control

If any person obtains control of the Company as a result of a general offer to buy all of the issued ordinaryshare capital of the Company, a participant may exercise his option in the period of six months after thechange of control or the date on which any conditions to the offer are met or waived.

If the general offer is made by means of compromise/arrangement or the court approves a compromise/arrangement between the Company and its members, a participant may exercise his option during suchperiod as the Board may decide starting not earlier than the date that the compromise/arrangement issanctioned and ending not later than six months after the date on which it becomes effective.

If any person who has control of the Company gives notice to compulsorily acquire shares of theCompany, a participant may exercise his option in the period of 30 days starting on the date the notice isgiven.

Options will lapse if not exercised during the periods above, unless they are exchanged for new options.

With the agreement of the acquiring company, a participant may release his option in return for the grantto him of a new option, provided the new option is over shares which meet the conditions of Schedule 3 tothe ITEPA 2003, the new option is over shares in the acquiring company or another company that meets

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the requirements of Schedule 3 to the ITEPA 2003 and the total exercise price of the new option andmarket value of the new shares is equal to the total exercise price of the old option and market value of theold shares (or is otherwise agreed by HMRC). The release and grant of a new option must occur in theperiod of six months starting on the date of change of control or court approval of a compromise/arrangement or, in the case of compulsory acquisition of shares, in the period during which the acquiringcompany remains bound or entitled to acquire shares.

Winding up

If a resolution is passed for winding up of the Company or an order is made for compulsory winding up ofthe Company, a participant may exercise his option during the period of 60 days starting on the date theresolution or order is passed or made. The participant is then entitled to share in the Company’s assetsalong with other shareholders.

Adjustments

The Company may adjust options following a variation in the Company’s share capital. The adjustmentmust be on the basis that there is no material change (as far as possible) to the total exercise price of theoption and must be approved by HMRC.

Amendments

The Company may amend the Sharesave Scheme in any way, including the creation of sub-schemes.However, shareholder approval is required for any amendment to the provisions dealing with eligibility,individual or scheme limits, terms of options, adjustment of options or changing and ending the schemewhere the amendment is to the advantage of employees. No amendment may be made which wouldadversely affect a participant’s subsisting rights without his written consent or the consent of the majorityof the participants affected by the amendment. While the Sharesave Scheme is intended to be approvedby HMRC, no amendment to a feature of the Sharesave Scheme which is necessary to meet therequirements of Schedule 3 to the ITEPA 2003 shall have effect unless it is approved by HMRC.

Notwithstanding the restrictions listed above, the Company may make amendments to allow theSharesave Scheme to keep or get approval under the ITEPA 2003, take account of changes in the law orkeep or get favourable tax/regulatory treatment. The Company may make minor amendments to easeadministration of the Sharesave Scheme or correct clerical errors.

11.3 The Company’s Joint Share Ownership Scheme (‘‘JSOS’’)

Status

The JSOS is a share ownership scheme under which its participants and Appleby Trust (Jersey) Limited(the ‘‘EBT Trustee’’) acquired separate beneficial interests in 32,476,700 Ordinary Shares whichrepresented, at the time of issue, 7.5 per cent. of the then issued share capital of the Company. As at5 July 2010, being the latest practicable date prior to the publication of this document, these sharescomprised 7.49 per cent. of the issued share capital of the Company, and following Admission, andassuming that the Offer Price is set at the mid-point in the Price Range, are expected to comprise 6.1 percent. of the issued share capital of the Company. These Ordinary Shares were divided into four tranches,vesting over four years.

Eligible employees

The employees eligible to participate in the JSOS are all bona fide employees of the Company or itssubsidiaries.

Participants’ interests are generally non-transferable during the period beginning on acquisition of theinterest and ending on 31 December 2013. However, interests can be transferred to a spouse, civilpartner or lineal descendant of a participant; a trust under which no person other than the participant ortheir spouse, civil partner or lineal descendant has a vested beneficial interest or any other personapproved by the EBT Trustee. If a participant purports to transfer, assign or charge his interest other thanas set out above, the EBT Trustee may acquire the participant’s interest for a total price of £1.

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Respective interests

The EBT Trustee and the participants together paid £1.50 per Ordinary Share acquired, apportioned inrelation to the value of their respective beneficial interests.

The Company’s remuneration committee is responsible for deciding the identity of the participants andthe number of Ordinary Shares that may be acquired.

The EBT Trustee’s interest in each Ordinary Share held under the JSOS is the value up to a specifiedprice for the tranche of which that share forms part (the ‘‘Hurdle’’). The participant’s interest is the excessin value over the Hurdle. Each tranche vests in the year indicated, normally only if the relevant participantremains employed by the Company, and the Hurdles for each tranche are as follows:

Tranche Vesting date Hurdle

1 1 January 2011 £1.732 1 January 2012 £1.913 1 January 2013 £2.084 1 January 2014 £2.28

Once the relevant vesting date is reached a tranche will vest even if the share price has not exceeded theHurdle. A participant may elect to leave his vested interests in the JSOS. Alternatively he may requestthat the EBT Trustee deliver to him his vested interest, either in cash (after deduction of any personal loanand broker’s commission and other costs of sale of the shares) or in Ordinary Shares.

A participant may request the EBT Trustee to sell to the participant the EBT Trustee’s interest in atranche, after the tranche has vested. The EBT Trustee is not bound to agree to this request.

Where, in relation to any Ordinary Share held under the JSOS or any participant interest, the Company ora member of the Company’s group is liable to account for tax or social security in respect of a participant,the EBT Trustee is entitled to sell any Ordinary Shares held under the JSOS and deduct from the saleproceeds an amount necessary to discharge such liability, unless the participant has paid an amountsufficient to discharge the liability beforehand.

Subscription for the Ordinary Shares

As described above, the subscription price for the Ordinary Shares acquired for the purposes of the JSOSwas apportioned between the participants and the EBT Trustee proportionately to the value of theirrespective beneficial interests. This meant that the majority of the subscription amount was borne by theEBT Trustee. The participants who were not Directors were granted loans by Ocado on arm’s lengthterms in order to fund their subscription; the participants who were Directors were not.

The EBT Trustee funded its subscription by way of a loan from Ocado. When the EBT Trustee sells jointlyowned Ordinary Shares held pursuant to the JSOS, it will apply the proceeds that represent its beneficialinterest to repay that loan. Ocado has no recourse under the loan to the assets of the EBT Trustee otherthan the proceeds of the sales of jointly held shares. To the extent that the Hurdles are not met, theproceeds of sale may not be sufficient for the EBT Trustee to repay the loan in full. If the proceeds of thesale of its beneficial interest are greater than the amount the EBT Trustee is required to repay under theloan, the EBT Trustee may apply any surplus for future employee incentivisation arrangements.

Voting rights

The EBT Trustee will not normally exercise the voting rights of unvested Ordinary Shares held under theJSOS but may exercise such rights on vested Ordinary Shares at the request of the relevant participants.Similarly, Ordinary Shares held under the JSOS will not receive any dividends paid, but the Hurdles willbe reduced proportionally so as not to distort the value of the participants’ interests in the OrdinaryShares.

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Leaving employment

If a participant leaves during the currency of the scheme, he may lose all or part of his beneficial interest,depending on the circumstances in which he leaves:

• if he is a ‘‘very bad leaver’’ (i.e., he has been or could have been dismissed by the Company forcause or he has been in material breach of an obligation binding on him after termination), his vestedand unvested interests in Ordinary Shares held under the JSOS may be acquired by the EBT Trusteefor the lower of their market value and the initial subscription price;

• if he is a ‘‘bad leaver’’ (i.e., he is neither a ‘‘good leaver’’ nor a ‘‘very bad leaver’’), he would retain hisvested interests but unvested interests may be acquired by the EBT Trustee for the lower of themarket value and the initial subscription price. If he subsequently goes to work for a competitor of theCompany, his vested interests may also be acquired by the EBT Trustee at market value; and

• if he is a ‘‘good leaver’’ (i.e., he left employment as a result of illness, injury, disability, redundancy,retirement on or after his contractual retirement date, early retirement by agreement with theCompany or the business in which he is engaged ceasing to be part of the Company’s group), hewould continue to participate in the JSOS although the EBT Trustee may offer to buy out his vestedand unvested interests. However, if a good leaver subsequently goes to work for a competitor of theCompany, his vested and unvested interests may be acquired by the EBT Trustee at market value.

Where the EBT Trustee acquires an unvested interest, that interest may be redistributed to benefit otheremployees or among the remaining participants in the JSOS.

If a participant dies while in employment or after having left as a ‘‘good leaver’’, then this interest will vestentirely on the date of his death.

Change of control

If a general offer is made which would result in the offeror obtaining control of the Company, a participantmay request the EBT Trustee to accept the offer with respect to Ordinary Shares that have vested underthe JSOS.

If the Company is subject to a compromise or arrangement approved by the court, a participant mayrequest the EBT Trustee to vote in accordance with his directions at any shareholder meeting in respectof Ordinary Shares that have vested under the JSOS. Where any consideration is received by the EBTTrustee as a result of such compromise or arrangement (other than consideration in the form of shares ofa company that has obtained control of the Company, where 90 per cent. of that company’s shares areheld in substantially the same proportions by substantially the same persons who previously held sharesin the Company) the EBT Trustee must pay a proportion of the consideration to a participant that isequivalent to his interest, and the participant will then have no further interest in the Ordinary Sharesunder the JSOS. Shares which are unvested because the vesting date has not yet been reached shall betreated for this purpose as if they have vested.

Repurchase

The Company may require the EBT Trustee to sell to it Ordinary Shares held under the JSOS at any timeafter 1 January 2019 or where the EBT Trustee has acquired a participant’s interest as a result of aparticipant ceasing to be employed.

Limitations on grant

The aggregate number of Ordinary Shares held for the purposes of the JSOS cannot exceed 7.5 per cent.of the Company’s issued ordinary share capital.

Amendment

The board of the Company may amend the rules of the JSOS from time to time.

However, an amendment may not be made to the definition of ‘‘eligible employee’’, the restrictions ontransfer of a participant’s interest or the limit of the aggregate number of Ordinary Shares that can beacquired through the JSOS without shareholder approval, unless the amendment is minor and benefits

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the administration of the JSOS, or is necessary for tax reasons or to take account of a change inlegislation. An amendment may not adversely affect the rights of a participant who already has abeneficial interest in Ordinary Shares under the JSOS except where the amendment has been approvedby the participant or is of a minor nature and benefits the administration of the JSOS.

12. Options and warrants over Ordinary Shares

12.1 Option granted to Anthony O’Neill

Ocado granted an option to subscribe for 74 shares in Ocado for £90.42 per share on 4 February 2002.This option will expire on 4 February 2012. Following the reorganisation that resulted in the Companybecoming the holding company of the Group, this option is now an option to subscribe for 7,400 OrdinaryShares at a price of £0.9042 per Ordinary Share.

12.2 Option granted to Tom Clayton

Ocado granted an option to subscribe for 943 shares in Ocado for £53 per share on 7 February 2002. Thisoption will expire on 7 February 2012. Following the reorganisation that resulted in the Companybecoming the holding company of the Group, this option is now an option to subscribe for 94,300 OrdinaryShares at a price of £0.53 per Ordinary Share.

12.3 Option granted to Compton Overseas International Limited

Ocado granted an option to Compton Overseas International Limited to subscribe for 477 Ocado LimitedPreference Shares for £103.37 per share on 30 April 2004. This option will expire 30 days afterAdmission. Following the reorganisation that resulted in the Company becoming the holding company ofthe Group, this option is now an option to subscribe for 47,700 Preference Shares at a price of £1.0337per Preference Share.

12.4 Option granted to The Apple Trust

Ocado granted an option to The Apple Trust on 3 January 2003 to subscribe for such number of shares inOcado (and following the reorganisation that resulted in the Company becoming the holding company ofthe Group, in the Company) at the Offer Price as are required to ensure that The Apple Trust will hold5.68 per cent. of the issued share capital of Ocado on Admission. Following the reorganisation thatresulted in the Company becoming the holding company of the Group, this option is now an option inrespect of Ordinary Shares.

12.5 Option granted to Hawkeye Capital Partners Limited (‘‘Hawkeye’’)

The Company documented an option to Hawkeye on 21 June 2010 to subscribe for 38,700 OrdinaryShares at a price of £1.0337 per share. This option was granted to Hawkeye for investor introductionservices performed by it in 2003. This option will expire 30 days after Admission.

12.6 Non-dilution right granted to Generation IM Climate Solution Fund, L.P. (‘‘Generation’’)

Ocado and Generation entered into a subscription agreement on 28 August 2009 which grantedGeneration the right to subscribe for such number of shares at the Offer Price as it elects in Ocado(following the reorganisation that resulted in the Company becoming the holding company of the Group,in the Company) up to an aggregate amount which would result in its percentage shareholding beingequal to the percentage shareholding of Generation prior to Admission.

12.7 Pre-emption right of FIL Investments International (‘‘FIL Int’’) and FIL Investment Services(UK) Limited (‘‘FIL UK’’)

Ocado, FIL Int and FIL UK entered into a subscription agreement on 29 August 2009 which, as amendedby a letter agreement dated 22 June 2010, granted FIL Int and FIL UK a pre-emption right in proportion totheir holding of Ordinary Shares over any Ordinary Shares issued by the Company if the offer price forsuch shares is lower than £1.35. The pre-emption right will expire immediately prior to Admission.

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12.8 Warrants granted to Lloyds TSB Bank plc

Ocado granted warrants to Lloyds TSB Bank plc to subscribe for 28,612 shares in Ocado for £180 pershare on 3 December 2004. These warrants were transferred to Ranelagh Nominees Limited (an affiliateof Lloyds TSB Bank plc) on 4 August 2006. Following the reorganisation that resulted in the Companybecoming the holding company of the Group, the warrants are now warrants to subscribe for 2,861,200Ordinary Shares in the Company at a price of £1.80 per Ordinary Share.

In addition, Ocado granted warrants to Lloyds TSB Bank plc to subscribe for 20,833 shares in Ocado for£180 per share on 30 May 2006. These warrants were transferred to Ranelagh Nominees Limited on4 August 2006. Following the reorganisation that resulted in the Company becoming the holding companyof the Group, the warrants are now warrants to subscribe for 2,083,300 Ordinary Shares in the Companyat a price of £1.80 per Ordinary Share.

Subject to the Offer Price being no less than £1.90, Ranelagh Nominees Limited has irrevocablycommitted to exercise all warrants transferred to it by Lloyds TSB Bank plc prior to Admission providedthat it may sell the resulting 4,244,500 New Ordinary Shares issued to it or its nominee pursuant to theOffers.

Please also see section 12.9 below.

12.9 Warrants granted to Ranelagh Nominees Limited

Ocado granted warrants to Ranelagh Nominees Limited to subscribe for 6,667 shares in Ocado for £180per share on 6 February 2007. Following the reorganisation that resulted in the Company becoming theholding company of the Group, the warrants are now warrants to subscribe for 666,700 Ordinary Sharesin the Company at a price of £1.80 per Ordinary Share.

Subject to the Offer Price being no less than £1.90, Ranelagh Nominees Limited has irrevocablycommitted to exercise all its warrants prior to Admission provided that it may sell the resulting 667,600New Ordinary Shares issued to it or its nominee pursuant to the Offers.

Please also see section 12.8 above.

12.10 Confirmation

The total issued warrants and options to subscribe for Ordinary Shares (as described in section 11.1 ofthis Part XIII and this section 12) will not, if all were exercised, exceed 20 per cent. of the issued sharecapital of the Company at Admission.

Additional information on the intentions of Ranelagh Nominees Limited with regard to the warrants it holdsto subscribe for 5,611,200 Ordinary Shares are provided in sections 12.8 and 12.9 above.

13. Corporate governance

13.1 Compliance with the UK Corporate Governance Code

In anticipation of Admission, the Board has implemented a number of changes to its governancearrangements to give further assurance to Shareholders that the Board is committed to the higheststandards of corporate governance. From Admission, the Company will apply the principles and complywith the provisions of the UK Corporate Governance Code save as described in sections 13.2 to 13.4below.

13.2 The Board

The Company is led and controlled by the Board. The names, responsibilities and details of the currentDirectors appointed to the Board are set out above in Part II (Directors).

The UK Corporate Governance Code recommends that at least half the board of directors of a UK listedcompany, excluding the chairman, should comprise non-executive directors determined by the Board tobe independent in character and judgement and free from relationships or circumstances which mayaffect, or could appear to affect, the director’s judgement. As at the date of this document, the Boardcomprises 12 members, including the chairman, two independent non-executive Directors, four

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Executive Directors and five non-executive Directors who are not deemed to be independent for thepurposes of the UK Corporate Governance Code. The Company will not therefore comply with therelevant requirements of the Code in relation to the balance of executive and independent non-executiveDirectors.

Of the eight non-executive Directors on the Board, the chairman, David Grigson and Ruth Anderson areindependent as defined in the UK Corporate Governance Code. However:

• Robert Gorrie is not deemed independent for the purposes of the UK Corporate Governance Codebecause he was an executive director of Ocado from April 2000 until April 2006 and a non-executivedirector from May 2006 until March 2010 when, along with some of the other members of the OcadoBoard, he became a Director of the Company. He also provides consulting services to the Groupunder a separate consulting agreement. The Board considers Robert to be independent;

• Jorn Rausing is not deemed independent for the purposes of the UK Corporate Governance Codebecause the Apple Trust (of which he is a beneficiary) is a Major Shareholder. Details of hisshareholding are set out in section 8 of this Part XIII. The Board considers Jorn to be independent;

• David Young is not deemed independent for the purposes of the UK Corporate Governance Codebecause he was a Director of Ocado from October 2000 to March 2010 when, along with all of theother then members of Ocado Board, he became a Director of the Company. The Board considersDavid to be independent;

• Patrick Lewis is a director of John Lewis Partnership plc. John Lewis Partnership plc is the ultimateholding company of Waitrose which, as described in this document, is the Group’s key supplier andalso a competitor. Patrick is also a director of and was appointed to the Board by the John LewisPension Fund which is a Major Shareholder. Accordingly Patrick Lewis is not deemed independentfor the purposes of the UK Corporate Governance Code; and

• Michael Robarts was appointed to the Board by the John Lewis Pension Fund which is a MajorShareholder. Accordingly Michael is not deemed independent for the purposes of the UK CorporateGovernance Code.

The Company has no immediate intention to appoint further independent non-executive Directors(although it does expect to appoint at least one in the six months following Admission), nor to remove fromthe Board any of the current Directors, to comply with the relevant provisions of the UK CorporateGovernance Code save that Michael Robarts is expected to stand down from the Board shortly afterAdmission). However, the Company expects that as existing members of the Board step down and newDirectors are appointed, the Company will become compliant with the UK Corporate Governance Code inthis respect.

In order to maintain high standards of corporate governance, the Final Articles require each Director toretire at every annual general meeting (each Director may offer himself for reappointment by themembers at such meeting). The UK Corporate Governance Code does not yet require the Company toimplement such a procedure.

13.3 Board responsibilities

The Board has authority for the conduct of the business of the Group. There are a number of matters thathave been specifically reserved for the Board.

13.4 Board committees

As envisaged by the UK Corporate Governance Code, the Board has established three committees: anaudit committee, a nomination committee and a remuneration committee. If the need should arise, theBoard may set up additional committees as appropriate.

Audit committee

The audit committee’s role is to assist the Board in fulfilling its oversight responsibilities, including thereview of the financial reporting process, the system of internal control and risk management, the audit

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process and the Company’s process for monitoring compliance with laws and regulations and its owncode of business conduct. The audit committee will normally meet no fewer than three times a year.

The audit committee is chaired by Ruth Anderson, and its other members are David Grigson, DavidYoung and Robert Gorrie. As required by the UK Corporate Governance Code, one member of the auditcommittee (Ruth Anderson) is considered by the Board to have recent and relevant financial experience.The UK Corporate Governance Code also requires a board to establish an audit committee of at leastthree independent non-executive directors. As explained above, while the Board considers each of itsnon-executive Directors on the audit committee to be independent, from the perspective of the UKCorporate Governance Code only two of the four members of the audit committee (Ruth Anderson andDavid Grigson) are independent. Therefore the Company does not comply with the UK CorporateGovernance Code in this respect.

The Group does not have a dedicated internal audit function, although internal reviews of the Group’soperations are undertaken periodically by senior financial staff. The audit committee and the Board haveconsidered the need for an internal audit function and concluded that, given the Group’s size andstructure, it is not necessary at this time. The need for an internal audit function will be monitored anddeveloped as the size and complexity of the Group increases.

Nomination committee

The nomination committee’s principal responsibility is to keep the composition and balance of the Boardunder review, consider succession planning, lead the process for Board appointments and makerecommendations to the Board on all new appointments and re-appointments of non-executive Directors.The nomination committee will normally meet no fewer than two times a year.

The nomination committee is chaired by David Grigson, and all of the other non-executive Directors(including Michael Grade) are members. The UK Corporate Governance Code requires a majority of themembers of the nomination committee to be independent non-executive directors. As explained above,while the Board considers six of its non-executive Directors on the nomination committee to beindependent, from the perspective of the UK Corporate Governance Code only three of the members ofthe nomination committee (David Grigson, Michael Grade and Ruth Anderson) are independent.Therefore the Company does not comply with the UK Corporate Governance Code in this respect.

Remuneration committee

The purpose of the remuneration committee is to determine and agree with the Board the remunerationpolicy and salary market position for the chairman of the Board and the Executive Directors, to monitor thestructure and levels of remuneration for the next most senior category of executives and makerecommendations if appropriate and to review and administer all aspects of any share scheme operatedby or to be established by the Company. This includes base salary, annual and long-term incentiveentitlements and awards and pension arrangements. No Director or executive shall be involved in anydecisions as to his or her remuneration. The remuneration committee will also generate an annual reportof the Company’s remuneration policy and practices which will form part of the Company’s annual reportand ensure that each year it is put to the Company’s shareholders for approval. The remunerationcommittee will normally meet no fewer than two times a year.

The remuneration committee is chaired by David Young, and its other members are Ruth Anderson,Robert Gorrie and Jorn Rausing. The UK Corporate Governance Code requires a board to establish aremuneration committee of at least three independent non-executive directors. As explained above, whilethe Board considers each of its non-executive Directors on the remuneration committee to beindependent, from the perspective of the UK Corporate Governance Code the only member of theremuneration committee who is independent is Ruth Anderson. Therefore the Company does not complywith the UK Corporate Governance Code in this respect.

13.5 Model Code

From Admission, the Company shall require the Directors and other persons discharging managerialresponsibilities within the Group to comply with the Model Code as published in the Listing Rules, andshall take all proper and reasonable steps to secure their compliance.

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14. Pensions

Ocado contributes to the personal pension plans of its staff through a defined contribution companypersonal pension scheme which is administered by Standard Life. Employer contributions to the schemeare a percentage of salary based on length of service.

15. Significant change

There has been no significant change in the financial or trading position of the Group since 16 May 2010being the date to which the historical financial information in Part VII (Unaudited Interim FinancialInformation relating to the Group for the 24 weeks ended 16 May 2010) was prepared.

16. Litigation

There are no governmental, legal or arbitration proceedings (including any such proceedings which arepending or threatened of which the Company is aware) which may have, or have had during the12 months preceding the date of this document, a significant effect on the Group or its financial position orprofitability.

17. Material contracts

Set out below is a summary of (a) each material contract (other than a contract in the ordinary course ofbusiness) to which Ocado or the Company is a party which has been entered into within the two yearsimmediately preceding the date of this document; and (b) any other contract (other than a contract in theordinary course of business) entered into by any member of the Group which contains a provision underwhich any member of the Group has any obligation or entitlement which is material to the Group as at thedate of this document.

17.1 Branding Arrangements and Sourcing Agreement with Waitrose and John Lewis

Various agreements have been entered into between Ocado and John Lewis and Waitrose. The originalSourcing and Branding Agreements (and the shareholders’ agreement that, from 2000, governed therelationship between Ocado and its shareholders) were progressively amended, superseded orotherwise updated, most recently by the 2008 Agreement and the 2010 Agreement. Such changes builton the strengths and continuing mutual benefits of the original deal between the parties and reflected alsothe development of both Ocado’s and Waitrose’s own online operations. The current relationshipbetween Waitrose (as a sourcing agent and brand owner) and Ocado is set out in this suite of agreementsto which the 2010 Agreement is the most recent addition, and is a newly extended arm’s lengthcommercial arrangement which takes into account the historic relationship between the parties and otherrelevant factors.

• 2010 Agreement

Under the 2010 Agreement, Ocado and Waitrose agreed to extend the term of their relationship andreached further agreement on certain other key elements.

As a result of the 2010 Agreement, the Sourcing Agreement will now expire on 1 September 2020,unless terminated earlier by any party giving written notice. The earliest such notice may expire is1 March 2017. To terminate by notice with effect from 1 March 2017, at least 18 months’ writtennotice must be given; such notice period reduces on a sliding scale so that to terminate by noticewith effect from 1 September 2017 onwards, only 12 months’ notice need be given.

• Sourcing Agreement

Under the Sourcing Agreement, Waitrose acts as Ocado’s sourcing agent for the negotiation andentry into of Ocado’s supply commitments. In the majority of cases where Waitrose sourcesproducts for Ocado in this way, Ocado is then able to place its orders for goods directly with thesupplier at the prices obtained by Waitrose, but must deal with all logistics, handling and billingmatters itself. Currently approximately 85 per cent. (by volume) of the goods sold by Ocado stocks(supplied by approximately 350 different suppliers) are sourced through Waitrose in this way. Inother cases, Ocado places orders with Waitrose for the relevant products, and these orders are

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aggregated with the requirements of Waitrose’s branches, delivered by the supplier to the Waitroseregional distribution centre, and then forwarded to Ocado. Waitrose then bills Ocado for the relevantproducts. In all cases Waitrose is obliged to use its reasonable endeavours to procure terms forOcado which are comparable to those obtained by Waitrose itself, including volume discounts andavailability of support for promotions. Ocado pays Waitrose a fee for these services in all cases.

The 2010 Agreement amended or clarified some important elements of the Sourcing Agreementand Branding Arrangements. These included:

• Sourcing fee

The sourcing fee is calculated as a percentage of Ocado’s net sales (exclusive of delivery charges,certain refunds, and VAT) of products sourced through Waitrose. The parties agreed a newsourcing fee under the 2010 Agreement to take effect from 1 December 2010; unlike the feecurrently paid, the new sourcing fee will vary according to whether the product sold is third party-branded, Waitrose own-label, John Lewis own-label or sourced from John Lewis (the percentagebeing higher in respect of the latter categories than the former).

Accordingly, the new sourcing fee will rise to the extent that Ocado sells a higher percentage ofproducts that are Waitrose own-label, John Lewis own-label or sourced from John Lewis, and(subject to the minimum sourcing fee described below) will fall to the extent that Ocado sells a higherpercentage of Ocado own-label, third party-branded products and products not sourced throughWaitrose.

In FYE 2009, Ocado paid Waitrose a sourcing fee of £4.7 million in accordance with the terms of the2008 Agreement. The Directors estimate that this would have increased to £6.4 million had thesourcing fee payable from 1 December 2010 been payable in FYE 2009.

From 1 December 2010 there will also be a minimum annual sourcing fee payable by Ocado toWaitrose. The Directors expect that this minimum fee will be broadly equivalent, as a percentage ofOcado’s net sales (exclusive of delivery charges and VAT) of grocery products, to the fee paid inFYE 2009.

• Scope of products covered

Ocado has the right to stock and sell (and must not source elsewhere) all grocery products in theassortment of grocery products stocked by Waitrose supermarkets (subject to certain exclusionssuch as where Waitrose is unable to procure such supply for Ocado, either at all or in sufficientquantities). If Ocado wishes to introduce a product not comprised in the Waitrose assortment thenWaitrose has a right of first refusal on whether to supply that product if it is a product from a rangethat is already stocked by Waitrose supermarkets; otherwise Ocado may source the product directlyfrom a third party, although Ocado is not permitted to stock and sell any products that carry thebrand of certain Waitrose competitors. This provision, contained in the 2010 Agreement, was asignificant change from the equivalent provision in the 2008 Agreement which had required Ocadoto offer Waitrose a right of first refusal to source for it any products it wished to stock.

The Sourcing Agreement treats differently the various non-grocery products that are either branded‘‘John Lewis’’ or sourced by Waitrose from John Lewis. Ocado also has the right to source certain ofthese non-grocery products. Either party may give the other three months’ notice to cease thesupply of any or all of these products. Sales of these non-grocery products accounted forapproximately 0.5 per cent. of Ocado’s gross sales in FYE 2009 (P1-3 2010: 0.8 per cent.). Ocadoand John Lewis are in discussions as to whether they can agree a separate agreement for Ocado tosource non-grocery products from John Lewis on a long term basis, and Ocado has agreed not tosource these products from certain John Lewis competitors until 1 January 2011 (unless thenegotiations terminate unsuccessfully before that date). Ocado is not otherwise restricted as towhom it may source non-grocery products from.

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• Minimum Sourcing Requirements

• Minimum sourcing of third party-branded groceries: in each quarter, at least 80 per cent.of Ocado’s sales of third party-branded groceries must be sourced through Waitrose(subject to certain exceptions designed to protect Ocado from Waitrose’s suppliersceasing to be willing to supply Ocado). Ocado will have three months, following noticefrom Waitrose, to remedy any breach of this provision. If Ocado fails to rectify the breachWaitrose may terminate the Sourcing Agreement and Branding Arrangements onsix months’ notice (and may terminate immediately, if Ocado breaches the provisionthree times in any rolling 24 month period). Following termination in thesecircumstances, Ocado is obliged to pay Waitrose a termination fee of £40 million. Theseminimum sourcing provisions cease to bind the parties once any party has given validnotice to terminate the agreements.

• Minimum sourcing of own-label groceries: in each quarter up to 25 May 2013, no morethan 20 per cent. of Ocado’s net grocery sales of Waitrose own-label and Ocadoown-label groceries may comprise net sales of Ocado own-label groceries. Thereafter,the threshold rises to 30 per cent. The same termination provisions (including thetermination fee) apply as apply to the minimum sourcing of third party-branded products,save that if in the 12 months prior to termination, no more than 20 per cent. (or, following25 May 2013, 30 per cent.) of the total number of own-label SKUs were Ocadoown-label, the termination fee will be £10 million. These minimum sourcing provisionscease to bind the parties once any party has given notice to terminate the agreements.

By way of illustration, in FYE 2009 99.5 per cent. of Ocado’s sales of third party-branded grocerieswere sourced from Waitrose (P1-3 2010: 99.2 per cent.) and 1.5 per cent. of Ocado’s sales ofown-label groceries comprised sales of Ocado own-label groceries (P1-3 2010: 2.4 per cent.). TheDirectors believe, therefore, that the minimum sourcing provisions in the 2010 Agreement do not,realistically, place a significant restriction on the independent growth of the Business. The minimumsourcing requirements do not affect Ocado’s sales of non-grocery products.

• Termination

Waitrose may terminate the Sourcing Agreement on six months’ written notice if Ocado fails to paysums due under the agreement within a set time period, commits certain material breaches (andfails to cure them within 30 business days), or the Branding Arrangements are terminated other thanas a result of breach by Waitrose. Waitrose may also terminate the Sourcing Agreementimmediately by giving Ocado written notice on Ocado’s insolvency or ceasing to operate its onlinehome delivery grocery service. Ocado may terminate the Sourcing Agreement on six months’ noticefollowing a failure to pay by Waitrose or a material breach and immediately on Waitrose’sinsolvency.

In addition, either party may terminate the agreement on three months’ notice following a competitorof Waitrose or John Lewis acquiring 50 per cent. or more of the Ordinary Shares or control of theCompany’s board. Following termination in these circumstances, Ocado will pay Waitrose the lowerof £40 million and 4 per cent. of the market capitalisation of the Company. This change of controlprovision will cease to bind the parties if, prior to the change of control, any party has already given avalid notice of termination.

• Branding Arrangements

Under the Branding Arrangements Ocado has a non-exclusive arrangement with Waitrose underwhich Ocado may, in accordance with set operating procedures and a style guide and subject toWaitrose’s prior approval, use the Waitrose brand and trademarks in the UK for its online groceryretailing and delivery service in return for a nominal royalty fee. The Branding Arrangements willterminate upon Ocado and Waitrose entering into a new branding agreement, and may terminateupon material breach by either party (and failure to cure such breach within 30 business days),insolvency of either party, or the bringing of the Ocado, John Lewis and/or Waitrose brands into

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disrepute, or termination of the Sourcing Agreement. On termination, Ocado is required to ceaseusing the Waitrose brand and the Waitrose trade marks immediately.

The 2010 Agreement strengthened some of the brand protection provisions. In particular, specificmention was made to the reputation for excellence of the Waitrose, John Lewis and the John LewisPartnership brands, and Ocado undertook on behalf of itself and any future controllers of Ocado notto do anything which would diminish or would be likely to diminish that reputation. Ocado alsoundertook not to position its offering as a whole to be similar to that of a discount retailer.

If Ocado (or any future controllers of it) breach these brand protection provisions, it would have90 days following notice from Waitrose or John Lewis to rectify the breach. If Ocado (or suchcontroller) fails to rectify the breach, or if it breaches the provisions three times in any rolling24 month period, Waitrose and John Lewis may terminate the Sourcing Agreement and BrandingArrangements on 30 days’ notice (or immediately following three breaches in a 24 month period).Following termination in these circumstances, Ocado is obliged to pay Waitrose £40 million.

• Restrictions on WaitroseDeliver

In addition to amending the Sourcing Agreement and replacing the Branding Agreement with theBranding Arrangements, Waitrose and Ocado agreed in the 2008 Agreement to relax thenon-compete provision applying to the WaitroseDeliver service which had been contained in theshareholders’ agreement. This provision was relaxed further under the 2010 Agreement.

As a result, until 31 December 2010, Waitrose is prevented from offering the WaitroseDeliverservice to any person living within the area bounded by the M25 motorway. This prohibition does notextend to a limited number of deliveries made from five Waitrose stores within the M25 to customersin certain postcode areas.

Between 1 January 2011 and 30 June 2011 Waitrose may effect a phased extension of theWaitroseDeliver service within the M25, so that by July 2011 it may provide the service withoutcontractual limitations.

• IPO Fee

Pursuant to the 2010 Agreement Ocado agreed to procure that the Company would pay John Lewisa fee of £850,000 following Admission in recognition of the support provided to the Business byJohn Lewis and in partial reimbursement for the costs incurred by the John Lewis Pension Fund (ofwhich John Lewis is sponsor) in respect of the Offers.

Termination or notice of termination of the Sourcing Agreement and Branding Arrangements in anycircumstances would be an event of default under the New Facility. However, with the exception of thechange of control termination right described in paragraph 1.4 of the Risk Factors, which is customary foran agreement of that type, the Company is in control of whether any such termination rights will arise.

17.2 CFC Leases

Ocado entered into a lease of the CFC on 12 June 2002 for an initial term of 20 years to expire on28 September 2021. Certain obligations of the Company as tenant under this lease were guaranteed byJohn Lewis. Ocado later entered into a reversionary lease of the CFC on 6 March 2008, which granted theCompany a further lease of the CFC for a term of 11 years which effectively extends the term of the initiallease of the CFC, to expire on 27 September 2032. There was no guarantor to this reversionary lease.Ocado also entered into a further lease of an additional storage yard at the CFC on 6 March 2008, for aterm expiring on 28 September 2032. For the purposes of this section the leases of the CFC arecollectively referred to as the ‘‘CFC Leases’’.

Under the CFC Leases, Ocado currently pays an annual rent of £2,528,984 comprising: £2,209,398 perannum for the principal warehouse; £294,586 per annum for a car park; and £25,000 per annum for theadditional storage yard. The rents will next be reviewed on 28 September 2011 and every fifth yearthereafter during the term, in each case on an upwards only open market basis.

In addition to the rent, Ocado pays a service charge towards the general upkeep and maintenance of theHatfield Business Park (originally the Hatfield Aerodrome) on which the CFC is situated. This service

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charge is paid in common with other occupiers of that business park and is calculated as a fair andreasonably proportion of the total service charge properly attributable to the CFC site.

In each case, Ocado has been granted a full structural demise of the relevant premises and the CFCLeases restrict Ocado’s use of the CFC site to storage and distribution with ancillary offices and stafffacilities.

The CFC Leases permit Ocado to assign, underlet, charge and part with possession of the leases,subject to certain conditions which are set out in the CFC Leases. The CFC Leases do not contain anybreak rights in favour of either the landlord or the tenant of those leases.

John Lewis currently guarantees Ocado’s obligations under the CFC Leases. Ocado pays John Lewis afee of £150,000 per annum in consideration for the guarantee being provided in accordance with theterms of an agreement entered into in September 2005. Under the 2008 Agreement, Ocado is required toprocure John Lewis’s release from this guarantee upon Admission. In consideration for John Lewisagreeing to continue to guarantee Ocado’s obligations under the CFC Leases for a period of up to18 months from Admission, Ocado has agreed to increase the fee payable to fee equivalent to £240,000per annum for the first six months from Admission and fee equivalent to £220,000 per annum for thetwelve months thereafter.

17.3 Key financing arrangements

• Lloyds TSB Bank plc

On 22 November 2004 Ocado (as borrower) and Lloyds TSB Bank plc (as lender) entered into a term loanagreement which was amended and restated on 30 May 2006, 6 February 2007, 15 August 2008 and26 May 2010. The facility consists of three sterling term loan facilities of £11,219,494.92 (the ‘‘A Facility’’),£15,887,267.50 (the ‘‘B Facility’’) and £7,500,000 (the ‘‘C Facility’’) and a sterling revolving credit facilityof £7,500,000 (the ‘‘RCF’’) and is for Ocado’s general corporate purposes. The facility is secured againstthe delivery management system software and the LOKI/Fenrir software program. The facility isguaranteed by the Company and Ocado Holdings Limited and by Ocado in the event of an additionalborrower drawing down under the facility.

Loans drawn under the A Facility and B Facility bear interest at the London Inter-Bank Offer Rate plus amargin of 2 per cent. per annum together with a sum for certain mandatory costs (if any). In addition,interest at a margin of 4 per cent. per annum is accrued, capitalised and added to the outstandingprincipal amount. Loans drawn under the C Facility bear interest at the London Inter-Bank Offer Rate plusa margin of 5 per cent. per annum together with a sum for certain mandatory costs (if any). Loans drawnunder the RCF bear interest at the London Inter-Bank Offer Rate plus a margin of 7 per cent. per annumtogether with a sum for certain mandatory costs (if any). Interest on overdue amounts is charged at a rateof 1 per cent. above the rate which would have been payable.

Repayment of £15,625,000 is due pro-rata on the A Facility and B Facility on 1 December 2010 with thebalance due on 1 December 2011. Repayments of the C Facility are due in three instalments of£2,500,000 on 26 May 2011, 26 May 2012 and 26 May 2013.

The agreement contains customary warranties, representations, covenants and events of default. Thefinancial covenants require that Ocado’s cumulative EBITDA be not less than specified incrementalamounts in specified quarterly test periods, that the ratio of EBITDA to net interest at the end of each suchquarter period be greater than one for one on 31 August 2010, two to one until 31 May 2011 and three toone for 31 August 2011 and for each quarter period thereafter and that Ocado maintain certain cash flowlevels in relation to debt service. Any material changes to the Sourcing Agreement and BrandingArrangements must be agreed in advance by Lloyds TSB Bank plc acting reasonably. The Company,Ocado and Ocado Holdings Limited may not acquire any company, business or undertaking without theprior written consent of Lloyds TSB Bank plc acting reasonably and may not enter into, invest in or acquireany interest in a joint venture. The agreement restricts the payments of dividends or any distributions byOcado. Termination or notice of termination of the Sourcing Agreement and Branding Arrangements withWaitrose or John Lewis or an adverse change in Ocado’s, the Company’s or Ocado Holdings Limited’sfinancial or trading position or prospects which, in the opinion of Lloyds TSB Bank plc, is likely tomaterially affect their ability to comply with their obligations under the agreement constitute an event ofdefault and all outstanding amounts would become repayable on demand.

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• Bank of London and the Middle East plc

On 27 July 2009 Ocado (as borrower) and Bank of London and the Middle East plc (as lender) enteredinto a murabaha facility agreement. The facility is governed under Shariah law and the facility amount is£10 million.

In place of interest, Ocado makes repayments to a principal sum in excess of the borrowed amountfollowing an exchange of metal commodities contract. This excess sum is calculated by multiplying thecommodity cost price by 8 per cent and again by N/365, where N is the number of days to elapse from thesettlement date to maturity. Repayments are made quarterly and all outstanding sums must be paid onthe maturity date, being 27 July 2012.

The agreement contains customary warranties, representations, covenants and events of default, withcertain financial covenants requiring that EBITDA must remain positive and that total borrowings andliabilities must not exceed £160 million. The agreement restricts the distribution of dividends unless theGroup is current with all payments under the agreement and provided that such distribution does notexceed 50 per cent. of Ocado’s net profit for the period on which the distribution is being made. If there isan adverse change in Ocado’s financial or trading position or prospects which, in the bank’s opinion islikely to materially affect its ability to comply with its obligations under the agreement, an event of defaultwould be triggered and all outstanding amounts would become repayable on demand.

• HSBC Equipment Finance (UK) Limited

On 22 July 2004 Ocado (as lessee) and HSBC Equipment Finance (UK) Limited (as lessor) entered into amaster sale and leaseback agreement. The agreement may be terminated on one month’s notice byeither party but without prejudice to rights accrued under any leasing agreements made thereunder.

Under the agreement, Ocado may purchase and install plant equipment and subsequently sell andleaseback the equipment. There have been 24 such sale and leaseback agreements covering themajority of the conveyor systems and associated capital goods that have been added to the CFC sinceAugust 2004, with outstanding sums totalling £31,580,000.

• Barclays Bank PLC, HSBC Bank plc and Lloyds TSB Bank plc

On 5 July 2010 Ocado (as original borrower) entered into a sterling term loan facility (the ‘‘New Facility’’)between, among others, Barclays Bank PLC, HSBC Bank plc and Lloyds TSB Bank plc (as mandatedlead arrangers and lenders), and Barclays Bank PLC (as agent and security trustee). The lenders haveagreed to make available £100 million to the borrowers under the New Facility. All amounts borrowedunder the New Facility shall be applied towards (i) the acquisition of land located in England and Wales;(ii) the acquisition of building materials, fixtures and buildings attached to land located in England andWales; and/or (iii) the acquisition of plant, machinery, equipment, fittings and/or any other tangiblemovable property to be located at the existing CFC, the second CFC and the Spokes located in Englandand Wales. The New Facility has an accordion feature which allows for the amount available under it to beincreased up to £130 million, subject to lenders (existing or additional) agreeing to make the additionalamount available.

The borrowers may only draw down under the New Facility if certain customary conditions precedent aresatisfied and Admission takes place. The New Facility is secured against the LOKI/Fenrir softwareprogram and the assets financed by the New Facility. The New Facility is guaranteed by the Company,Ocado Holdings Limited and Ocado in the event of an additional borrower drawing down under it. Any ofthe Company’s subsidiaries whose EBITDA, gross assets or turnover account for 5 per cent. or more ofthe Group’s EBITDA, gross assets or turnover (calculated on a consolidated basis) shall becomeadditional guarantors, and the guarantors (taken together) must account for at least 90 per cent. of theGroup’s EBITDA, gross assets and turnover.

Loans drawn under the New Facility bear interest at the London Inter-Bank Offer Rate plus a margin of3.5 per cent. per annum together with a sum for certain mandatory costs (if any). Repayment is due on thetermination date of the New Facility, 6 January 2014.

The New Facility contains customary warranties, representations, covenants and events of default. Thefinancial covenants require that the ratio of EBITDA to net interest at the end of each quarter period be not

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less than 3:1 until the test date falling in May 2011, not less than 3.5:1 thereafter until the test date fallingin August 2011 and 4:1 thereafter. The financial covenants also require that the ratio of net debt toEBITDA must not exceed 3:1, and that the ratio of gross debt to EBITDA must not exceed 5.5:1 for anycovenant test period in respect of which EBITDA is less than £35 million.

The New Facility contains an undertaking from Ocado that it shall ensure that there are no changes,amendments or waivers to the terms of the Sourcing Agreement and Branding Arrangements which arereasonably likely to have a material adverse effect on: (i) the ability of the borrowers and the guarantors(taken as a whole) to perform or comply with their payment obligations under the New Facility and/or thefinancial covenants and the guarantor cover test; or (ii) the validity or enforceability of, or the effectivenessor ranking of any security granted pursuant to the New Facility.

If either Ocado, Waitrose or John Lewis gives notice to terminate the Sourcing Agreement and BrandingArrangements it will be an event of default under the New Facility. However, with the exception of thechange of control termination right described in paragraph 1.4 of the Risk Factors, which is customary foran agreement of that type, the Company is in control of whether any such termination rights will arise.

Subject to exceptions for certain permitted acquisitions and permitted joint ventures, the borrowers andthe guarantors may not acquire any company, business or undertaking and may not enter into, invest in oracquire any interest in a joint venture. The terms of the New Facility also require that Ocado must ensurethat at all times when at least £10,000,000 is outstanding under the New Facility interest payments inrespect of at least 50 per cent. but not more than 100 per cent. of the amounts drawn under it (from time totime) are hedged for a minimum duration of three years or until the termination date of the New Facility(whichever is shorter).

17.4 Underwriting and Selling Shareholder Agreements

The Company, the Directors, the Major Selling Shareholders and the Underwriters have entered into theUnderwriting and Selling Shareholder Agreements dated 6 July 2010. Pursuant to these Agreements:

• the Company has agreed, subject to certain conditions (the last condition being Admission), to allotand issue, at the Offer Price, the New Ordinary Shares to be issued in connection with the Offers;

• the Selling Shareholders have agreed, subject to certain conditions (the last condition beingAdmission), to sell, at the Offer Price, the Ordinary Shares to be sold by them in connection with theOffers;

• the Underwriters have severally agreed, subject to certain conditions including Admission, toprocure subscribers and purchasers for (or, failing which, to subscribe or purchase themselves) theOffer Shares (in such proportions as set out in the Agreements) pursuant to the Offers;

• in consideration for their services under the Underwriting Agreement and subject to Admissionoccurring, the Company has agreed to pay to the Underwriters a commission of two per cent. of theamount equal to the product of the Offer Price and the aggregate number of New Ordinary Sharesissued and sold by the Company pursuant to the Offers;

• each Selling Shareholder has agreed to pay to the Underwriters a commission of two per cent. of theamount equal to the product of the Offer Price and the aggregate number of Ordinary Shares sold bythem pursuant to the Offers. UBS Holdings Cayman Limited, as provider of the Over-allotmentOption, has also agreed to pay to the Underwriters a commission of two per cent. of the amountequal to the product of the Offer Price and the aggregate number of Ordinary Shares sold pursuantto the Over-allotment Arrangements;

• subject to Admission occurring, the Company may also, in its discretion, decide to award to some orall of the Underwriters an incentive commission in aggregate at a level to be determined by theCompany of up to 1 per cent. of the amount equal to the product of the Offer Price and the aggregatenumber of Offer Shares (including Ordinary Shares sold pursuant to the Over-allotmentArrangements) (the ‘‘Incentive Commission’’). Any Incentive Commission shall be borne by theCompany and the Selling Shareholders (which includes UBS Holdings Cayman Limited, as providerof the Over-allotment Option, and Ranelagh Nominees Limited but does not include SellingOptionholders and Minor Selling Shareholders selling fewer than 50,000 Ordinary Shares in theOffers) pro rata to the number of Offer Shares being sold or allotted by them or on their behalf;

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• the obligations of the Underwriters to procure subscribers and purchasers for or, failing which,themselves to subscribe for and purchase the Ordinary Shares to be issued and sold in connectionwith the Offers on the terms of the Underwriting and Selling Shareholder Agreements are subject tocertain conditions. These conditions include the absence of any breach of representation orwarranty under the Underwriting and Selling Shareholder Agreements, there having been nomaterial adverse change since the date of the Underwriting and Selling Shareholder Agreementsand Admission having occurred not later than 8.00 a.m. on 26 July 2010 or such later time and/orsuch date (not later than 8.00 a.m. (London time) on 31 August 2010) as the Company may agreewith the JGCs (on behalf of themselves and the other Underwriters). In addition, any of the JGCs (onbehalf of themselves and the other Underwriters) has the right to terminate the Underwriting andSelling Shareholders’ Agreements, exercisable in certain circumstances prior to Admission. Thesecircumstances, which are typical for agreements of this nature, include the occurrence of certainsignificant changes in the condition (financial or otherwise), business prospects or earnings of theGroup and certain changes in financial, political or economic conditions;

• subject to the Underwriters bearing their own out-of-pocket costs and expenses and certainadditional expenses, the Company has agreed to pay the costs, charges, fees and expenses (otherthan any amount in respect of tax) incurred by the Underwriters in connection with the Offers,Admission and the arrangements contemplated by the Underwriting and Selling ShareholderAgreements;

• the Major Selling Shareholders have agreed to pay to and reimburse the Underwriters in respect ofany stamp duty and/or SDRT arising on the initial sale of the Ordinary Shares by Major SellingShareholders under the Offers (including the Sale of Ordinary Shares pursuant to theOver-allotment Option), subject to certain limitations;

• each of the Company, the Major Selling Shareholders and the Directors has given certainrepresentations, warranties and undertakings to the Underwriters. The liabilities of the Companyunder the Underwriting Agreement are not limited as to amount or by time. The liabilities of theDirectors and the Major Selling Shareholders under the Underwriting and Selling Shareholders’Agreements are limited as to time and amount;

• pursuant to the Underwriting Agreement, the Company has given an indemnity to the Underwritersin a form that is typical for an agreement of this nature;

• the parties to the Underwriting and Selling Shareholder Agreements have given certain covenantsto each other regarding compliance with laws and regulations affecting the making of the Offers inrelevant jurisdictions;

• the Company, the Major Selling Shareholders, the Directors and, pursuant to certain stand-alonelock-up deeds entered into on the same date as the Underwriting and Selling ShareholderAgreements, certain Shareholders who between them hold more than 37 per cent. of the issuedshare capital of the Company have agreed to be subject to certain lock-up arrangements furtherdetails of which are set out in section 10 of Part IX (Information about the Offers); and

• the Selling Shareholders’ Agreement also contains the terms of the Over-allotment Arrangementsmore fully described in section 7 of Part IX (Information about the Offers).

17.5 Stock Lending Agreement

In connection with the Over-allotment Arrangements, the Stabilising Manager will enter into the StockLending Agreement with Tim Steiner and Jason Gissing, pursuant to which the Stabilising Manager, onAdmission, will be able to borrow up to 18,131,750 Ordinary Shares for the purposes, among other things,of allowing the Stabilising Manager to settle, at Admission, over-allotments, if any, made in connectionwith the Offers pursuant to the Over-allotment Arrangements. If the Stabilising Manager borrows anyShares pursuant to the Stock Lending Agreement, it will be required to return equivalent securities to therelevant lender in accordance with the terms of the Stock Lending Agreement.

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18. Property

The Group has the following property interests, all of which are held by Ocado:

Purchase Price/ MajorProperty Location Tenure Rent (exc. VAT) Term Encumbrances

CFC Gypsy Moth Leasehold £2,528,984 per 20 years ending on N/AAvenue, Hatfield annum comprising: 27 SeptemberBusiness Park, 2021, reversionaryHatfield, Herts £2,209,398 per lease extendingAL10 9BD annum term until

(warehouse) 27 September2032

£294,586 perannum (car park)

£25,000 per annum Lease for yard N/A(additional yard) commenced on

6 March 2008 untilRent reviews in 28 SeptemberSeptember 2011 2032and every fiveyears thereafter

Titan Court Ground Titan Court Ground Leasehold 8 month rent-free 10 years ending on N/AFloor Floor, 3 Bishops period until June 20 October 2019

Square, Hatfield 2010Business Park,Hatfield, Herts £137,627.48 (firstAL10 9NE year rent)

£197,627.50 perannum (subject torent review inOctober 2014 butbenefitting fromfurther 4 monthrent-free period ifthe tenant breakoption at fifthanniversary oflease date is notexercised)

Titan Court Top Titan Court, Top Leasehold 8 months rent free 10 years ending on N/AFloor (Head Office) Floor, 3 Bishops period until June 20 October 2019

Square, Hatfield 2010Business Park,Hatfield, Herts £323,068 perAL10 9NE annum (subject to

rent review inOctober 2014 butbenefitting fromfurther 4 monthrent-free period ifthe tenant breakoption at fifthanniversary oflease date is notexercised)

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Purchase Price/ MajorProperty Location Tenure Rent (exc. VAT) Term Encumbrances

Weybridge Spoke Canada House, Leasehold £275,000 per 5 years ending on N/ACanada Road, annum and includingByfleet, West Note: Ocado is (warehouse, offices 19 February 2011Byfleet, Surrey currently and yard)KT14 7HQ negotiating a

reversionary lease £75,000 per annum 24 June 2007 until N/Aof this Spoke to (car park and 19 February 2011include the pathways)warehouse, officesand yard and the No rent reviewcar park. It isproposed that thelease will be for aterm of 10 yearscommencing on20 February 2011at the same rent asthe existing leasewith a 7 month rentfree period from20 February 2011,subject to anupwards only openmarket rent reviewon the fifthanniversary of thelease with a tenantbreak rightexercisable on20 February 2016subject to6 months’ notice.

50 additional car Licence £10,000 per annum 12 September N/Aparking spaces at 2007 untilCanada Road, 19 February 2011Byfleet, SurreyKT14 No review of

licence fee

Coventry Spoke 5 Crondal Road, Freehold £2,115,000 N/A Subject to aExhall, Coventry charge datedCV7 9NH 30 November 2006

in favour ofBarclays Bank PLC

Subject to acharge dated11 September2008 in favour ofBarclays MercantileBusiness FinanceLimited

Manchester Spoke Units D4 & D5 Leasehold £100,000 per 5 years ending on N/AStanley Green annum May 18 2014Trading Estate,Commercial No rent reviewAvenue, CheadleHulme, CheadleSK8 6QH

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Purchase Price/ MajorProperty Location Tenure Rent (exc. VAT) Term Encumbrances

Southampton Unit B5, Normandy Leasehold £84,150 per annum 10 years ending on N/ASpoke Way, Marchwood for B5 (Main 1 December 2015

Industrial Park, Building) subject toMarchwood, rent review onSouthampton, 2 December 2010HampshireSO40 4BX £13,850 per annum 18 January 2007 to N/A

for D1 (Additional 1 December 2015Yard Area) subjectto review on2 December 2010

£12,000 per annumfor B4.4 (Car Park)

4 years ending on N/A24 December 2011

Dartford Spoke Zone A, Plots 2 Freehold £2,475,000 N/A Subject to a chargeand 3, Littlebrook dated 17 FebruaryBusiness Park, 2010 in favour ofManor Way, Barclays Bank PLCDartford, KentDA1 5PZ Subject to a charge

dated 2 March2010 in favour ofBarclays MercantileBusiness FinanceLimited

Leeds Spoke Unit J, Springwell Freehold £254,000 N/A Subject to a27, Dark Lane, charge datedBirstall, Leeds 30 December 2008

in favour ofBarclays Bank PLC

Subject to acharge dated21 January 2009 infavour of BarclaysMercantileBusiness FinanceLimited

White City Spoke White City Spoke, Leasehold £147,598.50 per 25 June 2009 to N/A5 & 7 Ariel Way, annum subject to 31 December 2019White City review on 25 JuneIndustrial Park, 2014Wood Lane,Hammersmith,London W12 7SL

Note: Ocadoproposes to take afurther lease of athird unit at WhiteCity with theintention of it beingoperational inSeptember 2010.Negotiations forthat lease are at anearly stage andterms have not yetbeen agreed.

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Purchase Price/ MajorProperty Location Tenure Rent (exc. VAT) Term Encumbrances

Aylesford (Former Newsprint House, Leasehold £1,000 per month Rolling monthly N/ASpoke, now used New Hythe (Periodic Tenancy) subject to review basisto store old Industrial Estate, on a rollingequipment only) Bellingham Way, monthly basis

Aylesford, KentME20 7DL

19. Working capital statement

The Company is of the opinion that, taking into account the net proceeds of the Offers and the facilitiesavailable to the Group, the Group has sufficient working capital for its present requirements, that is, for atleast the next twelve months from the date of the publication of this document.

20. Dividend policy

Neither Ocado nor the Company has ever declared or paid a dividend. The Company currently intends toretain any future earnings of the Business and therefore the Directors do not anticipate declaring orpaying dividends in the foreseeable future.

21. Information on the CREST settlement system

CREST, the computerised paperless system for settlement of sales and purchases of shares in theLondon securities markets, commenced operations in July 1996.

The CREST Regulations provide for the transfer of shares in the UK without stock transfer forms, and theevidencing of title to shares without share certificates, through a computer-based system andprocedures, defined in the CREST Regulations as a ‘‘relevant system’’ and is operated by CRESTCo.

The Final Articles contain specific provisions to enable the Ordinary Shares to be dematerialised into arelevant system, including CREST. A copy of the Final Articles is available for inspection.

The Board has resolved to enable any or all of the Ordinary Shares to join CREST and, accordingly,Shareholders will be able to hold the Ordinary Shares to which they become entitled in electronic form inan account on the CREST system or in the physical form of certificates. Each Shareholder will be able tochoose whether or not to convert his Ordinary Shares into Uncertificated form and the Registrar willcontinue to register written instructions of transfer and issue Share Account Statements in respect of theOrdinary Shares held in Certificated form.

It is currently anticipated that the Ordinary Shares will be eligible to join CREST with effect immediatelyupon their admission to trading on the London Stock Exchange.

22. Consents

PricewaterhouseCoopers LLP has given and has not withdrawn its written consent to the inclusion in thisdocument of its reports in Part (A) of Part V (Financial Information Relating to the Group and Part (B) ofPart VI (Unaudited Pro Forma Financial Information) and the references thereto in the form and context inwhich they appear and has authorised the contents of its reports for the purposes of item 5.5.3R(2)(f) ofthe Prospectus Rules.

A written consent under the Prospectus Rules is different from a consent filed with the SEC undersection 7 of the US Securities Act. As the offered Ordinary Shares have not been and will not beregistered under the US Securities Act, PricewaterhouseCoopers LLP has not filed a consent undersection 7 of the US Securities Act.

23. Expenses of the Offers

The total expenses of, or incidental to, the Offers to be borne by the Company are estimated to beapproximately £15 million (assuming the discretionary part of the Underwriters’ commission described insection 17.4 of this Part XIII and the discretionary elements of the fees of the Company’s other advisersare paid) (exclusive of amounts in respect of VAT). This amount includes the IPO fee referred to insection 17.1 of this Part XIII.

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Each Selling Shareholder will bear the amount of any stamp duty or SDRT chargeable on the sale of hisOrdinary Shares and his pro rata share of any selling commissions.

24. Auditor

PricewaterhouseCoopers LLP whose registered office is 10 Bricket Road, St. Albans AL1 3JX, are theauditors of Ocado and audited the financial statements for Ocado for the three 52 week periodsended 29 November 2009, 30 November 2008 and 2 December 2007. The reports in respect of thefinancial statements for Ocado for the three 52 week periods ended 29 November 2009, 30 November2008 and 2 December 2007, respectively, were unqualified and did not contain a statement undersection 237(2) or (3) of the Companies Act 1985 or section 498(2) or (3) of the Companies Act.PricewaterhouseCoopers LLP is a member of the Institute of Chartered Accountants in England andWales.

25. No incorporation of website information

The contents of the Website, the Offer Website and the Corporate Website do not form part of thisdocument.

26. Sources of information

26.1 Financial information

Unless otherwise stated, in this document financial information in relation to the Group referred to in theProspectus has been extracted without material adjustment from, in respect of financial informationrelating to FYE 2007, FYE 2008, FYE 2009, P1-3 2009 and P1-3 2010, Part V (Financial Informationrelating to the Group), and, in relation to P1-6 2010, from Part VII (Unaudited Interim Financial Informationrelating to the Group for the 24 weeks ended 16 May 2010) or, in either case, has been extracted fromthose of the Group’s accounting records which have been used to prepare that financial information.Investors should ensure that they read the whole of this document and not only rely on the key informationor information summarised within them.

Unless stated otherwise, all financial information in this document relating to the Group for FYE 2007,FYE 2008, FYE 2009 and P1-3 2010 has been audited. For the avoidance of doubt, such financialinformation relating to the Group does not include operating information relating to the Group, even wheresuch operating information includes certain financial metrics. Such operating information which is notaudited includes, without limitation, average order size and average product wastage.

None of the financial information in this document relating to the Group for P1-3 2009 or P1-6 2010 hasbeen audited, nor has any financial information not relating to the Group (unless indicated otherwise).

26.2 Unaudited operating information

Unaudited operating information in relation to the Group is derived from the following sources:(i) management accounts for the relevant accounting periods presented; and (ii) internal financialreporting systems supporting the preparation of financial statements. Operating information derived frommanagement accounts or internal reporting systems in relation to Group is to be found principally in theSummary, Part I (Information about the Company), Part III (Selected Historical Financial Information),Part IV (Operating and Financial Review) and Part VII (Unaudited Interim Financial Information relating tothe Group for the 24 weeks ended 16 May 2010).

Management accounts are prepared using information derived from accounting records used in thepreparation of the Group’s historical financial information, but may also include certain othermanagement assumptions and analyses.

26.3 Industry and market data

Industry data have been obtained from industry publications, market participants and surveys. Such thirdparty providers of information include: IGD, Verdict, Which?, Tesco plc, J Sainsbury plc, John LewisPartnership plc and Wal-Mart Stores, Inc.

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Where third party information has been used in the Prospectus, the source of such information has beenidentified. The Company confirms that the information provided by the third parties referred to above hasbeen accurately reproduced. So far as the Company is aware and has been able to ascertain frominformation published by such third parties, no facts have been omitted which would render thereproduced information inaccurate or misleading.

27. Calculation of issued share capital on Admission

27.1 Options and warrants

All references in this document to the issued share capital of the Company on Admission (and thepercentage of such issued share capital held by certain Shareholders) have been calculated on the basisthat all of the options or warrants held over Ordinary Shares which are exercisable on or prior toAdmission (as described in sections 11.1, 11.2 and 12 of this Part XIII) will be exercised prior to or onAdmission.

15,816,926 Ordinary Shares are held under options or warrants which are capable of being exercisedbetween 5 July 2010 (being the latest practicable date prior to the publication of this document) andAdmission and thereafter.

27.2 Ordinary Shares held under the JSOS

As indicated in a number of places in this document, references to the issued share capital of theCompany are shown variously to include and exclude the 32,476,700 Ordinary Shares held by the EBTTrustee pursuant to the JSOS. Such Ordinary Shares are issued and fully paid shares which are treatedas treasury shares in the Group’s consolidated balance sheet. It is to reflect this accounting treatment thatsuch Ordinary Shares are sometimes excluded from the issued share capital figures; such accountingtreatment does not affect the issued and fully paid nature of these Ordinary Shares.

28. Securities laws and selling and transfer restrictions

The distribution of this document and the offer of Ordinary Shares in certain jurisdictions may be restrictedby law and therefore persons into whose possession this document come should inform themselvesabout and observe any restrictions, including those set out in the sections that follow. Any failure tocomply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

28.1 General

No action has been or will be taken in any jurisdiction (other than the UK), that would permit a publicoffering of the Ordinary Shares, or possession or distribution of this document or any other offeringmaterial in any country or jurisdiction where action for that purpose is required. Accordingly, the OrdinaryShares may not be offered or sold, directly or indirectly, and neither this document nor any other offeringmaterial or advertisement in connection with the Ordinary Shares may be distributed or published in orfrom any country or jurisdiction except under circumstances that will result in compliance with any and allapplicable rules and regulations of any such country or jurisdiction. Persons into whose possession thisdocument come should inform themselves about and observe any restrictions on the distribution of thisdocument, the Securities Note and the Summary and the offer of Ordinary Shares contained in thisdocument. Any failure to comply with these restrictions may constitute a violation of the securities laws ofany such jurisdiction. This document does not constitute an offer to subscribe for any of the OrdinaryShares offered hereby to any person in any jurisdiction to whom it is unlawful to make such offer orsolicitation in such jurisdiction.

28.2 United States

The Ordinary Shares have not been and will not be registered under the US Securities Act, or qualified forsale under the laws of any state of the United States. Subject to certain exceptions, the Ordinary Sharesmay not be offered, sold, pledged, taken up, exercised, resold, transferred or delivered directly orindirectly in the United States or to US persons (as defined in Regulation S) absent registration orpursuant to an exemption from or in a transaction not subject to, the registration requirements of theUS Securities Act. The Ordinary Shares will be offered and sold in the United States only to QIBs in

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reliance on Rule 144A or under exemption from, or in a transaction not subject to, the registrationrequirements of the US Securities Act and in offshore transactions outside the United States in relianceon Regulation S.

Any offer or sale of the Ordinary Shares in the United States in reliance on Rule 144A or anotherexemption from the registration requirements of the US Securities Act will be made by broker-dealers whoare registered as such under the US Exchange Act.

Until the expiration of 40 days after the later of the commencement of the offering and the original issue orsale date of the Ordinary Shares offered in the offering, an offer, sale or transfer of the shares within theUnited States by a dealer may violate the registration requirements of the US Securities Act if such offeror sale is made otherwise than pursuant to an exemption from registration under the US Securities Act.

Each subscriber or purchaser of the Ordinary Shares outside the United States pursuant to Regulation Swill be deemed, by its acceptance of the Ordinary Shares, to have represented and agreed, on its behalfand on behalf of any investor accounts for which it is subscribing for or purchasing the shares, that none ofthe Group or any of the Group’s affiliates nor the Underwriters, nor any person representing the Group,any of its affiliates or the Underwriters, has made any representation to it with respect to the offering orsale of any shares, other than the information contained in this document, which Prospectus has beendelivered to it and upon which it is solely relying in making its investment decision with respect to theOrdinary Shares, has had access to such financial and other information concerning the Company andthe shares as it has deemed necessary in connection with its decision to purchase any of the OrdinaryShares, and that:

• The subscriber or purchaser understands and acknowledges that the Ordinary Shares have notbeen and will not be registered under the US Securities Act, or with any securities regulatoryauthority of any state of the United States, and may not be offered, sold or otherwise transferredexcept in compliance with the registration requirements of the Securities Act or any other applicablesecurities law or pursuant to an exemption therefrom or in any transaction not subject thereto;

• The subscriber or purchaser and the person, if any, for whose account or benefit the subscriber orpurchaser is acquiring the Ordinary Shares acquiring the Ordinary Shares in an ‘‘offshoretransaction’’ meeting the requirements of Regulation S and is located outside the United States atthe time the buy order for the Ordinary Shares was originated and continues to be outside of theUnited States and has not purchased the Ordinary Shares for the benefit of any person in the UnitedStates or entered into any arrangement for the transfer of the Ordinary Shares to any person in theUnited States;

• The subscriber or purchaser is not an affiliate of the Group or a person acting on behalf of suchaffiliate; and it is not in the business of buying and selling securities or, if it is in such business, it didnot acquire the Ordinary Shares from the Group or an affiliate thereof in the initial distribution of theOrdinary Shares;

• The subscriber or purchaser is aware of the restrictions on the Offers and sale of the OrdinaryShares pursuant to Regulation S described in this document and agrees to give any subsequentpurchasers of such Ordinary Shares notice of any restrictions on the transfer thereof;

• The Ordinary Shares have not been offered to it by means of any ‘‘directed selling efforts’’ asdefined in Regulation S or as the result of a general solicitation as defined in Regulation D; and

• The Group shall not recognise any offer, sale, pledge or other transfer of the Ordinary Shares madeother than in compliance with the above-stated restrictions.

Terms defined in Regulation S shall have the same meaning when used in the foregoing paragraph. Eachsubscriber or purchaser of the Ordinary Shares within the United States pursuant to Rule 144A or anexemption from, or in a transaction not subject to, the registration requirements of the US Securities Actwill be deemed by its acceptance of the Ordinary Shares to have represented and agreed on its behalfand on behalf of any investor accounts for which it is subscribing for or purchasing the shares, that none ofthe Group or any of the Group’s affiliates nor the Underwriters, nor any person representing the Group,any of its affiliates or the Underwriters, has made any representation to it with respect to the offering orsale of any shares, other than the information contained in this document, which Prospectus has beendelivered to it and upon which it is solely relying in making its investment decision with respect to the

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Ordinary Shares, has had access to such financial and other information concerning the Company andthe shares as it has deemed necessary in connection with its decision to purchase any of the OrdinaryShares, and that:

• The subscriber or purchaser acknowledges that the Ordinary Shares have not been and will not beregistered under the Securities Act or with any securities regulatory authority of any state of theUnited States and are subject to significant restrictions on transfer;

• The subscriber or purchaser (i) is a QIB, (ii) is aware that the sale to it is being made in reliance onRule 144A or another exemption from, or in a transaction not subject to, the registrationrequirements of the US Securities Act, and (iii) is acquiring such Ordinary Shares for its own accountor for the account of a QIB, in each case for investment and not with a view to, or for offer or sale inconnection with, any resale or distribution of the Ordinary Shares in violation of the US SecuritiesAct or any state securities laws;

• The subscriber or purchaser is aware that the Ordinary Shares are being offered in the UnitedStates in a transaction not involving any public offering in the United States within the meaning of theUS Securities Act;

• If, in the future, the subscriber or purchaser decides to offer, resell, pledge or otherwise transfersuch Ordinary Shares, such Ordinary Shares may be offered, sold, pledged or otherwise transferredonly (i) to a person whom the beneficial owner and/or any person acting on its behalf reasonablybelieves is a QIB in a transaction meeting the requirements of Rule 144A, (ii) in accordance withRegulation S, (iii) in accordance with Rule 144 (if available), in each case in accordance with anyapplicable securities laws of any state of the United States or any other jurisdiction or (iv) in anothertransaction exempt from or not subject to the registration requirements of the US Securities Act;

• The Ordinary Shares have not been offered to it by means of any general solicitation or generaladvertising;

• The Ordinary Shares are ‘‘restricted securities’’ within the meaning of Rule 144(a)(3) and norepresentation is made as to the availability of the exemption provided by Rule 144 for resales of anyOrdinary Shares;

• The purchaser will not deposit or cause to be deposited such Ordinary Shares into any depositaryreceipt facility established or maintained by a depositary bank other than a Rule 144A restricteddepositary receipt facility, so long as such Ordinary Shares are ‘‘restricted securities’’ within themeaning of Rule 144(a)(3); and

• The Group shall not recognise any offer, sale pledge or other transfer of the Ordinary Shares madeother than in compliance with the above-stated restrictions.

Each subscriber or purchaser acknowledges that the Group and the Underwriters will rely upon the truthand accuracy of the foregoing acknowledgements, representations and agreements, and agrees that ifany of the acknowledgements, representations or warranties deemed to have been made by suchsubscriber or purchaser by its subscription for or purchase of shares are no longer accurate, it shallpromptly notify the Group and the Underwriters; if they are acquiring any Ordinary Shares as a fiduciary oragent for one or more investor accounts, each subscriber or purchaser they represents that they havesole investment discretion with respect to each such account and full power to make the foregoingacknowledgements, representations and agreements on behalf of each such account.

• The Ordinary Shares, to the extent they are in certificated form and unless otherwise determined bythe Group in accordance with applicable law, will bear a legend to the following effect:

THE SECURITY EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDERTHE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘US SECURITIES ACT’’) OR WITH ANYSECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THEUNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERREDEXCEPT (A)(1) TO A PERSON WHO THE SELLER AND ANY PERSON ACTING ON ITS BEHALFREASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OFRULE 144A UNDER THE US SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FORTHE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE

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REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITHRULE 903 OR RULE 904 OF REGULATION S UNDER THE US SECURITIES ACT, (3) PURSUANT TOAN EXEMPTION FROM REGISTRATION UNDER THE US SECURITIES ACT PROVIDED BYRULE 144 THEREUNDER (IF AVAILABLE) OR (4) IN ACCORDANCE WITH AN EFFECTIVEREGISTRATION STATEMENT UNDER THE US SECURITIES ACT, AND (B) IN ACCORDANCE WITHALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES. NOREPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BYRULE 144 UNDER THE US SECURITIES ACT FOR RESALES OF THIS SECURITY.NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THIS SECURITY MAYNOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECTOF SECURITIES ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK; and

• the Company shall not recognise any offer, sale, pledge or other transfer of the Ordinary Sharesmade other than in compliance with the above-stated restrictions.

Terms defined in Rule 144A shall have the same meaning when used in the foregoing paragraph.

Each subscriber or purchaser of the Ordinary Shares will be deemed by its acceptance of the OrdinaryShares to have represented and agreed that it is purchasing the Ordinary Shares for its own account, orfor one or more investor accounts for which it is acting as a fiduciary or agent, in each case for investment,and not with a view to, or for offer or sale in connection with, any distribution thereof in violation of the USSecurities Act or any state securities laws, subject to any requirement of law that the disposition of itsproperty or the property of such investor account or accounts be at all times within its or their control andsubject to its or their ability to resell such Ordinary Shares pursuant to Rule 144A, Regulation S or anyother exemption from registration available under the US Securities Act.

28.3 European Economic Area

In relation to each member state of the European Economic Area which has implemented the ProspectusDirective (each, a ‘‘relevant member state’’), with effect from and including the date on which theProspectus Directive was implemented in that relevant member state (the ‘‘relevant implementationdate’’), no Ordinary Shares have been offered or will be offered pursuant to the Offers to the public in thatrelevant member state prior to the publication of a prospectus in relation to the Ordinary Shares which hasbeen approved by the competent authority in that relevant member state or, where appropriate, approvedin another relevant member state and notified to the competent authority in the relevant member state, allin accordance with the Prospectus Directive, except that with effect from and including the relevantimplementation date, offers of Ordinary Shares may be made to the public in that relevant member stateat any time:

• to legal entities which are authorised or regulated to operate in the financial markets or, if not soauthorised or regulated, whose corporate purpose is solely to invest in securities;

• to any legal entity which has two or more of: (i) an average of at least 250 employees during the lastfinancial year; (ii) a total balance sheet of more than e43 million; and (iii) an annual turnover of morethan e50 million as shown in its last annual or consolidated accounts;

• to fewer than 100 natural or legal persons (other than qualified investors as defined in theProspectus Directive); or

• in any other circumstances which do not require the publication by the Company of a prospectuspursuant to Article 3(2) of the Prospectus Directive, provided that no such offer of Ordinary Sharesshall result in a requirement for the publication of a prospectus pursuant to Article 3 of theProspectus Directive or any measure implementing the Prospectus Directive in a relevant memberstate and each person who initially acquires any Ordinary Shares or to whom any offer is madeunder the Offers will be deemed to have represented, acknowledged and agreed that it is a‘‘qualified investor’’ within the meaning of Article 2(1)(e) of the Prospectus Directive.

For the purpose of this document, the expression ‘‘offer of any Ordinary Shares to the public’’ in relation toany Ordinary Shares in any relevant member state means the communication in any form and by anymeans of sufficient information on the terms of the Offers of any Ordinary Shares to be offered so as to

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Part XIII Additional Information

enable an investor to decide to purchase any Ordinary Shares, as the same may be varied in that relevantmember state by any measure implementing the Prospectus Directive in that relevant member state.

In the case of any Ordinary Shares being offered to a ‘‘financial intermediary’’ as that term is used inArticle 3(2) of the Prospectus Directive, such financial intermediary will also be deemed to haverepresented, acknowledged and agreed that the Ordinary Shares acquired by it in the Offers have notbeen acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to theiroffer or resale to, persons in circumstances which may give rise to an offer of any Ordinary Shares to thepublic other than their offer or resale in a relevant member state to qualified investors as so defined or incircumstances in which the prior consent of the JGCs has been obtained to each such proposed offer orresale. The Company, the JGCs and their affiliates, and others will rely upon the truth and accuracy of theforegoing representation, acknowledgement and agreement.

28.4 Australia

This document is not a disclosure document under Chapter 6D of the Australian Corporations Act 2001(Cth) (the ‘‘Australian Corporations Act’’), has not been and will not be, lodged with the AustralianSecurities and Investments Commission and does not purport to include the information required of adisclosure document under Chapter 6D of the Australian Corporations Act. Accordingly: (i) the offer of theOrdinary Shares in Australia may only be made to persons who are ‘‘sophisticated investors’’ (within themeaning of Section 708 (8) of the Australian Corporations Act) or to ‘‘professional Investors’’ (within themeaning of Section 708 (11) of the Australian Corporations Act) or otherwise pursuant to one or moreexemptions contained in Section 708 of the Australian Corporations Act, so that it is lawful to offer, orinvite applications for, the Ordinary Shares without disclosure to persons under Chapter 6D of theAustralian Corporations Act; and (ii) this document may only be made available in Australia to persons asset out in (i) above.

If you acquire Ordinary Shares, then you (i) represent and warrant that you are a person to whom an offerof securities can be made without a disclosure document in accordance with Subsections 708 (8) or (11)of the Australian Corporations Act and (ii) agree not to sell or offer for sale any Ordinary Shares inAustralia within 12 months after their issue to the offeree or invitee under this document, except incircumstances where disclosure to investors under Chapter 6D would not be required under theAustralian Corporations Act.

No person receiving a copy of this document may treat the same as constituting an invitation or offer tosuch person unless such an invitation or offer could lawfully be made to such person withoutcontravention of any registration or other legal requirements. In such circumstances, this document is tobe treated as received for information only and should not be copied or redistributed.

28.5 Canada

The Ordinary Shares have not been, and will not be, qualified by a prospectus in accordance with theprospectus requirements under applicable securities law in any Canadian jurisdiction and therefore maynot be offered or sold, directly or indirectly, in Canada except in compliance with applicable Canadiansecurities laws.

28.6 Japan

The Ordinary Shares have not been and will not be registered under the Securities and Exchange Law ofJapan (Law No. 25 of 1948 as amended) (the ‘‘Securities and Exchange Law’’), and may not be offered orsold, directly or indirectly, in Japan or to, or for the benefit of, a resident of Japan, or to others forre-offering or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan exceptpursuant to an exemption from the registration requirements of, and otherwise in compliance with, theSecurities and Exchange Law and other relevant laws and regulations of Japan.

28.7 Switzerland

The Ordinary Shares will not be publicly offered in Switzerland and will not be listed on the SIX SwissExchange (‘‘SIX’’) or on any other stock exchange or regulated trading facility in Switzerland. Thisdocument has been prepared without regard to the disclosure standards for issuance prospectuses

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Part XIII Additional Information

under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listingprospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange orregulated trading facility in Switzerland.

Neither this document nor any other offering or marketing material relating to the Company or theOrdinary Shares have been or will be filed with or approved by any Swiss regulatory authority. Inparticular, this document will not be filed with, and the offer of Ordinary Shares will not be supervised by,the Swiss Financial Market Supervisory Authority (FINMA), and the offer of Ordinary Shares has not beenand will not be authorised under the Swiss Federal Act on Collective Investment Schemes (‘‘CISA’’). Theinvestor protection afforded to acquirers of interests in collective investment schemes under the CISAdoes not extend to acquirers of Ordinary Shares.

29. Documents available for inspection

Copies of the following documents may be inspected at the registered office of the Company, Titan Court,3 Bishops Square, Hatfield Business Park, Hatfield, Hertfordshire AL10 9NE and the offices of Slaughterand May, One Bunhill Row, London EC1Y 8YY during normal business hours on any weekday(Saturdays, Sundays and public holidays excepted) for the duration of the Offers:

• the Final Articles;

• the historical financial information relating to the Group and the report thereon byPricewaterhouseCoopers LLP, as set out in Part V of this document;

• the unaudited pro forma financial information and the report thereon byPricewaterhouseCoopers LLP, as set out in Part VI of this document;

• the written consent letters of PricewaterhouseCoopers LLP referred to in section 22 of this Part XIII;and

• a copy of this document.

For the purposes of PR 3.2.4, the Prospectus will be published in printed form and available free of chargefor the duration of the Offers at the registered office of the Company at Titan Court, 3 Bishops Square,Hatfield Business Park, Hatfield, Hertfordshire AL10 9NE and at the offices of the JGCs. In addition, theProspectus will be published in electronic form and available on the Offer Website atwww.ocadoshares.com, subject to certain access restrictions applicable to persons resident outside theUK.

Dated 6 July 2010

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DEFINITIONS

The following definitions apply throughout this document unless the context requires otherwise:

‘‘2008 Agreement’’ means the agreement between Ocado, Waitrose and JohnLewis dated 20 February 2008 (as amended on 22 August2008), more fully described in section 17.1 of Part XIII(Additional Information);

‘‘2010 Agreement’’ means the agreement between Ocado, Waitrose and JohnLewis dated 25 May 2010, more fully described in section 17.1of Part XIII (Additional Information);

‘‘Admission’’ means the admission of the Ordinary Shares to the premiumlisting segment of the Official List and to trading on the LondonStock Exchange’s main market for listed securities which isexpected to be on 26 July 2010;

‘‘Articles’’ means the articles of association of the Company at the date ofthis document;

‘‘Banks’’ has the same meaning as the Underwriters;

‘‘Barclays Capital’’ Barclays Capital, the investment banking division of BarclaysBank PLC, a company incorporated in England and Wales withregistered number 1026167;

‘‘Board’’ means the board of directors of Ocado or the Company fromtime to time as the context may require;

‘‘Branding Agreement’’ means the branding agreement between Ocado and Waitrosedated 13 October 2000 as replaced by the BrandingArrangements, more fully described in section 17.1 of Part XIII(Additional Information);

‘‘Branding Arrangements’’ means the branding arrangements which replaced theBranding Agreement, as set out in the 2008 Agreement and the2010 Agreement, more fully described in section 17.1 ofPart XIII (Additional Information);

‘‘Business’’ means the Group’s core business, being the online sale ofgroceries via the Website;

‘‘Business Day’’ means any day other than a Saturday or Sunday on whichbanks are open for business in London, other than for thepurposes of trading and settlement in sterling;

‘‘CAGR’’ means compound annual growth rate;

‘‘Certificated’’ or ‘‘in Certificated means recorded on the relevant register as being held inform’’ Certificated form and title to which may be transferred by means

of a stock transfer form;

‘‘CFC’’ means either Ocado’s customer fulfilment centre, a dedicatedhighly automated warehouse used for the operation of theBusiness and more fully described in Part I (Information aboutthe Company) or, generally, a customer fulfilment centre (as thecontext requires);

‘‘Co-Bookrunners’’ means Barclays Capital and HSBC Bank plc;

‘‘Co-Lead Managers’’ means Jefferies International Limited, Lloyds TSB CorporateMarkets and Numis Securities Limited;

‘‘Companies Act’’ means the Companies Act 2006;

275

Definitions

‘‘Company’’ means Ocado Group plc, a company incorporated in Englandand Wales with registered number 7098618 whose registeredoffice is at Titan Court, 3 Bishops Square, Hatfield BusinessPark, Hatfield, Hertfordshire AL10 9NE;

‘‘Corporate Website’’ means www.ocadogroup.com;

‘‘Court’’ means the High Court of Justice of England and Wales;

‘‘CREST Regulations’’ means The Uncertificated Securities Regulations 2001(SI 2001 No. 3755), as amended from time to time;

‘‘Customer and Employee Offer’’ the offer of Ordinary Shares to Eligible Customers and EligibleEmployees at the Offer Price pursuant to the terms andconditions of the Customer and Employee Offer which are setout in Part X (Terms and Conditions of the Customer andEmployee Offer);

‘‘Customer and Employee Offer means the form on the Offer Website pursuant to which EligibleApplication Form’’ Customers and Eligible Employees can apply online to

purchase or subscribe for Ordinary Shares in the Customer andEmployee Offer;

‘‘Directors’’ means the directors of the Company whose names are set outin Part II (Directors) or the directors of Ocado from time to timeas the context may require;

‘‘Disclosure and Transparency means the disclosure and transparency rules made by the FSARules’’ under Part VI of FSMA;

‘‘EBITDA’’ means operating profit/(loss) before interest (including intereston finance leases), taxation, depreciation, amortisation andimpairment loss;

‘‘EBITDA margin’’ means EBITDA as a percentage of gross sales;

‘‘EBT Trustee’’ means the trustee from time to time of the employee benefittrust established for the purposes of the JSOS, currentlyAppleby Trust (Jersey) Limited;

‘‘Eligible Customers’’ means Ocado customers who are resident in the UK and whospent more than £300 with Ocado between 1 January 2010 and24 June 2010;

‘‘Eligible Employees’’ means all of the Group’s employees and officers as at the dateof this document who are over the age of 18 and resident in theUK or the Republic of Ireland;

‘‘ESOS’’ means the Ocado 2001 Executive Share Option Scheme asdescribed in section 11.1 of Part XIII (Additional Information);

‘‘Executive Directors’’ means Tim Steiner, Neill Abrams, Andrew Bracey and JasonGissing;

‘‘Existing Shares’’ the Ordinary Shares and Preference Shares that are in issue atthe date of this document (including the 32,476,700 OrdinaryShares issued to the EBT Trustee which are presented astreasury shares in the Group’s consolidated balance sheets);

‘‘Final Articles’’ means the articles of association of the Company resolved tobe adopted by a written members’ resolution dated 23 June2010, subject to, and with effect upon, Admission;

‘‘FSA’’ means the UK Financial Services Authority;

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Definitions

‘‘FSMA’’ means the Financial Services and Markets Act 2000 (asamended);

‘‘FTE’’ means full time equivalent;

‘‘FYE 2007’’ means the financial year (that is, the period of 52 weeks) ended2 December 2007;

‘‘FYE 2008’’ means the financial year (that is, the period of 52 weeks) ended30 November 2008;

‘‘FYE 2009’’ means the financial year (that is, the period of 52 weeks) ended29 November 2009;

‘‘Goldman Sachs International’’ means Goldman Sachs International, an unlimited companyincorporated in England and Wales with registerednumber 2263951;

‘‘Gross margin’’ means gross profit expressed as a percentage of gross sales;

‘‘Group’’ means the Company and its subsidiaries (as defined in theCompanies Act);

‘‘HMRC’’ means Her Majesty’s Revenue & Customs;

‘‘HSBC Bank plc’’ means the company of that name incorporated in England andWales with registered number 00014259;

‘‘IFRS-EU’’ means International Financial Reporting Standards as adoptedfor use in the EU;

‘‘Institutional Offer’’ the offer of Ordinary Shares to certain institutions at the OfferPrice as summarised in section 5.1 of Part IX (Information aboutthe Offers);

‘‘Investors’’ means any person who acquires Shares pursuant to the Offers;

‘‘IT’’ means information technology;

‘‘Jefferies International Limited’’ means the company of that name incorporated in England andWales with the registered number 01978621;

‘‘John Lewis’’ means John Lewis plc, the parent company of Waitrose. JohnLewis was incorporated in England and Wales with registerednumber 233462 and its registered office is 171 Victoria Street,London SW1E 5NN;

‘‘John Lewis Pension Fund’’ means John Lewis Partnership Pensions Trust, which is thecorporate trustee of the John Lewis Partnership Trust forPensions. The John Lewis Pension Fund was incorporated inEngland and Wales with registered number 372106 and itsregistered office is 171 Victoria Street, London SW1E 5NN;

‘‘Joint Global Co-ordinators’’ or means Goldman Sachs International, J.P. Morgan Cazenove‘‘JGCs’’ and UBS Limited;

‘‘J.P. Morgan Cazenove’’ means J.P. Morgan Securities Ltd., a company incorporated inEngland and Wales with registered number 2711006, whichoperates its investment banking business in the UK under thename J.P. Morgan Cazenove;

‘‘JSOS’’ means the Company’s joint share ownership scheme, morefully described in section 11.3 of Part XIII (AdditionalInformation);

277

Definitions

‘‘LGV’’ means Ocado’s large goods vehicles; Category N3 motorvehicles used for the carriage of goods and having a maximummass exceeding 12 tonnes;

‘‘Listing Rules’’ means the listing rules made by the UK Listing Authority underPart VI of FSMA;

‘‘Lloyds TSB Corporate Markets’’ is the trading name of Lloyds TSB Bank plc, a companyincorporated in England and Wales with registerednumber 00002065;

‘‘Lombard’’ means Lombard Vehicle Management Limited, LombardVehicle Management (1) Limited, Lombard VehicleManagement (2) Limited and Lombard VehicleManagement (3) Limited;

‘‘London Stock Exchange’’ means the London Stock Exchange plc;

‘‘Major Selling Shareholders’’ means those Selling Shareholders who have given non-bindingindications of interest in selling Ordinary Shares pursuant to theOffers and who are party to the Selling Shareholders’Agreement;

‘‘Major Shareholder’’ means these Shareholders listed as such in section 8 ofPart XIII (Additional Information);

‘‘Mercedes-Benz Charterway’’ is the trading name of Mercedes-Benz Financial Services UKLimited;

‘‘Minor Selling Shareholders’’ means those Shareholders holding (as at 5 July 2010, the latestpracticable date prior to the publication of this document)individually less than 1.33 per cent. of the issued share capitalof the Company who the Company has offered the opportunityto sell some or all of their Ordinary Shares pursuant to theOffers;

‘‘Model Code’’ the code set out at Annex 1 to Rule 9 of the Listing Rules;

‘‘New Facility’’ means the £100 million facility granted to Ocado by Lloyds,Barclays and HSBC described in section 17.3 of Part XIII(Information about the Company);

‘‘New Ordinary Shares’’ the new Ordinary Shares to be allotted and issued under theOffers or pursuant to the exercise of options or warrants tosubscibe for Ordinary Shares in the Company prior toAdmission;

‘‘Numis Securities Limited’’ means the company of that name incorporated in England andWales with registered number 02285918;

‘‘Ocado’’ means Ocado Limited, a company incorporated in England andWales with registered number 3875000 whose registered officeis at Titan Court, 3 Bishops Square, Hatfield Business Park,Hatfield, Herts AL10 9NE;

‘‘Ocado Information Technology means the company of that name incorporated in the RepublicLimited’’ of Ireland with registered number 479792 whose registered

office is at 1 Adelaide Court, Adelaide Road, Dublin 2;

‘‘Ocado IPO Helpline’’ means the telephone helpline available at 0800 141 2954;

‘‘Ocado Limited Ordinary Shares’’ means ordinary shares of 1 pence each in the share capital ofOcado;

278

Definitions

‘‘Ocado Limited Preference means convertible preference shares of 1 pence each in theShares’’ share capital of Ocado;

‘‘Ocado Share Account’’ means the arrangements for the holding of Ordinary Sharesthrough a nominee, the terms and conditions of which are setout in Part XI (Terms and Conditions of the Ocado ShareAccount);

‘‘Offer Price’’ means the price at which Ordinary Shares comprised in theOffers will be issued or sold to investors;

‘‘Offer Shares’’ means those Ordinary Shares comprised in the Offers;

‘‘Offer Website’’ means www.ocadoshares.com;

‘‘Offers’’ means the Institutional Offer and the Customer and EmployeeOffer;

‘‘Official List’’ means the Official List of the UK Listing Authority;

‘‘Old Articles’’ means the articles of association of the Company adopted on19 December 2009 which will be replaced by the Final Articles;

‘‘Ordinary Shares’’ means the ordinary shares with a nominal value of two penceeach in the share capital of the Company;

‘‘Over-allotment Arrangements’’ means the arrangements pursuant to which the StabilisingManager may procure purchasers for or failing which itselfpurchases or nominates purchasers for, the Over-allotmentShares, as more particularly described in Part IX (Informationabout the Offers);

‘‘Over-allotment Option’’ means the option granted by UBS Holdings Cayman Limited tothe Stablising Manager to buy Ordinary Shares at the OfferPrice in accordance with the Over-allotment Arrangements;

‘‘Over-allotment Shares’’ the Ordinary Shares which the Stabilising Manager, pursuantto the Over-allotment Arrangements, may purchase fromUBS Holdings Cayman Limited;

‘‘P1-3 2009’’ means the 12 week period ended 22 February 2009;

‘‘P1-3 2010’’ means the 12 week period ended 21 February 2010;

‘‘P1-6 2009’’ means the 24 week period ended 17 May 2009;

‘‘P1-6 2010’’ means the 24 week period ended 16 May 2010;

‘‘Preference Shares’’ means convertible preference shares of two pence each in theshare capital of the Company which will convert to OrdinaryShares on Admission;

‘‘Price Range’’ means the range of prices within which the Offer Price isexpected to fall, being 200 pence to 275 pence per OrdinaryShare;

‘‘Pricing Statement’’ means the statement expected to be published by the Companyon or around 21 July 2010, in which the Offer Price will beannounced;

‘‘Prospectus’’ means this document;

‘‘Prospectus Rules’’ means the prospectus rules made by the UK Listing Authorityunder Part IV of FSMA;

279

Definitions

‘‘Receiving Agent’’ means Capita Registrars Limited, incorporated in England andWales (with registration number 2605568) whose registeredoffice is The Registry, 34 Beckenham Road, Beckenham, KentBR3 4TU;

‘‘Registrar’’ means Capita Registrars Limited, incorporated in England andWales (with registration number 2605568) whose registeredoffice is The Registry, 34 Beckenham Road, Beckenham, KentBR3 4TU;

‘‘Registrar of Companies’’ means the registrar of Companies in England and Wales withinthe meaning of the Companies Act;

‘‘Scheme’’ means the scheme of arrangement under sections 895 to 899of the Companies Act between Ocado and holders of OcadoOrdinary Limited Shares and Ocado Limited PreferenceShares, the effective date of which was 9 February 2010;

‘‘SDRT’’ means stamp duty reserve tax;

‘‘SEC’’ means the US Securities and Exchange Commission;

‘‘Selling Optionholders’’ means those persons holding options or warrants over OrdinaryShares or Preference Shares (as at 5 July 2010, being the latestpracticable date prior to the publication of this document) towhom the Company has offered the opportunity to sell some orall of the New Ordinary Shares which will be issued upon theexercise of their options or warrants pursuant to the Offers;

‘‘Selling Shareholders’ Agreement’’ means the agreement between the Company, the Underwritersand the Major Selling Shareholders dated 5 July 2010, details ofwhich are set out in section 17.4 of Part XIII (AdditionalInformation);

‘‘Selling Shareholders’’ means each of the Major Selling Shareholders and some or allof the Minor Selling Shareholders and some or all of the SellingOptionholders as set out in section 2 of Part IX (Informationabout the Offers);

‘‘Settlement Date’’ is expected to be 26 July 2010, the date on which the sale orissue of Ordinary Shares pursuant to the Institutional Offer willbe completed;

‘‘Share Account Statement’’ means a statement of a person’s holding of Ordinary Shares inthe Ocado Share Account;

‘‘Share Nominee’’ means Capita IRG Trustees Limited (details of which are set outin Part XI (Terms and Conditions of the Ocado Share Account))or any other person appointed by the Company or ReceivingAgent to act as the nominee shareholder of Ordinary Shares inthe Ocado Share Account;

‘‘Shareholder’’ means a holder for the time being of Ordinary Shares;

‘‘SKU’’ means a ‘‘stock keeping unit’’, that is each individual productline stocked;

‘‘Sourcing Agreement’’ means the sourcing agreement between Ocado and Waitrosedated 13 October 2000 as progressively amended, supersededand updated from time to time, more fully described insection 17.1 of Part XIII (Additional Information);

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Definitions

‘‘Spoke’’ means the trans-shipment sites used for the intermediatedelivery of customers’ orders as more fully described in Part I(Information about the Company);

‘‘Stabilising Manager’’ means Goldman Sachs International;

‘‘Stock Lending Agreement’’ means the agreement described in section 17.5 of Part XIII(Additional Information);

‘‘Subscriber Ordinary Share’’ means the subscriber ordinary share of 110 pence in the capitalof the Company whose rights became deferred in accordancewith its terms upon the Scheme becoming effective;

‘‘Takeover Code’’ the City Code on Takeovers and Mergers;

‘‘UBS Investment Bank’’ means UBS Limited, a company incorporated in England andor ‘‘UBS Limited’’ Wales with registered number 2035362;

‘‘UK’’ or ‘‘United Kingdom’’ means the United Kingdom of Great Britain and NorthernIreland;

‘‘UK Corporate Governance Code’’ means the UK Corporate Governance Code published by theFinancial Reporting Council, as in force from time to time;

‘‘UK Listing Authority’’ means the Financial Services Authority acting in its capacity asthe competent authority for the purposes of Part VI of the FSMAand in the exercise of its functions in respect of the admission ofsecurities to the Official List other than in accordance withPart VI of the FSMA;

‘‘Uncertificated’’ or ‘‘in means recorded on the relevant register as being held inUncertificated form’’ uncertificated form in CREST and title to which, by virtue of the

CREST Regulations, may be transferred by means of CREST;

‘‘Underwriters’’ means Goldman Sachs International, J.P. Morgan Cazenove,UBS Limited, Barclays Capital, HSBC Bank plc, JefferiesInternational Limited, Lloyds TSB Corporate Markets andNumis Securities Limited;

‘‘Underwriting Agreement’’ means the agreement between the Company, the Underwritersand the Directors dated 6 July 2010, details of which are set outin section 17.4 of Part XIII (Additional Information);

‘‘Underwriting and Selling means the Underwriting Agreement and the SellingShareholder Agreements’’ Shareholders’ Agreement;

‘‘US’’, ‘‘USA’’ or ‘‘United States’’ means the United States of America, its territories andpossessions, any state of the United States of America and theDistrict of Columbia and all other areas subject to its jurisdiction;

‘‘US Securities Act’’ means the US Securities Act of 1933, as amended;

‘‘Usdaw’’ means the Union of Shop, Distributive and Allied Workers;

‘‘Waitrose’’ means Waitrose Limited, a company incorporated in Englandand Wales with registered number 99405;

‘‘WaitroseDeliver’’ means the online retail business of Waitrose, by whichcustomer orders placed online are delivered from Waitroseshops, and run currently from the websitewww.waitrosedeliver.com; and

‘‘Website’’ means www.ocado.com, Ocado’s public website from whichthe Business operates.

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Merrill Corporation Ltd, London10ZBD49501

ProspectusO

cado Group plc

Ocado Group plc, Titan Court, 3 Bishops Square, Hatfield Business Park, Hatfield, Herts AL10 9NE Ocado Group plc

Prospectus

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