Hi Elm72
I agree with Badgercub - the likelihood is that the groups right now roughly reflect ability level as assessed at the end of YR. Probably best to see this as a starting point. In our school groups always have 6 children and there are always 5 - which realistically really can't be possible. I'm sure that children 1 and 2 in Group 2 probably can do as well in Group 1. But the teachers always make a huge point of explaining that there often is very little difference in ability between groups.
Every school is different but hopefully from this point there will be some movements between groups as children progress (sometimes it can seem like jumping) up ability levels.
Although I can understand that there is a desire to understand precisely what the groups mean, in reality the real issue isn't what group they're in but how they're performing in themselves and against general expectations for that age group.
Bear in mind that each class is different and that some years Y1 children are very bright and all working to higher levels and other years, when for whatever reason, a group of Y1 children might be really struggling. The teaching, organisation of work groups in literacy/ numeracy and homework will all reflect that.
If it helps, Campaign for Real Education prepares statements on what should be covered by year/ age here: www.cre.org.uk/primary_contents.html. Please bear in mind that this is 'gold standard' and your school (and your child) may not quite be working to this, but at least it lets you know what could be possible in an ideal world.
The important things to understand as a parent are:
What does the school need you to be helping with at home right now.
What areas need more support/ practice (for instance might be o.k. at adding numbers to 10, but needs work on numbers up to 20).
Keeping a good routine of regularly reading - the more reading at home you can be doing with your DC the better.
HTH