XRO
23/12/2014 09:30
S/HOLDER
NOT PRICE SENSITIVE
REL: 0930 HRS Xero Limited
S/HOLDER: XRO: Letter to shareholders and Disclosure Notice
23 December 2014
Dear shareholder
2014 has been our biggest year yet, and we are delighted to have grown the
business to over $US100m Annualised Committed Monthly Revenue while growing
at over 80%. The real story of this year has been the onboarding of
world-class capability. We've now grown the team to over 1,000, who are
coming on stream to accelerate innovation in 2015. Onboarding so many staff
has been an incredibly time consuming activity but it positions us very
strongly for the coming years.
You may have read that we just recently passed 400,000 paying customers, a
major milestone as we head into key selling seasons in the UK, New Zealand
and the US. In 2014 we processed NZ$250 billion of transactions and 95
million invoices, connecting millions of businesses, advisors, suppliers and
customers worldwide.
The support from our customers and partners is both humbling and exciting.
Together we've established Xero as one of the leading platforms on which they
connect, collaborate and conduct their business. Through a constant
innovation cycle, we are fulfilling our potential as a small business growth
engine, bringing together crucial capabilities in accounting, payroll and
payments with insights and the business specific applications small
businesses need from our hundreds of partners worldwide.
We're now utilising large volumes of data to report business performance at
scale and deliver insights to help improve the growth of small businesses,
providing a real time data set to discover the real power of the small
business economy and trends such as growing self and part-time employment.
We're thrilled to be playing a role in igniting the small business economy.
Our customers are adding employees and growing revenue and margins by having
clear visibility of their numbers and easy access to advisors. At the same
time, the vibrant ecosystem around Xero, including the growing advisor
channel, is creating jobs worldwide.
We're continuously improving the platform with over 400 releases to benefit
users deployed during 2014. Most of these releases were silent, unnoticed by
customers, but span small business tasks ranging from payroll through to
beautiful business reporting. We just unveiled a new business dashboard to
help small businesses have better visibility of their cash flow as Xero
begins its delivery of 'Big Data for Small Business' in early 2015.
Our momentum is not only a clear vote for platforms born and bred in the
cloud, but also for those optimised for mobile devices. In the past 12
months, over 145,000 small businesses have downloaded Xero Touch enabling
them to pay, invoice, and manage cash flow any place, any time.
Today, we are New Zealand's and Australia's most loved accounting platform
and we are achieving a similar position in the UK. As we said at our Annual
Meeting in July this year, our focus until now has been to establish
Australia and the United Kingdom as our next growth engines. Having delivered
that, our focus is now on the US. We are making good progress in getting our
operating team in place. The small business cloud market is still in its
infancy: of the addressable market of hundreds of millions of small
businesses, only a small percentage currently use cloud financial software.
Throughout 2014 we've invested significantly in our platform, which is
becoming critical infrastructure in our core markets. We now manage 500
servers across multiple data centres while maintaining best-in-class uptime
of 99.99 percent. We have our sights set on not just leading in building our
cloud infrastructure, but also putting the innovations and investments from
the global cloud providers like Microsoft, Google and Amazon to work for
small businesses.
On the reverse of this letter is a disclosure notice informing shareholders
that we have extended the repayment dates (from December 2014 to July 2015)
for two executive loans that were granted in December 2011 to Ross Jenkins,
our CFO, and Chris Ridd, our Australian MD. These loans were used by Ross and
Chris to purchase shares in Xero. Ross and Chris remain valuable members of
our leadership team, and the Board has extended the repayment date of these
loans to help ensure that Ross and Chris, along with the remainder of the
leadership team, remain highly incentivised to continue to work hard for you
to drive long-term growth.
Thank you all for your support in 2014. Our team are fired up and excited
about what's to come. 2015 is going to rock.
Rod Drury, CEO
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This document is for information only. It does not require any action from
you.
Xero Limited
(the Company)
Disclosure Document Relating to the Provision of Financial Assistance Not
Exceeding 5% of Shareholders' Funds (Section 80(1)(b) Companies Act 1993)
To: All shareholders of the Company
Introduction
This document is provided to all shareholders in accordance with the
requirements set out in section 80 of the Companies Act 1993. It sets out the
details on which the financial assistance provided to selected employees by
the Company in December 2011, in connection with the purchase of shares in
the Company, is amended.
Details of Financial Assistance
On 10 December 2011, the Company provided financial assistance by way of
loans from the Company to Ross Jenkins, Chief Financial Officer of the
Company, and Chris Ridd, Managing Director of Xero Australia Pty Limited, to
enable each of them to purchase shares in the Company on identical terms as
described below:
a) Shares: 196,364 ordinary shares in the Company.
b) Consideration paid or payable for the shares: NZ$540,000 (based on the
volume weighted average price of Xero's shares quoted on the NZSX for the 20
days prior to 10 December 2011 of NZ$2.75 per share).
c) Nature and amount of the financial assistance: A loan of NZ$540,000 for up
to three years at 4% interest per annum.
The Board of the Company resolved to extend the repayment date of the above
loans to 9 July 2015. All other terms of these loans remain the same.
Dated: 23 December 2014
Signed
Chris Liddell
Chairman of the Board of Xero Limited
Rod Drury
Director of Xero Limited
End CA:00259301 For:XRO Type:S/HOLDER Time:2014-12-23 09:30:11
