Rules 4.7.3 and 4.10.31

Appendix 4G

Key to Disclosures

Corporate Governance Council Principles and Recommendations

Name of entity:

Xero Limited

ABN / ARBN:

Financial year ended:

ARBN 160 661 183

31 March 2019

Our corporate governance statement2for the above period above can be found at:3

⛝

These pages of our annual report:

77 to 89

☐This URL on our website:

The Corporate Governance Statement is accurate and up to date as at 18 April 2019 and has been approved by the board.

The annexure includes a key to where our corporate governance disclosures can be located.

Date: 16 May 2019

Name of Director or Secretary authorising lodgement:

Chaman Sidhu (Company Secretary)

1Under Listing Rule 4.7.3, an entity must lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX.

Listing Rule 4.10.3 requires an entity that is included in the official list as an ASX Listing to include in its annual report either a corporate governance statement that meets the requirements of that rule or the URL of the page on its website where such a statement is located. The corporate governance statement must disclose the extent to which the entity has followed the recommendations set by the ASX Corporate Governance Council during the reporting period. If the entity has not followed a recommendation for any part of the reporting period, its corporate governance statement must separately identify that recommendation and the period during which it was not followed and state its reasons for not following the recommendation and what (if any) alternative governance practices it adopted in lieu of the rec ommendation during that period.

Under Listing Rule 4.7.4, if an entity chooses to include its corporate governance statement on its website rather than in its annual report, it must lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. Th e corporate governance statement must be current as at the effective date specified in that statement for the purposes of rule 4.10.3.

2"Corporate governance statement" is defined in Listing Rule 19.12 to mean the statement referred to in Listing Rule 4.10.3 which discloses

the extent to which an entity has followed the recommendations set by the ASX Corporate Governance Council during a particular reporting period.

3Mark whichever option is correct and then complete the page number(s) of the annual report, or the URL o f the web page, where the entity's corporate governance statement can be found. You can, if you wish, delete the option which is not applicable.

Throughout this form, where you are given two or more options to select, you can, if you wish, delete any option which is not applicable and just retain the option that is applicable. If you select an option that includes " OR" at the end of the selection and you delete the other options, you can also, if you wish, delete the "OR" at the end of the selection.

Page 1

ANNEXURE - KEY TO CORPORATE GOVERNANCE DISCLOSURES

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the

We have NOT followed the recommendation in full for the whole

period above. We have disclosed …

of the period above. We have disclosed …4

PRINCIPLE 1 - LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

1.1

A listed entity should disclose:

… the fact that we follow this recommendation:

(a)

the respective roles and responsibilities of its board and

⛝in our Corporate Governance Statement (at Annual Report

management; and

page 78)

(b)

those matters expressly reserved to the board and those

… and information about the respective roles and responsibilities of

delegated to management.

our board and management (including those matters expressly

reserved to the board and those delegated to management):

⛝

at Annual Report page 78

1.2

A listed entity should:

… the fact that we follow this recommendation:

(a)

undertake appropriate checks before appointing a person, or

⛝

in our Corporate Governance Statement (at Annual Report

putting forward to security holders a candidate for election,

pages 78 and 79)

as a director; and

(b)

provide security holders with all material information in its

possession relevant to a decision on whether or not to elect

or re-elect a director.

1.3

A listed entity should have a written agreement with each director

… the fact that we follow this recommendation:

and senior executive setting out the terms of their appointment.

⛝

in our Corporate Governance Statement (at Annual Report

page 79)

1.4

The company secretary of a listed entity should be accountable

… the fact that we follow this recommendation:

directly to the board, through the chair, on all matters to do with the

⛝

in our Corporate Governance Statement (at Annual Report

proper functioning of the board.

page 79)

1.5

A listed entity should:

… the fact that we have a diversity policy that complies with

(a)

have a diversity policy which includes requirements for the

paragraph (a):

board or a relevant committee of the board to set

⛝

in our Corporate Governance Statement (at Annual Report

measurable objectives for achieving gender diversity and to

page 79)

assess annually both the objectives and the entity's progress

in achieving them;

(b)

disclose that policy or a summary of it; and

4If you have followed all of the Council's recommendations in full for the whole of the period above, you can, if you wish, delete this column from the form and re-format it.

Page 2

(c)

disclose as at the end of each reporting period the

… and a copy of our diversity policy or a summary of it:

measurable objectives for achieving gender diversity set by

⛝

in our Corporate Governance Statement (at Annual Report

the board or a relevant committee of the board in

page 79) and on the Xero website at:

accordance with the entity's diversity policy and its progress

https://www.xero.com/content/dam/xero/pdf/xero-

towards achieving them and either:

diversity-and-inclusion-policy.pdf

(1) the respective proportions of men and women on the

… and the measurable objectives for achieving gender diversity set by

board, in senior executive positions and across the

the board or a relevant committee of the board in accordance with our

whole organisation (including how the entity has defined

diversity policy and our progress towards achieving them:

"senior executive" for these purposes); or

⛝

(2) if the entity is a "relevant employer" under the Workplace

in our Corporate Governance Statement (at Annual Report

Gender Equality Act, the entity's most recent "Gender

page 80)

Equality Indicators", as defined in and published under

… and the information referred to in paragraphs (c)(1) or (2):

that Act.

⛝

in our Corporate Governance Statement (at Annual Report

page 81)

1.6

A listed entity should:

… the evaluation process referred to in paragraph (a):

(a)

have and disclose a process for periodically evaluating the

⛝

in our Corporate Governance Statement (at Annual Report

performance of the board, its committees and individual

page 81)

directors; and

… and the information referred to in paragraph (b):

(b)

disclose, in relation to each reporting period, whether a

⛝

in our Corporate Governance Statement (at Annual Report

performance evaluation was undertaken in the reporting

period in accordance with that process.

page 81)

1.7

A listed entity should:

… the evaluation process referred to in paragraph (a):

(a)

have and disclose a process for periodically evaluating the

⛝

in our Corporate Governance Statement (at Annual Report

performance of its senior executives; and

page 81)

(b)

disclose, in relation to each reporting period, whether a

… and the information referred to in paragraph (b):

performance evaluation was undertaken in the reporting

⛝

in our Corporate Governance Statement (at Annual Report

period in accordance with that process.

page 81)

PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE

2.1

The board of a listed entity should:

… the fact that we have a nomination committee that complies with

(a)

have a nomination committee which:

paragraphs (1) and (2):

(1) has at least three members, a majority of whom are

⛝

in our Corporate Governance Statement (at Annual Report

independent directors; and

page 82)

(2) is chaired by an independent director,

… and a copy of the charter of the committee:

and disclose:

⛝

on the Xero website at:

(3) the charter of the committee;

https://www.xero.com/content/dam/xero/pdf/xero-

(4) the members of the committee; and

nominations-committee-charter.pdf

Page 3

(5) as at the end of each reporting period, the number of

… and the information referred to in paragraphs (4) and (5):

times the committee met throughout the period and the

⛝

in our Corporate Governance Statement (at Annual Report

individual attendances of the members at those

meetings; or

page 78)

(b)

if it does not have a nomination committee, disclose that fact

and the processes it employs to address board succession

issues and to ensure that the board has the appropriate

balance of skills, knowledge, experience, independence and

diversity to enable it to discharge its duties and

responsibilities effectively.

2.2

A listed entity should have and disclose a board skills matrix setting

… our board skills matrix:

out the mix of skills and diversity that the board currently has or is

⛝

in our Corporate Governance Statement (at Annual Report

looking to achieve in its membership.

page 82)

2.3

A listed entity should disclose:

… the names of the directors considered by the board to be

(a) the names of the directors considered by the board to be

independent directors:

independent directors;

⛝

in our Corporate Governance Statement (at Annual Report

(b) if a director has an interest, position, association or

page 83)

relationship of the type described in Box 2.3 but the board is

… and the length of service of each director:

of the opinion that it does not compromise the independence

⛝

at Annual Report page 17 and 18

of the director, the nature of the interest, position, association

or relationship in question and an explanation of why the

board is of that opinion; and

(c)

the length of service of each director.

2.4

A majority of the board of a listed entity should be independent

… the fact that we follow this recommendation:

directors.

⛝

in our Corporate Governance Statement (at Annual Report

page 83)

2.5

The chair of the board of a listed entity should be an independent

… the fact that we follow this recommendation:

director and, in particular, should not be the same person as the

⛝

in our Corporate Governance Statement (at Annual Report

CEO of the entity.

page 83)

2.6

A listed entity should have a program for inducting new directors

… the fact that we follow this recommendation:

and provide appropriate professional development opportunities for

⛝

in our Corporate Governance Statement (at Annual Report

directors to develop and maintain the skills and knowledge needed

page 83)

to perform their role as directors effectively.

Page 4

PRINCIPLE 3 - ACT ETHICALLY AND RESPONSIBLY

3.1

A listed entity should:

… our code of conduct or a summary of it:

(a) have a code of conduct for its directors, senior executives

⛝

on the Xero website, at:

and employees; and

https://www.xero.com/content/dam/xero/pdf/About

(b) disclose that code or a summary of it.

%20Us/xero-code-of-conduct.pdf

PRINCIPLE 4 - SAFEGUARD INTEGRITY IN CORPORATE REPORTING

4.1

The board of a listed entity should:

… the fact that we have an audit committee that complies with

(a) have an audit committee which:

paragraphs (1) and (2):

(1) has at least three members, all of whom are non-

⛝

in our Corporate Governance Statement (at Annual Report

executive directors and a majority of whom are

page 83)

independent directors; and

… and a copy of the charter of the committee:

(2) is chaired by an independent director, who is not the

⛝

on the Xero website, at

chair of the board,

https://www.xero.com/content/dam/xero/pdf/xero-

and disclose:

audit-and-risk-management-charter.pdf

(3) the charter of the committee;

… and the information referred to in paragraphs (4) and (5):

(4) the relevant qualifications and experience of the

⛝

in our Corporate Governance Statement (at Annual Report

members of the committee; and

page 78) and pages 17 and 18 of the Annual Report

(5) in relation to each reporting period, the number of times

the committee met throughout the period and the

individual attendances of the members at those

meetings; or

(b) if it does not have an audit committee, disclose that fact and

the processes it employs that independently verify and

safeguard the integrity of its corporate reporting, including

the processes for the appointment and removal of the

external auditor and the rotation of the audit engagement

partner.

4.2

The board of a listed entity should, before it approves the entity's

… the fact that we follow this recommendation:

financial statements for a financial period, receive from its CEO and

⛝

in our Corporate Governance Statement (at Annual Report

CFO a declaration that, in their opinion, the financial records of the

page 84)

entity have been properly maintained and that the financial

statements comply with the appropriate accounting standards and

give a true and fair view of the financial position and performance

of the entity and that the opinion has been formed on the basis of a

sound system of risk management and internal control which is

operating effectively.

Page 5

4.3

A listed entity that has an AGM should ensure that its external

… the fact that we follow this recommendation:

auditor attends its AGM and is available to answer questions from

⛝

in our Corporate Governance Statement (at Annual Report

security holders relevant to the audit.

page 84)

PRINCIPLE 5 - MAKE TIMELY AND BALANCED DISCLOSURE

5.1

A listed entity should:

… our continuous disclosure compliance policy or a summary of it:

(a) have a written policy for complying with its continuous

⛝

on the Xero website, at

disclosure obligations under the Listing Rules; and

https://www.xero.com/content/dam/xero/pdf/About

(b) disclose that policy or a summary of it.

%20Us/xero-continuous-disclosure-policy-aug-

2018.pdf

PRINCIPLE 6 - RESPECT THE RIGHTS OF SECURITY HOLDERS

6.1

A listed entity should provide information about itself and its

… information about us and our governance:

governance to investors via its website.

⛝

on the Xero website, at

https://www.xero.com/au/about/investors/governan

ce/

6.2

A listed entity should design and implement an investor relations

… the fact that we follow this recommendation:

program to facilitate effective two-way communication with

⛝

in our Corporate Governance Statement (at Annual Report

investors.

page 84)

6.3

A listed entity should disclose the policies and processes it has in

… our policies and processes for facilitating and encouraging

place to facilitate and encourage participation at meetings of

participation at meetings of security holders:

security holders.

⛝

in our Corporate Governance Statement (at Annual Report

page 84)

6.4

A listed entity should give security holders the option to receive

… the fact that we follow this recommendation:

communications from, and send communications to, the entity and

⛝

in our Corporate Governance Statement (at Annual Report

its security registry electronically.

page 84)

PRINCIPLE 7 - RECOGNISE AND MANAGE RISK

7.1

The board of a listed entity should:

… the fact that we have a committee or committees to oversee risk

(a) have a committee or committees to oversee risk, each of

that comply with paragraphs (1) and (2):

which:

⛝

in our Corporate Governance Statement (at Annual Report

(1) has at least three members, a majority of whom are

pages 85 and 83)

independent directors; and

… and a copy of the charter of the committee:

(2) is chaired by an independent director,

⛝

on the Xero website, at

and disclose:

https://www.xero.com/content/dam/xero/pdf/xero-

(3) the charter of the committee;

audit-and-risk-management-charter.pdf

Page 6

(4) the members of the committee; and

… and the information referred to in paragraphs (4) and (5):

(5) as at the end of each reporting period, the number of

⛝

in our Corporate Governance Statement (at Annual Report

times the committee met throughout the period and the

page 78)

individual attendances of the members at those

meetings; or

(b) if it does not have a risk committee or committees that satisfy

(a) above, disclose that fact and the processes it employs for

overseeing the entity's risk management framework.

7.2

The board or a committee of the board should:

… the fact that board or a committee of the board reviews the entity's

(a) review the entity's risk management framework at least

risk management framework at least annually to satisfy itself that it

continues to be sound:

annually to satisfy itself that it continues to be sound; and

(b) disclose, in relation to each reporting period, whether such a

⛝

on the Xero website, at

review has taken place.

https://www.xero.com/content/dam/xero/pdf/xero-

audit-and-risk-management-charter.pdf

… and that such a review has taken place in the reporting period

covered by this Appendix 4G:

⛝

in our Corporate Governance Statement (at Annual Report

page 85)

7.3

A listed entity should disclose:

… how our internal audit function is structured and what role it

(a) if it has an internal audit function, how the function is

performs:

structured and what role it performs; or

⛝

in our Corporate Governance Statement (at Annual Report

(b) if it does not have an internal audit function, that fact and the

page 85)

processes it employs for evaluating and continually

improving the effectiveness of its risk management and

internal control processes.

7.4

A listed entity should disclose whether it has any material exposure

… whether we have any material exposure to economic,

to economic, environmental and social sustainability risks and, if it

environmental and social sustainability risks and, if we do, how we

does, how it manages or intends to manage those risks.

manage or intend to manage those risks:

⛝

in our Corporate Governance Statement (at Annual Report

pages 85 and 86)

PRINCIPLE 8 - REMUNERATE FAIRLY AND RESPONSIBLY

8.1

The board of a listed entity should:

… the fact that we have a remuneration committee that complies with

(a) have a remuneration committee which:

paragraphs (1) and (2):

(1) has at least three members, a majority of whom are

⛝

in our Corporate Governance Statement (at Annual Report

independent directors; and

page 86)

(2) is chaired by an independent director,

… and a copy of the charter of the committee:

Page 7

and disclose:

⛝

on the Xero website, at

(3) the charter of the committee;

https://www.xero.com/content/dam/xero/pdf/xero-

(4) the members of the committee; and

remuneration-committee-charter.pdf

(5) as at the end of each reporting period, the number of

… and the information referred to in paragraphs (4) and (5):

times the committee met throughout the period and the

⛝

in our Corporate Governance Statement (at Annual Report

individual attendances of the members at those

page 78)

meetings; or

(b) if it does not have a remuneration committee, disclose that

fact and the processes it employs for setting the level and

composition of remuneration for directors and senior

executives and ensuring that such remuneration is

appropriate and not excessive.

8.2

A listed entity should separately disclose its policies and practices

… separately our remuneration policies and practices regarding the

regarding the remuneration of non-executive directors and the

remuneration of non-executive directors and the remuneration of

remuneration of executive directors and other senior executives.

executive directors and other senior executives:

⛝

in our Corporate Governance Statement (at Annual Report

pages 86-89)

8.3

A listed entity which has an equity-based remuneration scheme

… our policy on this issue or a summary of it:

should:

⛝

in our Corporate Governance Statement (at Annual Report

(a) have a policy on whether participants are permitted to enter

page 89)

into transactions (whether through the use of derivatives or

otherwise) which limit the economic risk of participating in the

scheme; and

(b) disclose that policy or a summary of it.

Page 8

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Xero Limited published this content on 16 May 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 16 May 2019 07:37:07 UTC