SEEK LIMITED — Annual Report 2012

Aug 21, 2012

SEEK Limited Appendix 4E and Statutory Accounts

For the year ended 30 June 2012 ABN: 46 080 075 314 Lodged with the ASX under Listing Rule 4.3A

Corporate Directory

Directors

Robert (Bob) C G Watson Chairman

Andrew R Bassat Managing Director and Chief Executive Officer

Colin B Carter

Neil G Chatfield Denise I Bradley

Secretary

Moana Weir

Principal registered office in Australia Level 6 541 St Kilda Road MELBOURNE VIC 3004 Ph: +61 3 8517 4100

Share register

Computershare Investor Services Pty Ltd 452 Johnston Street ABBOTSFORD VIC 3067 Ph: +61 3 9415 4000

Auditor

PricewaterhouseCoopers Freshwater Place 2 Southbank Boulevard SOUTHBANK VIC 3006

Solicitors

Arnold Bloch Leibler Level 21 333 Collins Street MELBOURNE VIC 3000

Bankers

Westpac Banking Corporation

Stock exchange listing

SEEK Limited shares are listed on the Australian Stock Exchange (Listing code: SEK)

Website address

www.seek.com.au

Notice of Annual General Meeting

The Annual General Meeting of SEEK Limited will be held at: Crown Melbourne Limited 8 Whiteman Street Southbank, Victoria 3006

Time: 3.00pm Date: 29 November 2012

2

SEEK Limited

ABN 46 080 075 314

Year ended 30 June 2012

(Previous corresponding period: Year ended 30 June 2011)

Results for Announcement to the Market

Appendix 4E

Information required by ASX Listing Rule 4.3A

	$’000
Revenuefrom ordinary activities Profitfrom ordinary activities after tax Netprofitafter tax attributable to members of SEEK Limited	Up 29% To 445,230 Up 42% To 137,458 Up 35% To 131,680
Dividends/distributions	Amount per security Franked amount per security
2011 Final dividend paid 2012 Interim dividend paid 2012 Final dividend(declared after balance date)	7.5 cents 7.5 cents 8.3 cents 8.3 cents 9.0 cents 9.0 cents
Record date for determining entitlements to the dividend Dividend payable	12 September 2012 16 October 2012
	16 October 2012

Other information as required by Listing Rule 4.3A

Other information requiring disclosure to comply with Listing Rule 4.3A is contained in the 30 June 2012 Annual Report.

3

Contents

DIRECTORS’ REPORT ...............................................................................................................................................................6
REMUNERATION REPORT......................................................................................................................................................17
AUDITOR’S INDEPENDENCE DECLARATION ...........................................................................................................................33
CORPORATE GOVERNANCE STATEMENT...............................................................................................................................34
BOARD ANDSENIORMANAGEMENTFUNCTIONS..................................................................................................................................34
RESPONSIBILITIES...........................................................................................................................................................................34
BOARDCOMPOSITION ANDSIZE........................................................................................................................................................35
DIRECTORINDEPENDENCE................................................................................................................................................................35
ACCESS TOINFORMATION................................................................................................................................................................35
BOARDREMUNERATION ANDPERFORMANCEREVIEW...........................................................................................................................36
EXECUTIVEREMUNERATION ANDPERFORMANCEREVIEW......................................................................................................................36
DIVERSITY.....................................................................................................................................................................................36
SHARETRADINGPOLICY...................................................................................................................................................................37
BOARDCOMMITTEES......................................................................................................................................................................38
REMUNERATIONCOMMITTEE...........................................................................................................................................................38
AUDIT ANDRISKMANAGEMENTCOMMITTEE......................................................................................................................................39
NOMINATIONCOMMITTEE...............................................................................................................................................................40
RECOGNISE ANDMANAGERISK.........................................................................................................................................................41
CONTINUOUSDISCLOSURE...............................................................................................................................................................41
COMMUNICATION WITHSHAREHOLDERS.............................................................................................................................................41
AGM...........................................................................................................................................................................................42
COMMUNICATIONS WITH ANALYSTS...................................................................................................................................................42
CODE OFCONDUCT........................................................................................................................................................................42
CONSOLIDATED INCOME STATEMENT ..................................................................................................................................44
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME.................................................................................................45
CONSOLIDATED BALANCE SHEET ..........................................................................................................................................46
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ..........................................................................................................47
CONSOLIDATED STATEMENT OF CASH FLOWS ......................................................................................................................48
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES........................................................................................................................49
2. FINANCIAL RISK MANAGEMENT..................................................................................................................................................63
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS....................................................................................................................68
4. SEGMENT INFORMATION..........................................................................................................................................................70
5. REVENUE..............................................................................................................................................................................75
6. OTHER INCOME......................................................................................................................................................................76
7. EXPENSES.............................................................................................................................................................................76
8. INCOME TAX..........................................................................................................................................................................77
9. CASH AND CASH EQUIVALENTS..................................................................................................................................................81
10. TRADE AND OTHER RECEIVABLES................................................................................................................................................81
11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD...........................................................................................................83
12. OTHER FINANCIAL ASSETS.........................................................................................................................................................86
13. PLANT AND EQUIPMENT...........................................................................................................................................................87
14. INTANGIBLE ASSETS.................................................................................................................................................................88
15. TRADE AND OTHER PAYABLES....................................................................................................................................................90
16. BORROWINGS........................................................................................................................................................................91
17. OTHER FINANCIAL LIABILITIES....................................................................................................................................................92
18. PROVISIONS..........................................................................................................................................................................93
19. CONTRIBUTED EQUITY.............................................................................................................................................................95
20. EQUITY.................................................................................................................................................................................96
21. DIVIDENDS............................................................................................................................................................................99
22. KEY MANAGEMENT PERSONNEL DISCLOSURES...............................................................................................................................99
23. REMUNERATION OF AUDITORS................................................................................................................................................104
24. CONTINGENT LIABILITIES........................................................................................................................................................105
25. COMMITMENTS FOR EXPENDITURE...........................................................................................................................................105

4

1. SHARE-BASED PAYMENTS .......................................................................................................................................................106 27. RELATED PARTY TRANSACTIONS ...............................................................................................................................................108 28. DEED OF CROSS GUARANTEE...................................................................................................................................................109 29. BUSINESS COMBINATIONS ......................................................................................................................................................112 30. INTERESTS IN CONTROLLED ENTITIES .........................................................................................................................................117 31. EVENTS OCCURRING AFTER BALANCE DATE.................................................................................................................................118 32. RECONCILIATION OF PROFIT FOR THE YEAR TO NET CASH INFLOW FROM OPERATING ACTIVITIES ............................................................119 33. EARNINGS PER SHARE ............................................................................................................................................................120 34. NET TANGIBLE ASSET BACKING ................................................................................................................................................121 35. PARENT ENTITY FINANCIAL INFORMATION..................................................................................................................................121 DIRECTORS’ DECLARATION .................................................................................................................................................122 INDEPENDENT AUDITOR’S REPORT.....................................................................................................................................123

5

Directors’ Report

Your directors present their report on the consolidated entity (referred to hereafter as the Group), consisting of SEEK Limited and the entities it controlled at the end of, or during, the year ended 30 June 2012.

Directors

The following persons were directors of the company during the financial year and up to the date of this report:

R C G Watson Chairman, non-executive director A R Bassat Managing Director and Chief Executive Officer (“CEO”) C B Carter Non-executive director N G Chatfield Non-executive director D I Bradley Non-executive director

Principal activities

During the year the principal continuing activities of the Group consisted of:

• Advertising employment classifieds and related services on the internet; and

• Provision and distribution of vocational training and higher education courses.

Dividends

Dividends paid to shareholders during the financial year were as follows:

		Franked	Total
	Payment	Amount amount	dividend
Dividend	date	per share per share	$'000
Year 2011
2010 final dividend	15 October 2010	6.7 cents 6.7 cents	$22,550
2011 interim dividend	19 April 2011	6.8 cents 6.8 cents	$22,889
			$45,439
Year 2012
2011 final dividend	12 October 2011	7.5 cents 7.5 cents	$25,277
2012 interim dividend	18 April 2012	8.3 cents 8.3 cents	$27,980
			$53,257
Dividends paid or declared by the company after year end (to be paid		out of retained profits at 30 June 2012):
2012 final dividend	16 October 2012	9.0 cents 9.0 cents	$30,339

The total dividend for the year is 17.3 cents (2011: 14.3 cents).

6

Directors’ Report

Review of operations

A summary of consolidated revenues and results is set out below:

A summary of consolidated revenues and results is set out below:
		2012	2011
	Notes	$’000	$’000
Operating revenue	5	442,254	343,054
Interest revenue	5	2,976	1,681
Revenue from continuing operations	5	445,230	344,735
Segment EBITDA (1)	4	193,625	135,636
Depreciation	13	(8,805)	(6,203)
Amortisation	14	(11,645)	(6,392)
Amortisation of share-based payments and other long-term incentive schemes	7	(4,130)	(999)
Interest expense	7	(23,650)	(14,588)
Interest income	5	2,976	1,681
Fair value gain/(loss) on step acquisitions	29	28,224	(811)
Other non-operating gains	6	1,130	-
Impairment loss	14(b)	(24,115)	-
Share of net profits of associates and jointly controlled entities accounted
for using the equity method	11(b)	30,871	24,685
Profit from continuing operations before income tax		184,481	133,009
Income tax expense	8(a)	(47,023)	(36,295)
Profit for the year		137,458	96,714
Non-controlling interests	20	(5,778)	974
Profit for theyear attributable to owners of SEEK Limited		131,680	97,688

(1) Segment EBITDA is earnings before interest, tax, depreciation and amortisation and excluding share of net profits of associates and jointly controlled entities accounted for using the equity method, fair value gains/(losses) on acquisition, impairment loss, amortisation of share-based payments and longterm incentives and other non-operating gains/(losses).

Strong performance across all of SEEK's businesses has led to a record full year result with net profit for the year (SEEK Limited’s share) of $131,680,000 (2011: $97,688,000) up 35% on the prior year. The strong result was achieved in challenging conditions, as a result of continued growth in the domestic Employment business, strong growth in all International markets as well as from acquisitions and strong underlying earnings in the Education business.

Further information on segment results is provided below.

SEEK Employment

SEEK Employment
	2012	2011		Growth
	$’000	$’000	$’000		%
Operating revenue	247,769	224,005	23,764		11%
Employment	247,769	224,037	23,732		11%
Inter-segment revenue	-	(32)	32		n/a
Segment EBITDA	152,146	133,517	18,629		14%
EBITDA(%)	61%	60%

SEEK’s domestic Employment business achieved a solid result despite subdued labour market conditions, with revenue growth of 11% on the prior period attributable to volume growth of 1% and a 10% increase in yield.

Key highlights:

• The pleasing result reflects SEEK’s market leadership and resilience of the business model.

• SEEK Employment generated strong revenue and earnings growth with an increase in EBITDA margins to 61% despite the challenging macro environment.

• The successful launch of several new products and services further improved the ‘Jobseeker and advertiser marketplace’, including the iPhone app and refinement of Jobseeker Profiles.

7

Directors’ Report

Review of operations continued

SEEK Education

SEEK’s Education segment includes SEEK Learning, Think and share of profits/(losses) from IDP (50%) and Swinburne Online (50%).

(50%).
	2012	2011		Growth
	$’000	$’000	$’000		%
Operating revenue	132,386	110,322	22,064		20%
SEEK Learning	49,478	44,466	5,012		11%
Think	86,913	69,078	17,835		26%
Inter-segment revenue	(4,005)	(3,222)	(783)		24%
Segment EBITDA	20,544	5,549	14,995		270%
SEEK Learning	15,261	13,046	2,215		17%
Think	5,283	(7,497)	12,780		n/a
EBITDA (%)	16%	5%
SEEK Learning	31%	29%
Think	6%	(11%)
Share of net profits/(losses) of associates and	jointly controlled entities
IDP	8,161	7,742	419		5%
Swinburne Online	(2,028)	(46)	(1,982)		n/a

SEEK Education achieved a solid result for the year with EBITDA of $20,544,000 and each business executing against its key objectives.

Key highlights:

• SEEK Learning achieved a solid result with EBITDA increasing 17% on the prior period and a robust margin of 31%. Continued improvements in marketing efficiencies have been coupled with the launch of three new partners and 49 new courses, as well as investment in brand awareness.

• Think achieved a strong result with revenue increasing by 26% on the prior period, and EBITDA improving by $12,780,000 to turnaround a positive EBITDA result of $5,283,000. Key drivers have been an 18% growth in online students and an improvement in campus students across all faculties. The Melbourne Design Campus successfully launched with approximately 730 students educated in FY12.

• IDP achieved a pleasing result despite subdued market conditions, with EBITDA increasing by 9% on the prior year as a result of growth in IELTS candidates and a focus on cost containment in core operations. SEEK received dividends from IDP of $6,000,000 during the year (2011: $2,500,000).

• Swinburne Online is performing ahead of expectations with higher than anticipated student enrolments and revenue per student.

8

Directors’ Report

Review of operations continued

SEEK International

SEEK International owns interests in leading job boards that are exposed to favourable structural and macro trends. SEEK’s International segment includes JobsDB (consolidated from 5 May 2011), Brasil Online Holdings Coöperatief U.A. (“Brasil Online”) (consolidated from 31 May 2012), Online Career Center Mexico S.A. De C.V. (“OCC”) (consolidated from 19 June 2012), other operating costs incurred by SEEK and share of net profits from International associates.

	2012	2011		Growth
	$’000	$’000	$’000		%
Operating revenue	62,099	8,727	53,372		n/a
JobsDB	52,926	8,727	44,199		506%
Brasil Online	8,818	-	8,818		n/a
OCC	355	-	355		n/a
Segment EBITDA	20,935	(3,430)	24,365		n/a
JobsDB	20,752	3,535	17,217		n/a
Brasil Online	2,982	-	2,982		n/a
OCC	112	-	112		n/a
Other Operating Costs	(2,911)	(6,965)	4,054		58%
EBITDA (%)	34%	(39%)
JobsDB	39%	41%
Brasil Online	34%	n/a
OCC	32%	n/a

SEEK International achieved a strong result with the first full year of consolidation of JobsDB as well as a reduction in other operating costs (prior year included JobsDB acquisition costs of $6,203,000).

Key highlights

• JobsDB achieved solid earnings growth and an EBITDA result of $20,752,000 reflecting a full year of SEEK’s increased ownership. JobsDB continues to pay dividends with SEEK’s share being $4,214,000 this year.

• SEEK moved to majority ownership in Brasil Online and OCC and both businesses achieved solid results in the investment period with underlying revenue growth in Brasil Online of 14% and OCC of 15%, as well as strong cashflows.

During the year dividends and distributions of $9,525,000 were received from these three investments.

Share of net profits of International associates

Further details of SEEK’s investments in International associates are included in note 11.

	2012	2011		Growth
	$’000	$’000	$’000	%
Zhaopin	16,490	8,702	7,788	89%
Brasil Online (1)	4,654	4,144	510	12%
JobStreet	2,773	2,679	94	4%
OCC (2)	821	749	72	10%
JobsDB (3)	-	715	(715)	n/a
Share of netprofits of International associates	24,738	16,989	7,749	46% ~~#DIV/0!~~

(1) Results included as an associate to 31 May 2012

(2) Results included as an associate to 19 June2012

(3) Comparative result included as JobsDB was equity accounted from 23 December 2010 to 5 May 2011

9

Directors’ Report

Review of operations continued

Profits from our share of International associates grew 46% to $24,738,000 (2011: $16,989,000).

Key highlights:

• Zhaopin continues to achieve strong results with underlying revenue and EBITDA growth of 28% and 70% respectively from prior year. SEEK’s share of profits increased 89% from the prior year to $16,490,000.

• JobStreet achieved solid underlying revenue and EBITDA growth of 18% and 6% respectively and SEEK received dividends during the year of $1,544,000.

Analysis of key items below EBITDA

Analysis of key items below EBITDA
	2012	2011	Movement
Expense/(income)	$’000	$’000	$’000	%
Interest expense	23,650	14,588	9,062	62%
Interest income	(2,976)	(1,681)	(1,295)	77%
Depreciation	8,805	6,203	2,602	42%
Amortisation	11,645	6,392	5,253	82%
Amortisation of share-based payments and other long-term
incentive schemes	4,130	999	3,131	313%
Fair value (gain)/loss on step acquisitions	(28,224)	811	(29,035)	n/a
Other non-operating gain	(1,130)	-	(1,130)	n/a
Impairment loss	24,115	-	24,115	n/a
	40,015	27,312	12,703	47%

Key highlights:

• The key driver of the increase in interest expense has been the higher average borrowings throughout the current year, primarily as a result of the recent acquisitions (JobsDB in the latter half of the 2011 and more recently Brasil Online and OCC).

• The higher depreciation charge is primarily driven by the Education and International businesses, in particular Think office and campus fit-outs and the full year consolidation of JobsDB.

• The higher amortisation is driven mainly by the full year impact of the amortisation of intangible assets recognised as part of the JobsDB acquisition.

• The increase in amortisation of share-based payments and other long-term incentive schemes reflects additional schemes opened in the year (including the deferred share plan) and additional option allocations. In the prior year, a credit of approximately $2,500,000 was recognised in profit and loss where certain vesting conditions were not met (including the resignation of Paul Bassat).

• The fair value gain of $28,224,000 was recognised as part of the acquisition accounting for the additional ownership interests in Brasil Online and OCC (refer to note 29(a) for further details on these transactions).

• The impairment loss relates to the write down of goodwill and brands and licences in the Think business during the current year (refer to note 14(b)).

10

Directors’ Report

Significant changes in the state of affairs

Business combinations

Brasil Online Holdings Coöperatief UA (‘Brasil Online’)

On 31 May 2012, the Group acquired an additional 21.0% interest in Brasil Online, the owner of the two leading employment websites in Brazil, for US$78,750,000 (A$80,563,000 at the exchange rate on the date of the transaction). The acquisition was funded through cash and an additional $30,000,000 drawdown on the syndicated bank debt facility and takes the total interest held in Brasil Online to 51.0%.

Online Career Center Mexico SA de CV (‘OCC’)

On 19 June 2012, the Group acquired an additional 15.6% interest in OCC, the leading employment website in Mexico, for US$22,500,000 (A$22,250,000 at the exchange rate on the date of the transaction). The acquisition was funded through cash and takes the total interest held in OCC to 56.7%.

These acquisitions significantly enhance SEEK’s exposure to the two largest economies in the highly attractive Latin American online employment sector. SEEK has a majority of voting rights and positions on the Board of Directors in both businesses and will play an active role in driving the strategic and growth agenda.

The businesses are considered subsidiaries of SEEK and have been consolidated into the Group from the date of acquisition. Refer to note 29(a) in the Financial Report for further information in relation to these transactions.

Change in key management personnel

On 1 October 2011 SEEK appointed David Gibbons as Chief Information Officer (CIO). For further information refer to the Remuneration Report.

Matters subsequent to the end of the financial year

Syndicated debt facility

The Group is in the process of re-financing the existing syndicated debt facility to extend the maturity by at least a further three years. The re-financing process is progressing well and is expected to be completed within the next few weeks.

Minority shareholding in Think

SEEK is in exclusive discussions with a Global Education Company with the company looking to acquire a minority shareholding (c.20%) in Think. If completed, the investment will be accompanied by board representation in Think proportionate to its shareholding and typical minority shareholder protection rights. The strategic rationale for SEEK is that it brings onto the Think Board additional expertise and capabilities to assist in the ongoing growth of Think.

Additional investment in Swinburne Online

On 1 July 2012, as detailed in the joint venture agreement, SEEK and Swinburne University each contributed an additional $2,500,000 to Swinburne Online. SEEK will recognise this transaction as an additional investment in Swinburne Online.

No other matters or circumstances have arisen since 30 June 2012 that have significantly affected, or may significantly affect the Group’s operations in future financial years, the results of those operations in future financial years, or the Group’s state of affairs in future financial years.

Likely developments and expected results of operations

At the date of this report there are no likely developments in the operations of the consolidated entity constituted by the SEEK Group which would materially impact the results of the Group. Further information about the Group’s future results has not been disclosed as it could be prejudicial to the best interests of the Group.

11

Directors’ Report

SEEK’s environmental, social and governance framework

SEEK is focused on continually enhancing its positive organisational culture and values, through its investment in the wellbeing and professional development of SEEK employees and the ongoing promotion of employee engagement.

SEEK’s values support its culture of ethical corporate conduct. SEEK contributes to the wider community through the SEEK Volunteer website, and by providing volunteering opportunities to employees to directly assist and/or donate to charitable organisations. The Company is also committed to reducing its corporate carbon footprint, which has been achieved through the implementation of a number of environmental sustainability programs.

SEEK social and governance

Employee development and engagement

SEEK measures employee engagement through bi-annual “Insight” surveys. In 2012, SEEK was recognised as a 2012 Best Employer in the annual Aon Hewitt accreditation program, the seventh time the organisation has received this honour out of the eight years in which it has participated in the study.

SEEK also has innovative talent development programs, as well as professional development opportunities provided both through internal and external programs, mentoring and coaching.

SEEK promotes the health and well-being of its employees by offering a variety of group and individual sporting activities for staff, discount gym memberships, fruit and healthy snack options and regular communications promoting well-being in the workplace.

Community

SEEK’s community contribution program is known as SEEK Village. SEEK Village manages the SEEK Volunteer website in partnership with Volunteering Australia and Volunteering WA, which aims to provide volunteers with volunteering opportunities suited to their skills and requirements. This year SEEK has invested in the re-development and improvement of the SEEK Volunteer website which launched in August 2012. This was supported by a major campaign to raise awareness of the site to prospective volunteers with significant pro bono support from media companies across Australia.

SEEK also encourages employees to contribute directly to the wider community through the internal volunteer program, where employees are provided one day a year to work for a charitable organisation of their choice. SEEK also supports selected charities through a workplace donation program called Bright Futures.

Corporate Conduct

SEEK’s Code of Conduct sets out the tenets of ethical and respectful conduct against which all employees are required to comply when dealing with each other, our suppliers, customers, shareholders and external stakeholders, and the broader community. These include acting honestly, in good faith and in the best interests of the company, without conflict of interest or improperly taking advantage of position or confidential information, and all times within the law.

In turn, SEEK’s whistleblower policy protects employees from detrimental action where they disclose in good faith and with reasonable grounds any unethical or improper conduct, financial impropriety or fraud, contravention of legal provisions or auditing non disclosure within the organisation.

Governance

SEEK is committed to strong and effective governance frameworks. SEEK’s corporate governance policies are described in the Corporate Governance Statement set out in the Directors’ Report and are also available for viewing from its website seek.com.au in the Investor section.

SEEK environment

Sustainability programs

SEEK has a number of sustainability programs which include:

(i) SEEK Green

SEEK Green is an internal program which focuses on sustainability and minimising SEEK’s environmental impact. SEEK Green identifies behaviours, work practices and in-house initiatives associated with carbon reduction, and implements improvements in the areas of energy, waste reduction and recycling, consumables, cleaning and water.

12

Directors’ Report

Some initiatives include reducing consumption of paper and energy to reduce carbon consumption, and the introduction of a mobile phone recycling program to reduce landfill. SEEK’s Enviro Council also helps the organisation to drive a greener working environment by ensuring the adoption of better environmental practices while achieving its business goals.

(ii) Carbon offsets

SEEK’s business emits low levels of carbon emissions. Since November 2007, SEEK has collected energy consumption and travel data and engaged an external consultant to calculate its greenhouse gas emissions for its domestic online employment business and SEEK Learning. SEEK continues to offset greenhouse gas emissions associated with electricity and natural gas consumption and business air travel through the purchase of offsets from Origin Energy’s Carbon Reduction Scheme.

SEEK is compliant with environmental legislative requirements

As a result of SEEK’s low greenhouse gas emissions, energy consumption and waste management program, it is compliant with current environmental legislative requirements as set out in the National Greenhouse and Energy Reporting (NGER) and Energy Efficiency Opportunities (EEO) Acts , as well as waste legislation. Due to SEEK’s current level of scope 1 greenhouse emissions, SEEK is not liable under the Clean Energy Act 2011 .

13

Directors’ Report

Information on directors

	Robert(Bob) C G Watson	Andrew R Bassat	Colin B Carter	Neil G Chatfield	Denise I Bradley
Position	Chairman, independent non-executive	Chief Executive Officer	Independent non-executive director	Independent non-executive director	Independent non-executive director
	director	Co-founder
Age	56	46	69	58	70
Appointed	February1999,Chairman since August 2009	September 1997	March 2005	June 2005	February2010
Other current	None.	None.	Wesfarmers Limited (non-executive)	Virgin Australia Holdings Limited (non-	None.
directorships			since October 2002.	executive) since May 2006 and Chairman
				since June 2007.
				Transurban Group (non-executive) since
				February 2009.
				Grange Resources Limited (non-
				executive) since January 2009.
Former	Cytopia Limited (non-executive) June 2003 to	None	None	Whitehaven Coal (non-executive) 2007 to	None
directorships in last	February 2010.			2012
three years	Cytopia was acquired in 2010 by YM
	Biosciences Inc (incorporated in Canada).
	Removed from the ASX in February2010.
Special	Chairman of the Board	Chief Executive Officer	Member of the Remuneration	Chairman of the Audit and Risk	Member of the Remuneration Committee.
responsibilities	Chairman of the Remuneration Committee	Managing Director	Committee.	Management Committee.	Member of the Nomination Committee.
	Member of the Audit and Risk Management		Member of the Audit and Risk	Member of the Nomination Committee.
	Committee		Management Committee
	Chairman of the Nomination Committee		Member of the Nomination Committee.
Interests in shares	4,238,648 shares, representing 1.26% of	13,500,113 shares, representing 4.00% of	94,458 shares, representing 0.03% of	32,656 shares, representing 0.01% of	4,000 shares, representing 0.0012% of issued capital.
and options	issued capital.	issued capital and 3,652,357 options.	issued capital.	issued capital.
Experience and	Bob Watson has 25 years at CEO and director	Andrew is the CEO and Managing Director	Colin Carter has an extensive consulting	Neil Chatfield is an established executive	Emeritus Professor Denise Bradley AC has been extensively
expertise	level in the information technology, internet,	of SEEK, and co-founded SEEK in 1997. He	background in organisational and	and non-executive director with	involved in national education policy groups for more than
	recruitment and labour hire industries. His	has been involved in all stages of the	business strategy. He is a former Senior	extensive experience across all facets of	two decades. She was a member of the Commonwealth
	Chief Executive roles have included Mayne	development of the business since then.	Partner of, and a current senior adviser	company management, and with specific	Tertiary Education Commission (CTEC) and later of the
	Nickless Computer Services, Data Sciences International (in the UK) and Lend Lease Employer Systems. Bob founded and developed several private technology businesses including Australia’s largest IT labour contracting business which was sold to Adecco where Bob was subsequently appointed Australasian CEO.	Andrew is an Executive Director of SEEK Limited. He is also a Director of a number of the Group’s fully owned Australian subsidiaries as well as a director on the majority of the Group’s International investments and holding companies. He is a Director of the charitable Shane Warne Foundation.	to, The Boston Consulting Group. Colin is a non-executive Director of ASX- listed companies Wesfarmers Limited and Lend Lease Corporation Ltd, and is a Director of World Vision Australia. He is President of the Geelong Football Club. He is also a director of The Ladder Project (for youth homelessness). In	expertise in financial management, capital markets, mergers and acquisitions, and risk management. In addition to SEEK, Neil also holds non- executive roles across a range of industries in ASX listed companies and is currently the Chairman of Virgin Australia, a non-executive Director of	National Board of Employment, Education and Training (NBEET) and was deputy chair of the Higher Education Council of NBEET. In 2008 she chaired the Expert Panel which undertook the National Review of Higher Education. She has also had significant roles on other government and educational boards and committees involved in higher education and training. Professor Bradley is also a former President and
		Prior to co-founding SEEK, Andrew was a management consultant with Booz Allen & Hamilton and prior to that, he worked as a solicitor at Corrs Chambers Westgarth. Andrew holds a Bachelor of Science (Computer Science) degree from the	February 2010, Colin was appointed by the Federal government to the new position of Government Ambassador for Business Action to support the economic development of Indigenous communities.	Transurban Group and Grange Resources, and from 2007 to 2012 was a non-executive Director of Whitehaven Coal. Neil’s most recent executive role was Executive Director and Chief Financial	Chair of IDP Education Pty Ltd in which SEEK has a 50% investment in partnership with Australian Universities. Professor Bradley is currently a member of the Education Investment Fund Advisory Board; a member of the Australian National Commission for UNESCO; a member of the NSW National Partnerships Evaluation Committee, Chair
		University of Melbourne, a Bachelor of	Colin has a Bachelor of Commerce	Officer of ASX listed Toll Holdings,	of VERNet and of the Australian Health Workforce Advisory
		Laws (Honours) degree from Monash	degree from Melbourne University and	Australia's largest transport and logistics	Council.
		University, and a Master of Business Administration degree from Melbourne Business School.	an MBA from Harvard Business School where he graduated with distinction and as a Baker Scholar.	company; a position he held for over 10 years. Neil has a Masters of Business in Finance	On Australia Day 2008 Professor Bradley was made a Companion of the Order of Australia, Australia’s highest honour, in recognition of her service to higher education.
				and Accounting, and is a Fellow of CPA Australia (FCPA) and Fellow of the Australian Institute of Company Directors (FAICD).	Professor Bradley has a Bachelor of Arts degree from Sydney University, a Diploma of Education from Adelaide University, a Diploma of Librarianship from the University of NSW, and a Masters degree in Social Administration from Flinders
					University. She also holds Honorary Doctorates from
					Pukyong University (Korea), University of South Australia,
					Royal Melbourne Institute of Technology and the University
					of Western Sydney.

14

Directors’ Report

Company secretary

The Company Secretary is Moana Weir. Moana was appointed General Counsel and Company Secretary of SEEK in December 2010. Moana has 11 years senior management experience in listed online companies, having previously been the Company Secretary and General Counsel at both REA Group Ltd (realestate.com.au) and Melbourne IT Ltd.

Moana was appointed as a non-executive director of Vline Corporation in October 2010 and is the Chair of the Vline Remuneration Committee. She is an independent director with a school not-for-profit organisation. She holds a BA, LLB (Hons) and is a Graduate member of the Australian Institute of Company Directors (GAICD).

Meetings of directors

	Board Audit and Risk Management Committee Remuneration Committee Nomination Committee
	Attended Held Attended Held Attended Held Attended Held
R C G Watson A R Bassat C B Carter N G Chatfield D I Bradley	10 10 5 5 5 5 - - 10 10 5 - 5 - - - 10 10 3 5 4 5 - - 10 10 5 5 3 - - - 9 10 2 - 5 5 - -

• Denotes Committee meetings attended by a director as an invitee (not as a member of the Committee).

Retirement, election and continuation in office of directors

Under the SEEK constitution, the following directors will seek re-election at the 2012 Annual General Meeting (AGM):

• Colin Carter, being eligible, will seek re-election at the next AGM

Under the SEEK Limited constitution, directors cannot serve beyond three years or the third AGM after their appointment, whichever is longer.

If no director is in a position requiring them to stand for re-election in the normal rotation, then one director must stand for reelection at the AGM, as selected under the rules of the constitution.

Andrew Bassat, who is Managing Director and Chief Executive Officer, is not required to be re-elected while he holds the position of Managing Director.

Insurance of officers

SEEK Limited has entered into Deeds of Indemnity with all SEEK Limited directors in accordance with the SEEK constitution. During the financial year, SEEK Limited paid a premium to insure the directors, officers and managers of the company and its controlled entities. The insurance contract requires that the amount of the premium paid is confidential.

Proceedings on behalf of the Company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001 .

Non-audit services

The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company and/or the consolidated entity are important. Such services are typically associated with large transactions and are one-off in nature.

Details of the amounts paid to the auditor (PricewaterhouseCoopers) for non-audit services provided during the year are set out on page 16.

15

Directors’ Report

The Board of Directors has considered the position and, in accordance with the advice received from the Audit and Risk Management Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 . The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• all non-audit services have been reviewed by the Audit and Risk Management Committee to ensure they do not impact the integrity and objectivity of the auditor;

• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants .

A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 is set out on page 33.

During the year the following fees were paid or payable for non-audit services provided by the auditor of the parent entity, its related practices and non-related audit firms.

related practices and non-related audit firms.
	2012	2011
	$	$
(a) Other assurance services
PricewaterhouseCoopers Australian firm:
Due diligence services	674,404	1,345,462
Other services	-	-
Total remuneration for other assurance services	674,404	1,345,462
(b) Taxation services
PricewaterhouseCoopers Australian firm:
Tax compliance services and consulting	53,900	553,676
Tax related due diligence services	586,962	55,195
Tax consulting	43,138	71,935
Related Practices of PricewaterhouseCoopers Australian firm:
Tax Compliance services, including review of company tax returns	20,106	8,981
Total remuneration for taxation services	704,106	689,787
c) Other advisory services
PricewaterhouseCoopers Australian firm:
Education awards project	-	30,132
Executive team benchmarking	-	49,900
Other services	-	16,058
Total remuneration for other advisory services	-	96,090
Total remuneration for non-audit services	1,378,510	2,131,339

It is the Group’s policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit duties where PricewaterhouseCoopers’ expertise and experience with the Group are important. These assignments are principally tax advice and due diligence reporting on acquisitions, or where PricewaterhouseCoopers is awarded assignments on a competitive basis. It is the Group’s policy to seek competitive tenders for all major consulting projects.

Rounding of amounts

The company is of a kind referred to in Class Order 98/100, issued by the Australian Securities & Investments Commission, relating to the “rounding off” of amounts in the Directors’ Report. Amounts in the Directors’ Report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

Auditor

PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001 .

16

Directors’ Report

Remuneration Report

Introduction and contents

This Remuneration Report sets out remuneration information for SEEK Limited’s non-executive directors, executive directors and other senior executives (key management personnel) of the Group. The information in this report has been prepared based on the requirements of the Corporations Act 2001 and the applicable accounting standards. The report has been audited.

The Remuneration Report is set out under the following headings:

Remuneration governance................................................................................................................................................... 18 Remuneration Committee function..........................................................................................................................................18 Use of remuneration advisors................................................................................................................................................... 18 Non-executive director fees ................................................................................................................................................. 19 Fee policy .................................................................................................................................................................................. 19 Fees for 2011 and 2012............................................................................................................................................................. 20 Executive remuneration strategy and framework ................................................................................................................ 21 Overview of executive remuneration strategy, structure and mix........................................................................................... 21 Base pay .................................................................................................................................................................................... 21 Benefits ..................................................................................................................................................................................... 22 Short-term incentives (“STI”).................................................................................................................................................... 22 Long-term Incentives (“LTI”) ..................................................................................................................................................... 22 Summary of CEO remuneration and service agreements.........................................................................................................24 Remuneration outcomes...................................................................................................................................................... 25 Relationship between remuneration and company performance ........................................................................................... 25 Remuneration for 2011 and 2012.............................................................................................................................................27 Appendix A: Terms of LTI awards ......................................................................................................................................... 29 Appendix B: Historical LTI awards ........................................................................................................................................ 33

Directors and executives disclosed in this report

Name	Position
Non-executive directors
R C G Watson	Chairman, non-executive director
C B Carter	Non-executive director
N G Chatfield	Non-executive director
D I Bradley	Non-executive director
Executive directors
A R Bassat	Managing Director and Chief Executive Officer (“CEO”)
Other key management personnel
J A Armstrong	Chief Financial Officer
J S Powell	Managing Director (SEEK Employment (Australia & New Zealand))
J S Lenga	Managing Director (SEEK International)
P D Everingham	Managing Director (SEEK Education)
M F Callaghan	Group Human Resources Director
H J Souness	Marketing Director
M J Ilczynski	Group Strategy Director
D Gibbons	Chief Information Officer(appointed 1 October 2011)

17

Directors’ Report

Remuneration Report continued

Remuneration governance

Remuneration Committee function

The Remuneration Committee reviews and makes recommendations to the Board on remuneration packages and policies applicable to the CEO, non-executive directors, and where considered appropriate, executives. The Remuneration Committee is responsible for ensuring the remuneration levels are set competitively to attract appropriately qualified and experienced non-executive directors, executive directors and executives.

The Remuneration Committee makes decisions in the context of SEEK’s remuneration strategy and ensures shareholder and employee interests are aligned.

The Board (on recommendation from the Remuneration Committee) determines short-term incentive (“STI”) payment quantum and long-term incentive (“LTI”) vesting as follows:

• STI quantum is determined taking into account: EBITDA results; and CEO recommendations regarding executive performance against individual objectives and SEEK values criteria.

• LTI performance achievement is determined taking into account a combination of (as appropriate per plan):

• Relative Total Shareholder Return (“RTSR”) result for comparator companies (ASX200 excluding real estate, energy and metals and mining) undertaken by independent consultants;

• Earnings Per Share (“EPS”) aggregate target over a 3 year period and set by the Board. Minimum and stretch aggregate EPS targets are set;

• Return On Investment (“ROI”) result in comparison against minimum and maximum targets.

In this way, those components of incentive payments which are based on corporate performance are independently assessed.

The Board has absolute discretion to vary remuneration outcomes for STI and LTI payments (including in change of control circumstances) and to determine whether a portion of existing incentives may vest on cessation of employment. Upon leaving SEEK, all STI and unvested LTI payments lapse and the Board has not exercised discretion to award pro-rata payments for leavers in either the current or previous financial years.

Use of remuneration advisors

To ensure the Remuneration Committee is fully informed of market practice and trends, regulatory developments and shareholder views, the Remuneration Committee approved the engagement of Mercer Consulting (Australia) Pty Ltd during the year. Mercer provided remuneration recommendations regarding STI and LTI design, executive benchmarking, profit share plan design, nonexecutive director fees and CEO remuneration for the new structure to be implemented during FY13. Both Mercer and the Remuneration Committee are satisfied the recommendations received are free from undue influence from the key management personnel (KMP) to whom the remuneration recommendations apply. The following arrangements were made to meet this requirement:

• Mercer was engaged by, and reported directly to, the chair of the Remuneration Committee. The agreement for the provision of remuneration consulting services was executed by the chair of the Remuneration Committee under delegated authority on behalf of the Board;

• The report containing the remuneration recommendations was provided by Mercer directly to the chair of the Remuneration Committee; and

• Mercer was permitted to speak to management throughout the engagement to understand company processes, practices and other business issues and obtain management perspectives. However Mercer was not permitted to provide any member of management with a copy of their draft or final report that contained the remuneration recommendations.

The remuneration recommendations were provided to SEEK as an input into decision making only. The Remuneration Committee considered the recommendations, along with other factors, in making its remuneration decisions.

The fees paid to Mercer for the remuneration recommendations were $156,145. Fees paid for other services provided by Mercer during the year were $8,750.

In addition, during the first half of the financial year, Guerdon Associates were engaged to benchmark executive salaries against the market. The fees paid to Guerdon were $27,379.

18

Directors’ Report

Remuneration Report continued

Non-executive director fees

Fee policy

The following table outlines the non-executive director fee policy:

Aggregate non- executive director fee pool	Non-executive directors’ fees are determined within an aggregate directors’ fee pool limit. The fee pool currently stands at $1,250,000 per annum, covering all non-executive directors. The current fee pool was approved by shareholders at the 2011 Annual General Meeting (AGM).
Non-executive director fee reviews	Non-executive directors’ fees and payments are reviewed periodically by the Remuneration Committee, and approved by the Board, to ensure fees are appropriately positioned against the market to attract and retain high calibre non-executive director talent. The current non-executive director fee structure was implemented from 1 July 2010, following a review by independent remuneration consultants (described in the 2011 Remuneration Report). There was a 5% increase in non-executive director remuneration from 1 July 2011 and a subsequent 5% increase from 1 July 2012. The Chairman’s fees are determined as a separate exercise to those of other non-executive directors’ fees. The Chairman is not present at any discussions relating to determination of his own remuneration.
Non-executive director fees	Fees and payments to non-executive directors are determined on an individual basis in accordance with demands that are made on, and the responsibilities of, the directors. The fees for each director are as follows: R C G Watson Chairman of the Board $252,000 C B Carter Non-executive director $110,250 N G Chatfield Audit and Risk Management Committee Chair $152,250 D I Bradley Non-executive director $110,250 In addition to the fees, non-executive directors receive superannuation payments in accordance with statutory requirements, calculated as 9% of directors’ fees.
Non-executive director minimum shareholding requirement	All non-executive directors are required to acquire over time a SEEK shareholding equivalent to one year of directors’ fees. Non-executive directors have the option of reaching this level by purchasing shares themselves or by opting into an arrangement with SEEK. This arrangement is that SEEK purchases an amount of shares on behalf of the non-executive director twice a year immediately following the financial results release as permitted under the terms of the SEEK share trading policy, to the value of 20% of their annual fee after tax. Directors may opt into a greater amount than 20% if they wish. When the non-executive director reaches the required shareholding they can opt to end the arrangement and receive their full annual fee as cash.
Performance - based remuneration	Non-executive directors do not receive share options or any performance-based remuneration.

19

Directors’ Report

Remuneration Report continued

Fees for 2011 and 2012

Details of the nature and amount of each element of the remuneration of each non-executive director of the parent entity and the Group for the year ended 30 June 2012 is set out in the following table:

	Short term benefits Post-employment benefits Director fees Cash Bonus Non-monetary benefits Super- annuation Retirement benefits Total $ $ $ $ $ $
Non-executive directors R C G Watson 2012 252,000 - - 22,680 - 274,680 2011 240,000 - - 21,600 - 261,600 C B Carter 2012 110,250 - - 9,923 120,173 2011 105,000 - - 9,450 - 114,450 N G Chatfield 2012 152,250 - - 13,703 165,953 2011 145,000 - - 13,050 - 158,050 D I Bradley 2012 110,250 - - 9,923 120,173 2011 105,000 - - 9,450 - 114,450
Total 2012 624,750 - - 56,229 - 680,979 2011 595,000 - - 53,550 - 648,550

20

Directors’ Report

Remuneration Report continued

Executive remuneration strategy and framework

Overview of executive remuneration strategy, structure and mix

SEEK’s remuneration strategy provides a strong link between performance and reward. Performance measures are sufficiently stretching to provide reward to executives only when shareholder value is delivered, whilst remaining competitive and appropriate to ensure attraction and retention of executives.

The following outlines the key criteria utilised by the Board when considering remuneration structures:

• Attraction and retention of high calibre executives

• Alignment to shareholder expectations

• Alignment to achievement of company vision and goals

• Reasonableness and transparency

SEEK is currently undertaking a review of the SEEK executive remuneration structure and proposes to change the structure for FY13 as a result of the review. One of the key objectives of the Board in undertaking the review is to emphasise the focus for executives to build long-term and sustainable shareholder value. Details of the new executive remuneration structure for FY13 will be explained in the Chairman’s letter as part of the SEEK Annual Report to be distributed to shareholders in October 2012.

The following table outlines the components of the executive remuneration structure for the 2012 financial year:

Basepay	Benefits	Short-term Incentives	Long-term Incentives
Base salary	Superannuation	Annual cash payment (subject to performance)	Grant of share options or cash
Salary sacrificed benefits and related Fringe Benefits Tax.	Salary continuance insurance cover	Financial and non-financial performance	Performance linked to RTSR or growth in business value (ROI or EPS)
	Car parking	12 month performance period	3 year performance period
		30% of basepay	40-50% of basepay

The above remuneration mix provides a balance of fixed and variable remuneration, cash and equity and long-term and short-term performance focus.

Given the CEO is a founder of the company with a large shareholding, SEEK has developed a customised remuneration structure to support long-term decision making and enhance alignment to shareholders. For further details of the CEO remuneration structure refer to page 24.

Base pay

Base pay is set at a market competitive rate and is reviewed annually by external remuneration consultants. Base pay is also reviewed on promotion, and upon changes in role requirements or scope. Remuneration is targeted between the 50[th] – 80[th] percentile of a comparator group comprising internet, media and industrials seen to be peers based on market capitalisation as at 31 March each year. The comparator group selected is appropriate as it represents the market for talent, and the targeted position reflects a general, market competitive rate for executives. Base pay is structured as a total package which may be delivered as a combination of cash and benefits at the executives’ discretion. There is no guaranteed increase in executive contracts. The comparator group is reassessed regularly to ensure that it remains an appropriate basis of comparison.

As a result of the resignation of Paul Bassat (former joint CEO) the responsibilities for all executive roles increased (with the exception of the Chief Information Officer and Marketing Director). As such, base pay levels were reviewed and increases were awarded from 1 January 2011 where relevant to reflect the revised role scope. During the current financial year, a market review was conducted to benchmark executive base pay against the market and increases were awarded for certain executives from 1 July 2011.

21

Directors’ Report

Remuneration Report continued

Benefits

Executives receive salary continuance insurance cover, which is provided to all permanent employees of the Company.

Retirement benefits are delivered under the Superannuation Guarantee Charge (SGC). Under current legislation, SEEK Limited provides choice of superannuation funds to all employees. The SEEK Limited default fund is the SEEK Limited Superannuation Plan, which is provided by MLC Limited Group. This fund is an accumulation fund. Other retirement benefits for directors and executives may be provided directly by the Company if the benefit is within statutory limits or is approved by shareholders.

Short-term incentives

Executives participate in a cash incentive plan which delivers payments based on performance against the Company’s annual financial goals as well as non-financial measures assessed at the individual level. The level of the target STI opportunity is set as a percentage of the executive’s base pay, currently set at 30% for all KMP. STI payments are capped at 125% of target. Incentives are usually assessed and paid after the release of the company’s annual results. Note the CEO does not currently participate in the STI.

The STI plan rewards executives for delivery of financial and non-financial performance as illustrated below:

	50% 50% 30% of Base Pay Total STI	Non-financial performance Assessed through an internal performance management program based on individual performance against: - Individual objectives - SEEK values and culture Each executive’s performance is assessed via a 360° feedback tool by their immediate manager, peers and direct staff reporting to them.
Base Pay
		Financial performance Based on segment or Group performance against EBITDA targets: EBITDA STI
		Below 90% of target No STI payable Between 90% and 99% of target (inclusive) 80% of allocated STI plus additional 2% of allocated STI for every additional 1% that EBITDA exceeds 90% of target 100% of target 100% of allocated STI Above 100% of target 100% of allocated STI plus additional 1% of allocated STI for every additional 1% that EBITDA exceeds 100% of target up to a cap of 125%

Long-term Incentives

Similar to STI, the LTI is based on a maximum value calculated as a percentage of base pay, ranging from 40% to 50% of base salary.

Since the first plan commenced in 2000, the Group has established a number of different LTI plans in which executives have participated depending on when they joined the organisation. Many of these plans are closed and no further awards will be made under these plans. Refer to the 2011 Remuneration Report for an overview of these plans. Details of awards granted in previous years that are yet to vest are found in Appendix A. In accordance with SEEK’s share trading policy participants are prohibited from engaging in hedging arrangements over unvested securities.

The Managing Director (SEEK International) participates in an additional LTI. The performance measures for the additional LTI support long-term business growth of the International business, rewarding for sustained return on investment.

22

Directors’ Report

Remuneration Report continued

The following grants were made in the 2012 financial year:

	Options Plans	Options Plans
Objectives	Align the reward for participants with shareholder wealth and Group or segment performance over a period of time
Participants	All executives	ManagingDirector (SEEK International)
Grant date	1 September 2011	1 September 2011
Vehicle	Options	Options
Vesting period and Vest date	3 years with vesting on 1 September 2014 No retestingthereafter	3 years with vesting on 1 September 2014 No retestingthereafter
Expiry date	1 September 2016	1 September 2016
Share price at grant date	$5.62	$5.62
Performance conditions	Dependent on achieving RTSR and individual performance hurdles.	Dependent on achieving a cumulative ROI of SEEK International over a three year period and individualperformance hurdles.
Vesting schedule	Entitlement to vest options under the RTSR measurement test is: - Below median: 0% vest - From median to 75th percentile: 50% vest plus 2% for every additional percent above median - 75th percentile or higher: 100% vest.	ROI targets are set taking into account business forecasts and industry expectations, approved by the Board. The targets are commercially sensitive and will therefore be disclosed on a retrospective basis upon vesting.
Exercise price	$5.36	$5.36
Fair value	$1.23	$0.73

23

Directors’ Report

Remuneration Report continued

Summary of Chief Executive Officer remuneration and service agreements

Chief Executive Officer remuneration

The Chief Executive Officer’s remuneration comprises:

• Base pay

• Fixed payment of options (refer below)

• Benefits

• LTI subject to RTSR performance

To support long-term strategic decision making, the CEO does not participate in a STI plan. There are no potential conflicts for the CEO to maximise short-term gain at the expense of long-term performance.

As the company informed the market last year, Andrew Bassat’s remuneration was reviewed at the time he signed a new employment agreement in February 2011 to commit to the role of sole CEO. The terms of the remuneration review were initially determined by the Board and then approved by the company’s shareholders at the 2011 AGM.

In summary it was determined by the Board and approved by the company’s shareholders that Andrew’s remuneration would be structured to ensure alignment with shareholder interests. In addition to a fixed salary component of $770,000, Andrew would be issued a fixed payment of options over two years (50% each year) of $2,000,000 (determined by reference to the fair value of the options) at the date of issuance being 1 January 2011. Details of the options plan are outlined in the table below.

Under his regular salary package, the CEO was also granted a number of options during the year under an LTI Plan with assigned RTSR hurdles to further support long-term strategic decision making.

The key terms of the options granted to the CEO during the year (which received shareholder approval at the 2011 AGM) are as follows:

	Fixed Remuneration Option Grant	Fixed Remuneration Option Grant	CEO Nov 2011 Options Plan
Objectives	Ensure retention of the CEO and support market competitive remuneration levels		Align the reward for CEO with shareholder wealth and Group performance over a period of time
	Tranche 1	Tranche 2
Grant date	21 November 2011		21 November 2011
Vehicle	Options		Options
Vesting period and Vest date	1 year from 1 January 2011 (first 50% of options vested on 31 December 2011)	2 years from 1 January 2011 (second 50% of options vest on 31 December 2012)	ȿ脈樃顊 ars to 1 September 2014
Expiry date	31 December 2014		1 September 2016
Share price at grant date	$6.05		$6.05
Performance conditions	Service with company		Dependent on achieving RTSR and individual performance hurdles
Vesting schedule	As per vesting period		Entitlement to vest options under the RTSR measurement test is: - Below median: 0% vest - From median to 75th percentile: 50% vest plus 2% for every additional percent above median - 75th percentile or higher: 100% vest
Exercise price	$6.80		$5.36
Fair value	Tranche 1: $0.63	Tranche 2: $0.74	$1.41

24

Directors’ Report

Remuneration Report continued

Service agreements

Remuneration and other terms of employmen t for the CEO and the other key management personnel are formalised in service agreements. Each of these agreements provid e for base salary, short-term and long-term incentives and are reviewed annually by the Remuneration Committee.

All executives (excluding CEO) have terminatio n notice periods of three months by employee and th r ee months by employer. In addition, all executives (excluding CEO) have n o n-competition periods of three months within Austr a lia from termination date.

The CEO has a termination notice period of six months by employee and six months by employer. The company can terminate employment with a payment in lieu of notice. I n addition, the CEO has a non-competition period of t hree months within Australia from termination date.

Remuneration outcomes

Relationship between remuneration and company performance

The overall level of executive rewards takes in t o account the performance of the Group over a nu m ber of years, whereby SEEK has elected to move towards a stronger link betw e en company results and executive remuneration.

Historical earnings and shareholder wealth information

The table below sets out summary informatio n about the Group’s earnings and movements in shar e holders’ wealth for the past five years up to and including the current financial year and shows movements between executives’ co m pensation (excluding nonexecutive directors) and SEEK’s performance.

201 2 2011 2010 2009 2008 2012 Balances 2011 2010 2009 2008 Change

Total Executive Remuneration ($'000) Revenue ($'000) Segment EBITDA ($'000) NPAT attributable to SEEK ($'000) Share price at year end ($) Weighted average share price ($) Basic EPS (cents) Total dividend(centsper share)

8,610 445,230 193,625 131,680 6.34 6.11 39.1 17.3 6,275 5,567 4,241 4,430 37.2% 344,735 281,792 209,778 211,488 29.2% 135,636 117,365 97,767 109,809 42.8% 97,688 89,521 55,301 76,280 34.8% 6.44 7.01 4.17 5.00 (1.6%) 6.86 6.30 3.86 6.60 (10.9%) 29.0 26.6 18.8 26.6 34.8% 14.3 11.9 9.2 18.6 21.0% 12.7% 31.3% (4.3%) (1.6%) 22.3% 34.3% (0.8%) 33.1% 15.6% 20.0% (11.0%) 36.7% 9.1% 61.9% (27.5%) 37.4% (8.1%) 68.1% (16.6%) (32.2%) 8.8% 63.1% (41.5%) 7.0% 9.1% 41.5% (29.3%) 35.7% 20.2% 29.3% (50.5%) 35.8%

Total remuneration outcomes

The total executive remuneration for the year is $8,610,000 which represents 6.5% of net profit after tax attributable to SEEK and this proportion has remained constant in com p arison to the prior year. The change in total executi v e remuneration over the last five years is in line with the performance of the business with higher remuneration paid in stronger yea r s, as illustrated in the graph below.

==> picture [145 x 190] intentionally omitted <==

==> picture [216 x 172] intentionally omitted <==

==> picture [96 x 190] intentionally omitted <==

==> picture [216 x 10] intentionally omitted <==

25

Directors’ Report

Remuneration Report continued

LTI performance outcomes

The current LTI plans are option plans which have been designed to align executive rewards with shareholder value through the use of RTSR and EPS hurdles. Several of these plans have not yet vested and all plans have exercise periods over several years.

The 2009 LTI plan vested on 30 June 2012 due to the achievement of both RTSR and EPS hurdles over the 3 year term. SEEK ranked in the 82.5[th] percentile against the comparator group (RTSR target is met if over 75[th] percentile achieved) and achieved the maximum EPS growth rate over the three year period.

STI performance outcomes

As discussed on page 22, the STI plan rewards executives for delivery of financial (segment or Group EBITDA) and non-financial performance. The STI has fluctuated with the level of net profit after tax attributable to SEEK Limited over the past 5 years with higher STIs payable in the stronger years.

The STI performance outcomes for the 2012 financial year for each segment are as follows:

• SEEK’s domestic Employment business achieved a solid result despite subdued labour market conditions, with revenue growth of 11% on the prior period attributable to volume growth of 1% and a 10% increase in yield.

• SEEK Education continued its trend of improving performance with a solid result in the current year. Revenue growth of 20% was achieved on the prior period with strong results from SEEK Learning and a positive EBITDA result from THINK.

• SEEK International achieved a strong result with the first full year of consolidation of JobsDB as well as a reduction in other operating costs. The Group also moved to majority ownership in Brasil Online and OCC and both businesses achieved solid results in the investment period.

The percentage of STI vested is based on achieving financial (segment or Group EBITDA) and non-financial targets. The non-financial targets are specific to each individual. Where the percentage of STI vested exceeds 100%, this implies the segment or Group has exceeded 100% of target EBITDA. The portion of STI payments relating to financial performance is capped at 125% of target. The following tables outlines the STI achieved in the year for each executive.

		Percentage of	Percentage of
Executive	EBITDA target	STI vested	STI forfeited
J Powell	Employment	83%	17%
P Everingham	Education	113%	nil
J Lenga	International	101%	nil
J Armstrong	Group	88%	12%
M Illczynski	Education	113%	nil
M Callaghan(1)	Group	88%	12%
H Souness(2)	Employment	83%	17%
D Gibbons(3)	Group	88%	12%

(1) Percentages based on bonus achieved in comparison to pro-rated maximum as a result of maternity leave

(2) Percentages based on bonus achieved in comparison to pro-rated maximum as a result of pro-rated working hours

(3) Percentages based on bonus achieved in comparison to pro-rated maximum as a result of start date of 1 October 2011

26

Directors’ Report

Remuneration Report continued

Remuneration for 2011 and 2012

Details of the remuneration of the key management personnel (excluding non-executive directors) of SEEK Limited and the SEEK Group are set out in the following tables.

	Short term benefits	Short term benefits	Post-employment benefits Subtotal Super- annuation (2) Retirement benefits $ $	Post-employment benefits Subtotal Super- annuation (2) Retirement benefits $ $	Total Long service leave Share-based payments (3) Fixed remuneration options (4) Education LTI (5) $ $ $ $ Long-term benefits	Percentage of remuneration that consists of:
	Cash salary (1) $	Cash Bonus Non- monetary benefits $ $	Super- annuation (2) $			Fixed (6) At risk STI At risk LTI % % %
Executive directors A R Bassat 2012 814,300 2011 748,900 P M Bassat (7) 2012 - 2011 683,500		- 5,531 - 5,222 - - - 5,222	25,000 25,000 - 25,000	- 844,831 - 779,122 - - - 713,722	7,551 1,275,198 (41,329) - 2,086,251 54,290 769,530 725,144 - 2,328,086 - - - - - 26,725 (691,018) - - 49,429 22,857 149,616 - - 916,999 18,793 64,115 - - 589,449 - - - - - 24,503 62,182 - - 511,106 24,071 256,947 - - 1,185,055 19,671 116,685 - - 831,382 18,467 293,553 - - 1,200,830 40,264 94,310 - - 792,012 29,498 79,444 - - 938,183 14,106 (26,703) - (162,514) 409,033 31,426 122,095 - - 533,127 (6,504) 68,879 - - 338,319 8,287 99,240 - - 475,658 9,952 62,994 - - 357,905 23,483 72,561 - - 853,111 21,378 - - (511,912) 68,719 22,680 38,889 - - 420,662 - - - - -	39% n/a 61% 67% n/a 33% n/a n/a n/a 100% n/a n/a
Other key management personnel J A Armstrong 2012 571,118 2011 420,219 C M T Eaton (8) 2012 - 2011 348,204 J S Powell 2012 706,659 2011 578,312 J S Lenga 2012 668,754 2011 541,474 P D Everingham (10)(11) 2012 606,143 2011 495,906 M F Callaghan (9) 2012 283,949 2011 216,699 H J Souness (9) 2012 270,256 2011 221,981 M J Ilcyznksi (9)(10)(11) 2012 549,970 2011 469,190 D Gibbons (12) 2012 268,642 2011 -		142,877 5,531 56,100 5,222 - - 45,900 5,317 166,363 6,015 86,250 5,464 189,041 6,015 85,500 5,464 193,050 5,048 58,500 4,738 65,196 5,383 31,684 5,207 67,179 5,531 35,775 5,018 176,324 5,773 61,200 5,283 69,110 3,858 - -	25,000 25,000	744,526 - 506,541		68% 16% 16% 80% 10% 10% n/a n/a n/a 79% 9% 12% 64% 14% 22% 76% 10% 14% 60% 16% 24% 77% 11% 12% 71% 21% 8% 132% 15% (46%) 65% 12% 23% 70% 10% 20% 65% 14% 21% 73% 9% 18% 71% 21% 9% 756% 89% (745%) 74% 16% 9% n/a n/a n/a
			-	-
			25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,078 22,354 25,165 22,185 25,000 23,580 17,483 -	- 424,421 904,037 - 695,026 888,810 - 657,438 829,241 - 584,144 379,606 - 275,944 368,131 - 284,959 757,067 - 559,253 - 359,093 - -
Total 2012 4,739,791 2011 4,724,385		1,069,140 48,685	217,726	- 6,075,342	188,320 2,387,543 (41,329) - 8,609,876
		460,909 52,157	243,119	- 5,480,570	223,178 520,974 725,144 (674,426) 6,275,440

27

Directors’ Report

Remuneration Report continued

1. Cash salary includes base salary and excess superannuation

2. Staff can elect to have superannuation capped at $25,000. Any excess super is paid in cash and is included within “Cash salary”

3. Amounts disclosed reflect the value of remuneration consisting of Options and Performance Rights, based on the value of options expensed during the year. Negative amounts indicate expenses reversed during the year due to a failure to satisfy certain vesting conditions.

4. Andrew Bassat was issued 1,156,069 options through a fixed remuneration option arrangement at average ‘fair value’ of $1.73 on offer date of 1 January 2011. Following shareholder approval at the AGM, the options were revalued at an average fair value of $0.69 on grant date of 21 November 2011. The credit in 2012 relates to adjustment due to change in fair value. Further details of the options plan is outlined on page 24.

5. Represents estimate of amounts that may be paid in the future. Negative amounts indicate expenses reversed during the year due to lower than expected performance for the Education business across the remaining LTI forecast periods. A nil expense implies no change to the provision in the year.

6. Fixed remuneration includes cash salary, non-monetary benefits, all superannuation benefits, long service leave, salary sacrifice options and termination payments.

7. Paul Bassat resigned effective 1 July 2011.

8. Carey Eaton resigned 1 July 2011. Total remuneration for the day, consisting of cash salary and superannuation, was $1,509.

9. Appointed to Executive management group from 22 July 2010.

10. On 30 June 2011, the 2008-2011 Education LTI plan vested and resulted in an entitlement of $151,961 to Michael Ilczynski. The 2009-2012 Education LTI plan vested on 30 June 2012 and resulted in a nil entitlement to both Michael Ilczynski and Peter Everingham

11. Restated prior year bonus to reflect actual cash payment.

12. David Gibbons was appointed on 1 October 2011 and his total remuneration has been pro-rated from this day.

28

Directors’ Report

Remuneration Report continued

Appendix A: Terms of LTI awards

Details of equity grants

The following table outlines the details of the LTI grants outstanding for each participant and other movements in options and performance rights in the year.

No options will vest if the performance conditions are not satisfied, hence the minimum value of the option yet to vest is $nil. Fair value is calculated in accordance with the Group’s accounting policy as discussed in note 1(s)(iv). There were no amounts paid and there are no amounts outstanding or due from KMP in relation to the grant of options during the year.

Individual Grant date Number of options and performance rights granted Exercise Price Value of options at grant date (1 $ $	) Vested (3) Forfeited/ Lapsed (3) Value at lapse date of lapses (2) Financial year of lapse Financial years in which options may vest Maximum total value of grant yet to vest % % $ $
1/07/2008 914,838 5.29 518,512 30/11/2009 559,212 4.10 1,688,820 1/07/2010 502,000 7.39 1,004,000 21/11/2011 1,156,069 6.80 2,000,000 21/11/2011 964,065 5.36 1,359,332 A R Bassat	29% - - 2012 2012 - 100% - - 2012 2012 - - - - - 2013 334,667 (4) 50% - - 2012/2013 2012/2013 1,028,901 - - - - 2015 1,359,332
1/07/2008 23,166 - 70,193 30/06/2009 77,563 4.10 121,386 1/07/2010 73,530 7.39 147,060 1/09/2011 176,000 5.36 216,480 J A Armstrong	50% 50% 74,479 2012 2012 - 100% - - 2012 2012 - - - - - 2013 147,060 - - - - 2015 216,480
D Gibbons 1/09/2011 113,821 5.36 140,000	- - - - 2015 101,388
1/07/2008 43,856 - 132,884 30/06/2009 150,316 4.10 235,245 1/07/2010 129,438 7.39 258,876 1/09/2011 269,970 5.36 332,063 J S Powell	50% 50% 140,997 2012 2012 - 100% - - 2012 2012 - - - - - 2013 258,876 - - - - 2015 332,063
1/07/2008 28,355 - 85,916 30/06/2009 94,937 4.10 148,576 1/07/2010 113,750 7.39 227,500 1/09/2011 254,878 5.36 313,500 1/09/2011 400,000 5.36 292,000 J S Lenga	50% 50% 91,161 2012 2012 - 100% - - - 2012 - - - - - 2013 227,500 - - - - 2015 313,500 - - - - 2015 292,000
1/07/2008 24,386 - 73,890 1/09/2011 232,520 5.36 286,000 P D Everingham	50% 50% 78,401 2012 2012 - - - - - 2015 286,000
1/09/2011 212,375 5.36 261,221 M Ilcyznksi	2015 189,177
1/07/2008 18,949 - 57,415 30/06/2009 63,443 4.10 99,288 1/07/2010 60,000 7.39 120,000 1/09/2011 143,411 5.36 176,396 M Callaghan	50% 50% 60,921 2012 2012 - 100% - - 2012 2012 - - - - - 2013 120,000 - - - - 2015 176,396
1/07/2008 18,045 - 54,676 30/06/2009 60,418 4.10 94,554 1/07/2010 53,000 7.39 106,000 1/09/2011 94,797 5.36 116,600 H Souness	50% 50% 58,015 2012 2012 - 100% - - 2012 2012 - - - - - 2013 106,000 - - - - 2015 116,600

1. The value at grant date calculated in accordance with AASB 2: Share-based Payments

2. The value at lapse date of options that were granted as part of remuneration and that lapsed during the year were due to a failure to satisfy vesting conditions. The value is determined at the time of lapsing.

3. The percentage of options vested and forfeited is calculated on total options that were due to vest in the current financial year for each particular grant.

4. Andrew was issued $2,000,000 in options over two years through a fixed remuneration options arrangement at an average fair value of $1.73 on offer date of 1 January 2011, determined by external remuneration consultants. Following approval at the AGM, and in accordance with AASB 2: Share-based Payments, the options were revalued at an average fair value of $0.69 on grant date of 21 November 2011 giving a total value of the options of $797,688.

29

Directors’ Report

Remuneration Report continued

Shares provided on exercise of remuneration options

Details of ordinary shares in the Company provided as a result of the exercise of remuneration options to each director of SEEK Limited and other key management personnel of the Group are set out below.

		Number of ordinary		Value at
		shares issued upon	Weighted average	exercise date
	Date of exercise	exercise	exerciseprice	(1)	Options fulfillment
Other key management personnel
J A Armstrong	5 October 2011	11,583	Nil	60,382	Shares purchased on market
J S Powell	5 October 2011	21,928	Nil	114,311	Shares purchased on market
J S Lenga	5 October 2011	14,178	Nil	73,910	Shares purchased on market
P D Everingham	5 October 2011	12,193	Nil	63,562	Shares purchased on market
M F Callaghan	5 October 2011	8,422	Nil	43,904	Shares purchased on market
H J Souness	5 October 2011	9,023	Nil	47,037	Sharespurchased on market

(1) The value at exercise date of the options that were granted as part of the remuneration and were exercised during the year has been determined as the intrinsic value of the options at that date.

On 1 July 2011 Paul Bassat (former Executive Director) and Carey Eaton (former KMP) exercised 471,011 and 10,208 options respectively, which were satisfied by the issue of new shares.

Shares under option

Unissued ordinary shares of SEEK Limited under option at the date of this report are as follows:

		Exercise price
Dategranted	Expiry date	of options	Number
Executive Director Options
1 July 2008	1 July 2012	$ 5.29	471,011
30 November 2009	30 November 2014	$ 4.10	559,212
21 November 2011	31 December 2014	$ 6.80	1,156,069
21 November 2011	1 September 2016	$ 5.36	964,065
Options Plans
30 June 2009	1 July 2014	$ 4.10	702,385
1 July 2010	1 July 2015	$ 7.39	1,321,755
1 September 2011	1 September 2016	$ 5.36	1,998,178
Total Options			7,172,675

FY13 options

As noted in the “Executive remuneration strategy framework” section on page 21, SEEK is currently undertaking a review of the SEEK executive remuneration structure. SEEK proposes to change the SEEK executive remuneration structure for FY13, including the options structure, as a result of the review. One of the key objectives of the Board in undertaking the review is to emphasise the focus for executives to build long term and sustainable shareholder value. Details of the new executive remuneration structure for FY13 will be explained in the Chairman’s letter as part of the SEEK Annual Report to be distributed to shareholders in October 2012

30

Directors’ Report

Remuneration Report continued

Appendix B: Historical LTI awards

Plan name Executive Director Options Options Plan Education Cash LTI Plan	Plan name Executive Director Options Options Plan Education Cash LTI Plan	Plan name Executive Director Options Options Plan Education Cash LTI Plan	Plan name Executive Director Options Options Plan Education Cash LTI Plan	Plan name Executive Director Options Options Plan Education Cash LTI Plan	Plan name Executive Director Options Options Plan Education Cash LTI Plan
Objectives	Align the reward for executives and senior managers with shareholder wealth and company performance.				Drive growth in the Education business.
Participants	Executive Directors		Other executives and senior managers	Executive Directors, other executives and senior managers	Managing Director (SEEK Education) and Group Strategy Director
Offer date	1 July 2009		30 June 2009	1 July 2010	1 July 2008, 2009 and 2010
Grant date	30 November 2009		30 June 2009	1 July 2010	1 July 2008, 2009 and 2010
Vehicle	Share Options				Cash payment
Performance period	3 years (vesting on 30 June 2012) with no retesting thereafter.			3 years (vesting on 30 June 2013) with no retesting thereafter.	Based on the increase in value of the Education business over three years, measured on 30 June 2011, 2012 and 2013
Performance conditions	50% of the award is tested with reference to the Company’s RTSR performance. 50% of the award is tested with reference to EPS targets				Payments are subject to achieving a minimum valuation growth hurdle and are limited to a percentage of the increase in the valuation of the business
Vesting schedule		Vesting occurs according to the following schedule:			The growth hurdles are commercially sensitive and are therefore not disclosed. The current estimate of future amounts to be paid under this plan is $nil.
		Performance Proportion of award to vest Performance Proportion of award to vest TSR EPS
		Below median 0% Below minimum target 0% Between median and 75thpercentile 50% of award plus 2% for every additional % above median Between minimum and maximum target 50% plus a pro rata allocation 75th percentile or higher 100% Above maximum target 100%
Exercise price		$410		$739	Nil (cash payment)
		.		.
Expiry date	30 June 2014		1 July 2014	1 July 2015	30 June 2011, 2012 and 2013
Fair value	RTSR:$2.90 EPS:$3.14		RTSR:$1.49 EPS:$1.64	RTSR: $1.89 EPS:$2.11	Cash payment

31

Directors’ Report

Directors’ Resolution

This report is made in accordance with a resolution of the directors.

==> picture [150 x 40] intentionally omitted <==

Bob Watson Chairman Melbourne 22 August 2012

32

==> picture [78 x 59] intentionally omitted <==

Auditor’s Independence Declaration

As lead auditor for the au d it of SEEK Limited for the year ended 30 June 2 0 12, I declare that to the best of my knowledge and belief, there have been:

• a) no contraventions of the auditor independence requirements of the C orporations Act 2001 in relation to the audit; and

• b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in resp e ct of SEEK Limited and the entities it controlled during the period.

John Yeoman Partner PricewaterhouseCoopers

==> picture [11 x 79] intentionally omitted <==

Melbourne 22 August 2012

PricewaterhouseCoopers, ABN 52 780 433 757 Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 13 3 1, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8 6 03 1999, www.pwc.com.au

Liability limited by a scheme appro v ed under Professional Standards Legislation.

Corporate Governance Statement

The Board of SEEK considers that high standards of corporate governance are a cornerstone to creating long term and sustainable shareholder value. It is also a key element in ensuring that the Company workplace is fair, equitable and respectful of its employees, and protects the interests of other stakeholders.

Features of the SEEK corporate governance regime are summarised below. Further details on the Company corporate governance codes, policies and charters are available from the About SEEK/Corporate Governance section on the SEEK website www.seek.com.au (the “Company website”).

SEEK has adopted the revised ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (2nd Edition) issued on 30 June 2010. SEEK considers that its governance systems were consistent with these Principles throughout the reporting period.

Board and Senior Management Functions

(Corporate Governance Principles and Recommendations: 1.1, 2.3)

The Board operates in accordance with the SEEK Board Charter, which is available from the Company website and sets out the functions reserved to the Board. The Board reviews and approves the Board Charter on an annual basis.

Responsibilities

The responsibilities of the Board as set out in the Board Charter include:

1. Strategy

2. Providing input and approval of the Group’s strategic direction and business plans as developed by Management.

3. Directing, monitoring and assessing the Group’s performance against strategic and business plans.

4. Approving and monitoring capital management including major capital expenditure, acquisitions and divestments.

5. Risk management

6. Ensuring a process is in place to identify the principal risks of the Group’s business.

7. Reviewing, ratifying and assessing the integrity of the Group’s systems of risk management, legal compliance, and internal compliance and control.

8. Reporting and disclosure

9. Approving and monitoring financial and other reporting, including reporting to shareholders and other stakeholders.

10. Establishing procedures to ensure implementation and adherence by appropriate management levels of the Group’s continuous reporting policy.

4. Management

• Appointment and terms of engagement of the CEO.

• Ensuring that a process is in place such that the remuneration and conditions of service of senior executives are appropriate.

• Ensuring that a process is in place for executive succession planning, and monitoring that process.

5. Performance

• Evaluating the CEO’s performance.

• Approving criteria for assessing performance of senior executives and for monitoring and evaluating the performance of senior executives.

• Undertaking a performance evaluation of the Board.

• Establishing and reviewing succession plans for Board membership.

34

Corporate Governance Statement continued

1. Corporate governance

2. Establishing appropriate standards and encouraging ethical behaviour and compliance with the Group’s own governing documents, including the Group’s Code of Conduct.

3. Monitoring the Group’s compliance with corporate governance standards.

The SEEK Board Charter was reviewed in 2012 to ensure it remains consistent with the Board’s objectives and responsibilities. The Charter delegates authority to the Managing Director (MD) and CEO for management of the Company. The role has overall responsibility for the operational, financial and business performance of SEEK and the SEEK Group of companies, while also managing the organization in accordance with the strategy and policies approved by the Board. Executives reporting to the CEO have their roles and responsibilities defined in specific position descriptions.

The roles of Chairman and CEO are not exercised by the same individual.

Board Composition and Size

(Corporate Governance Principles and Recommendations: 2.1, 2.2, 2.6)

The SEEK Board comprises the following directors at the date of this Report:

Name	Position	Appointed
Mr Bob Watson	Chairman, independent and non-executive director	Feb 99
Mr Andrew Bassat	MD and CEO, executive director	Sept 97
Mr Neil Chatfield	Independent and non-executive director	June 05
Mr Colin Carter	Independent and non-executive director	March 05
Ms Denise Bradley	Independent and non-executive director	Feb 10

The directors determine the size of the Board with reference to the SEEK Constitution and SEEK Board Charter, which provides that there will be a minimum of three directors. The SEEK Board currently comprises four non-executive directors and the Managing Director.

The Board considers that the directors bring professional skills, knowledge and experience as well as personal attributes which enable the Board to operate effectively and meet its responsibilities to the Company, its shareholders and other stakeholders.

The professional experience of the Board members covers diverse areas across a broad range of industries such as Employment, Transport and Logistics, and Education. For further information on the directors please refer to the Information on Directors section of the Directors’ Report.

As noted in the 2011 Notice of AGM to shareholders, the SEEK Board conducted a review of its composition in financial year 2011 through its Nomination Committee, and determined that the Board and the Company would benefit from the addition of a new Director or Directors to increase the existing skills, experience and diversity of Directors. The Board is currently conducting a selection process for the appointment of an additional Director or Directors.

Director Independence

(Corporate Governance Principles and Recommendations: 2.1, 2.6)

The Board confirms that all current serving non-executive directors are independent. Mr Andrew Bassat, by virtue of his executive office as MD and CEO, is not considered to be independent.

The Board has determined that none of its independent directors hold relationships which could reasonably be perceived to materially interfere with or compromise their independent judgement.

The Board tables individual director interests at every SEEK Board meeting.

Access to Information

(Corporate Governance Principles and Recommendations: 2.6)

Directors are able to access members of senior management to request relevant information in their role as a non-executive director.

Directors are entitled to seek independent professional advice at the Company’s expense relating to their role as a SEEK director, subject to the prior written approval of the Chairman.

35

Corporate Governance Statement continued

Board Remuneration and Performance Review

(Corporate Governance Principles and Recommendations: 2.5, 2.6, 8.2, 8.3)

The Board reviews its performance, including Board documentation and process, internally, on an annual basis. The Board uses surveys for the purpose of its internal Board performance reviews. The surveys are prepared and collated externally. The aim of the internal Board performance review is to ensure that individual directors and the Board as a whole work effectively in meeting their responsibilities as described in the Board Charter. The Chairman will meet annually with each nonexecutive director to discuss individual performance. The Chair of the Audit Committee will meet annually with the Chairman to discuss the Chair’s performance.

In addition to internal Board performance reviews, the Board will conduct externally facilitated performance reviews on a periodic basis, with the aim to conduct such reviews in every third year. These reviews will incorporate feedback from Executives and stakeholders beyond the Board.

All directors receive copies of all Committee Board packs, including the minutes for each Committee meeting. In addition, the Committee Chair provides an update at the following Board meeting on the activities of the Committee. The Board reviews and approves the Charters of each Committee on an annual basis.

The maximum aggregate amount of fees that may be paid to all SEEK non-executive directors each year is capped at $1.25 million, which was approved by shareholders at the 2011 AGM. The total fees (including superannuation) paid to nonexecutive directors during the reporting period was $680,977.62.

Further details on directors’ remuneration are disclosed in the Remuneration Report.

Executive Remuneration and Performance Review

(Corporate Governance Principles and Recommendations: 1.2, 1.3, 8.3)

The performance of the Executive team including the CEO is assessed annually, in June. Assessment is measured against the Company’s performance rating system (SEEK Synergy), which is applied in relation to all SEEK employees. The performance of the Executive team is measured against quantifiable goals and objectives set at the start of the financial year, and the individual performance of the executive. Performance is also assessed as for all Company employees against the employee’s fulfilment of the Company values.

In addition to this, the performance of the CEO is reviewed by the Board. The Chairman meets annually with the CEO to discuss individual performance.

Further details on CEO and Executive remuneration are disclosed in the Remuneration Report.

Diversity

(Corporate Governance Principles and Recommendations: 3.2, 3.3, 3.4)

SEEK recognises the great value contributed to the organisation by the talent and diversity of its employees, bringing varied skills, cultural backgrounds and experience.

The Company’s success is a reflection of the quality and skill of its people. SEEK has an energetic and dynamic workforce with passion and fresh ideas, able to innovate and produce strong business performance results – a key competitive advantage.

SEEK is committed to fostering this diversity by providing a work environment and culture in which all its employees are valued and treated with respect, and provided with equal access to opportunities.

SEEK values gender diversity in its workforce, as is evident from the strong female representation in the Company. In June 2012, within SEEK Ltd and its fully owned Australian subsidiary companies:

• Women comprise 54% of all employees, and 37% of its senior management team (including at the Executive level).

• In the Executive team, women comprise 20%.

• At the Board level, SEEK has one female director, which comprises 25% of non-executive Board representation

36

Corporate Governance Statement continued

In order to enhance its commitment to gender and broader diversity principles, SEEK continually works to achieve objectives which include:

1. Continuing to maintain or improve its high levels of female participation at senior management level at or above 37% 2. Maintaining principles of gender pay equity

2. Ensuring that there is at least one viable female candidate on the shortlist for all senior management positions

3. Continuing its innovative programs to develop a diverse pool of SEEK employees, including women, to take on senior roles within the business, in senior management, executive and operational roles, and

4. Initiating programs for indigenous engagement and enhancing awareness and appreciation of cultural diversity for SEEK employees.

SEEK’s approach to diversity is stated in the Company Diversity Policy which is available on the employee intranet. The policy is focused on providing flexible work practices to all its employees male or female to assist in the balancing of work and family responsibilities, and to assist employees in pursuing their personal as well as professional development goals. These include the following, which are summarised from the Diversity Policy:

• Flexible working time arrangements

• Employee education assistance

• Employee network and support groups

• Mentor programmes

• Flexible policies including unlimited access to sick and carer’s leave

• Appointment of a Diversity and EEO Contact Officer to whom employees may make suggestions and complaints

• SEEK Connect – an internal program designed to ensure that employees meet with a wide range of people within the business with whom they might otherwise not interact on a regular basis.

SEEK’s organisational goals and objectives on diversity are endorsed by the Board. On going responsibility for the measuring and reporting of progress against SEEK’s diversity objectives is undertaken by the Remuneration Committee, which will review progress on a regular basis. The Board will report on the Company’s achievement of its measurable objectives in the SEEK Annual Report.

Share Trading Policy

SEEK’s Share Trading Policy governs when its officers, defined as its directors, executives or senior managers, may deal in SEEK securities and the process which must be followed in respect of such dealings.

In August 2012 SEEK amended its Share Trading Policy. Previously trading by officers in SEEK securities was only permitted during the trading windows set out in the policy. SEEK has amended the Trading Policy to provide that SEEK officers and their associates are not permitted to deal in SEEK securities (or in any financial products and associated products issued or created over SEEK securities by third parties) during defined Blackout Periods:

• (a) between 1 January and one trading day following the announcement of the half year results, and

• (b) between 1 July and one trading day following the announcement of the full year results.

• At any time outside the Blackout Periods, officers may trade in SEEK securities where the officer:

• (a) is not, at the time of the proposed dealing, in possession of any price sensitive information, and

• (b) where the officer is a director, the director obtains the prior written clearance of the Chairman to deal in SEEK securities, or

• (c) where the officer is not a director, where the officer obtains the prior written clearance of the CFO or Company Secretary.

SEEK directors, executives or their associates are prohibited from entering into transactions in associated products which operate to limit the economic risk of security holdings in the Company over unvested entitlements.

SEEK officers are only permitted to enter margin loans with the prior written approval of the Chairman. If approval is granted, the Continuous Disclosure Committee (comprising the CEO, CFO and Company Secretary) will review the terms of the margin loan to determine whether there are any material terms requiring disclosure to the market.

37

Corporate Governance Statement continued

Board Committees

The Board is supported by a Remuneration Committee, Audit and Risk Management Committee and Nomination Committee. The Committees are comprised of independent non-executive directors. The members of these Committees at the date of this Report are:

this Report are:
	Board	Audit and Risk	Remuneration	Nomination
		Management	Committee	Committee
		Committee
R C G Watson				
A R Bassat		-	-	-
C B Carter				
N G Chatfield			-	
D I Bradley		-		

For information on the skills, experience and expertise of the Committee members, please refer to page 14 of the Directors’ Report. In relation to the number of meetings and attendance of members at the Committee meetings please refer to page 15 of the Directors’ Report.

Remuneration Committee

(Corporate Governance Principles and Recommendations: 8.1, 8.2)

The Remuneration Committee comprises three members, all of whom are independent non-executive directors. It is chaired by the Chairman of the SEEK Board. Other directors that are not members of the Committee and executives attend by invitation.

The Remuneration Committee Charter, which is available from the Company website, sets out its role and responsibilities. In summary, the Committee has the delegated responsibility from the SEEK Board to conduct detailed examination of the following matters:

• Remuneration packages and policies applicable to the CEO, non-executive directors, and where considered appropriate, Executives;

• Compliance with statutory responsibilities relating to remuneration disclosure;

• Review and approval of the design of equity-based plans including eligibility criteria, performance hurdles and proposed awards;

• Review and approval of budget and guidelines each year for annual performance review and salary review processes;

• Review and approval of decisions regarding where to position the Company relative to market remuneration levels and composition;

• Review policies relating to employee share and option plans;

• Review progress against SEEK’s diversity objectives;

• Review the Company’s superannuation plan and compliance with relevant laws and regulations;

• Review executive and director retirement and termination payments;

• Review and monitor fringe benefits;

• Monitor effective succession planning for the positions of CEO, non-executive directors and Executives.

38

Corporate Governance Statement continued

Audit and Risk Management Committee

(Corporate Governance Principles and Recommendations: 4.1, 4.2, 4.3, 4.4)

The Audit and Risk Management Committee consists of three members, all of whom are independent non-executive directors. It is chaired by an independent non-executive director. Other directors that are not members of the Committee, the external auditor and executives attend meetings by invitation.

The Audit and Risk Management Committee Charter, which is available from the Company website, sets out its role and responsibilities. In summary, the Committee has the delegated responsibility from the SEEK Board to conduct detailed examination of the following matters:

Financial Reporting

• The primary responsibility of the Committee is to oversee the financial reporting process on behalf of the Board and to recommend to the Board appropriate actions in the interests of the integrity of financial reporting.

Statutory Financial Reports

• Review the statutory financial reports of the SEEK Group and become satisfied that the reports provide a true and fair view of the financial affairs of the SEEK Group.

Assessment of Systems of Financial Risk Management and Internal Control

• Oversight of SEEK Group’s accounting and financial controls, for the purpose of forming a view as to the effectiveness of these controls, policies, procedures and programs.

• Oversight of the SEEK Group’s accounting policies and methods for the purpose of forming a view as to the appropriateness (as opposed to the acceptability) of these policies and methods.

• Review all related party transactions involving the SEEK Group.

• May request reports from SEEK Management on the risk frameworks and controls within entities in which SEEK holds equity but not a controlling interest.

External Audit

• Recommend to the Board the appointment and remuneration (and, where appropriate, replacement) of the external auditor and the terms of their engagement.

• Agree with the external auditor the overall scope of the external audit, including identified risk areas and any additional procedures considered necessary.

• Monitor and periodically evaluate the effectiveness of the external auditor.

Independence of the External Auditor and Provision of Non-audit Services

• Periodically (at least once per annum) assess the independence of the external auditor

• Approve and review the External Auditor Independence Policy (refer to the separate policy available on the Company website) Recommend to the Board the appropriate disclosure in each year’s Financial Report of the full details of fees paid to the external auditor, including an analysis of non-audit services

• Require that the lead external audit engagement partner be rotated every five years at a minimum.

Risk Profile Oversight

Financial Reporting

• Review the SEEK Group’s assessment of material risks and form an opinion on the adequacy and effectiveness of the risk assessment based on an evaluation of the rigour and suitability of the process undertaken.

• Consider the processes that management uses to design and assure controls and to measure their effectiveness together with Group risk reports from Management to form an opinion on the reliability of the risk assessment.

• Review the SEEK Group’s risk profiles as developed by management and monitor emerging risks and changes in the SEEK Group’s risk profile.

39

Corporate Governance Statement continued

Effectiveness of the Risk Management Framework

Review, recommend to the Board, and oversee the operation of, risk management policies and procedures, so that there is, amongst other things:

• A procedure for identifying risks relevant to the SEEK Group’s businesses and controlling their financial or nonfinancial impacts on the SEEK Group;

• An adequate system of internal control, risk management and safeguarding of assets;

• A system of reporting and investigating breaches of risk management policies and procedures;

• A review of internal control systems and the operational effectiveness of risk management policies and procedures;

• A culture of risk management and compliance throughout the SEEK Group; and

• Adequate resources to support the risk management function and enable proper remedial action to be taken to address areas of weakness.

• Review, recommend to the Board, and monitor the SEEK Group’s Whistleblower Policy.

• Review and monitor the SEEK Group’s risk management performance, including conducting specific investigations where necessary.

• Review and provide oversight on the Group’s insurance policies.

Nomination Committee

(Corporate Governance Principles and Recommendations: 2.4, 2.6)

The Nomination Committee consists of all of the independent non-executive directors of the SEEK Board, comprising four members. It is chaired by the Chairman of the SEEK Board. The CEO and MD who is not a member of the Committee and other executives attend meetings by invitation.

The Nomination Committee Charter, which is available from the Company website, sets out its role and responsibilities. The Committee has the delegated responsibility from the SEEK Board to conduct detailed examination of the following matters:

• assessing and enhancing the necessary and desirable competencies of the Board and Chairman;

• reviewing the size and composition of the Board, including succession plans to enable an appropriate balance of skills, experience and expertise to be maintained;

• making recommendations to the Board on the appointment and removal of Directors;

• developing and reviewing the process for the evaluation of the performance of the Board, the Chairman and individual Directors;

• evaluating the performance of the Board, its Committees and Directors;

• ensuring that there is an appropriate induction process in place for new Directors and reviewing its effectiveness;

• reviewing the process for the selection and removal of Directors and assessing its effectiveness; and

• ensuring there is a continuing education program for directors in respect to compliance and governance issues.

When a new director is to be appointed, the Nomination Committee under delegation from the Board, reviews the range of skills, experience, expertise and diversity on the Board, identifies the requirements of the Board and the Company, and prepares a short-list of candidates with appropriate skills and experience. Where necessary, advice is sought from independent search consultants. The Nomination Committee will recommend to the Board the most suitable candidate, who, if selected by the Board, must stand for election at the next Annual General Meeting of the Company.

The Board’s nomination of existing directors for re-appointment is not automatic and is contingent on their past performance, contribution to the Company and the current and future needs of the Board and the Company.

40

Corporate Governance Statement continued

Recognise and Manage Risk

(Corporate Governance Principles and Recommendations: 7.1, 7.2, 7.3, 7.4)

The Board is responsible for approving and reviewing the SEEK risk management strategy and policy, with the Audit and Risk Management Committee having delegated responsibility to conduct detailed review in a number of key risk areas as outlined in the A&RMC Charter (and set out above). The active identification of risks and implementation of appropriate controls and mitigation measures are the responsibilities of Management.

SEEK’s enterprise risk management framework is based on the international standard (AS/NZS ISO 31000:2009) for risk management.

Management has established a Group risk framework, and within this each business unit/department is required to profile its risk environment, control identification and operation. The outcomes of the risk profile across the Group are aggregated for reporting to the Executive and Audit and Risk Management Committee.

Management monitors and reviews the Company’s internal control systems and procedures, and reports to the Audit and Risk Management Committee. The Audit and Risk Management Committee provides oversight on the risk framework and aggregated risk profiles at the Group level, and monitors Management’s response to internal risk and assurance reviews.

The Group risk function is independent of the external audit, has access to the Audit and Risk Management Committee and also has access to the Company executives and employees.

When considering the Audit and Risk Management Committee’s review of financial reports, the Board receives a written statement signed by the CEO and MD, and the CFO, affirming that SEEK’s financial reports give a true and fair view in all material respects of the Company’s financial position and comply in all materials respects with relevant accounting standards. The statement also confirms that the Company’s financial reports are founded on a sound system of risk management and internal control and that the system is operating effectively in relation to the financial reporting risks.

SEEK’s risk management policy is available on the Company website.

Continuous Disclosure

(Corporate Governance Principles and Recommendations: 5.1, 5.2)

SEEK’s Continuous Disclosure Policy sets out the key responsibilities for the Company employees in relation to continuous disclosure. The Policy is reviewed annually by the Board.

The Policy sets out SEEK’s obligations under the ASX Listing Rules and the Corporations Act 2001 . It refers to the type of information that requires disclosure. The policy also provides procedures for internal notification and external disclosure.

The Board is responsible for ensuring that SEEK complies with its continuous disclosure obligations. The CEO, CFO and Company Secretary (the Continuous Disclosure Committee) are responsible for determining what matters might be considered to be price sensitive and whether or not disclosure is required under the ASX Listing Rules.

A copy of the Company’s Continuous Disclosure Policy is available on the Company website.

Communication with Shareholders

(Corporate Governance Principles and Recommendations: 6.1, 6.2)

SEEK is committed to transparency and openness in its communication with its shareholders. It works to keep shareholders fully informed regarding developments and important information affecting the Company.

The key channels currently utilised by SEEK to distribute information to shareholders include:

1. the SEEK website;

2. the Notice of AGM and explanatory memoranda;

3. the Annual Report;

4. Financial statements and accompanying presentations to the market, and

5. ASX announcements.

41

Corporate Governance Statement continued

AGM

The Annual General Meeting is a key opportunity for shareholders to hear the CEO and Chairman provide updates on Company performance, ask questions of the Board, and to express a view and vote on the various matters of Company business on the agenda. Shareholders may also ask questions of the Company’s external auditors at the meeting. SEEK encourages its shareholders to attend its AGM. SEEK also commits to deal with shareholder queries in a respectful and timely manner whenever they are received by the Company.

Communications with analysts

The Company communication framework includes the following to ensure provision of equal access to material information:

1. All discussions with analysts are conducted by or with the sanction of the CEO or the CFO, and are limited to explanation of previously disclosed material.

2. Where information is likely to be price sensitive, in line with its legal obligations and Continuous Disclosure Policy, SEEK immediately discloses the information to the market.

3. All formal SEEK analyst presentations are released to the market.

4. Generally speaking, meetings with analysts to discuss Financial results are not held from 1 January to release of the half year results, or from 1 July to release of the full year results.

Code of Conduct

(Corporate Governance Principles and Recommendations: 3.1, 3.5)

SEEK prides itself on creating and maintaining a vibrant and transparent employee culture which demonstrates the Company values of Honesty, Ownership, Teamwork and Passion. The SEEK values form an integral part of the Company performance review and reward process (SEEK Synergy). All SEEK employees including executives are required to meet both their professional KPIs and a minimum performance rating evidencing their demonstration of the SEEK values for the relevant review period.

The SEEK code of conduct is available on the employee intranet. The SEEK code of conduct reflects the SEEK values to ensure a work environment and culture that complies with the law, is honest, respectful, equitable and professional.

Ethical and responsible decision making at SEEK is also promoted by an additional code of conduct for directors and executives, based on a code of conduct for directors prepared by the AICD. The code of conduct for directors and executives is found on the Company website.

SEEK has a Whistleblowers Policy available on the employee intranet which is designed to support and protect employees who properly report non-compliant, illegal or unethical conduct by other employees. The aim of the Policy is to protect the confidentiality and position of employees wishing to raise matters which affect the fairness, legality or integrity of the Company.

42

SEEK Limited

Financial Report for 30 June 2012

SEEK Limited Financial Report for 30 June 2012	SEEK Limited Financial Report for 30 June 2012
CONSOLIDATED INCOME STATEMENT ..................................................................................................................................44
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME.................................................................................................45
CONSOLIDATED BALANCE SHEET ..........................................................................................................................................46
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ..........................................................................................................47
CONSOLIDATED STATEMENT OF CASH FLOWS ......................................................................................................................48
1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES........................................................................................................................49
2.	FINANCIAL RISK MANAGEMENT..................................................................................................................................................63
3.	CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS....................................................................................................................68
4.	SEGMENT INFORMATION..........................................................................................................................................................70
5.	REVENUE..............................................................................................................................................................................75
6.	OTHER INCOME......................................................................................................................................................................76
7.	EXPENSES.............................................................................................................................................................................76
8.	INCOME TAX..........................................................................................................................................................................77
9.	CASH AND CASH EQUIVALENTS..................................................................................................................................................81
10.	TRADE AND OTHER RECEIVABLES................................................................................................................................................81
11.	INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD...........................................................................................................83
12.	OTHER FINANCIAL ASSETS.........................................................................................................................................................86
13.	PLANT AND EQUIPMENT...........................................................................................................................................................87
14.	INTANGIBLE ASSETS.................................................................................................................................................................88
15.	TRADE AND OTHER PAYABLES....................................................................................................................................................90
16.	BORROWINGS........................................................................................................................................................................91
17.	OTHER FINANCIAL LIABILITIES....................................................................................................................................................92
18.	PROVISIONS..........................................................................................................................................................................93
19.	CONTRIBUTED EQUITY.............................................................................................................................................................95
20.	EQUITY.................................................................................................................................................................................96
21.	DIVIDENDS............................................................................................................................................................................99
22.	KEY MANAGEMENT PERSONNEL DISCLOSURES...............................................................................................................................99
23.	REMUNERATION OF AUDITORS................................................................................................................................................104
24.	CONTINGENT LIABILITIES........................................................................................................................................................105
25.	COMMITMENTS FOR EXPENDITURE...........................................................................................................................................105
26.	SHARE-BASED PAYMENTS.......................................................................................................................................................106
27.	RELATED PARTY TRANSACTIONS...............................................................................................................................................108
28.	DEED OF CROSS GUARANTEE...................................................................................................................................................109
29.	BUSINESS COMBINATIONS......................................................................................................................................................112
30.	INTERESTS IN CONTROLLED ENTITIES.........................................................................................................................................117
31.	EVENTS OCCURRING AFTER BALANCE DATE.................................................................................................................................118
32.	RECONCILIATION OF PROFIT FOR THE YEAR TO NET CASH INFLOW FROM OPERATING ACTIVITIES............................................................119
33.	EARNINGS PER SHARE............................................................................................................................................................120
34.	NET TANGIBLE ASSET BACKING................................................................................................................................................121
35.	PARENT ENTITY FINANCIAL INFORMATION..................................................................................................................................121
DIRECTORS’ DECLARATION .................................................................................................................................................122
INDEPENDENT AUDITOR’S REPORT.....................................................................................................................................123

This Financial Report covers SEEK Limited as a consolidated entity consisting of SEEK Limited and its controlled entities. The financial report is presented in the Australian currency. The Financial Report was authorised for issue by the directors on 22 August 2012. The Company has the power to amend and reissue the Financial Report.

SEEK Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Level 6, 541 St Kilda Road, Melbourne Victoria 3004

A description of the nature of the consolidated entity’s operations and its principal activities is included in the review of operations and activities in the Directors’ Report on pages 6 to 32, which are not part of this Financial Report.

Through the use of the internet, we have ensured that our corporate reporting is timely, complete, and available globally at minimum cost to the company. All press releases, financial reports and other information are available at our Investor Relations page on our website at www.seek.com.au.

43

Consolidated Income Statement

For the year ended 30 June 2012

		2012	2011
	Notes	$'000	$'000
Revenue from continuing operations	5	445,230	344,735
Other income	6	29,354	-
Operating expenses
Direct cost of services		(35,394)	(30,141)
Sales and marketing		(134,420)	(103,874)
Business development		(25,313)	(19,963)
Operations and administration		(99,170)	(66,020)
Finance costs	7	(26,677)	(16,413)
Total operating expenses		(320,974)	(236,411)
Share of profits of associates and jointly controlled entities accounted
for using the equity method	11 (b)	30,871	24,685
Profit before income tax expense		184,481	133,009
Income tax expense	8 (a)	(47,023)	(36,295)
Profit for theyear		137,458	96,714
Profit is attributable to:
Owners of SEEK Limited	20(a)	131,680	97,688
Non-controlling interests	20(a)	5,778	(974)
		137,458	96,714
Earnings per share for profit attributable to the ordinary equity holders of the Company:		Cents	Cents
Basic earnings per share	33	39.1	29.0
Diluted earningsper share	33	38.9	28.9

The above Consolidated Income Statement should be read in conjunction with the accompanying notes.

44

Consolidated Statement of Comprehensive Income

For the year ended 30 June 2012

For the year ended 30 June 2012
		2012	2011
	Notes	$'000	$'000
Profit for the year		137,458	96,714
Other comprehensive income
Exchange differences on translation of foreign controlled operations	20(a)	(14,234)	(6,876)
Exchange differences on translation of foreign associates	11(c)	(15,214)	(38,879)
Gains/(losses) on hedge contracts of controlled entities	20(a)	536	(2,705)
Gains/(losses) on hedge contracts of associates (net of tax)	11(c)	223	(262)
Recycled foreign currency translation reserve on step acquisition	20(a)	33,137	-
Recycled cash flow hedge reserve on step acquisition	20(a)	(10,561)	-
Recycled foreign currency translation reserve on closure of foreign operation	20(a)	165	-
Income tax recognised in other comprehensive income	8(c)	3,001	490
Other comprehensive income for the year		(2,947)	(48,232)
Total comprehensive income for theyear for SEEK Limited		134,511	48,482
Total comprehensive income for the year attributable to:
Owners of SEEK Limited		135,271	54,678
Non-controlling interests	20(a)	(760)	(6,196)
		134,511	48,482

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

45

Consolidated Balance Sheet

As at 30 June 2012

Consolidated Balance Sheet As at 30 June 2012
			2011
		2012	Restated*
	Notes	$'000	$’000
Current assets
Cash and cash equivalents	9	92,703	98,291
Trade and other receivables	10	65,566	44,814
Other financial assets	12	630	17,379
Current tax assets		2,924	-
Total current assets		161,823	160,484
Non-current assets
Investments accounted for using the equity method	11(b)	196,063	315,930
Plant and equipment	13	24,744	19,201
Intangible assets	14	984,487	463,587
Deferred tax assets	8(d)	24,615	11,397
Total non-current assets		1,229,909	810,115
Total assets		1,391,732	970,599
Current liabilities
Trade and other payables	15	57,028	43,698
Unearned income		61,680	38,366
Other financial liabilities	17	82,487	147,887
Current tax liabilities		19,376	5,370
Current provisions	18(a)	2,849	1,923
Total current liabilities		223,420	237,244
Non-current liabilities
Borrowings	16(b)	318,433	275,281
Deferred tax liabilities	8(e)	47,434	18,534
Non-current provisions	18(b)	31,312	4,781
Total non-current liabilities		397,179	298,596
Total liabilities		620,599	535,840
Net assets		771,133	434,759
Equity
Contributed equity	19	186,525	183,950
Reserves	20(a)	(63,884)	(71,208)
Retained profits	20(a)	276,867	198,474
Non-controllinginterests	20(a)	371,625	123,543
Total equity		771,133	434,759

• Refer to note 29(b) for details of restatement on the completion of acquisition accounting for JobsDB

The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.

46

Consolidated Statement of Changes in Equity

For the year ended 30 June 2012

							Non-
		Contributed		Retained			controlling
		equity	Reserves	profits		Total	interests	Total
Consolidated	Notes	$’000	$’000	$’000		$’000	$’000	$’000
Balance at 1 July 2010		183,950	22,668	146,339		352,957	-	352,957
Profit for the year		-	-	97,688		97,688	(974)	96,714
Other comprehensive income		-	(43,010)	-		(43,010)	(5,222)	(48,232)
Total comprehensive income for theyear	20(a)	-	(43,010)	97,688		54,678	(6,196)	48,482
Transactions with owners in their capacity as
owners Restated*:
Dividends provided for or paid	20(a)	-	-	(45,439)		(45,439)	-	(45,439)
Employee share options scheme	20(a)	-	1,504	-		1,504	-	1,504
Purchase of shares-on-market for
employee share option scheme	20(a)	-	(38)	(163)		(201)	-	(201)
Tax associated with employee share
option schemes	8 (c)	-	(49)		49	-	-	-
JobsDB related items Restated *:
Non-controlling interest at fair value
arising on acquisition		-	-	-		-	64,624	64,624
Non-controlling interest acquired on
acquisition		-	-	-		-	1,279	1,279
Put option provided to vendor of JobsDB	20(a)	-	(50,629)	-		(50,629)	(22,788)	(73,417)
Transactions with non-controlling
interests		-	-	-		-	87,969	87,969
Acquisition of non-controlling interest in
CJOL	20(c)	-	(1,654)	-		(1,654)	(1,345)	(2,999)
Balance at 30 June 2011 Restated*		183,950	(71,208)	198,474		311,216	123,543	434,759
Profit for the year		-	-	131,680		131,680	5,778	137,458
Other comprehensive income		-	3,591	-		3,591	(6,538)	(2,947)
Total comprehensive income for theyear	20(a)	-	3,591	131,680		135,271	(760)	134,511
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction
costs and tax	19	2,575	-	-		2,575	-	2,575
Dividends and distributions provided for
or paid	20(a)	-	-	(53,257)		(53,257)	(4,628)	(57,885)
Employee share options scheme	20(a)	-	4,263	-		4,263	-	4,263
Purchase of shares-on-market for
employee share option scheme	20(a)	-	(197)	(363)		(560)	-	(560)
Tax associated with employee share
option schemes	8 (c)	-	(333)	333		-	-	-
Non-controlling interests acquired on
acquisition	29(a)	-	-	-		-	253,470	253,470
Balance at 30 June 2012		186,525	(63,884)	276,867		399,508	371,625	771,133

• Refer to note 29(b) for details of restatement on the completion of acquisition accounting for JobsDB

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

47

Consolidated Statement of Cash Flows

For the year ended 30 June 2012

Consolidated Statement of Cash Flows For the year ended 30 June 2012
		2012	2011
	Notes	$’000	$’000
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)		470,316	383,355
Payments to suppliers and employees (inclusive of goods and services tax)		(270,049)	(230,270)
		200,267	153,085
Interest received		2,976	1,418
Interest paid		(20,182)	(14,167)
Income taxes paid		(41,793)	(32,150)
Net cash inflow from operating activities	32	141,268	108,186
Cash flows from investing activities
Payments for acquisition of interests in associates and jointly controlled entities		-	(49,512)
Payments for investments in subsidiaries, net of cash acquired	29 (c)	(147,372)	(186,134)
Payments for transaction costs on investments in subsidiaries	29	(188)	(6,203)
Dividends and distributions received from associates	11(c)	12,855	9,841
Payments for plant and equipment		(8,714)	(8,375)
Proceeds from the sale of plant and equipment		66	-
Payments for intangible assets		(8,213)	(3,692)
Net cash(outflow) from investing activities		(151,566)	(244,075)
Cash flows from financing activities
Proceeds from borrowings		124,783	406,704
Repayment of borrowings		(83,000)	(228,000)
Transaction costs on syndicated debt facility		-	(5,584)
Purchase of shares for employee share options plans		(597)	(201)
Proceeds from issues of shares	19	2,575	-
Dividends paid	21	(53,257)	(45,439)
Dividends and distributions paid to non-controlling interests		(3,433)	-
Payment for additional interest in subsidiary	20(c)	-	(3,857)
Contributions from non-controlling interests - transaction costs	29(b)	-	1,925
Contributions from non-controlling interests-purchase consideration	29	16,980	68,648
Net cash inflow from financing activities		4,051	194,196
Net (decrease)/increase in cash and cash equivalents		(6,247)	58,307
Cash and cash equivalents at the beginning of the financial year		98,291	39,731
Effect of exchange rate changes on cash and cash equivalents		659	253
Cash and cash equivalents at the end of the financialyear	9	92,703	98,291

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

48

Notes to the Financial Statements

1. Summary of significant accounting policies

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the consolidated entity consisting of SEEK Limited and its subsidiaries.

(a) Basis of preparation

The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001 . SEEK Limited is a ‘for profit’ entity for the purpose of preparing the financial statements.

At 30 June 2012 the Group’s current liabilities exceed its current assets by $61,597,000. This financial report has been prepared on a going concern basis as this deficiency is principally due to the $81,216,000 put option in place under which the Group’s controlled entity, SEEK Asia Limited, may be required to purchase the remaining 20% of JobsDB. In addition, the Group has sufficient available cash and committed facilities in place to support the capital requirements of the business and has also commenced discussions around refinancing the existing syndicated debt facility (refer to note 31).

(i) Compliance with IFRS

The consolidated financial statements of SEEK Limited also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

(ii) Historical cost convention

These financial statements have been prepared under the historical cost convention as modified by the revaluation of financial assets and liabilities (including derivative instruments) at fair value through profit or loss.

(iii) Critical accounting estimates

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.

(b) Principles of consolidation

(i) Subsidiaries

The Consolidated Financial Statements incorporate the assets and liabilities of all subsidiaries of SEEK Limited (‘company’ or ‘parent entity’) as at 30 June 2012 and the results of all subsidiaries for the year then ended. SEEK Limited and its subsidiaries together are referred to in this financial report as the Group or the consolidated entity.

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies of those subsidiaries. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations made by the Group (refer to note 1(g)).

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet and Consolidated Statement of Changes in Equity respectively.

Investments in subsidiaries are accounted for at cost in the individual financial statements of the investing entity.

49

Notes to the Financial Statements

1. Summary of significant accounting policies continued

(ii) Associates

Associates are all entities over which the Group has significant influence but not control or joint control. Investments in associates are accounted for after initially being recognised at cost using the equity method of accounting.

The Group’s investment in associates includes goodwill identified on acquisition.

The Group’s share of its associates’ post-acquisition profits or losses is recognised in the Consolidated income statement and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates are recognised as a reduction in the carrying amount of the investment.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

(iii) Joint venture entities

The interest in a joint venture entity is accounted for using the equity method after initially being recognised at cost. Under the equity method, the share of the profits or losses of the entity is recognised in the Consolidated Income Statement, and the share of the post-acquisition movement in reserves is recognised in other comprehensive income. Any cash contributions made to the jointly controlled entity are recognised in the Group’s financial statements as an investment in the jointly controlled entity. Details relating to the Group’s joint venture entity are set out in note 11(e).

(iv) Changes in ownership interests

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to owners of SEEK Limited.

When the group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. If the ownership interest in a jointly-controlled entity or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.

(c) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief Executive Officer.

(d) Foreign currency translation and transactions

(i) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Australian dollars, which is SEEK Limited’s functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when they are deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.

50

Notes to the Financial Statements

1. Summary of significant accounting policies continued

(iii) Group companies

The results and financial position of all Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

• income and expenses for each income statement and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

• all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, a proportionate share of such exchange difference is reclassified to profit or loss, as part of the gain or loss on sale where applicable.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

(e) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and amounts collected on behalf of third parties. Revenue is recognised for the major business activities as follows:

(i) Job advertisements

Revenues from the provision of job advertisements on the Group’s websites are recognised in the period over which the advertisements are placed.

(ii) Banner advertising

Revenues from banner advertising on the Group’s websites are generated based on a fixed price which is based on the impressions each banner receives. These revenues are recognised in the period that the impressions occur.

(iii) Brasil Online: CV online revenue

CV online is Brasil Online’s primary service for job seekers and its principle source of revenue, whereby jobseekers are permitted to apply for job opportunities posted on the databases, and to post resumes online for review by employers and recruiting agencies. CV online has billing cycles that range from one month to one year, and job seekers’ credit cards or bank accounts are charged. Revenue from services provided to jobseekers through CV online is recognised over the service period.

(iv) Education: classroom-based training

Revenues from classroom-based training are recognised from course commencement and brought to account on a prorata basis over the duration of the relevant teaching period.

(v) Education: distance learning

Revenues from distance learning are apportioned between an amount recognised on receiving the course materials and an amount over the period to completion. This has been determined with reference to the proportion of costs incurred upfront to the total estimated cost of providing the services.

(vi) Education: commission revenue

Commission revenue is recognised when the customer obtains unconditional access to the course material or when revenue can be reliably estimated. Revenue that relates to agency/principal relationships is recognised on a net basis.

51

Notes to the Financial Statements

1. Summary of significant accounting policies continued

(vii) Interest income

Interest income is recognised on a time proportion basis using the effective interest method (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income.

(viii) Dividends

Dividends are recognised as revenue when the right to receive payment is established. This applies even if they are paid out of pre-acquisition profits. However, the investment may need to be tested for impairment as a consequence, refer note 1(k).

(ix) Royalty income

Royalty income relates to intercompany charges for the use of intellectual property. It is recognised on an accruals basis and is reviewed annually.

(f) Income tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company's subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax 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 tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Consolidated Financial Statements. However, deferred income tax is not provided for if it arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are able to be recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, would be recognised subsequently if new information about facts and circumstances changed. The adjustment would either be treated as a reduction to goodwill (as long as it does not exceed goodwill) if it was incurred during the measurement period or in profit or loss.

52

Notes to the Financial Statements

1. Summary of significant accounting policies continued

(g) Business combinations

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisitionby-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the noncontrolling interests proportionate share of the acquiree’s net identifiable assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group's share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently re-measured to fair value with changes in fair value recognised in profit or loss.

In a business combination achieved in stages, the Group re-measures its previously held equity interest in the acquiree at its acquisition-date fair value and recognises the resulting gain or loss, if any, in profit or loss.

Acquired deferred tax assets recognised after the initial acquisition accounting will increase the Group’s net profit after tax.

(h) Impairment of assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cashgenerating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

(i) Cash and cash equivalents

For the purposes of presentation in the Statement of Consolidated Cash Flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

(j) Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. This provision includes amounts that are not considered to be recoverable from debtors and amounts that are expected to be credited to debtors. Trade receivables are generally due for settlement no more than 30 days from the date of recognition.

53

Notes to the Financial Statements

1. Summary of significant accounting policies continued

Collectability of trade receivables is reviewed on an ongoing basis. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired. In addition, the trade receivables balances are considered for credit notes that are expected to be raised against individual and collective balances.

The amount of the provision relating to non-collectible items is recognised in the Consolidated Income Statement in ‘operations and administration’ expense. The amount of the provision for amounts that are expected to be credited is recognised in the Consolidated Income Statement in ‘revenue from continuing operations’. Trade receivables which are known to be uncollectible are written off against the provision for impairment. Subsequent recoveries of amounts previously written off to the provision for impairment are credited against ‘operations and administration’ expense in the Consolidated Income Statement.

(k) Investments and other financial assets

Classification

The Group classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at each reporting date.

(i) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are expected to be settled within 12 months; otherwise they are classified as non-current. Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with net changes in fair value recognised in finance costs in the income statement.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classified as non-current assets. Loans and receivables are included in trade and other receivables in the Consolidated Balance Sheet (note 10). After initial measurement, such financial assets are subsequently measured at amortised cost using the EIR method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR.

(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity. Held-to-maturity financial assets are included in non-current assets, except for those with maturities less than 12 months from the end of the reporting period, which are classified as current assets. After initial measurement, held-to-maturity investments are measured at amortised cost using the EIR, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR.

(iv) Available-for-sale financial assets

Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the end of the reporting period. Investments are designated as available-for-sale if they do not have fixed maturities and fixed or determinable payments and management intends to hold them for the medium to long term.

54

Notes to the Financial Statements

1. Summary of significant accounting policies continued

Recognition and de-recognition

Regular purchases and sales of investments are recognised on trade date, the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in the Consolidated Income Statement. Financial assets are de-recognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are analysed between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security. The translation differences are recognised in profit or loss and other changes in carrying amount are recognised in other comprehensive income. Changes in the fair value of other monetary and nonmonetary securities classified as available-for-sale are recognised in other comprehensive income.

When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the Consolidated Income Statement as gains and losses from investment securities.

Details on how the fair value of financial instruments is determined are disclosed in note 2.

Fair value

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using commonly used valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entity specific inputs.

Impairment

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered an indicator that the assets are impaired.

(l) Derivatives and hedging activities

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either:

• i. hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge);

• ii. hedges of the cash flows of recognised assets and liabilities and highly probable forecast transactions (cash flow hedges); or

• iii. hedges of a net investment in a foreign operation (net investment hedges).

The Group documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.

Movements in the Hedging reserve in equity are shown in note 20. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.

55

Notes to the Financial Statements

1. Summary of significant accounting policies continued

(i) Fair value hedge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in profit or loss, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The gain or loss relating to the effective portion of interest rate swaps hedging fixed rate borrowings is recognised in profit or loss within ‘finance costs’, together with the changes in the fair value of the hedge fixed rate borrowings attributable to interest rate risk. The gain or loss relating to the ineffective portion is recognised in the Consolidated Income Statement within ‘other income’ or ‘operating and administration expenses’.

If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedge item for which the effective interest method is used is amortised to profit or loss over the period to maturity using a recalculated effective interest rate.

(ii) Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognised immediately in the Consolidated Income Statement within ‘other income’ or ‘operating and administration’ expenses.

Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss. The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognised in profit or loss within ‘finance costs'.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the Consolidated Income Statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to profit or loss.

(iii) Net investment hedges

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss within ‘other income’ or ‘operating and administration’ expenses. Gains and losses accumulated in equity are reclassified to profit or loss when the foreign operation is partially disposed of or sold.

(iv) Derivatives that do not qualify for hedge accounting

Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in profit or loss and are included in ‘other income’ or ‘operating and administration’ expenses.

(m) Plant and equipment

Plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Consolidated Income Statement during the financial period in which they are incurred.

Depreciation on assets is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives, as follows:

- Plant and equipment: three to ten years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (note 1(h)).

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Consolidated Income Statement.

56

Notes to the Financial Statements

1. Summary of significant accounting policies continued

(n) Intangible assets

(i) Goodwill

Goodwill is measured as described in note 1(g). Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates is included in investments in associates. Goodwill is not amortised but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose, identified according to operating segments (refer to note 14).

(ii) Brand and licences

Brands and licences are carried at the lower of cost or fair value less any impairment losses and are not amortised. Instead, they are tested for impairment annually, or more frequently if events or changes in circumstances indicate that they might be impaired, and are carried at cost or fair value less accumulated impairment losses.

(iii) Course development and accreditation

Costs incurred on developing and designing courses are recognised as an expense unless it is probable that the course will generate future economic benefits and its cost can be measured reliably. Course development expenditure is recognised as an asset at cost less any impairment losses. Once delivery of the course to which the development costs relate has commenced the associated costs are amortised over the life of the accreditation which is five years.

(iv) Customer relationships

Acquired customer relationships have a finite useful life and are carried at fair value at acquisition date less accumulated amortisation and impairment losses. Amortisation is calculated using the straight-line method to allocate the cost of the asset over its estimated useful life, which is between one and six years.

(v) Computer software and website development

Costs incurred in acquiring, developing and implementing new websites or software are recognised as intangible assets only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The expenditure capitalised comprises all directly attributable costs, including costs of materials, services, licences and direct labour. Amortisation is calculated using the straight-line method to allocate the cost of software over their estimated useful lives, which is between three and six years.

Website developments have a finite useful life and are carried at cost less accumulated amortisation and impairment losses. Amortisation is calculated using the straight-line method to allocate the cost of website development over their estimated useful lives, which is three years.

(vi) Work in progress

Work in progress (WIP) represents intangible assets of other classes not yet put into use. These assets are amortised from the date of completion over their estimated useful life according to the amortisation policies above.

(o) Trade and other payables

These amounts represent liabilities for goods and services provided to the group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

(p) Leases

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases. Leases are made up of operating leases of property. Payments made under operating leases (net of any incentives received from the lessor) are charged to the Consolidated Income Statement on a straightline basis over the period of the lease. Benefits that are provided to the Group as an incentive to enter into a lease arrangement are recognised as a liability and amortised on a straight-line basis over the life of the lease.

57

Notes to the Financial Statements

1. Summary of significant accounting policies continued

(q) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Consolidated Income Statement over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities, which are not an incremental cost relating to the actual drawdown of the facility, are recognised as transaction costs and amortised on a straight-line basis over the term of the facility.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

(r) Provisions

Provisions for legal claims and make-good obligations are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Make-good provisions are amortised through the Consolidated Income Statement over the life of the lease.

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

(s) Employee benefits

(i) Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.

(ii) Long service leave

The liability for long service leave expected to vest within 12 months of the end of the period in which employees render the related service is recognised in the provision for employee benefits and is measured in accordance with (i) above. The liability for long service leave expected to vest in more than 12 months from the reporting date is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(iii) Retirement benefit obligations

All employees of the Group in Australia and New Zealand are entitled to benefits on retirement, disability or death from the Group’s superannuation plan. All employees in Australia and New Zealand are party to a defined contribution scheme and receive fixed contributions from Group companies and the Group’s legal or constructive obligation is limited to these contributions. Contributions to defined contribution funds are recognised as an expense as they become payable. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payment is available.

Employees of subsidiaries of SEEK Limited who are located outside of Australia and New Zealand are entitled to benefits as outlined in local company policies.

(iv) Share-based payments

Share-based compensation benefits are provided to employees via the SEEK Option Plans. Information relating to these schemes is set out in note 26.

The fair value of options granted under the SEEK Option Plans is recognised as an employee benefit expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted, which includes any market performance conditions but excludes the impact of any service and nonmarket performance vesting conditions and the impact of any non-vesting options. The fair value is measured at grant date and the expense recognised over the period during which the employees become unconditionally entitled to the options.

58

Notes to the Financial Statements

1. Summary of significant accounting policies continued

The fair value at grant date is independently determined using a Black-Scholes or similar option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

The fair value of the options granted is adjusted to reflect market vesting conditions, but excludes the impact of any nonmarket vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to vest which are revised at the end of each reporting period. The impact of the revision to original estimates, if any, is recognised in the Consolidated Income Statement, with a corresponding adjustment to equity. The employee benefit expense recognised each period takes into account the most recent estimate.

(v) Profit sharing and bonus plans

A liability for employee benefits in the form of profit sharing and bonus plans is recognised in other payables where there is a legal or constructive obligation and depending on an assessment against the Group’s profit performance and the individual’s personal performance and at least one of the following conditions are met:

• there are formal terms in the plan for determining the amount of the benefit, or

• the amounts to be paid are determined before balance sheet date.

(t) Contributed equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration. Where any group company purchases the company’s equity instruments, for example as the result of a share buy-back or a share-based payment plan, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners of SEEK Limited as Treasury shares until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of SEEK Limited.

(u) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the financial year but not distributed at the end of the reporting period.

(v) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(w) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from or payable to the taxation authority is included within trade and other receivables or trade and other payables in the Consolidated Balance Sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

59

Notes to the Financial Statements

1. Summary of significant accounting policies continued

(x) Rounding of amounts

The company is of a kind referred to in Class Order 98/100, issued by the Australian Securities & Investments Commission, relating to the “rounding off’’ of amounts in the financial report. Amounts in the financial statements have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.

(y) Parent entity financial information

The financial information for the parent entity, SEEK Limited, disclosed in note 35 has been prepared on the same basis as the consolidated financial statements, except as set out below.

(i) Investments in subsidiaries, associates and joint venture entities

Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements of SEEK Limited. Dividends received from associates are recognised in the parent entity’s profit or loss, rather than being deducted from the carrying amount of these investments.

(ii) Tax consolidation legislation

SEEK Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.

The head entity, SEEK Limited, and the controlled entities in the tax consolidated group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand-alone taxpayer in its own right.

In addition to its own current and deferred tax amounts, SEEK Limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group.

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate SEEK Limited for any current tax payable assumed and are compensated by SEEK Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to SEEK Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities' financial statements.

The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts receivable from or payable to other entities in the group.

Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.

(iii) Financial guarantees

Where the parent entity has provided financial guarantees in relation to loans and payables of subsidiaries for no compensation, the fair values of these guarantees are accounted for as contributions and recognised as part of the cost of the investment.

60

Notes to the Financial Statements

1. Summary of significant accounting policies continued

(z) New and amended Accounting Standards and Interpretations

(i) New and amended Accounting Standards and Interpretations issued and effective

The Group has adopted the following new and amended Accounting Standards and Interpretations which were applicable as disclosed in the table below. Adoption of these new and amended Accounting Standards and Interpretations has not had a material impact on the Company or the Group.

Summary	Application date of standard	Application date for Group
AASB 124 (Revised) The revised AASB 124_Related Party Disclosures (December 2009)_simplifies the definition of a related party, clarifying its intended meaning and eliminating inconsistencies from the definition.	1 January 2011	1 July 2011
AASB 2009-12 This standard makes numerous editorial changes to a range of Australian Accounting Standards and Interpretations.	1 January 2011	1 July 2011
AASB 2010-4 Amendments to Australian Accounting Standards arising from the Annual Improvements Project, providing guidance relating to disclosures for AASB 7 and AASB 124, analysis of other comprehensive income and fair value of award credits.	1 January 2011	1 July 2011
AASB 2010-5 This Standard makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of IFRS by the IASB.	1 January 2011	1 July 2011
AASB 2010-6 Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets. The amendments increase the disclosure requirements for transactions involving transfers of financial assets but which are not derecognised and introduce new disclosures for assets that are derecognised but the entity continues to have a continuing exposure to the asset after the sale.	1 July 2011	1 July 2011

61

Notes to the Financial Statements

1. Summary of significant accounting policies continued

(ii) Accounting standards issued but not yet effective

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2012 reporting periods. The Group’s assessment of the impact of these new standards and interpretations is set out below.

Initial application of the following Standards and Interpretations will not affect any of the amounts recognised in the financial report, but may change the disclosures presently made in relation to the Group:

Summary	Application date of standard	Application date for Group
AASB 2011-9 - Amendments to Australian Accounting Standards – Presentation of Other Comprehensive Income. This Standard requires entities to group items presented in other comprehensive income on the basis of whether they might be reclassified subsequently to profit or loss and those that will not.	1 July 2012	1 July 2012
AASB 9 - Financial Instruments AASB 9 includes requirements for the classification and measurement of financial assets. It was further amended by AASB 2010-7 to reflect amendments to the accounting for financial liabilities. These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of AASB 139.	1 January 2013*	1 July 2013
AASB 10 - Consolidated Financial Statements AASB 10 establishes a new control model that applies to all entities. It replaces parts of AASB 127 Consolidated and Separate Financial Statements dealing with the accounting for consolidated financial statements and UIG-112 Consolidation – Special Purpose Entities. The new control model broadens the situations when an entity is considered to be controlled by another entity and includes new guidance for applying the model to specific situations.	1 January 2013	1 July 2013
AASB 11 - Joint Arrangements AASB 11 replaces AASB 131 Interests in Joint Ventures and UIG-113 Jointly- controlled Entities – Non- monetary Contributions by Ventures. AASB 11 uses the principle of control in AASB 10 to define joint control, and therefore the determination of whether joint control exists may change. In addition it removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, accounting for a joint arrangement is dependent on the nature of the rights and obligations arising from the arrangement.	1 January 2013	1 July 2013
AASB 12 - Disclosure of Interests in Other Entities AASB 12 includes all disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and structures entities. New disclosures have been introduced about the judgements made by management to determine whether control exists, and to require summarised information about joint arrangements, associates and structured entities and subsidiaries with non-controlling interests.	1 January 2013	1 July 2013
AASB 13 - Fair Value Measurement AASB 13 establishes a single source of guidance for determining the fair value of assets and liabilities. AASB 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair value is required or permitted. AASB 13 also expands the disclosure requirements for all assets or liabilities carried at fair value.	1 January 2013	1 July 2013
Annual Improvements to IFRSs 2009–2011 Cycle This standard sets out amendments to International Financial Reporting Standards (IFRSs) and the related bases for conclusions and guidance made during the International Accounting Standards Board’s Annual Improvements process. These amendments have not yet been adopted by the AASB.	1 January 2013	1 July 2013
AASB 2011-4 - Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements This Amendment deletes from AASB 124 individual key management personnel disclosure requirements for disclosing entities that are not companies.	1 July 2013	1 July 2013

• AASB ED 215 Mandatory effective date of IFRS 9 proposes to defer the mandatory effective date of AASB 9 to annual periods beginning on or after 1 January 2015, with early application permitted. At the time of preparation, finalisation of ED 215 is still pending by the AASB. However, the IASB has deferred the mandatory effective date of IFRS 9 to annual periods beginning on or after 1 January 2015, with early application permitted

62

Notes to the Financial Statements

2. Financial risk management

The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, price risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial instruments such as foreign exchange contracts to hedge certain risk exposures.

Risk management is the responsibility of the Chief Financial Officer (CFO) and follows policies approved by the Board of Directors. The CFO identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units.

As detailed in note 29, on 31 May 2012 and 19 June 2012 respectively, the Group acquired a controlling interest in Brasil Online and OCC, leading providers of online employment websites in Brazil and Mexico respectively. Given the timing of the acquisitions, SEEK is currently reviewing the financial risk policies in both Brasil Online and OCC and during the next financial year will align their policies with the rest of the Group.

In the prior year, the Group acquired a controlling interest in JobsDB, a provider of online employment websites in South East Asia. During the current financial year, SEEK has reviewed the financial risk policies in JobsDB and is in the process of aligning these policies with the rest of the Group.

The Group holds the following financial instruments:

		2012	2011
			Restated*
	Notes	$’000	$’000
Financial assets
Cash and cash equivalents	9	92,703	98,291
Trade and other receivables(1)	10	61,098	42,699
Other financial assets	12	630	17,379
Financial liabilities
Trade and other payables	15	57,028	43,698
Other financial liabilities	17	82,487	147,887
Borrowings(principal)	16	320,487	278,704

• Refer to note 29(b) for details of restatement on the completion of acquisition accounting for JobsDB

(1) Trade and other receivables in the table excludes prepayments which are not classified as financial instruments

The carrying value of the assets and liabilities disclosed in the table above closely approximates or equals their fair value.

Borrowings are issued at variable interest rates (for details of the maturity of borrowings, refer to note 16) and cash and cash equivalents (refer to note 9) attract interest at variable interest rates. All other financial assets and liabilities are non-interest bearing.

(a) Market risk

(i) Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, predominately the US dollar (USD), Singapore dollar (SGD), Hong Kong dollar (HKD), New Zealand dollar (NZD), British pound (GBP), Brazil Real (BRL) and Mexican Peso (MXN). The Group’s exposure to these and other key currencies is detailed on page 64.

Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the entity’s functional currency.

Forward contracts are sometimes used to manage foreign currency exchange risk. The CFO is responsible for managing exposures by using external forward currency contracts, for example for one-off significant transactions. During the financial year, SEEK also entered into a net investment hedge for $50,000,000 (HKD388,725,000). This is designated as a hedge against the Hong Kong assets, thereby protecting this portion of assets against depreciation of the HKD over the three year life of the swap.

The Group’s foreign exchange risk management policy is to hedge up to 100% of anticipated significant cash flows in foreign currencies for up to a six month period. The forward foreign currency exchange contracts taken up by the Group are regularly reassessed.

63

Notes to the Financial Statements

2. Financial risk management continued

Group

The Group’s exposure to foreign currency exchange risk at the reporting date, expressed in each currency, was as follows:

2012	AUD Denominated	HKD Denominated	MXN Denomimated
	NZD GBP MYR USD HKD 000's 000's 000's 000's 000's	PHP THB NTD IDR MYR SGD INR RMB USD AUD 000's 000's 000's 000's 000's 000's 000's 000's 000's 000's	USD 000's
Cash and cash equivalents Trade and other receivables Financial assets Trade and other payables Borrowings(principal)	- 62 1,746 362 - 755 179 - - - - - - - - 355 385 - - - - - - - -	- - - - - 3,493 - 14 396 103 1,265 12,681 3,215 - 8,822 - 6,065 - - - - - - - - - - - - - - - - 7,908,680 - 663 - 7,108 - - - - - - - - - - - -	13 3 - - -
2011	AUD Denominated	HKD Denominated	MXN Denomimated
	NZD GBP MYR USD HKD 000's 000's 000's 000's 000's	PHP THB NTD IDR MYR SGD INR RMB USD AUD 000's 000's 000's 000's 000's 000's 000's 000's 000's 000's	USD 000's
Cash and cash equivalents Trade and other receivables Financial assets Trade and other payables Borrowings(principal)	- 536 3,768 1 - - 832 - - - - - - - - 4,083 50 - 1,124 51,112 - - - - -	- - - - - - - - - - - - - 8,921,984 - 6,213 - - - - - - - - - - - - - - 9,396 22,388 3,113 - 7,790 - 6,134 9,624 - - - - - - - - - - - -	- - - - -

64

Notes to the Financial Statements

2. Financial risk management continued

The analysis below reflects management’s view of possible movements in relevant foreign currencies against the Australian dollar in the short term subsequent to 30 June 2012. The table summarises the range of possible outcomes that would affect the Group’s net profit and equity as a result of foreign currency movements.

The impact of reasonably possible movements in exchange rates is as follows:

	Profit or loss
	2011 $’000 2012 $’000
	High Low High Low
AUD to NZD (Range +5% to -5%) AUD to GBP (Range +5% to -5%) AUD to MYR (Range +5% to -5%) AUD to HKD (Range +5% to -5%) AUD to USD (Range +5% to -5%) HKD to PHP (Range +5% to -5%) HKD to THB (Range +5% to -5%) HKD to NTD (Range +5% to -5%) HKD to IDR (Range +5% to -5%) HKD to MYR (Range +5% to -5%) HKD to SGD (Range +5% to -5%) HKD to INR (Range +5% to -5%) HKD to RMB (Range +5% to -5%) HKD to USD (Range +5% to -5%) HKD to AUD (Range +5% to -5%) MXN to USD (Range+5% to-5%)	(15) 17 84 (93) 11 (12) (93) 103 (26) 28 59 (65) - - 291 (322) (17) 19 50 (55) (1) 2 10 (11) (18) 20 32 (36) (5) 5 5 (5) 39 (43) (46) 51 (127) 141 - - (103) 113 (224) 248 (5) 6 6 (7) 52 (57) 66 (73) (18) 20 - - 5 (5) - - (1) 1 - -
Net movement	(230) 255 240 (265)

(ii) Price risk

The Group is not exposed to significant equities price risk.

(iii) Cash flow interest rate risk

The Group’s main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk if the borrowings are carried at fair value.

As part of its capital risk management policy the Group protects part of its borrowings from exposure to fluctuations in interest rates. The Group has entered into interest rate swap contracts under which it is obliged to receive interest at variable rates and to pay interest at fixed rates.

Swaps currently in place cover approximately 25% (2011: 11%) of the variable loan principal outstanding and are timed to expire as each loan repayment falls due. Refer to note 12 for further details.

At the end of the reporting period, the Group had the following variable rate borrowings and interest rate swap contracts outstanding:

	$’000 $’000 2012 2011
	Weighted Weighted average average interest rate interest rate % $'000 % $'000
Bank loans - principal (note 16) Less amounts covered by interest rate swaps	7.1% 320,487 7.1% 278,704 4.9% (80,000) 4.5% (30,000)
	240,487 248,704

65

Notes to the Financial Statements

2. Financial risk management continued

The interest rate and term for bank borrowings is determined at the date of each drawdown. The weighted average interest rate for the year ended 30 June 2012 was 7.1% (2011: 7.1%). At 30 June 2012 if the weighted average interest rate of the facility had been 10% higher or 10% lower, interest expense would increase/decrease by $2,110,000.

Cash balances

As at 30 June 2012 the Group has $17,690,000 held in bank deposits, debentures, fixed income funds and short-term marketable securities held by the subsidiaries of SEEK’s controlled entity Brasil Online, which attract a higher rate of interest.

The Group’s bank accounts are predominantly interest bearing accounts. Funds that are excess to short term liquidity requirements are generally invested in short term commercial bills, backed by the four major Australian domestic banks. Where excess funds are significantly in excess of short term requirements, they are then applied to reduce the syndicated loan facility balance, thus reducing interest payable.

At 30 June 2012, if the interest rates on interest bearing cash balances were to move 10% higher or 10% lower than the weighted average rate of 3.08%, annual interest income would increase/decrease by $282,000 respectively.

(b) Credit risk

The Group’s exposure to credit risk arises from the potential default of the Group’s trade and other receivables as well as the institutions in which the Group’s cash and cash equivalents are deposited, with a maximum exposure equal to the carrying amounts of these assets. Further details of the Group’s trade receivables are included in note 10 and cash and cash equivalents are detailed in note 9.

For trade and other receivables, the Group does not hold any credit derivatives or collateral to offset its credit exposure. Due to the short term nature of these receivables, their carrying amount is assumed to approximate their fair value.

Group trade receivables at 30 June 2012 is $55,475,000 (note 10).

The domestic Employment business accounts for 48% of gross trade receivables with a customer base comprising of agencies, national/major accounts and SMEs. Credit risk assessments are conducted on new and renegotiated contracts to evaluate each customer’s credit worthiness.

The Education business accounts for 20% of gross trade receivables and their customer base is made up predominantly of full and part-time students. The majority (94%) of these students receive FEE-HELP for which the debt recorded is not yet due and the risk of default is relatively low as the debt is settled by the Department for Education. The remainder are self-funded and whilst individual debtors are low, they represent a higher credit risk.

The International business represents 33% of gross trade receivables and the exposure to credit risk is relatively low due to the credit terms provided and the large and diverse customer base.

Credit risk is managed in the following ways:

• The provision of credit is covered by a risk assessment process for all customers (eg appropriate credit history, credit limits, past experience);

• Concentrations of credit risk are minimised by undertaking transactions with a large number of customers.

The Group’s treasury policy only authorises dealings with financial institutions that have an investment grade rating.

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash flows and ensuring that all term deposits can be converted to funds at call. Due to the dynamic nature of the underlying businesses, the CFO aims to maintain flexibility in funding by keeping accessible the cash reserves of the business. A borrowing facility of $340,000,000 was set up in the prior year to enable the Group to borrow cash when necessary, repayable during December 2013 (refer to note 16). In addition in May 2012, a short term borrowing facility of $20,000,000 was set up to enable additional cash borrowings when necessary. This facility was not drawn down at 30 June 2012, and expires in August 2012.

66

Notes to the Financial Statements

2. Financial risk management continued

At 30 June 2012 the Group has recognised a financial liability of A$81,216,000 (2011: $74,630,000) which represents the net present value of the expected cash consideration to be paid to the vendor of JobsDB for the remaining 20% ownership. The vendor has been granted the option to exercise between 23 June 2012 and 23 June 2014; as the option is now current, the value of the liability is no longer discounted at 30 June 2012. The selling price is dependent on future earnings, but capped at HK$640,000,000 which is the amount currently recognised. At the date of this report the option had not been exercised.

All other financial liabilities are current and anticipated to be repaid over the normal credit terms, usually 30 days.

(i) Financing arrangements

The Group had access to the following borrowing facilities at end of the reporting period:

	Undrawn Total Drawn
	2012 2011 2012 2011 2012 2011 $’000 $’000 $’000 $’000 $’000 $’000
Floating rate Expiring within one year Expiring beyond one year	- - 20,000 - 20,000 - 320,487 278,704 19,513 61,296 340,000 340,000
	320,487 278,704 39,513 61,296 360,000 340,000

Subject to the continuance of meeting certain financial covenants, the bank loan facilities may be drawn down at any time.

Refer to note 16 for further details of the Group’s borrowing arrangements.

(d) Fair value measurements

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

SEEK Limited is required to disclose fair value measurements by level of the following fair value measurement hierarchy:

• (a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)

• (b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2) ,and

• (c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

At 30 June 2012 the Group held at fair value the following level 2 financial assets and liabilities (refer to note 12):

• Net investment hedge $672,000 gain

• Interest rate swaps $42,000 loss

At 30 June 2012 the Group held at fair value a put option, classified as a level 3 financial liability. The fair value of the put option is determined based on the net present value of anticipated future cash outflows. These cash outflows are dependent on a multiple of future earnings, capped at HK$640,000,000. The fair value has been determined using the maximum cash outflow and is not discounted as the option is current. The following table shows the movement in the put option during the current and prior years:

		2012	2011
	Notes	$’000	$’000
Carrying amount at start of year		74,630	-
Recognised during the period as level 3		-	73,396
Exchange differences		4,583	980
Interest unwound and charged to the Consolidated Income Statement		2,003	254
Carrying amount at end ofyear	17	81,216	74,630

67

Notes to the Financial Statements

2. Financial risk management continued

(e) Capital risk management

The Group’s policy is to maintain a capital structure for the business which ensures sufficient liquidity and support for business operations, maintains shareholder and market confidence, provides strong stakeholder returns, and positions the business for future growth. In assessing capital management the Group considers both equity and debt instruments.

The ongoing maintenance of this policy is characterised by:

• Ongoing cash flow forecast analysis and detailed budgeting processes which, combined with continual development of banking relationships, is directed at providing a sound financial positioning for the Group’s operations and financial management activities;

• A capital structure that provides adequate funding for the Group’s potential acquisition and investment strategies, building future growth in shareholder value. The syndicated loan facility will be partly used to fund significant investments as part of the Group’s growth strategy; and

• Investment criteria that consider earnings accretion and risk adjusted rate of return requirements based on the Group’s weighted average cost of capital, and overall strategic goals.

The Group is not subject to externally imposed capital requirements, other than normal banking covenants and obligations. The Company has complied with all bank lending requirements during the year and at the date of this report.

3. Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

(a) Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future which may not equal the related actual results. The estimates and assumptions that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(i) Business combinations

Following the guidance in AASB 3: Business Combinations , the Group has made assumptions and estimates to determine the purchase price of businesses acquired as well as its allocation to acquired assets and liabilities. To do so, the Group is required to determine the acquisition-date fair value of the identifiable assets acquired, including intangible assets such as brand, customer relationships and liabilities assumed. Goodwill is measured as the excess of the fair value of the consideration transferred including the recognised amount of any non-controlling interest over the net recognised amount of the identifiable assets and liabilities.

The assumptions and estimates made by the Group have an impact on the asset and liability amounts recorded in the financial statements. In addition, the estimated useful lives of the acquired amortisable assets, the identification of intangible assets and the determination of the indefinite or finite useful lives of intangible assets acquired will have an impact on the Group’s future profit or loss.

In step acquisitions where the Group obtains control over an entity by acquiring an additional interest in that entity, the Group’s previously held equity interest is remeasured to fair value at the date the controlling interest is acquired and a gain or loss is recognised in the Income Statement. The Group has also adopted the fair value method in measuring non-controlling interests in recent step-acquisitions. The determination of these fair values involves managements’ judgement and takes into consideration purchase price of the acquired controlling interest, other comparable transactions and trading comps.

(ii) Estimated impairment of goodwill

The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in note 1(h). The recoverable amounts of CGUs have been determined based on value-in-use or fair value calculations. These calculations require the use of assumptions. Please refer to note 14 for details of these assumptions and the potential impact of changes to these assumptions.

68

Notes to the Financial Statements

3. Critical accounting estimates and judgements continued

(iii) Income taxes

The Group is subject to income taxes in Australia and in a number of overseas jurisdictions. Judgement is required in determining the Group provision for income taxes.

• There are certain transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group estimates its tax liabilities based on its current understanding of the tax law. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the future period in which such determination is made.

• Research and development tax concessions available to the business are estimated in the accounts because a full assessment of the position cannot be made by the year end. This has been one of the causes of over-provision for tax in prior periods as it is the policy of the business to only bring to account that portion of expenses that are reasonably expected to be claimable at period end.

Please refer to note 8 for further details on the Group’s income tax balances.

(iv) Potential deferred tax liability on undistributed profits of IDP Education Pty Ltd (an associate of SEEK Limited)

The Group did not recognise a deferred tax liability in relation to undistributed profits of IDP Education Pty Ltd since a dividend policy agreement has been put in place, which stipulates that dividends will be fully franked, and the directors consider that this gives them the ability to control the timing and reversal of the temporary differences.

(v) Acquired contingent liabilities

In accordance with Australian Accounting Standards for Business Combinations, the Group are required to re-assess contingent liabilities acquired in a business combination and record them at their fair value. The fair value of the contingent liabilities reflects the range of possible outcomes across the portfolio of contingent liabilities and is adjusted for risk. Given the accounting for the acquisitions are preliminary, these fair values are still being assessed and are subject to change.

(b) Critical judgements in applying the entity’s accounting policies

(i) Significant influence over associates

The Group follows the guidance in AASB 128: Investments in Associates to determine its level of control and influence over its investments in associates. This determination can require judgement particularly around voting rights and participation in the financial and operating activities of the investee. If the Group’s influence increased such that the Group has the power to govern the financial and operating activities of the associate, then its results would have to be fully consolidated. Conversely, if the Group’s influence reduced and the Group did not have the power to participate in the financial and operating activities of the associate then it would need to account for its interest in the associate as an available-for-sale financial asset.

The key judgemental areas are as follows:

Zhaopin Limited (“Zhaopin”)

The Group owns 56.1% of Zhaopin. Although SEEK’s equity interest is more than 50%, the terms of a shareholders’ agreement mean that SEEK does not exercise control over the financial and operating policies of the entity. A representative of the Group is a director of the entity, enabling the Group to exert significant influence over the entity. For this reason the investment is considered to be an associate of the Group.

IDP Education Pty Ltd (“IDP”)

The Group owns 50% of the voting rights in IDP. The Group does not have control over the investment as its voting rights and board seats are equal to its co-investors. The Group is required to equity account for IDP as an associate company due to the fact that the Group has significant influence over IDP.

JobStreet Corporation Berhad (“JobStreet”)

The group owns 22.0% of the voting rights in JobStreet and management has determined that this ownership provides it with significant influence over JobStreet. This is however a judgemental area and the group continue to monitor its position to participate in the JobStreet policy-making processes. If this situation were to change and the group did not have the power to participate in the financial and operating policy decisions of JobStreet, then it would need to account for its interest in JobStreet as an available-for-sale financial asset at fair value and would no longer equity account for its share of profit.

69

Notes to the Financial Statements

3. Critical accounting estimates and judgements continued

(ii) Impairment of the investment in associates

The Group has not impaired any of its investments in associates, a decision which requires significant estimates and judgements. As required by current Accounting Standards, the Group has evaluated, among other factors, the financial health of and business outlook for its associates and assessed the carrying value of its investments against current estimated fair value. Where an impairment indicator exists due to the current economic climate an impairment test has been performed. This has resulted in no impairment write downs being required in the current financial period.

4. Segment information

(a) Description of segments

Management have determined the operating segments based on the reports reviewed and relied upon by the CEO (the chief operating decision maker (CODM)).

The Group operates in three core industries: online employment classified advertising (Employment); the provision and execution of training courses (Education); and overseas investments in online employment websites (International).

• The Employment business is considered as one reporting segment which provides online employment classified advertising services through the SEEK website. It sells these services in Australia, New Zealand and the United Kingdom, which have similar business characteristics and are managed as one business.

• The Education division comprises two segments: Learning and Think.

• The Learning business markets, sells and distributes (predominantly through online channels) vocational training and education training courses in Australia. These courses are developed and delivered by outside providers (including Think). It also holds the Group’s investment in IDP.

• Think is a provider of vocational training and higher education courses, including classroom-based and distance learning courses and operates solely in Australia.

• The International division now comprises three operating businesses being JobsDB, Brasil Online, OCC as well as other head office costs (previously disclosed as one business). As a result of the increased investments in Brasil Online and OCC during the year and the acquisition of JobsDB in the prior year, these entities now represent significant individual businesses within the Group. SEEK now has a presence in China, South East Asia, Brazil and Mexico.

Segment EBITDA is the measure utilised by the CODM to measure the businesses’ profitability. Segment EBITDA is earnings before interest, tax, depreciation and amortisation and excludes share of net profits from associates and jointly controlled entities accounted for using the equity method, fair value gain/loss on acquisition, impairment loss, amortisation of sharebased payments and long-term incentives and other non-operating gains/losses. Interest income and expenditure are not allocated to segments, as this type of activity is driven and managed centrally by the Group.

Segment revenue, expenses, assets and liabilities are those that are directly attributable to a segment and the relevant portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, other financial assets, plant and equipment and goodwill and other intangible assets, net of related provisions. While most of these assets can be directly attributable to individual segments, the carrying amounts of certain assets used jointly by segments are allocated based on reasonable estimates and usage. Segment liabilities consist primarily of trade and other creditors, other financial liabilities and employee entitlements.

Segment revenues, expenses and results include transfers between segments. Such transfers are prices on an “arm’s length” basis and are eliminated on consolidation.

The amounts provided to the CODM with respect to total assets and total liabilities are measured in a manner consistent with that of the financial statements. Assets and liabilities are allocated based on the operations of the segment.

70

Notes to the Financial Statements

4. Segment information continued

(b) Segment information provided to the CODM

30 June 2012 Notes	Employment $’000	Learning Think Eliminations $’000 $’000 $’000	Education $’000	JobsDB Brasil Online (1) OCC (1) Int'l Other $’000 $’000 $’000 $’000	International $’000	Consolidated $’000
Revenue Segment revenue from external customers 5 Inter-segment revenue	247,769 -	45,473 86,913 - 4,005 - (4,005)	132,386 -	52,926 8,818 355 - - - - -	62,099 -	442,254 -
Total segment revenue Interest revenue 5	247,769	49,478 86,913 (4,005)	132,386	52,926 8,818 355 -	62,099	442,254 2,976
Consolidated revenue 5						445,230
Segment EBITDA Depreciation 13 Amortisation 14 Share of profits from associates and jointly controlled entities accounted for using the equity method 11(b) Fair value gains on step acquisitions 29(a) Impairment loss 14	152,146 (1,900) (2,626) - - -	15,261 5,283 - (998) (4,688) - (308) (3,053) - 6,133 - - - - - - (24,115) -	20,544 (5,686) (3,361) 6,133 - (24,115)	20,752 2,982 112 (2,911) (1,017) (157) (45) - (5,448) (173) (37) - - 4,654 821 19,263 - 15,462 12,762 - - - - -	20,935 (1,219) (5,658) 24,738 28,224 -	193,625 (8,805) (11,645) 30,871 28,224 (24,115)
Segment result	147,620	20,088 (26,573) -	(6,485)	14,287 22,768 13,613 16,352	67,020	208,155
Amortisation of share-based payments and other long-term incentive schemes 7 Interest revenue 5 Interest expense 7 Other non-operating gain 6						(4,130) 2,976 (23,650) 1,130
Profit before tax Income tax expense 8(a)	- - -		-			184,481 (47,023)
Profit for the year Non-controlling interests 20(a)						137,458 (5,778)
Profit for theyear attributable to the owners of SEEK	Limited					131,680

1. As discussed in note 29(a), SEEK moved to controlling interests in Brasil Online (31 May 2012) and OCC (19 June 2012) and the EBITDA results in these businesses are reflective of the period since control was gained.

71

Notes to the Financial Statements

4. Segment information continued

4. Segment informationcontinued
Employment Eliminations 30 June 2011 Restated Notes $’000 $’000*	Employment $’000	Learning Think Eliminations $’000 $’000 $’000	Education $’000	JobsDB Brasil Online OCC Int'l Other $’000 $’000 $’000 $’000	International $’000	Consolidated $’000
Revenue Segment revenue from external customers 5 224,005 - Inter-segment revenue 32 (32)	224,005 -	41,244 69,078 - 3,222 - (3,222)	110,322 -	8,727 - - - - - - -	8,727 -	343,054 -
Total segment revenue 224,037 (32) Interest revenue 5	224,005	44,466 69,078 (3,222)	110,322	8,727 - - -	8,727	343,054 1,681
Consolidated revenue 5						344,735
Segment EBITDA 133,517 - Depreciation 13 (1,938) - Amortisation 14 (2,567) - Share of profits from associates and jointly controlled entities accounted for using the equity method 11(b) - - Fair value loss on step acquisition - -	133,517 (1,938) (2,567) - -	13,046 (7,497) -	5,549 (4,116) (2,904) 7,696 -	3,535 - - (6,965)	(3,430) (149) (921) 16,989 (811)	135,636 (6,203) (6,392) 24,685 (811)
		(640) (3,476) - (173) (2,731) -		(149) - - - (921) - - -
		7,696 - - - - -		715 4,144 749 11,381 (811) - - -
Segment result 129,012	129,012	19,929 (13,704)	6,225	2,369 4,144 749 4,416	11,678	146,915
Amortisation of share-based payments and other long-term incentive schemes 7 Interest revenue 5 Interest expense 7						(999) 1,681 (14,588)
Profit before tax Income tax expense 8(a) -	- -		- - (36,295)			133,009 (36,295)
Profit for the year Non-controlling interests 20(a)						96,714 974
Profit for theyear attributable to the owners of SEEK Limited						97,688

• As discussed in note 4(a) the International division has been restated to reflect the acquisitions in the year.

72

Notes to the Financial Statements

4. Segment information continued

Balance Sheet information

Balance Sheet information
30 June 2012 Notes	Employment $’000	Learning Think $’000 $’000	Education $’000	JobsDB Brasil Online OCC Int'l Other $’000 $’000 $’000 $’000	International $’000	Consolidated $’000
Assets Total segment assets Unallocated: Deferred tax assets 8(d) Current tax assets	68,358	92,794 114,371	207,165	381,302 416,649 163,816 126,903	1,088,670	1,364,193 24,615 2,924
Total assets						1,391,732
Total assets include:
Additions to non-current assets (other than financial assets and deferred tax)	5,971	852 8,690	9,542	1,336 131 - -	1,467	16,980
Carrying value of investments in associates and jointly controlled entity 11(b) Liabilities Total segment liabilities	- (39,665)	74,028 - (3,318) (31,388)	74,028	- - - 122,035 (23,963) (45,057) (7,494) (84,471)	122,035	196,063
						-
			(34,706)		(160,985)	(235,356)
Unallocated: Non-current borrowings 16 Current tax liabilities Deferred tax liabilities 8(e)						(318,433) (19,376) (47,434)
Total liabilities						(620,599)

73

Notes to the Financial Statements

4. Segment information continued

30 June 2011 Restated* Notes	Employment $’000	Learning Think $’000 $’000	Education $’000	JobsDB Brasil Online OCC Int'l Other $’000 $’000 $’000 $’000	International $’000	Consolidated $’000
Assets Total segment assets Unallocated: Deferred tax assets 8(d)	99,440	93,432 127,658	221,090	362,026 101,028 40,944 134,674	638,672	959,202 11,397
Total assets						970,599
Total assets include:				100 - - - - 101,028 40,944 100,329 (21,633) - - (148,064)
Additions to non-current assets (other than financial assets and deferred tax)	2,566	4,121 8,681	12,802		100	15,468
Carrying value of investments in associates and jointly controlled entity 11(b) Liabilities Total segment liabilities	- (38,304)	73,629 - (1,618) (27,036)	73,629 - (28,654)		242,301	315,930
						(236,655)
					(169,697)
Unallocated: Non-current borrowings 16 Current tax liabilities Deferred tax liabilities 8(e)					(275,281) (5,370) (18,534)
Total liabilities					(535,840)

• As discussed in note 4(a) the International division has been restated to reflect the acquisitions in the year.

74

Notes to the Financial Statements

4. Segment information continued

(c) Geographical information

In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of the customers. Segments assets are based on the geographical location of the assets.

	2012 2011
	Non-current Non-current Revenue(1) assets(2) Revenue(1) assets(2) Restated $’000 $’000* $’000 $’000
Australia New Zealand United Kingdom Brazil Mexico China Hong Kong(3) Malaysia Other South East Asia	362,565 193,830 318,577 215,755 17,241 4,910 15,073 4,730 349 - 676 - 8,818 384,963 - 101,028 355 153,022 - 40,944 10,410 80,584 1,679 59,674 20,438 339,416 3,290 327,629 723 44,833 152 43,724 21,355 3,736 3,607 5,234
Total allocated	442,254 1,205,294 343,054 798,718
Unallocated: Interest revenue Deferred tax assets	2,976 - 1,681 - - 24,615 - 11,397
Total	445,230 1,229,909 344,735 810,115

• Refer to note 29(b) for details of restatement on the completion of acquisition accounting for JobsDB

(1) Amounts allocated represent segment revenue from external customers

(2) Amounts allocated represent all non-current assets excluding deferred tax assets

(3) Non-current assets allocated to Hong Kong include goodwill and other indefinite life intangible assets assumed as part of the JobsDB acquisition, which is consistent with the approach for impairment testing (refer to note 14)

5. Revenue

5. Revenue
	2012	2011
	$’000	$’000
Revenue from continuing operations
Sales revenue
Employment - job and banner advertising	247,769	224,005
International - job, banner advertising and CV online	62,099	8,727
Education - commission revenue	41,652	37,377
Education-classroom-based training	90,734	72,945
Total sales revenue	442,254	343,054
Other revenue
Interest income	2,976	1,681
Total revenue from continuing operations	445,230	344,735

75

Notes to the Financial Statements

6. Other income

2012 2011 $’000 $’000 Notes	2012 2011 $’000 $’000 Notes
Fair value gains on step acquisitions 29(a) 28,224 - Other non-operating gain(1) 1,130 -
	29,354 -

(1) Other non-operating gain relates to a forward exchange contract settled during the year

7. Expenses

Net losses and expenses

Profit before income tax expense includes the following specific net losses and expenses:

		2012	2011
	Notes	$’000	$’000
Specific costs included within operations and administration
Depreciation of plant and equipment	13	8,805	6,203
Amortisation of intangible assets	14	11,645	6,392
Rental expense relating to operating leases:
Minimum lease payments		13,969	10,656
Net foreign exchange (gains)/losses recognised in profit before income tax expense		(428)	614
Net loss on disposal of plant and equipment		108	-
Fair value loss on step acquisition		-	811
Impairment loss	14	24,115	-
		58,214	24,676
Finance costs
Interest expense		23,650	14,588
Interest unwound on put option	2	2,003	254
Other finance charges paid/payable		1,024	1,571
Total finance costs		26,677	16,413
Employee benefits
Share-based payments and other long term incentives		4,130	999
Salary costs		96,915	78,394
Superannuation costs		7,698	6,517
Total employee benefits		108,743	85,910

76

Notes to the Financial Statements

8. Income tax

(a) Income tax expense

		Consolidated	Consolidated
		2012	2011
	Notes	$’000	$’000
Current tax		48,761	36,981
Deferred tax		(4,380)	(797)
Release of hedge reserves on step acquisitions	29(a)	3,169	-
Under/(over) provision in prior years		(527)	111
Income tax expense	8(b)	47,023	36,295
The entire income tax expense relates to profit from continuing operations.
Deferred income tax expense included in income tax expense comprises:
(Increase) in deferred tax assets		(3,558)	(1,345)
(Decrease)/increase in deferred tax liability		(822)	548
		(4,380)	(797)

(b) Numerical reconciliation of income tax expense to prima facie tax payable:

	Consolidated	Consolidated
	2012	2011
	$’000	$’000
Profit from ordinary activities before income tax expense	184,481	133,009
Income tax calculated @ 30% (2011: 30%)	55,344	39,903
Tax effect of amounts that are not deductible/(taxable) in calculating income tax:
Fair value gains on financial assets	-	243
Fair value gains on step acquisitions	(5,298)	-
Research and development claim	(240)	(225)
Share of net profit of associates and jointly controlled entities	(9,261)	(7,406)
Non-assessable dividend income	(379)	197
Impairment loss on goodwill	6,750	-
Non-deductable expenses:
Entertainment	166	148
Legal fees and acquisition costs	378	2,261
Share-based payments	345	802
Other non-deductable/non-assessible items	(236)	446
	47,569	36,369
Income tax adjusted for permanent differences:
Effect of change in tax rates	(19)	-
Effect of different rates of tax on overseas income	-	(185)
(Over)/under provision in prior year	(527)	111
Income tax expense attributable toprofit from ordinary activities	47,023	36,295

77

Notes to the Financial Statements

8. Income tax continued

(c) Amounts recognised directly in equity

Tax expense relating to items of other comprehensive income

Tax expense relating to items of other comprehensive income
		Consolidated
		2012	2011
	Notes	$’000	$’000
Release of hedge reserve on step acquisitions	29(a)	3,169	-
Current tax (debited)/credited directly to hedge reserve		(3)	716
Deferred tax credited directly to hedge reserve		-	90
Deferred tax (debited) associated with share-based payment schemes	20(a)	(165)	(316)
	20(a)	3,001	490

Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or loss or other comprehensive income but directly debited or credited to equity

comprehensive income but directly debited or credited to equity
		Consolidated
		2012	2011
	Notes	$’000	$’000
Current tax credited directly to share-based payment reserves
- shares purchased on market		108	38
- new issue of shares		225	-
Deferred tax credited directly to share-based payment reserves		-	49
	20(a)	333	87

78

Notes to the Financial Statements

8. Income tax continued

(d) Deferred tax assets

The balance comprises temporary differences attributable to:

		Consolidated	Consolidated
		2012	2011
	Notes	$’000	$’000
Amounts recognised in profit or loss:
Provision for impairment of trade receivables		1,866	1,672
Unearned income		1,719	-
Employee benefits		5,211	3,996
Provision for credit notes		942	563
Fringe benefits tax		51	50
Share-based payments		1,204	580
Accounting fees		284	240
Non-current provisions		6,362	-
Plant and equipment and intangible assets		5,056	2,240
Deferred expenditure - other		1,115	1,098
Foreign exchange gains/(losses)		116	(124)
Commissions-non-employment benefits		271	241
		24,197	10,556
Amounts recognised directly in equity:
Share-based payments		245	413
Hedge on acquisition of JobsDB		-	90
Capital raising costs		173	338
		418	841
Net deferred tax assets		24,615	11,397
Movements:
Opening balance at 1 July		11,397	10,421
Credited to the Consolidated Income Statement		3,558	1,345
Credited to equity		(165)	(275)
Exchange differences		(593)	(7)
Acquisition of subsidiary	29(a)	10,660	-
Under/(overs) in the prior year		(242)	(87)
Closing balance at 30 June		24,615	11,397
Deferred tax assets to be recovered within 12 months		12,724	8,876
Deferred tax assets to be recovered after more than 12 months		11,891	2,521
		24,615	11,397

79

Notes to the Financial Statements

8. Income tax continued

(e) Deferred tax liabilities

(e) Deferred tax liabilities
		Consolidated
			2011
		2012	Restated*
	Notes	$’000	$’000
The balance comprises temporary differences attributable to:
Intangible assets		46,026	17,507
Withholding tax on undistributed profits		1,408	-
Borrowing costs		-	1,027
Net deferred tax liabilities		47,434	18,534
Movements:
Opening balance at start of year		18,534	6,694
(Credited)/charged to the Consolidated Income Statement		(822)	548
Acquisition of subsidiaries (restated*)	29	32,838	11,163
Exchange differences		(3,116)	129
Closing balance at end ofyear		47,434	18,534
Deferred tax liabilities expected to be recovered within 12 months		3,020	1,413
Deferred tax liabilities expected to be recovered after more than 12 months		44,414	17,121
Closing balance at end ofyear		47,434	18,534

• The prior year balance has been restated. Refer to note 29(b) for details of restatement on the completion of acquisition accounting for JobsDB and refer to note 29(a) for the current year acquisitions of Brasil Online and OCC.

Tax consolidation legislation

SEEK Limited and its wholly-owned Australian controlled entities implemented the tax consolidation legislation as of 1 July 2004. The Australian Taxation Office has been notified of this decision. The accounting policy on implementation of the legislation is set out in note 1(y).

On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement which, in the opinion of the directors, limits the joint and several liability of the wholly owned entities in the case of a default by the head entity, SEEK Limited.

The entities have also entered into a tax funding agreement under which the wholly owned entities fully compensate SEEK Limited for any current tax payable assumed and are compensated by SEEK Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to SEEK Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly owned entities’ financial statements.

The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The funding amounts are recognised as current intercompany receivable or payables.

80

Notes to the Financial Statements

9. Cash and cash equivalents

9. Cash and cash equivalents
	2012	2011
	$’000	$’000
Cash at bank and on hand	75,013	98,291
Short-term investments	17,690	-
	92,703	98,291

(a) Risk exposure

The Group’s exposure to interest rate risk is discussed in note 2. The maximum exposure to credit risk at the reporting date is the carrying amount of each class of cash and cash equivalents mentioned above.

(b) Restricted cash in the People’s Republic of China

At 30 June 2012 cash of RMB45,057,000 ($7,015,000) was held by local subsidiaries in the People’s Republic of China (2011: $5,429,000). This cash can be used in the People’s Republic of China, but is not freely convertible into other currencies for transfer around the Group. The Group is currently considering capital management initiatives to utilise these funds.

(c) Short term investments

Short term investments comprise mainly bank deposits, debentures, fixed income funds and short term marketable securities held by subsidiaries of SEEK’s controlled entity Brasil Online. These highly liquid deposits and investments are readily convertible into known cash amounts and are subject to insignificant risk of changes of value.

10. Trade and other receivables

10. Trade and other receivables
	2012	2011
		Restated*
	$’000	$’000
Trade receivables	55,475	36,686
Less:provision for impairment of receivables(note a)	(5,970)	(7,642)
	49,505	29,044
Other receivables (note c)	11,593	13,579
Prepayments	4,468	2,191
	65,566	44,814

• Refer to note 29(b) for details of restatement on the completion of acquisition accounting for JobsDB

(a) Impaired trade receivables

As at 30 June 2012 the amount of the provision for current trade receivables was $5,970,000 (2011: $7,642,000) with $2,248,000 (2011: $5,758,000) being provision for doubtful debts and $3,722,000 (2011: $1,884,000) being credit note provisions. The Group has recognised a loss of $5,732,000 (2011: $15,037,000) in respect of impaired trade receivables during the year ended 30 June 2012.

Movements in the provision for impairment of receivables are as follows:

		2012	2011
	Notes	$’000	$’000
Opening balances		7,642	5,181
Provision for impairment recognised during the year		5,732	15,037
Utilisation of provision for credit notes and receivables written off		(7,436)	(12,485)
Unused amount reversed		(377)	(50)
Acquisition of subsidiaries	29(a)	419	-
Exchange differences		(10)	(41)
Closing balance		5,970	7,642

81

Notes to the Financial Statements

10. Trade and other receivables continued

The creation or release of the doubtful debts provision has been included in ‘operations and administration’ expense in the Consolidated Income Statement and the creation or the release of the credit note provision has been included within revenue. Amounts charged to the provision are generally written off when there is no expectation of recovering additional cash.

(b) Ageing of net trade receivables from due date

(b) Ageing of net trade receivables from due date
	2012	2011
	$’000	$’000
Current - 30 days	43,951	24,623
30-60 days (1)	3,773	3,259
60-90 days(1)	1,124	773
90-120 days(1)	347	217
120+days(1)	310	172
Closing balance	49,505	29,044

(1) Past due and not considered impaired. Trade receivables are considered past due when they are not collected within credit terms.

The Group does not hold any collateral in relation to these receivables.

(c) Other receivables

The other receivables balance mainly represents accrued revenue in the Education business.

The other classes within trade and other receivables do not contain impaired assets and are not past due. Based on the credit history of these other classes, it is expected that these amounts will be received when due.

(d) Foreign exchange and interest rate risk

Information about the Group’s exposure to foreign currency risk and interest rate risk in relation to trade and other receivables is provided in note 2.

(e) Fair value and credit risk

Due to the short term nature of these receivables, their carrying amount is assumed to approximate their fair value.

The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned above. Refer to note 2 for more information on the risk management policy of the Group and the credit quality of the entity’s trade receivables.

82

Notes to the Financial Statements

11. Investments accounted for using the equity method

The results of associates and the jointly controlled entity are reflected in the results of the Group for the period from the later of the date of SEEK’s investment or 1 July 2011 to the earlier of the date the investment ceased to be an associate or jointly controlled entity or 30 June 2012.

(a) Details of associates and jointly controlled entities

Information relating to associates and the jointly controlled entity is set out below:

Associates	Country of incorporation	Ownership interest %	Ownership interest %	Year end	Principal activities
		2012	2011
IDP Education Pty Ltd	Australia	50.0	50.0	30 June	Provides services for international
(“IDP”)					students wishing to study in Australian
					educational institutions and also
					provides International English Language
					Testing (IELTS)
Zhaopin Ltd (“Zhaopin”)	The Cayman	56.1	56.1	31 December	Provides both online and print
	Islands				employment classified advertising
					services in China
Brasil Online Holdings	The	51.0(c(i))	30.0	31 December	Owns Catho Online and Manager Online,
Coöperatief U.A.	Netherlands				two leading employment websites in
(“Brasil Online”)					Brazil
JobStreet Corporation	Malaysia	22.0	22.0	31 December	Provider of online employment websites
Berhad(“Jobstreet”)					in South East Asia (listed in Malaysia)
Online Career Center	Mexico	56.7(c(ii))	41.1	31 December	Leading provider of online employment
Mexico SA de CV					websites in Mexico
(“OCC”)
Jointly controlled entity
Online Education	Australia	50.0(e)	50.0	30 June	A joint venture entity between SEEK and
Services Pty Ltd					Swinburne University of Technology to
(“Swinburne Online”)					deliver online learning to students

(b) Investments in associates and jointly controlled entity

2012 2011 Notes $'000 $'000 Consolidated	2012 2011 Notes $'000 $'000 Consolidated
Carrying amount Investments in associates 11(c) 195,637 313,476 Investments in jointly controlled entity 11(e) 426 2,454
Total investments accounted for using the equity method 196,063 315,930
Share of profits / (losses) after income tax Investments in associates 11(c) 32,899 24,731 Investments in jointly controlled entity 11(e) (2,028) (46)
Total investments accounted for using the equity method	30,871 24,685

83

Notes to the Financial Statements

11. Investments accounted for using the equity method continued

(c) Movements in carrying amounts – associates

	Notes	IDP $’000	$’000 Zhaopin	$’000 Brasil Online	$’000 JobStreet	$’000 OCC	JobsDB $’000	Total $’000
Carrying amount as at 30 June 2010 66,734 57,221 110,241 49,173 - - 283,369 Investments during the year at cost - - - - 44,696 144,713 189,409 Dividends received or declared in the year (2,500) - (4,378) (1,519) (1,665) - (10,062) Share of profits after income tax 7,742 8,702 4,144 2,679 749 715 24,731 Elimination recognised against redemption reserve 20(c) - 634 - - - - 634 Movements in foreign currency translation reserve 20(a) (539) (9,913) (8,979) (6,648) (2,836) (9,964) (38,879) Movements in hedge reserve - cash flow hedges 20(a) (262) - - - - - (262) Acquisition of additional controlling interest(1) - - - - - (128,450) (128,450) Loss on step acquisition(1) - - - - - (7,014) (7,014)
Carrying amount as at 30 June 2011 71,175 56,644 101,028 43,685 40,944 - 313,476 Dividends and distributions received or declared in the year (6,000) - (4,235) (1,544) (1,076) - (12,855) Share of profits after income tax 8,161 16,490 4,654 2,773 821 - 32,899 Movements in foreign currency translation reserve 20(a) 43 4,102 (14,830) (115) (4,414) - (15,214) Movements in hedge reserve - cash flow hedges 20(a) 223 - - - - - 223 Acquisition of additional controllinginterests 29(a) - - (86,617) - (36,275) - (122,892)
Carrying amount as at 30 June 2012 73,602 77,236 - 44,799 - - 195,637

(1) These movements were incurred as part of the acquisition accounting for JobsDB (refer to note 29(b) for further details on the JobsDB transaction)

(i) Brasil Online

On 31 May 2012, the Group acquired an additional 21.0% interest in Brasil Online for US$78,750,000 (A$80,563,000 at the exchange rate on the date of the transaction). The acquisition was funded through cash and an additional $30,000,000 drawdown on the syndicated bank debt facility and takes the total interest held in Brasil Online to 51.0%. As a result of this transaction, Brasil Online is now considered a subsidiary of SEEK and has been consolidated into the Group from the date of acquisition. Refer to note 29(a) for additional information on this transaction.

(ii) OCC

On 19 June 2012, the Group acquired an additional 15.6% interest in OCC for US$22,500,000 (A$22,250,000 at the exchange rate on the date of the transaction). The acquisition was funded through cash and takes the total interest held in OCC to 56.7%. As a result of this transaction, OCC is now considered a subsidiary of SEEK and has been consolidated into the Group from the date of acquisition. Refer to note 29(a) for additional information on this transaction.

(iii) JobsDB

SEEK Limited, through its controlled entity SEEK Asia, exercised significant influence over JobsDB from 23 December 2010 to 5 May 2011 and accounted for its share of profits using the equity method. On 5 May 2011, SEEK increased its ownership to 60% at which point it began accounting for JobsDB as a subsidiary and the original ownership of JobsDB was reclassified at fair value to goodwill and intangible assets. SEEK continues to consolidate JobsDB at 30 June 2012. Refer to note 29(b) for additional information.

(iv) JobStreet

JobStreet is listed in Malaysia. At 30 June 2012, the market value of the Group’s investment in JobStreet was $47,733,000 (2011: $63,725,000), based on the published share price as at that date.

84

Notes to the Financial Statements

11. Investments accounted for using the equity method continued

(d) Summarised financial information of associates

(i) Group’s share of the results and aggregated assets (including goodwill) and liabilities of its associates

Ownership	Ownership		Group's share of	Group's share of	Group's share of
	%		Assets $’000	Liabilities $’000	Revenues Profit $’000 $’000
30 June 2012 IDP 50.0% 67,120 16,106 102,317 8,161 Zhaopin 56.1% 64,032 38,335 66,036 16,490 Brasil Online(2) 4,654 JobStreet 22.0% 18,726 3,899 10,531 2,773 OCC(3) 821
Total 149,878 58,340 178,884 32,899
30 June 2011 IDP 50.0% 60,266 11,682 94,898 7,742 Zhaopin 56.1% 37,666 29,550 54,594 8,702 Brasil Online 30.0% 38,477 19,162 36,645 4,144 JobStreet 22.0% 15,256 2,943 9,411 2,679 OCC 41.1% 4,918 2,940 6,079 749 JobsDB (1) 715
Total 156,583 66,277 201,627 24,731

(1) Represents profit as an associate from 23 December 2010 until 5 May 2011 when JobsDB became a subsidiary. Refer to note 29(b) for details.

(2) Represents profit as an associate from 1 July 2011 until 31 May 2012 when Brasil Online became a subsidiary. Refer to note 29(a) for details.

(3) Represents profit as an associate from 1 July 2011 until 19 June 2012 when OCC became a subsidiary. Refer to note 29(a) for details.

(ii) Contingent assets and liabilities of associates

The Group’s share of contingent liabilities in associates are as follows:

JobStreet

In 2008, JobStreet provided a corporate guarantee for SGD 5.5 million to a financial institution for a treasury/foreign exchange facility granted to the company’s wholly-owned subsidiary, JobStreet.com Pte. Ltd. SEEK’s share of this guarantee is $920,000.

(iii) Commitments

The Group's share of expenditure commitments, relating to operating lease commitments, non-cancellable advertising contracts and capital commitments are as follows:

• IDP $3,013,000 (2011: $3,489,000)

• Zhaopin $5,626,000 (2011: $5,139,000)

• JobStreet $28,000 (2011: $155,000)

,

85

Notes to the Financial Statements

11. Investments accounted for using the equity method continued

(e) Jointly controlled entity – Swinburne Online

On 12 January 2011 SEEK entered into a joint venture agreement with Swinburne University to deliver online tertiary courses specifically designed to meet the educational needs of working Australians. The two parties formed a new entity, Online Education Services Pty Ltd (“Swinburne Online”). Both SEEK and Swinburne each hold 50% of the equity of the entity, 50% of the voting rights and each has three Board seats and is entitled to 50% of the profits and losses of the entity. The first student intake occurred in the second half of the financial year.

In March 2011 each party contributed cash of $2,500,000 to the joint venture and the Group has recognised this contribution as an investment in Swinburne Online. As detailed in the joint venture agreement between SEEK and Swinburne University each venturer committed to contribute an additional $2,500,000 to the joint venture. On 1 July 2012, both partners made this additional contribution. SEEK will recognise this transaction as an additional investment in Swinburne Online.

In accordance with the accounting policy described in note 1(b), the Group’s interest in Swinburne Online is accounted for in its consolidated financial statements using the equity method of accounting.

Further information relating to the joint venture is set out below:

Further information relating to the joint venture is set out below:
	2012	2011
	$’000	$’000
Opening carrying amount at 30 June	2,454	-
Investment at cost	-	2,500
Share of (losses) after income tax	(2,028)	(46)
Closing carrying amount at 30 June	426	2,454
Group share of:
Assets	1,565	2,512
Liabilities	625	57
Revenues	1,087	-
Share of(losses)after income tax	(2,028)	(46)

Swinburne Online has no contingent liabilities or capital commitments at 30 June 2012 (30 June 2011: nil).

12. Other financial assets

12. Other financial assets
	2012	2011
	$’000	$’000
Other financial assets (i)	630	37
Amounts due from co-investors (ii)	-	17,342
	630	17,379

(i) Other financial assets

Other financial assets represent the fair value of interest rate swaps and cross-currency swaps and are discussed in further detail below.

In accordance with the Group’s accounting policy detailed in note 1(l), the gain or loss from remeasuring the hedging instruments at fair value is deferred in equity in the hedging reserves (cashflow hedge reserve and net investment hedge reserve), to the extent that the hedge is effective, and reclassified into the Consolidated Income Statement when the hedged instrument is recognised or when it is impaired or sold.

The Group’s capital risk management policy is discussed in note 2. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of derivative financial assets mentioned above.

86

Notes to the Financial Statements

12. Other financial assets continued

Interest rate swap contracts – cash flow hedge

The Group has entered into interest rate swap contracts under which it is obliged to receive interest at variable rates and to pay interest at fixed rates. The contracts require settlement of net interest receivable or payable each 90 days. The settlement dates coincide with the dates on which interest is payable on the underlying debt. The contracts are settled on a net basis.

A loss of $42,000 has been recognised in the Consolidated Statement of Comprehensive Income reflecting the change in fair value of the interest rate swap in the financial year.

Cross-currency swap contracts – net investment hedge

During the financial year, SEEK entered into a net investment hedge for HKD388,725,000 (A$50,000,000). This is designated as a hedge against the Hong Kong assets, thereby protecting this portion of assets against depreciation of the HKD over the three year life of the swap.

A gain of $672,000 has been recognised in the Consolidated Statement of Comprehensive Income reflecting the fair value of the net investment hedge at 30 June 2012.

(ii) Amounts due from co-investors

The amount receivable from co-investors at 30 June 2011 represented the outstanding cash consideration payable by the coinvestors for the third stage of SEEK Asia’s investment in JobsDB which was settled in July 2011. Refer to note 29(b) for further details.

13. Plant and equipment

		2012	2011
	Notes	$’000	$’000
Opening at 1 July
Cost		50,863	33,218
Accumulated depreciation		(31,662)	(18,929)
Net book amount at 1 July		19,201	14,289
Carrying amount at 1 July		19,201	14,289
Additions		8,767	9,929
Disposals		(174)	-
Acquisition of subsidiaries	29	5,753	1,167
Exchange differences		2	19
Depreciation expense	4	(8,805)	(6,203)
Carrying amount at 30 June		24,744	19,201
Closing at 30 June
Cost		65,211	50,863
Accumulated depreciation		(40,467)	(31,662)
Net Book amount at 30 June		24,744	19,201

87

Notes to the Financial Statements

14. Intangible assets

14. Intangible assets
				Course		Computer
				development		software
			Brands and	and	Customer	and website	Work in
		Goodwill	**licences **	accreditation	**relationships **	development	progress	Total
	Notes	$’000	$’000	$’000	$’000	$’000	$’000	$’000
At 1 July 2010
Cost		93,052	20,889	5,119	3,860	14,866	229	138,015
Accumulated amortisation		-	-	(787)	(1,536)	(6,718)	-	(9,041)
Net book amount		93,052	20,889	4,332	2,324	8,148	229	128,974
Year ended 30 June 2011 Restated*								-
Opening net book amount		93,052	20,889	4,332	2,324	8,148	229	128,974
Exchange differences		(17)	422	-	230	15	-	650
Additions		-	-	2,194	-	1,005	2,340	5,539
Transfers		-	-	-	-	686	(686)	-
Acquisition of subsidiaries	29(b)	275,303	39,724	-	19,330	459	-	334,816
Amortisation charge (1)		-	-	(1,163)	(1,949)	(3,280)	-	(6,392)
Closing net book amount		368,338	61,035	5,363	19,935	7,033	1,883	463,587
At 30 June 2011 Restated*
Cost		368,338	61,035	7,313	23,420	17,031	1,883	479,020
Accumulated amortisation		-	-	(1,950)	(3,485)	(9,998)	-	(15,433)
Net book amount		368,338	61,035	5,363	19,935	7,033	1,883	463,587
Year ended 30 June 2012
Opening net book amount		368,338	61,035	5,363	19,935	7,033	1,883	463,587
Exchange differences		(8,992)	(2,921)	-	646	(196)	-	(11,463)
Additions		-	-	1,658	-	1,466	5,089	8,213
Transfers		-	-	-	-	2,834	(2,834)	-
Acquisition of subsidiaries(2)	29(a)	457,714	89,264	-	9,863	3,069	-	559,910
Amortisation charge (1)		-	-	(1,571)	(6,144)	(3,930)	-	(11,645)
Impairment charge	14(b)	(22,500)	(1,615)	-	-	-	-	(24,115)
Closing net book amount		794,560	145,763	5,450	24,300	10,276	4,138	984,487
At 30 June 2012
Cost		794,560	145,763	8,971	33,929	24,204	4,138	1,011,565
Accumulated amortisation		-	-	(3,521)	(9,629)	(13,928)	-	(27,078)
Net book amount		794,560	145,763	5,450	24,300	10,276	4,138	984,487

• Refer to note 29(b) for details of restatement on the completion of acquisition accounting for JobsDB

(1) Amortisation charges have been included within ‘operations and administration’ expenses in the Consolidated Income Statement

(2) Includes identifiable intangible assets acquired through the purchase of Brasil Online and OCC

Intangible assets are amortised over their estimated useful life (as listed below) on a straight line basis:

• Goodwill, brands and licences – indefinite life and not amortised;

• Course development and accreditation – five years;

• Customer relationships – one to six years; and

• Computer software and website development – three to six years.

88

Notes to the Financial Statements

14. Intangible assets continued

(a) Cash-generating-units (CGUs)

For the purpose of undertaking impairment testing, the Group has determined its CGUs as the smallest group of assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. This assessment is usually determined by considering business and operating segments and areas of operation.

A segment level summary of the carrying amount of goodwill and intangible assets with indefinite useful lives is detailed below:

CGU Business segment	2012 2011
	Intangible Intangible assets with assets with indefinite indefinite Goodwill useful lives Goodwill useful lives Restated Restated $’000 $’000 $’000 $’000
Employment SEEK New Zealand Education DWT Education SEEK Learning Education Think International JobsDB International Brasil Online International OCC	4,779 - 4,709 - 2,140 - 2,140 - 3,666 - 3,666 - 59,789 19,274 82,289 20,889 288,596 42,059 275,534 40,146 311,401 65,629 - - 124,189 18,801 - -
Total	794,560 145,763 368,338 61,035

• Refer to note 29(b) for details of restatement on the completion of acquisition accounting for JobsDB

For Think, JobsDB and Brasil Online, the goodwill balance has been assessed across the group of CGUs that comprise these businesses as the goodwill balance contributes to the generation of cash flows across the whole of these businesses. All other goodwill balances have been allocated to a single CGU (or business). This approach and the impact on impairment are discussed in more detail below.

(b) Impairment testing and key assumptions

The Group tests whether goodwill and other intangible assets have suffered any impairment in accordance with the accounting policy stated in note 1 (h). The recoverable amount of assets and CGUs have been determined based on the higher of value-in-use and fair value less costs to sell. These calculations require the use of key assumptions including student numbers, course price and the cost base of the business in the Education segment, and advertising volumes and price in the Employment business, as well as discount rates applied in determining value in use.

The table below shows the pre-tax discount rates for each CGU where value in use has been used:

	Pre-tax discount rate
	2012 2011 % %
Employment SEEK New Zealand	17.9 14.0
Education DWT Education SEEK Learning	14.6 14.0 14.6 14.0

(i) SEEK New Zealand, DWT and SEEK Learning

The goodwill balances for SEEK New Zealand, DWT and SEEK Learning are all relatively small amounts in the Consolidated Balance Sheet and have been held for several years. Five year cash flow forecasts have been based on next year’s budgeted result, with the remaining years applying a real growth rate of 2.5% to budgeted EBITDA and using a terminal value cash flow beyond five years with a real growth rate of 0%. The pre-tax discount rate applied to these CGUs is between 14.6% and 17.9%. For these businesses any reasonable possible change in assumptions would not result in any impairment.

89

Notes to the Financial Statements

14. Intangible assets continued

(ii) Think

During the year, SEEK has undertaken a detailed review of the business operations and strategy of Think. This review has indicated that its carrying value is higher than its fair value less costs to sell. The Think CGU is a reportable segment and is a group of CGUs. The fair value assessment was determined by applying valuation methodologies including discounted cash flow analysis and comparison with recent transactions in the industry (including the negotiations with a strategic investor for a potential minority shareholding as disclosed in note 31). The key assumptions within the discounted cash flow analysis include five years of forecast cash flows, 0% real growth beyond five years and a pre-tax discount rate of 15.6%. Accordingly, an impairment charge of $24,115,000 has been recorded in the Consolidated Income Statement. The charge has been allocated between brands and licences ($1,615,000) and goodwill ($22,500,000).

(iii) JobsDB

JobsDB is a leading provider of online employment websites and operates across seven countries throughout South East Asia. Each key region has been determined as a CGU. As discussed above in (a), for the purpose of impairment testing goodwill is tested across this group of CGUs.

The goodwill balance for JobsDB is a significant component of the Consolidated Balance Sheet and is attributable to JobDB’s strong position across key markets throughout South East Asia and the high growth potential in these emerging markets.

JobsDB was consolidated into the SEEK Group when control was gained on 5 May 2011. The carrying value of the JobsDB assets and liabilities has been determined based on a purchase price allocation exercise performed by an external consultant in the twelve months post acquisition (note 29(b)). The independent purchase price allocation exercise was performed based on best estimates of the JobsDB business’s five year cash flow forecasts and applicable discount rates.

At 30 June 2012, given the proximity between the acquisition date and completion of the purchase price allocation exercise, the recoverable amount of the asset is based on fair value less costs to sell. In the next financial year, recoverable amount will be assessed based on future cash flow forecasts derived from budgeted results and long-term profit forecasts for the business.

(iv) International business – Brasil Online and OCC (acquired during the year)

Brasil Online operates the two leading employment websites in Brazil: Catho Online and Manager Online and considers them as two CGUs. As discussed above in (a), for the purpose of impairment testing, goodwill is tested across this group of CGUs.

OCC is the leading employment website in Mexico, and has been determined as a CGU in its entirety.

Brasil Online and OCC were consolidated into the SEEK Group when control was gained on 31 May 2012 and 19 June 2012 respectively. At 30 June 2012 the recoverable amount of both entities’ assets is based on fair value less costs to sell determined with reference to the recent purchase price of the acquired interests. There are no indicators to suggest that the fair value of Brasil Online or OCC has significantly changed since acquisition.

15. Trade and other payables

	2012	2011
		Restated*
	$’000	$’000
Trade and other payables	53,839	40,427
GST payable	3,189	3,271
	57,028	43,698

• Refer to note 29(b) for details of restatement on the completion of acquisition accounting for JobsDB

90

Notes to the Financial Statements

16. Borrowings

(a) Current borrowings

Standby cash advance facility

On 1 June 2012, the Group entered into a new $20,000,000 standby cash advance facility with National Australia Bank in line with the Permitted Financial Indebtedness under the Syndicated Facility Agreement.

The facility has not been drawn down or utilised and is valid for a term of 3 months expiring on 30 August 2012. The facility can be used to cover short term financial requirements of the Group.

(b) Non-current borrowings

		2012	2011
		$’000	$’000
Bank borrowings	- principal	320,487	278,704
Less: transaction	costs capitalised	(2,054)	(3,423)
Total non-current	borrowings	318,433	275,281

Syndicated loan agreements (unsecured)

The Group’s current debt facility of $340,000,000 was entered into in December 2010 and is structured as a three-year revolving unsecured senior debt facility, which is fully underwritten by a syndicate comprising the National Australia Bank, Westpac Banking Corporation, ANZ, Commonwealth Bank and HSBC.

At 30 June 2012, $320,487,000 (30 June 2011: $278,704,000) principal had been drawn down against this facility. Transaction costs of $4,108,000 were incurred to establish the facility and have been capitalised on the Consolidated Balance Sheet of which $2,054,000 has not yet been amortised through the Consolidated Income Statement.

The interest rate on bank borrowings has varied during the year from 5.8% to 7.6%. Interest is calculated on the principal outstanding at each interest period. The interest period and interest rates are agreed at each interest period.

Under the syndicated debt facility certain entities within the Group are required to meet a number of covenants, all of which have been fully complied with during the year and as at the date of this report.

All Australian and New Zealand wholly-owned subsidiaries have entered into a deed of cross guarantee in respect of the facility.

At the date of this report the syndicated loan balance was $320,487,000.

The Group is in the process of re-financing the existing syndicated debt facility as discussed further in note 31.

(c) Risk exposure

Details of the Group exposure to risks arising from borrowings are set out in note 2.

91

Notes to the Financial Statements

17. Other financial liabilities

17. Other financial liabilities
	2012	2011
	$’000	$’000
Put option (i)	81,216	74,630
Payment due to vendor on acquisition (ii)	-	71,760
Deferred consideration (iii)	1,271	1,198
Foreign exchange contract-cash flow hedge	-	299
Total financial liabilities	82,487	147,887

JobsDB acquisition

During the financial year ended 30 June 2011, SEEK Asia acquired a controlling interest in JobsDB. Refer to note 29(b) for further details of this transaction and ownership interests. These financial liabilities relate to this transaction and are discussed below.

(i) Put option

In relation to the remaining ownership of JobsDB held by the vendor, between 23 June 2012 and 23 June 2014 the vendor has been granted the option to sell up to 20% of its remaining interest in JobsDB to SEEK Asia. The selling price is dependent on future earnings but capped at HK$640,000,000. At 30 June 2012 the SEEK Group has recognised a financial liability of $81,216,000 (2011: $74,630,000) which represents the net present value of the expected cash consideration to be paid to the vendor should the option be exercised at current exchange rates.

In accordance with accounting standards, SEEK has recognised an expense through ‘finance costs’ in the Consolidated Income Statement for the difference between the net present value of the option and the expected cash consideration. The charge for the current year is $2,030,000 (2011: $242,000).

In line with their relevant ownership interests, the co-investors have contractually agreed to fund their share should the put option be exercised, which based on the capped amount of HK$640,000,000 at current exchange rates would total approximately $25,000,000. In accordance with Australian accounting standards the Group has not recognised a financial asset for this contribution. The estimated net cash outflow if the option is exercised at the full capped amount at current exchange rates is approximately $56,000,000.

(ii) Payment due to vendor on acquisition

This relates to the consideration for the third stage of the investment in JobsDB of HK$600,000,000 (A$71,760,000 at 30 June 2011 exchange rates). This was settled during the year; refer to note 29(b) for further details.

(iii) Deferred consideration

This balance represents amounts which are required to be paid to the vendor of JobsDB at a future date to be agreed with the vendor and are translated at 30 June exchange rates.

92

Notes to the Financial Statements

18. Provisions

(a) Current provisions

(a) Current provisions
	2012	2011
	$’000	$’000
Employee benefits provision(1)	2,016	1,340
Lease incentives	833	583
	2,849	1,923

(1) Includes long service leave, all of which is expected to be used in the next 12 months.

Movement in lease incentives

The movement in lease incentives during the financial year is set out below:

	2012	2011
	$’000	$’000
Lease incentives
Carrying amount at start of year	583	351
Additional provision recognised in the year	429	382
Transferred from non-current provisions	447	89
Credited to the Consolidated Income Statement	(626)	(239)
Carrying amount at end of theyear	833	583

(b) Non-current provisions

		2012	2011
	Notes	$’000	$’000
Employee benefits provision(1)		1,748	1,793
Lease incentives		2,660	1,365
Make-good provisions		2,572	1,623
Other provisions	18(c)	24,332	-
		31,312	4,781

(1) Includes long service leave and cash long-term incentive.

93

Notes to the Financial Statements

18. Provisions continued

Movement in provisions

The movement in lease incentives, make-good provisions and other provisions during the financial year is set out below:

		2012	2011
	Notes	$’000	$’000
Lease incentives
Carrying amount at start of year		1,365	144
Additional provision recognised in the year		1,742	1,339
Transferred to current provisions		(447)	(89)
Credited to the Consolidated Income Statement		-	(29)
Carrying amount at end ofyear		2,660	1,365
Make-good provisions
Carrying amount at start of year		1,623	1,536
Additional provision recognised in the year		949	87
Carrying amount at end ofyear		2,572	1,623
Other provisions
Carrying amount at start of year		-	-
Assumed in a business combination	29(a)	26,197	-
Additional provision recognised in the year		86	-
Exchange differences		(1,951)	-
Carrying amount at end ofyear		24,332	-

(c) Other provisions

Other provisions relate to a number of outstanding legal, tax, labour and social security provisions in Brasil Online and its subsidiaries which were acquired on acquisition (refer to note 29(a)). All of these cases may take a number of years to come to conclusion and the difference between the settlement amounts and the amount provided for may be material.

	Other provisions
	$’000
Legal (i)	3,962
Tax (ii)	6,219
Other provision	2,825
Acquired contingent liabilities(iii)	11,326
Total	24,332

As noted above, there are a number of outstanding legal, tax and social security cases and details of the significant and material cases for which a provision has been made have been provided below. The remaining cases are considered to be immaterial individually and in aggregate.

(i) Legal case provision and contingencies

Two of Brasil Online’s competitors, Curriculum Technologia Ltda and Gelre Informatica S/C Ltda initiated lawsuits against Catho Online (a subsidiary of Brasil Online) in May 2002 and March 2003. In both cases, judgements were rendered by the same judge against Catho Online who was ordered to pay damages, interest and costs. Brasil Online has subsequently filed a motion to appeal the decision and request that the judge clarify the legal grounds for the calculation of the amount of the indemnification and classification of Catho Online’s conduct as unlawful. Advice from local external legal counsel is that there are valid grounds for appeal in relation to the calculation of the damages awarded against Catho Online and Catho Online has based its provision on the basis of the external legal advice.

(ii) Tax case provision and contingencies

Catho Online is also subject to a number of tax infraction notices from the tax authority in Brasil. These tax infractions are either open, subject to legal proceedings, or under appeal after legal proceedings. Based on advice from local legal counsel, Catho has estimated the most likely amounts payable including penalties and interest and have recognised this amount as a provision.

94

Notes to the Financial Statements

18. Provisions continued

(iii) Acquired contingent liabilities

As disclosed in note 29(a) and in accordance with the Group’s accounting policy as described in note 1(g), the Group have recognised the fair value of contingent liabilities acquired as part of the business combination. Contingent liabilities of $12,236,000 were recognised at acquisition date which at 30 June 2012 exchange rates were $11,326,000.

(iv) Unrecognised contingent liabilities

Unrecognised contingent liabilities represent the difference between the current value of any judgements or outstanding tax infraction notices or claims and the associated provisions. They represent the maximum potential outflow and do not reflect management’s estimate of the most likely amounts payable. There is $70,460,000 of unrecognised contingent liabilities at 30 June 2012 relating mainly to legal cases as well as a number of other tax, labour and social security cases.

In accordance with Australian Accounting Standards, unrecognised contingent liabilities have only been disclosed to the extent to which there is a possible outflow to settle the obligation.

19. Contributed equity

(a) Share capital

(a) Share capital
		Consolidated and	parent entity
	2012	2011	2012	2011
	Shares	Shares	$'000	$'000
Ordinary shares
Issued and fully paid	337,101,307	336,584,488	186,525	183,950

(b) Movements in ordinary share capital

(b) Movements in ordinary share capital
Date Details	Number Average of shares issue price $'000
1 July 2010 Balance 30 June 2011 Balance 5 July 2011 Exercise of Director Options 5 July 2011 Exercise of performance rights and options 18 August 2011 Exercise of Options 25 November 2011 Exercise of Options Movement 30 June 2012 Balance	336,584,488 183,950 336,584,488 183,950 471,011 5.29 2,491 10,208 - - 13,500 2.34 32 22,100 2.34 52 516,819 2,575 337,101,307 186,525

(c) Ordinary shares

Ordinary shares have no par value and entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

(d) Exercise of staff options

During the current year, 516,819 shares were issued to fulfil employee options exercised in the year (2011: nil). In addition 107,360 shares were acquired on market in relation to other exercised employee options.

95

Notes to the Financial Statements

20. Equity

(a) Reconciliation of movement in equity

Non- Contributed Retained controlling Total equity profits interests equity Hedging Hedging Share- Foreign reserve - reserve - based currency cash flow net Redemption payments translation hedge investment reserve Total reserve reserve reserve hedge Reserves 2012 Notes $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Reserves	Non- Contributed Retained controlling Total equity profits interests equity Hedging Hedging Share- Foreign reserve - reserve - based currency cash flow net Redemption payments translation hedge investment reserve Total reserve reserve reserve hedge Reserves 2012 Notes $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Reserves
Balance at 1 July 2011 Restated 183,950* Profit for the year - Exchange differences on translation of foreign controlled operations - Exchange differences on translation of foreign associates 11(c) - Gains/(losses) on hedge contracts of controlled entities - Gains on hedge contracts of associates (net of tax) 11(c) - Reserve balances recycled on step acquisition 29(a) - Reserve balances recycled on closure of foreign operation(1) - Income tax recognised in other comprehensive income 8(c) -	8,594 (33,513) 5,994 - (52,283) (71,208) 198,474 123,543 434,759 - - - - - - 131,680 5,778 137,458 - (7,696) - - - (7,696) - (6,538) (14,234) - (15,214) - - - (15,214) - - (15,214) - - (136) 672 - 536 - - 536 - - 223 - - 223 - - 223 - 33,137 (10,561) - - 22,576 - - 22,576 - 165 - - - 165 - - 165 (165) - 3,166 - - 3,001 - - 3,001
Total comprehensive income for theyear -	(165) 10,392 (7,308) 672 - 3,591 131,680 (760) 134,511
Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs and tax 19 2,575 Dividends and distributions provided for or paid 21 - Employee share options schemes - Purchase of shares-on-market for employee share option scheme - Tax associated with employee share schemes 8(c) - Non-controlling interests at fair value arising on acquisition 29(a) -	- - - - - - - - 2,575 - - - - - - (53,257) (4,628) (57,885) 4,263 - - - - 4,263 - - 4,263 (197) - - - - (197) (363) - (560) (333) - - - - (333) 333 - - - - - - - - - 253,470 253,470
Balance at 30 June 2012 186,525	12,162 (23,121) (1,314) 672 (52,283) (63,884) 276,867 371,625 771,133

• Refer to note 29(b) for details of restatement on the completion of acquisition accounting for JobsDB

(1) During the year the SEEK Learning business in the UK was closed

96

Notes to the Financial Statements

20. Equity continued

Non- Contributed Retained controlling Total equity profits interests equity Share- Foreign Hedging based currency reserve - Redemption payments translation cash flow reserve Total reserve reserve hedge Reserves 2011 Restated Notes $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Reserves*	Non- Contributed Retained controlling Total equity profits interests equity Share- Foreign Hedging based currency reserve - Redemption payments translation cash flow reserve Total reserve reserve hedge Reserves 2011 Restated Notes $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Reserves*
Balance at 1 July 2010 183,950 Profit for the year - Exchange differences on translation of foreign controlled operations - Exchange differences on translation of foreign associates 11 (c) - (Losses) on hedge contracts of controlled entities - (Losses) on hedge contracts of associates (net of tax) 11 (c) - Income tax recognised in other comprehensive income 8(c) -	7,493 7,020 8,155 - 22,668 146,339 - 352,957 - - - - - 97,688 (974) 96,714 - (4,732) - - (4,732) - (2,144) (6,876) - (35,801) - - (35,801) - (3,078) (38,879) - - (2,705) - (2,705) - - (2,705) - - (262) - (262) - - (262) (316) - 806 - 490 - - 490
Total comprehensive income for theyear -	(316) (40,533) (2,161) - (43,010) 97,688 (6,196) 48,482
Transactions with owners in their capacity as owners: Dividends and distributions provided for or paid 21 - Employee share options schemes - Purchase of shares-on-market for employee share option scheme - Tax associated with employee share schemes 8(c) - JobsDB related items Restated*: 29(b) Non-controlling interest at fair value arising on acquisition - Non-controlling interest acquired on acquisition - Put option provided to vendor of JobsDB - Non-controlling interest on initial investment by co- investors in SEEK Asia - Acquisition of non-controllinginterest in CJOL 20(c) -	- - - - - (45,439) - (45,439) 1,504 - - - 1,504 - - 1,504 (38) - - - (38) (163) - (201) (49) - - - (49) 49 - - - - - - - - - 64,624 64,624 - - - - - - 1,279 1,279 - - - (50,629) (50,629) - (22,788) (73,417) - - - - - - 87,969 87,969 - - - (1,654) (1,654) - (1,345) (2,999)
Balance at 30 June 2011 Restated 183,950*	8,594 (33,513) 5,994 (52,283) (71,208) 198,474 123,543 434,759

• Refer to note 29(b) for details of restatement on the completion of acquisition accounting for JobsDB

97

Notes to the Financial Statements

20. Equity continued

(b) Nature and purpose of reserves

Share-based payments reserve

The reserve is comprised of two components:

• Unexercised: is used to recognise the fair value of options and deferred shares issued but not exercised.

• Exercised: is used to hold the fair value of options that have been exercised and options that have lapsed but are not required to be adjusted through the Consolidated Income Statement.

Foreign currency translation reserve

Exchange differences arising on the translation of foreign controlled entities and associates are recognised in the foreign currency translation reserve, as described in note 1(d).

Hedging reserve – cash flow hedges

The hedging reserve – cash flow hedges is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised directly in equity, as described in note 1(l). Amounts are recognised in the Consolidated Income Statement when the associated hedged transaction affects the profit or loss or when it is impaired or sold or if the forecast transaction is no longer expected to take place.

Hedging reserve – net investment hedge

The hedging reserve – net investment hedge is used to record gains or losses on a hedging instrument in a net investment hedge that are recognised directly in equity, as described in note 1(l). Amounts are recognised in the Consolidated Income Statement when the associated hedged transaction affects the profit or loss or when it is impaired or sold. Gains and losses accumulated in equity are reclassified to profit or loss when the foreign operation is partially disposed of or sold.

Redemption reserve

The redemption reserve is used to record the excess of the purchase price of non-controlling interests above the amount carried in the accounts and the reserve for future contractual purchases of non-controlling interests where the risks and rewards of ownership have not yet passed to the Group.

(c) JobsDB acquisition of non-controlling interest in CJOL

During the prior year JobsDB purchased an additional 23.7% interest in CJOL from SEEK’s associate Zhaopin (note 11), taking their total interest to 75.58%. The carrying amount of the non-controlling interest acquired was $224,000 and the consideration paid to the non-controlling interest was $3,857,000. The excess of the consideration paid was $3,633,000 and of this $634,000 was eliminated on consolidation in relation to SEEK’s share of Zhaopin’s profit on sale (refer to note 27(b)(i)). The net amount of $2,999,000 was recognised in the redemption reserve and non-controlling interests within equity.

98

Notes to the Financial Statements

21. Dividends

21. Dividends
		Franked	Total
	Payment	Amount amount	dividend
Dividend	date	per share per share	$'000
Year 2011
2010 final dividend	15 October 2010	6.7 cents 6.7 cents	$22,550
2011 interim dividend	19 April 2011	6.8 cents 6.8 cents	$22,889
			$45,439
Year 2012
2011 final dividend	12 October 2011	7.5 cents 7.5 cents	$25,277
2012 interim dividend	18 April 2012	8.3 cents 8.3 cents	$27,980
			$53,257
Dividends paid or declared by the company after year end (to be paid		out of retained profits at 30 June 2012):
2012 final dividend	16 October 2012	9.0 cents 9.0 cents	$30,339

The franked portion of final dividends for the financial year paid after 30 June 2012 will be franked out of franking credits arising from the balance of the franking account as at the year end and the payment of income tax subsequent to the year ending 30 June 2012. The dividend payment on 16 October 2012 will reduce the franking credits available by $13,002,000 for the consolidated Group. At 30 June 2012 all Australian controlled entities are included in the consolidated income tax group and therefore their franking credits are fully available for distribution to shareholders of the Group.

		2012	2011
		$’000	$’000
Franking credits available for subsequent financialyears based on a tax rate of	30%	97,735	72,158

The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for franking credits that will arise from the payment of the current tax liability.

22. Key management personnel disclosures

(a) Directors

The following persons were directors of SEEK Limited during the financial year:

R C G Watson Chairman, non-executive director A R Bassat Managing Director and Chief Executive Officer C B Carter Non-executive director N G Chatfield Non-executive director D I Bradley Non-executive director

99

Notes to the Financial Statements

22. Key management personnel disclosures continued

(b) Other key management personnel

The following persons also had authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, during the financial year:

Name	Position	Employer
J A Armstrong	Chief Financial Officer	SEEK Limited
J S Powell	Managing Director (SEEK Employment (Australia and NZ))	SEEK Limited
J S Lenga	Managing Director (SEEK International)	SEEK Limited
P D Everingham	Managing Director (SEEK Education)	SEEK Learning Pty Ltd
M F Callaghan	Group Human Resources Director	SEEK Limited
H J Souness	Marketing Director	SEEK Limited
M J Ilczynski	Group Strategy Director	SEEK Limited
D Gibbons	Chief Information Officer(appointed 1 October 2011)	SEEK Limited

(c) Key management personnel compensation

	2012	2011
	$	$
Short-term employee benefits	6,482,366	5,832,451
Post-employment benefits	273,955	296,669
Share-based employee benefits	2,387,543	520,974
Fixed remuneration options(1)	(41,329)	725,144
Other long-term benefits	188,320	223,178
Cash LTI	-	(674,426)
	9,290,855	6,923,990

(1) Andrew Bassat has a fixed remuneration arrangement whereby he was issued 1,156,069 options over two years. The fair value expense has been disclosed separately in the table above and for 2011 has been re-allocated from share-based employee benefits for comparative purposes. The credit in the current year is due to the revaluation of the options after approval at the AGM in November 2011.

Detailed remuneration disclosures are provided in pages 17 to 31 of the Remuneration Report.

(d) Equity instrument disclosures relating to key management personnel

(i) Options provided as remuneration and shares issued on exercise of such options

Details of options provided as remuneration and shares issued on the exercise of such options, together with terms and conditions of the options can be found in the Remuneration Report.

100

Notes to the Financial Statements

22. Key management personnel disclosures continued

(ii) Option holdings and Performance Rights

The numbers of options over ordinary shares in the Company held during the financial year by each director of SEEK Limited and other key management personnel of the Group and the company, including their personally related parties, are set out below:

below:
		Granted			Other		Vested and	Unvested
	Balance at	during	Exercised	Forfeited	changes	**Balance at **	exercisable	options at
	the start of	the year as	during	during	during	the end of	at the end	the end of
2012	theyear	compensation	theyear	theyear	theyear	theyear	of theyear	theyear
Executive directors
A R Bassat	2,688,292	964,065	-	-	-	3,652,357	1,608,258	2,044,099
Other key management personnel								-
J A Armstrong	174,259	176,000	(11,583)	(11,583)	-	327,093	77,563	249,530
J S Powell	323,610	269,970	(21,928)	(21,928)	-	549,724	150,316	399,408
J S Lenga	237,042	654,878	(14,178)	(14,177)	-	863,565	94,937	768,628
P D Everingham	24,386	232,520	(12,193)	(12,193)	-	232,520	-	232,520
M F Callaghan	142,392	143,411	(8,422)	(10,527)	-	266,854	63,443	203,411
H J Souness	131,463	94,797	(9,023)	(9,022)	-	208,215	60,418	147,797
M J Ilczynski	-	212,375	-	-	-	212,375	-	212,375
D Gibbons	-	113,821	-	-	-	113,821	-	113,821

		Granted			Other		Vested and	Unvested
	Balance at	during	Exercised	Forfeited	changes	**Balance at **	exercisable	options at
	the start of	the year as	during	during	during	the end of	at the end	the end of
2011	theyear	compensation	theyear	theyear	theyear	theyear	of theyear	theyear
Executive directors
P M Bassat(2)	1,291,606	502,000	-	(1,322,595)	-	471,011	471,011	-
A R Bassat	1,291,606	1,658,069	-	(261,383)	-	2,688,292	471,011	2,217,281
Other key management personnel								-
J A Armstrong	100,729	73,530	-	-	-	174,259	-	174,259
C M T Eaton (3)	85,424	63,180	-	-	3,346	151,950	-	151,950
J S Powell	194,172	129,438	-	-	-	323,610	-	323,610
J S Lenga	123,292	113,750	-	-	-	237,042	-	237,042
P D Everingham	34,386	-	(10,000)	-	-	24,386	-	24,386
M F Callaghan(1)	-	60,000	(7,083)	-	89,475	142,392	-	142,392
H J Souness (1)	-	53,000	-	-	78,463	131,463	-	131,463
M J Ilczynski (1)	-	-	-	-	-	-	-	-

(1) Granted and exercised options and Performance Rights are included from 22 July 2010. The balance of options and Performance Rights is included within 'other changes during the year'.

(2) Paul Bassat resigned from SEEK effective 1 July 2011 and exercised his remaining 471,011 of options on that date.

(3) Carey Eaton resigned from SEEK effective 1 July 2011 and exercised 10,208 options on that date. His remaining options of 141,742 lapsed on his resignation.

101

Notes to the Financial Statements

22. Key management personnel disclosures continued

(iii) Share holdings

The numbers of ordinary shares in the company held during the financial year by each director of SEEK Limited and other key management personnel of the Group, including their personally related parties, are set out below. There were no shares granted during the reporting period as compensation.

		Received
		during the			Other
	Balance at	year on			changes	Balance at
	the start of	exercise	Purchase	Sales of	during	the end of
2012	theyear	of options	of shares	shares	theyear	theyear
Non-executive directors
R C G Watson	4,238,648	-	-	-	-	4,238,648
C B Carter	94,458	-	-	-	-	94,458
N G Chatfield	32,656	-	401	-	-	33,057
D I Bradley	1,000	-	3,000	-	-	4,000
Executive directors
A R Bassat	13,500,113	-	-	-	-	13,500,113
Other key management personnel
J A Armstrong	92,276	11,583	-	(49,484)		54,375
J S Powell	6,336	21,928	-	(6,336)	-	21,928
J S Lenga	249,926	14,178	-	(49,997)		214,107
P D Everingham	147,448	12,193	-	(60,000)	-	99,641
M F Callaghan	33,494	8,422	11,675	-		53,591
H J Souness	11,233	9,023	-	(5,500)	-	14,756
M J Ilczynski	14,777	-	-	-	-	14,777
D Gibbons	-	-	-	-	-	-

D Gibbons	-	-	-	-	-	-
		Received
		during the			Other
	Balance at	year on			changes	Balance at
	the start of	exercise	Purchase	Sales of	during	the end of
2011	theyear	of options	of shares	shares	the year (1)	theyear
Non-executive directors
R C G Watson	4,238,648	-	-	-	-	4,238,648
C B Carter	94,458	-	-	-	-	94,458
N G Chatfield	32,656	-	-	-	-	32,656
D I Bradley	-	-	1,000	-	-	1,000
Executive directors
P M Bassat(2)	12,712,613	-	-	-	-	12,712,613
A R Bassat	13,500,113	-	-	-	-	13,500,113
Other key management personnel
J A Armstrong	92,276	-	-	-	-	92,276
C M T Eaton(3)	20,347	-	-	-	-	20,347
J S Powell	17,383	-	-	(13,000)	1,953	6,336
J S Lenga	299,926	-	-	(50,000)	-	249,926
P D Everingham	137,448	10,000	-	-	-	147,448
M F Callaghan(1)	-	7,083	-	-	26,411	33,494
H J Souness (1)	-	-	-	(11,000)	22,233	11,233
M J Ilczynski (1)	-	-	2,000	-	12,777	14,777

(1) Granted and exercised Options and Performance Rights are included from 22 July 2010. The balance of shares is included within 'other changes during the year'.

(2) Paul Bassat resigned effective 1 July 2011.

(3) Carey Eaton resigned on 1 July 2011.

102

Notes to the Financial Statements

22. Key management personnel disclosures continued

(e) Loans to key management personnel

There have been no loans to directors or executives during the financial year (2011: nil).

(f) Other transactions with key management personnel

During the year there were no other transactions with key management personnel, apart from related party transactions disclosed in note 27(d).

103

Notes to the Financial Statements

23. Remuneration of auditors

During the year the following fees were paid for services provided by the auditor of the parent entity, its related practices and non-related audit firms:

non-related audit firms:
	Consolidated
	2012	2011
	$	$
(a) PricewaterhouseCoopers Australia
Audit and other assurance services
Audit and review of financial reports	1,003,000	861,671
Other assurance services:
Due diligence services	674,404	1,345,462
Total remuneration for audit and other assurance services	1,677,404	2,207,133
Taxation services
Tax consulting - international	53,900	553,676
Tax consulting - domestic	586,962	55,195
Tax compliance	43,138	71,935
Total remuneration for taxation services	683,999	680,806
Other services
Education awards project	-	30,132
Executive team benchmarking	-	49,900
Other services	-	16,058
Total remuneration for other services	-	96,090
Total remuneration of PricewaterhouseCoopers Australia	2,361,403	2,984,029
(b) Network firms of PwC Australia
Audit and other assurance services
Audit and review of financial reports	291,362	10,342
Total remuneration for audit and other assurance services	291,362	10,342
Taxation services
Tax compliance services, including review of company income tax returns	20,106	8,981
Total remuneration for taxation services	20,106	8,981
Total remuneration of Related Practices of PricewaterhouseCoopers Australia	311,468	19,323
(c) Non- PricewaterhouseCoopers Australia
Audit and other assurance services
Audit and review of financial reports	110,059	-
Other assurance services:
Other	146,131	-
Total remuneration for audit and other assurance services	256,190	-
Taxation services
Tax compliance services, including review of company income tax returns	175,126	-
Total remuneration for taxation services	175,126	-
Other services
Executive share options valuation	54,075	-
Total remuneration for other services	54,075	-
Total remuneration of Non - PricewaterhouseCoopers Australia	485,391	-

It is the Group’s policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit duties where PricewaterhouseCoopers’ expertise and experience with the Group are important. These assignments are principally tax advice and due diligence reporting on acquisitions, or where PricewaterhouseCoopers is awarded assignments on a competitive basis. It is the Group’s policy to seek competitive tenders for all major consulting projects.

104

Notes to the Financial Statements

24. Contingent liabilities

At 30 June 2012, the Group has unrecognised contingent liabilities relating to Brasil Online of $70,460,000 (2011: nil). Refer to Note 18: Provisions for further details. There are no other contingent liabilities.

25. Commitments for expenditure

Capital commitments

At 30 June 2012, the Group had no capital commitments (2011:nil).

Other commitments

Commitments for the payment of IT services, advertising and promotions under long-term contracts in existence at the reporting date but not recognised as liabilities payable are as follows:

reporting date but not recognised as liabilities payable are as follows:
	2012	2011
	$’000	$’000
Within one year	8,255	6,548
Later than one year but not later than five years	3,795	268
More than five years	-	-
Total	12,050	6,816

Lease commitments

Operating leases

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

	2012	2011
	$’000	$’000
Within one year	13,865	12,295
Later than one year but not later than five years	32,765	25,328
More than five years	6,254	2,772
Total	52,884	40,395

The Group leases various offices under non-cancellable operating leases expiring within one to six years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the lease are negotiated.

105

Notes to the Financial Statements

26. Share-based payments

Expenses arising from share-based payments transactions

Total expenses arising from share-based payments transactions (excluding Education LTI) recognised during the period as part of employee benefits expense were $4,430,000 (2011: $1,504,000) relating to:

• Deferred Share Plan $742,000

• Performance Rights and Options Plans $3,688,000

Deferred Share Plan

The Deferred Share Plan is a new scheme in the year. Plan participants are eligible to receive shares up to the value of 20% of base salary each year depending on their individual performance. The shares are granted at the end of the performance year with the number granted based on a five day volume weighted average price (VWAP) prior to grant. Vesting of the shares is deferred for a further year and is dependent on the plan participant being a SEEK employee at the end of this two year period.

Performance Rights and Options Plans

For details of Performance Rights and Options Plans refer to the Remuneration report contained in the Directors’ Report.

The table below summarises the movement in the number of options in these plans during the year.

					Number of options	Number of options
									Options
									vested and
	Expiry			Granted	Exercised	Forfeited			exercisable
2012	date	Exercise	Opening	during	during	during	Other	Closing	at the end
Grant date	(years)	price	balance	theyear	theyear	theyear	changes	balance	of theyear
Senior Executive Option Plan
11 November 2005	6	$2.34	35,600	-	(35,600)	-	-	-	-
Total			35,600	-	(35,600)	-	-	-	-
Executive Director Options
1 July 2008	5	$5.29	942,022	-	(471,011)	-	-	471,011	471,011
30 November 2009	5	$4.10	559,212	-	-	-	-	559,212	559,212
21 November 2011(1)	4	$6.80	1,156,069	-	-	-	-	1,156,069	578,035
21 November 2011(1)	5	$5.36	-	964,065	-	-	-	964,065	-
Total			2,657,303	964,065	(471,011)	-	-	3,150,357	1,608,258
Performance Rights and Options	Plan
1 July 2008	4	-	239,099	-	(117,568)	(121,531)	-	-	-
30 June 2009	5	$4.10	781,040	-	-	(78,655)	-	702,385	702,385
1 July 2010	5	$7.39	1,442,029	-	-	(120,274)	-	1,321,755	-
1 September 2011	5	$5.36	-	1,998,178	-	-	-	1,998,178	-
Total			2,462,168	1,998,178	(117,568)	(320,460)	-	4,022,318	702,385
Total Plans			5,155,071	2,962,243	(624,179)	(320,460)	-	7,172,675	2,310,643
Weighted average exerciseprice			$5.64	$5.36	$4.13	$3.78	$0.00	$5.74

(1) Approved and granted at AGM on 21 November 2011

106

Notes to the Financial Statements

26. Share-based payments continued

					Number of options	Number of options
									Options
									vested and
	Expiry			Granted	Exercised	Forfeited			exercisable
2011	date	Exercise	Opening	during	during	during	Other	Closing	at the end
Grant date	(years)	price	balance	theyear	theyear	theyear	changes	balance	of theyear
Senior Executive Option Plan
15 August 2005	6	$2.48	10,000	-	(10,000)	-	-	-	-
2 November 2005	6	$2.78	7,083	-	(7,083)	-	-	-	-
11 November 2005	6	$2.78	18,000	-	(18,000)	-	-	-	-
11 November 2005	6	$2.34	45,600	-	(10,000)	-	-	35,600	35,600
Total			80,683	-	(45,083)	-	-	35,600	35,600
Executive Director Options
1 July 2008	5	$5.29	1,464,788	-	-	(522,766)	-	942,022	942,022
30 November 2009	5	$4.10	1,118,424	-	-	(559,212)	-	559,212	-
21 November 2011	4	$6.80	-	1,156,069	-	-	-	1,156,069	-
Total			2,583,212	1,156,069	-	(1,081,978)	-	2,657,303	942,022
Performance Rights and Options	Plan
1 July 2008	4	-	248,902	-	-	(13,149)	3,346	239,099	-
30 June 2009	5	$4.10	847,350	-	-	(66,310)	-	781,040	-
1 July2010	5	$7.39	-	2,053,751	-	(611,722)	-	1,442,029	-
Total			1,096,252	2,053,751	-	(691,181)	3,346	2,462,168	-
Total Plans			3,760,147	3,209,820	(45,083)	(1,773,159)	3,346	5,155,071	977,622
Weighted average exerciseprice			$4.26	$7.18	$2.62	$5.56	$0.00	$5.64

The weighted average share price at the date of exercise of options exercised during the year ended 30 June 2012 was $6.19 (2011: $7.08).

The weighted average remaining contractual life of share options outstanding at the end of the year was 1.50 years (2011: 2.72 years).

Fair value of Options and Performance Rights

The fair value of Options and Performance Rights at grant date is independently determined in accordance with AASB2: Share-based payments , using a Black-Scholes or similar option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information.

Refer to page 23 and 24 of the Remuneration Report contained within the Directors’ Report, for details on the fair value of options and Performance Rights issued during the financial year.

107

Notes to the Financial Statements

27. Related party transactions

(a) Interests in controlled entities

Interests in controlled entities are set out in note 30.

(b) Transactions with associates

The following transactions occurred with associates:

	Consolidated	Consolidated
	2012	2011
	$	$
Sale and purchase of investment (i)	-	633,750
Dividends and distributions received from associates	12,855,134	10,060,342
Directors' fees and otherpersonnel costs charged to associates	195,000	195,000

(i) Sale and purchase of investment

As discussed in note 20(c), in the prior financial year the Group’s associate, Zhaopin, completed the disposal of its investment in CJOL to JobsDB, who is the majority shareholder of CJOL. Zhaopin recognised a gain on sale of RMB7,845,000 ($1,129,680) through profit and loss. The terms of this transaction were agreed on an arm’s-length basis. SEEK’s share of the profit recognised on the sale of CJOL of $633,750 was eliminated in the Consolidated Income Statement through ‘share of net profits of associates and jointly controlled entities’ and also from the redemption reserve.

(c) Transactions with key management personnel

Disclosures relating to key management personnel are set out in note 22.

(d) Transactions with other related parties

Other related parties comprise transactions with entities associated with key management personnel. The nature of the relationship with related parties includes the supply of advertising services and use of facilities between the related parties.

Aggregate amounts that resulted from transactions with other related parties:

	Consolidated	Consolidated
	2012	2011
	$	$
Purchases from other relatedparties	208,000	201,000

At 30 June 2012 A R Bassat individually holds an investment in CareerFAQ with a value of $349,558.

During the year, SEEK Learning paid an amount of $208,000 to Career FAQ in a lead generation deal on an arm’s length basis. A balance of $20,000 has been accrued and is outstanding at 30 June 2012.

Some of the Group’s independent non-executive directors are also non-executive directors for other companies. SEEK Limited, from time to time, may provide or receive services from these companies on an arms-length basis.

108

Notes to the Financial Statements

28. Deed of cross guarantee

The following controlled entities have entered into a deed of cross guarantee:

Company	Financialyear entered into agreement
SEEK Limited	30 June 2006
SEEK Learning Pty Ltd	30 June 2006
Dynamic Web Training Pty Ltd	30 June 2006
SEEK Campus Pty Ltd	30 June 2006
SEEK Commercial Pty Ltd	30 June 2007
SEEK Investments Pty Ltd	30 June 2007
SEEK International Investments Pty Ltd	30 June 2007
Think: Education Group Pty Limited	30 June 2010
Think: Colleges Pty Limited	30 June 2010
Think: Education Services Pty Limited	30 June 2010
APM Training Institute Pty Limited	30 June 2010
Australasian College of Natural therapies (Holdings) Pty Limited	30 June 2010
Jansen Newman Institute Pty Limited	30 June 2010
Graduate Institute of Management and Technology Pty Limited	30 June 2010
Billy Blue English School Pty Limited	30 June 2010
Billy Blue Catering Pty Limited	30 June 2010
Commercial Arts Training College Pty Limited	30 June 2010
GMM Projects PtyLimited	30 June 2010

The companies that are party to this deed guarantee the debts of the others and represent the ‘Closed Group’ from the date of entering into the agreement.

These wholly-owned entities have been relieved from the requirement to prepare a financial report and directors’ report under Class Order 98/1418 (as amended) issued by the Australian Securities and Investments Commission.

109

Notes to the Financial Statements

28. Deed of cross guarantee continued

(a) Income Statement, Other Comprehensive Income and a summary of movements in consolidated retained profits

Since there are no other parties to the Deed of Cross Guarantee that are controlled by SEEK Limited the companies detailed on page 109 also represent the ‘Extended Closed Group’.

on page 109 also represent the ‘Extended Closed Group’.
	2012	2011
	$’000	$’000
Income Statement
Revenue from continuing operations	372,944	320,878
Other income	9,256	-
Operating expenses
Direct cost of services	(34,075)	(29,981)
Sales and marketing	(96,408)	(90,562)
Business development	(22,156)	(20,379)
Operations and administration	(89,782)	(55,665)
Finance costs	(22,844)	(16,105)
Total operating expenses	(265,265)	(212,692)
Share of profits of associates and jointly controlled entities accounted for using	25,409	23,967
the equity method
Profit before income tax expense	142,344	132,153
Income tax expense	(39,426)	(35,428)
Profit for theyear	102,918	96,725
Other comprehensive income
Exchange differences on translation of foreign associates	4,030	(19,936)
Gains/(losses) on hedge contracts of controlled entities	537	(2,705)
Gains/(losses) on hedge contracts of associates (net of tax)	223	(262)
Income tax relating to other comprehensive income	3,001	490
Other comprehensive income for the year	7,791	(22,413)
Total comprehensive income for theyear	110,709	74,312
Summary of movements in consolidated retained profits
Balance 1 July	193,016	141,844
Profit for the year	102,918	96,725
Tax credited directly to retained profits - share-based payments	333	49
Purchase of shares on-market on exercise of employee share options	(363)	(163)
Dividends paid	(53,257)	(45,439)
Balance 30 June	242,647	193,016

110

Notes to the Financial Statements

28. Deed of cross guarantee continued

(b) Consolidated balance sheet

Set out below is a consolidated balance sheet as at 30 June 2012 of the Closed Group.

	2012	2011
Consolidated balance sheet	$’000	$’000
Current assets
Cash and cash equivalents	30,427	60,463
Trade and other receivables	47,463	36,094
Financial assets	630	31
Total current assets	78,520	96,588
Non-current assets
Investments in controlled entities	436,431	297,132
Investments accounted for using the equity method	196,063	214,268
Plant and equipment	17,979	18,048
Intangible assets	101,951	124,077
Deferred tax assets	14,080	11,102
Loans with controlled entities	523	-
Total non-current assets	767,027	664,627
Total assets	845,547	761,215
Current liabilities
Trade and other payables	30,450	31,808
Unearned income	29,584	25,579
Financial liabilities	-	299
Current tax liabilities	14,721	2,827
Provisions	2,486	1,923
Loans with controlled entities	-	41,160
Total current liabilities	77,241	103,596
Non-current liabilities
Borrowings	318,433	275,281
Deferred tax liabilities	5,471	7,324
Provisions	6,979	4,781
Total non-current liabilities	330,883	287,386
Total liabilities	408,124	390,982
Net assets	437,423	370,233
Equity
Contributed equity	186,525	183,950
Reserves	8,251	(6,733)
Retained profits	242,647	193,016
Total equity	437,423	370,233

111

Notes to the Financial Statements

29. Business combinations

(a) Brasil Online and OCC Step acquisitions

During the year, SEEK continued the focus on international expansion and through its wholly owned subsidiary Seek International Investments II Coöperatie U.A., acquired controlling interests in the following entities:

• On 31 May 2012, SEEK acquired an additional 21.0% interest in Brasil Online Holdings Coöperatief U.A. (“Brasil Online”) for $80,563,000 (US$78,750,000) bringing its ownership to 51.0%;

• On 19 June 2012, SEEK acquired an additional 15.6% interest in Online Career Center Mexico S.A. De C.V. (“OCC”) for $22,250,000 (US$22,500,000) bringing its ownership to 56.7%.

Brasil Online operates two leading employment websites (including the market leader Catho Online) in Brazil and OCC is the leading employment website in Mexico. These acquisitions significantly enhance SEEK’s exposure to the two largest economies in the highly attractive Latin American online employment sector.

SEEK has a majority of voting rights and positions on the Board of Directors in both businesses and will play an active role in driving the strategic and growth agenda.

From the date of step acquisition, the Group has accounted for Brasil Online and OCC as controlled entities and recognised the relevant non-controlling interest in the Group financial statements. Prior to this, the Group accounted for its interests in both Brasil Online and OCC as associates under the equity accounting method (refer to note 11).

Purchase consideration

The cash consideration and total purchase consideration are detailed in the table below and discussed further in the following paragraphs.

			AUD
		Brasil Online	OCC	Total
	Notes	$’000	$’000	$’000
Purchase consideration – cash outflow		80,563	22,250	102,813
Fair value of pre-existing interest		115,090	58,602	173,692
Purchase consideration prior to non-controlling interest		195,653	80,852	276,505
Non-controlling interests at fair value arising on acquisition	20(a)	187,980	65,490	253,470
Totalpurchase consideration		383,633	146,342	529,975

Details of net assets and liabilities acquired

The preliminary fair value of the assets and liabilities arising from the acquisition are as follows:

		Preliminary	fair value (AUD)
		Brasil Online	OCC	Total
	Notes	$’000	$’000	$’000
Cash and cash equivalents		18,293	8,175	26,468
Trade and other receivables		16,666	1,293	17,959
Plant and equipment	13	4,036	1,717	5,753
Intangible assets
Brands and licences	14	70,901	18,363	89,264
Customer relationships	14	1,763	8,100	9,863
Computer software and website development	14	2,980	89	3,069
Deferred tax assets	8(d)	8,739	1,921	10,660
Trade and other payables		(9,861)	(1,114)	(10,975)
Unearned income		(12,822)	(5,508)	(18,330)
Current tax liabilities		(1,883)	(552)	(2,435)
Non current provisions	18	(26,197)	-	(26,197)
Deferred tax liabilities	8(e)	(25,401)	(7,437)	(32,838)
Net identifiable assets		47,214	25,047	72,261
Add goodwill acquired	14	336,419	121,295	457,714
		383,633	146,342	529,975

112

Notes to the Financial Statements

29. Business combinations continued

The goodwill is attributable to Brasil Online and OCC’s strong positions in their respective markets and the high growth potential of those markets. Goodwill is not expected to be deductible for tax purposes.

Initial Accounting

Given that the acquisition occurred close to year end, both the net asset value and allocation of the purchase price to acquired assets are still preliminary. In particular, the contingent liabilities and fair values assigned to intangible assets are still being assessed and may be subject to change. The acquisition accounting will be finalised within 12 months of the acquisition date.

Acquired receivables

Brasil Online: The fair value of trade and other receivables is $16,666,000 and includes trade receivables with a fair value of $13,623,000. The gross contractual amount of trade receivables due is $14,016,000, of which $366,000 is expected to be uncollectible.

OCC: The fair value of trade and other receivables is $1,293,000 and includes trade receivables with a fair value of $995,000. The gross contractual amount of trade receivables due is $1,048,000 of which $53,000 is expected to be uncollectible

Acquired contingent liabilities

Within non-current provisions acquired of $26,197,000, as required by AASB3: Business Combinations , the Group has recognised an amount of $12,236,000 being the fair value of acquired contingent liabilities. Refer to Note 18(c) for further details.

Business combinations acquired in stages

In accordance with the accounting policy set out in Note 1(g) for a business combination achieved in stages the Group has remeasured its previously held equity interests in Brasil Online and OCC at their acquisition-date fair value immediately prior to the business combinations. The Group has also recycled amounts held in reserves in relation to these associates including foreign currency translation losses and cash flow hedge gains and losses. The resulting net gain before tax of $28,224,000 (after tax $25,055,000) has been recognised in ’Other income’ in the Consolidated Income Statement (refer to note 6).

		Gain on	step-acquisition	(AUD)
		Brasil Online	OCC	Total
	Notes	$’000	$’000	$’000
Fair value of pre-existing interest		115,090	58,602	173,692
Less: carrying value of Brasil Online as an associate	11 (c)	(86,617)	(36,275)	(122,892)
Less: foreign currency translation reserve loss recycled	20 (a)	(25,887)	(7,250)	(33,137)
Add/(less): cash flow hedge reservegain(before tax)recycled	20(a)	12,876	(2,315)	10,561
Fair value gains on step-acquisitions (before tax)	6	15,462	12,762	28,224
Less/(add): tax on reserve balances recycled	8(c)	(3,863)	694	(3,169)
Fair valuegains on step-acquisitions(after tax)		11,599	13,456	25,055

Non-controlling interests

In accordance with the accounting policy set out in Note 1(g), the group elected to recognise the non-controlling interests in Brasil Online and OCC at fair value rather than at the proportionate share of the net identifiable assets. The fair value of the non-controlling interest in Brasil Online and OCC has been determined with reference to the purchase price of the acquired interest, as this represented a transaction between a willing buyer and two independent willing sellers.

The current ownership structures of Brasil Online and OCC are as follows:

	Ownership	in
Investor	Brasil Online	OCC
SEEK Limited	51.0%	56.7%
Non-controlling interests
Tiger Global	49.0%	34.7%
OCC management	-	8.6%
Total non-controlling interests	49.0%	43.3%

113

Notes to the Financial Statements

29. Business combinations continued

Revenue and profit contribution

Brasil Online contributed revenues of $8,818,000 and net profit of $1,906,000 before non-controlling interests for the SEEK Group for the period from 31 May 2012 to 30 June 2012. If the acquisition occurred on 1 July 2011, the contribution to consolidated revenue and consolidated profit before non-controlling interests for the SEEK Group for the current year would have been $108,921,000 and $21,457,000 respectively, offset by a reduction in the share of net profit from associates of $4,654,000.

OCC contributed revenues of $355,000 and net profit of $35,000 before non-controlling interests for the SEEK Group for the period from 19 June 2012 to 30 June 2012. If the acquisition occurred on 1 July 2011, the contribution to consolidated revenue and consolidated profit before non-controlling interests for the SEEK Group for the current year would have been $14,757,000 and $1,704,000 respectively, offset by a reduction in the share of net profit from associates of $821,000.

These amounts have been calculated using the Group’s accounting policies and by adjusting the results of Brasil Online and OCC to reflect the additional amortisation that would have been charged assuming the fair value adjustments to intangible assets had applied from 1 July 2011, together with any tax effects.

Year end

The Brasil Online and OCC groups have a 31 December year end. For group reporting purposes, the financial year end has been aligned to that of the SEEK Group.

Acquisition related costs

Transaction costs relating to the acquisitions were $188,000 and have been recognised in the Consolidated Income Statement in “operations and administration” expenses.

(b) Finalisation of JobsDB Inc step acquisition

During the previous financial year SEEK Limited, together with Consolidated Media Holdings Limited, Macquarie Capital and Tiger Global (together referred to as the “co-investors”) formed a new subsidiary SEEK Asia Limited (“SEEK Asia”). SEEK Limited’s ownership interest in SEEK Asia is 68.96%, with the co-investors holding the remaining 31.04%.

SEEK Asia was established to acquire a controlling interest in JobsDB Inc (JobsDB). This transaction builds upon SEEK’s existing international footprint and increases its exposure to the high growth potential for online employment advertising in emerging regions.

Further details of the acquisition and preliminary purchase consideration are disclosed in the annual report for the year ended 30 June 2011.

Details of assets and liabilities acquired

Given that the acquisition occurred close to the previous financial year end, the final net asset valuation and allocation of the purchase price to acquired assets and fair values assigned to intangible assets were preliminary. In accordance with the Group’s accounting policy, the accounting for the acquisition of JobsDB was finalised during the current year and the preliminary step acquisition balances have been updated accordingly. The completion of the net asset valuation process has led to a change in the purchase consideration of $154,000 and there have been reallocations of the purchase price to acquired assets and fair values assigned to intangible assets as outlined in the table below. The total final purchase consideration was $326,937,000 (preliminary $327,091,000) and final goodwill of $275,303,000 (preliminary $274,756,000).

114

Notes to the Financial Statements

29. Business combinations continued

The fair value of the assets and liabilities arising from the acquisition are as follows:

		Final	Preliminary
		Fair Value	Fair Value
	Notes	$'000	$'000
Cash and cash equivalents		19,118	19,118
Trade and other receivables		7,372	7,449
Plant and equipment		1,167	1,167
Intangible assets
Brands and licences	14	39,724	40,133
Customer relationships	14	19,330	19,471
Computer software and website development	14	459	459
Trade and other payables		(9,451)	(9,359)
Unearned income		(11,338)	(11,338)
Current tax liabilities		(2,305)	(2,320)
Deferred tax liabilities	8(e)	(11,163)	(11,845)
Non-controlling interests in JobsDB subsidiaries	20	(1,279)	(600)
Net identifiable assets		51,634	52,335
Add: goodwill acquired	14	275,303	274,756
		326,937	327,091

Cash consideration

As previously disclosed, the acquisition cashflows for the year ended 30 June 2011 were:

• Outflow of cash – investing activities of $186,134,000

• Inflow of cash – financing activities of $68,648,000

Details of settled assets and liabilities and associated cashflows during the year 30 June 2012 are as follows:

(i) Payment due to vendor on acquisition

The consideration of the third stage of the investment in JobsDB was HK$600,000,000 ($ 71,760,000 at 30 June 2011 exchange rates). An amount of $70,260,000 (including foreign exchange translation differences) was settled on 7 July 2011 and the balance of $767,000 including the working capital adjustment was settled on 23 February 2012.

(ii) Amounts due from co-investors

The amount receivable from co-investors at 30 June 2011 of $17,342,000 represented the outstanding cash consideration payable by the co-investors for the third stage of SEEK Asia’a investment in JobsDB. During July 2011, an amount of $16,980,000 (including foreign exchange translation differences) was received from co-investors in settlement of this balance.

(iii) Acquisition related costs

Acquisition related costs of $6,203,000 were incurred in the previous year.

Acquired indemnification assets and liabilities

As a result of the final determination of fair values, the indemnification asset was increased to $1,016,000. The indemnification asset is recognised in relation to certain pre-acquisition liabilities. Should these liabilities be required to be settled, then the vendor has agreed to reimburse SEEK Asia for any loss. The indemnification asset has been calculated as SEEK Asia’s proportion of the related liability and is a fixed proportion of this related liability. This amount is included within ‘other receivables.’

115

Notes to the Financial Statements

29. Business combinations continued

(c) Reconciliation of purchase consideration to cash outflow

The following table details the purchase consideration and cash outflow in the current year in relation to the transactions discussed in the sections above:

	Brasil Online	OCC	JobsDB	Total
	$’000	$’000	$’000	$’000
Cash consideration	80,563	22,250	71,027	173,840
Less: cash acquired	(18,293)	(8,175)	-	(26,468)
Payments for investments in subsidiaries, net of
cash acquired	62,270	14,075	71,027	147,372

116

Notes to the Financial Statements

30. Interests in controlled entities

The consolidated financial statements incorporate the assets, liabilities and results of the following consolidated entities in accordance with the accounting policy described in note 1(b):

Name of entity Country of incorporation Class of shares Equity holding 2012 % Equity holding 2011 % SEEK Campus Pty Ltd Australia Ordinary 100 100 SEEK NZ Limited (1) New Zealand Ordinary 100 100 SEEK Learning Pty Ltd Australia Ordinary 100 100 Dynamic Web Training Pty Ltd Australia Ordinary 100 100 SEEK Learning UK Limited(5) United Kingdom Ordinary n/a 100 SEEK Commercial Pty Ltd Australia Ordinary 100 100 SEEK Investments Pty Ltd Australia Ordinary 100 100 Seek International Investments II Coöperatie U.A.(1) Netherlands n/a 100 100 Brasil Online Holdings Coöperatief U.A. Netherlands n/a 51 30 CTHO Online Holdings, LLC USA Ordinary 100 100 CTHO Online Ltda Brazil Ordinary 100 100 Catho Online, Ltda. Brazil Ordinary 100 100 Manager Online Servicos de Internet, Ltda. Brazil Ordinary 100 100 Manager Online Servicos de Informatica Ltda Brazil Ordinary 100 100 Online Career Centre Mexico SA de CV Mexico Ordinary 56.7 41.1 OCC Consultoría, S.A. de C.V. Mexico Ordinary 100 100 OCC Consultoría Ejecutiva, S.A. de C.V. Mexico Ordinary 100 100 Online Career Center Mexico Inc. USA Ordinary 100 100 Think: Education Group Pty Limited Australia Ordinary 100 100 Think: Colleges Pty Limited Australia Ordinary 100 100 Think: Education Services Pty Limited Australia Ordinary 100 100 APM Training Institute Pty Limited Australia Ordinary 100 100 Australasian College of Natural Therapies (Holdings) Pty Limited Australia Ordinary 100 100 Jansen Newman Institute Pty Limited Australia Ordinary 100 100 Graduate Institute of Management and Technology Pty Limited Australia Ordinary 100 100 Billy Blue English School Pty Limited Australia Ordinary 100 100 Billy Blue Catering Pty Limited Australia Ordinary 100 100 Commercial Arts Training College Pty Limited Australia Ordinary 100 100 GMM Projects Pty Limited Australia Ordinary 100 100 The Trustee for the CATC Trust Australia Ordinary 100 100 The CATC Trust Australia n/a n/a n/a

Name of entity Country of incorporation Class of shares Equity holding 2012 % Equity holding 2011 %

SEEK International Investments Pty Ltd Australia Ordinary 100 100 SeekAsia Ltd(1) Cayman Islands Ordinary 69 69 Jobs DB Inc (1)(4) British Virgin Islands Ordinary 80 60 Jobs DB Hong Kong Limited Hong Kong Ordinary 100 100 Jobs DB Singapore Pte Limited Singapore Ordinary 100 100 Jobs DB Taiwan Limited Taiwan Ordinary 100 100 Jobs DB Australia Pty Limited Australia Ordinary 100 100 Jobs DB India Private Limited India Ordinary 100(6) 100 Jobs DB Recruitment (Thailand) Limited Thailand Ordinary 69.5(3)(6) 69.5(3)(6) Jobs DB Malaysia Sdn. Bhd. Malaysia Ordinary 49(3) 49(3) PT. Jobs DB Indonesia Indonesia Ordinary 90 90 PT. Prestige Indonesia Indonesia Ordinary 49(3) 49(3) Jobs DB Philippines Inc. Philippines Ordinary 100 100 Jobs DB China Investments Limited Hong Kong Ordinary 100 100 Ezyjobs (Thailand) Limited Thailand Ordinary 69.5(3)(6) 69.5(3)(6) Job88 (BVI) Inc. British Virgin Islands Ordinary 100 100 Job88.com Limited Hong Kong Ordinary 100 100 就業網絡信息技術(深圳)有限公司 People's Republic of China Ordinary 100 100 廣州厚博信息科技有限公司 People's Republic of China Ordinary 100 100 深圳市希捷爾人力資源有限公司 People's Republic of China Ordinary 75.6 75.6 東莞市希捷爾人力資源有限公司 People's Republic of China Ordinary 75.6 75.6 深圳市富才信息咨詢有限公司 People's Republic of China Ordinary n/a(7) 100 東莞市富才信息咨詢有限公司 People's Republic of China Ordinary n/a(7) 100 Jobs DB Assets (Thailand) Limited Thailand Ordinary 40 (3) 40 (3) Jobs DB Prestige Inc. Philippines Ordinary 25 (3) 25 (3) Sure Luck Invest Limited British Virgin Islands Ordinary 100 100 SEEK Deferred Share Plan Trust (2) Australia n/a n/a n/a SEEK Exempt Share Plan Trust (2) Australia n/a n/a n/a

Note 1: All subsidiaries have been granted relief from the necessity to prepare financial reports in accordance with Class Order 98/1418 issued by the Australian Securities and Investments Commission apart from SEEK NZ Limited, SEEK Learning UK Limited, SEEK Asia Ltd, JobsDB Inc and SEEK International Investments II Coöperatief UA. Note 2: The Trusts are included within the consolidated group as the Group has the power to govern the financial and operating policies of these entities

Note 3: At 30 June 2011 the Group has fully consolidated these entities because JobsDB Inc has the ability to control their financial and operating policies despite not holding a majority of equity as required by local regulations. Note 4: At 30 June 2011 the equity holding in JobsDB was 60%, however SEEK Asia was contractually committed to purchase an additional 20% interest in JobsDB on 7 July 2011 bringing the total holding to 80% at that date. Note 5: Entity liquidated during the year.

Note 6: Equity holding represents direct and indirect interest

Note 7: Deregistered during the year

117

Notes to the Financial Statements

31. Events occurring after balance date

The following events occurred after balance date:

Syndicated debt facility

The Group is in the process of re-financing the existing syndicated debt facility to extend the maturity by at least a further three years. The re-financing process is progressing well and is expected to be completed within the next few weeks.

Minority shareholding in Think

SEEK is in exclusive discussions with a Global Education Company with the company looking to acquire a minority shareholding (c.20%) in Think. If completed, the investment will be accompanied by board representation in Think proportionate to its shareholding and typical minority shareholder protection rights. The strategic rationale for SEEK is that it brings onto the Think Board additional expertise and capabilities to assist in the ongoing growth of Think.

Additional investment in Swinburne Online

On 1 July 2012, as detailed in the joint venture agreement, SEEK and Swinburne University each contributed an additional $2,500,000 to Swinburne Online. SEEK will recognise this transaction as an additional investment in Swinburne Online.

No other matters or circumstances have arisen since 30 June 2012 that have significantly affected, or may significantly affect the Group’s operations in future financial years, the results of those operations in future financial years, or the Group’s state of affairs in future financial years.

118

Notes to the Financial Statements

32. Reconciliation of profit for the year to net cash inflow from operating activities

		Consolidated	Consolidated
		2012	2011
	Notes	$’000	$’000
Profit for theyear		137,458	96,714
Non-cash items
Depreciation and amortisation		20,450	12,595
Amortisation of share-based payments and other long-term incentive schemes	7	4,130	999
Net (gain)/loss on disposal of plant and equipment	7	108	-
Unrealised exchange (gains)/losses	7	(428)	614
Amortisation of syndicated loan transaction costs	16	1,369	2,518
Aggregated tax amounts arising in the reporting period recognised
directly in equity		168	452
Share of profits of equity accounted investments	11(b)	(30,871)	(24,685)
Impairment loss	14	24,115	-
Items relating to step acquisitions
Fair value (gains)/losses on step acquisitions	29	(28,224)	811
Tax on reserve balances recycled	29(a)	3,169	-
Other non-operating gain	6	(1,130)	-
Classified as financing and investing activities
Transaction costs on acquisition of subsidiary	29	188	6,203
Change in operating assets and liabilities:
(Increase) / decrease in trade and other receivables		(2,792)	(1,549)
(Increase) / decrease in deferred tax assets		(2,648)	(976)
(Increase) / decrease in current tax assets		(2,924)	-
(Decrease) / increase in trade and other payables		2,355	9,468
(Decrease) / increase in deferred income		4,984	1,255
(Decrease) / increase in current tax liability		11,571	547
(Decrease)/increase in provisions		1,260	1,067
(Decrease)/increase in deferred tax liability		(3,938)	3,065
(Decrease) / increase in other financial liabilities		2,030	-
Exchange gain/(loss) on translation of foreign operations		868	(912)
Net cash inflow from operating activities		141,268	108,186

119

Notes to the Financial Statements

33. Earnings per share

Information concerning the classification of securities

(a) Fully paid ordinary shares

All shares are fully paid and have been included in both the basic earnings per share (EPS) and the diluted earnings per share (EPS).

(b) Options

Options granted to employees under the SEEK Limited Option Plans are considered to be potential ordinary shares and have been included in the determination of diluted earnings per share. The options have not been included in the determination of basic EPS. Details relating to these options are set out in note 26.

	Consolidated
	2012	2011
	$’000	$’000
Basic EPS	39.1	29.0
Diluted EPS	38.9	28.9

Weighted average number of shares used as the denominator

	Consolidated	Consolidated
	2012	2011
	number	number
Weighted average number of shares used as the denominator in
calculating basic EPS	337,090,873	336,584,488
Weighted average number of Options and Performance Rights	1,065,927	974,089
Weighted average number of shares used as the denominator in
calculatingdiluted EPS	338,156,800	337,558,577

Reconciliation of earnings used in calculating EPS

	Consolidated	Consolidated
	2012	2011
	$’000	$’000
Basic EPS
Earnings used in calculatingbasic EPS	131,680	97,688
Diluted EPS
Earnings used in calculatingdiluted EPS	131,680	97,688

120

Notes to the Financial Statements

34. Net tangible asset backing

34. Net tangible asset backing
	2012	2011
		Restated*
	Centsper share Centsper share
Net tangible asset backing per share	(63.29)	(8.56)

• Refer to note 29(b) for details of restatement on the completion of acquisition accounting for JobsDB

A large proportion of the Group’s assets are intangible in nature, consisting of goodwill and identifiable intangible assets relating to businesses acquired. These assets are excluded from the calculation of net tangible assets per security, which results in the negative outcome.

Net assets per share at 30 June 2012 was $2.29 (30 June 2011: $1.29).

Refer to note 16 for further information on the Group’s borrowings and debt facilities.

35. Parent entity financial information

(a) Summary financial information

The individual financial statements for the parent entity show the following aggregate amounts:

	2012	2011
	$’000	$’000
Balance sheet
Current assets	48,466	79,528
Total assets	713,533	651,885
Current liabilities	45,843	37,773
Total liabilities	365,409	315,189
Net assets	348,124	336,696
Equity
Issued capital	186,525	183,950
Reserves
Hedging reserve - cash flow hedge reserve	(429)	8,050
Foreign currency translation reserve	(92)	(166)
Share-based payments reserve	12,157	8,594
Retained earnings	149,963	136,268
	348,124	336,696
Profit or loss for theyear	67,979	78,295
Total comprehensive income	71,516	78,394

(b) Guarantees entered into by the parent entity

The parent entity has given unsecured guarantees along with its Australian subsidiaries in respect of the syndicated loan facility of $360,000,000 of which $320,487,000 has been drawn. Refer to note 16.

In addition, there are cross guarantees given by SEEK Limited, as described in note 28. No deficiencies of assets exist in any of these entities. The parent entity has further provided a guarantee in respect of obligations for rental commitments, as described in note 25.

(c) Contingent liabilities of the parent entity

The parent entity did not have any contingent liabilities as at 30 June 2012 or 30 June 2011.

(d) Contractual commitments

As at 30 June 2012, the parent entity had contractual commitments for minimum lease payments in relation to noncancellable operating leases totalling $19,088,000 (2011: $10,545,000). Other commitments for the payment of IT services, advertising and promotions under long-term contracts in existence totalled $3,166,000 (2011: $5,694,000).

121

Directors’ Declaration

In the directors’ opinion:

• (a) the financial statements and notes set out on pages 44 to 121 are in accordance with th e Corporations Act 2001 , including:

• (i) complying with Accounting S tandards, the Corporations Regulations 2001 and ot h er mandatory professional reporting requirements; and

• (ii) giving a true and fair view of the consolidated entity's financial position as at 30 J u ne 2012 and of their performance for the financial year ended on that date; and

• (b) there are reasonable grounds to b e lieve that the company will be able to pay its debts a s and when they become due and payable; and

• (c) at the date of this declaration, ther e are reasonable grounds to believe that the membe r s of the extended closed group identified in note 28 will be able to meet any obligations or liabilities to which they are, o r may become, subject by virtue of the deed of cross guarant e e described in note 28.

Note 1(a) confirms that the financial statements also comply with International Financial Repo r ting Standards as issued by the International Accounting Standards Board.

The directors have been given the declara t ions by the Chief Executive Officer and Chief Financi a l Officer required by section 295A of the Corporations Act 2001 .

This declaration is made in accordance wi t h a resolution of the directors.

==> picture [149 x 40] intentionally omitted <==

Bob Watson Chairman

Melbourne 22 August 2012

122

==> picture [78 x 59] intentionally omitted <==

Independent auditor’s report to the members of SEEK Limited

Report on the financial report

We have audited the accompanying financial report of SEEK Limited (the company), which comprises the balance sheet as at 30 June 2012, and the income statement, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration for the SEEK Limited Group (the consolidated entity). The consolidated entity comprises the company and the entities it controlled at the year's end or from time to time during the financial year.

Directors’ responsibility for the financial report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the financial statements comply with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

PricewaterhouseCoopers, ABN 52 780 433 757

Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

==> picture [78 x 59] intentionally omitted <==

Independence

In conducting our audit, w e have complied with the independence require m ents of the Corporations Act 2001.

Auditor’s opinion

In our opinion:

• (a) the financial repo r t of SEEK Limited is in accordance with the Cor p orations Act 2001 , including:

• (i) giving a t r ue and fair view of the consolidated entity’s fina n cial position as at 30 June 2012 and of its performance for the year ended on that date; and

• (ii) complyin g with Australian Accounting Standards (includi n g the Australian Accounti n g Interpretations) and the Corporations Regula t ions 2001; and

• (b) the financial repo r t and notes also comply with International Fina n cial Reporting Standards as disclosed in No t e 1.

Report on the Remuneration Report

We have audited the remuneration report included in pages 17 to 31 of the d irectors’ report for the year ended 30 June 2012. The d irectors of the company are responsible for the p reparation and presentation of the remun e ration report in accordance with section 300A o f the Corporations Act 2001 . Our responsibility i s to express an opinion on the remuneration repo r t, based on our audit conducted in accordance w ith Australian Auditing Standards.

Auditor’s opinion

In our opinion, the remun e ration report of SEEK Limited for the year ende d 30 June 2012, complies with section 300A of the C orporations Act 2001 .

PricewaterhouseCoopers

John Yeoman Partner

==> picture [42 x 93] intentionally omitted <==

Melbourne 22 August 2012