SEEK Annual Report 2021 | Quarterlytics

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SEEK ANNUAL REPORT 2021 We help people live more fulfilling and productive working lives and help organisations succeed WE HELP PEOPLE LIVE MORE FULFILLING AND PRODUCTIVE WORKING LIVES AND HELP ORGANISATIONS SUCCEED SEEK Continuing Operations A market leader in online employment marketplaces with deep and rich insights into the future of work A global presence including Australia, New Zealand, Hong Kong, South-East Asia, Brazil & Mexico. In addition, SEEK has minority investments in China, Korea and a number of other countries Leveraging data and technology to create innovative solutions for candidates and hirers Employing 3,000+ people across Australia, New Zealand, Asia and Latin America Creating a culture of innovation, empowerment and collaboration Australian listed with headquarters in Melbourne, Victoria Approximately 50m Candidate relationships Approximately 300k Hirer relationships Approximately 900m Population exposure Continuing Operations Continuing Operations includes SEEK’s Asia Pacific and Americas businesses and select Early Stage Ventures (ESVs) that will continue to be owned by SEEK under the new structure announced in August 2021. SEEK also holds a minority interest of 23.5% in Zhaopin which is not included in the metrics above. SEEK Growth Fund The SEEK Growth Fund (the Fund) is a newly created unit trust in which SEEK is expected to hold c84.5%(1) of the units after the first capital round is completed. As announced in August 2021, the Fund will be seeded with SEEK’s interest in Online Education Services and the majority of SEEK’s existing ESV portfolio including investments across the key themes of Online Education, HR SaaS and Contingent Labour. These are not included in the metrics above. (1) Based on a A$1,215m portfolio valuation of the SEEK seeded assets and completion of the transfer of those assets plus A$200m of SEEK capital divided by A$1,215m portfolio valuation plus A$200m SEEK capital plus A$260m external capital. Ownership interest of c84.5% assumes all committed capital is fully drawn. SEEK is implementing a new corporate structure to enable greater focus on the growth opportunities within its core online employment businesses whilst retaining economic exposure to the SEEK Growth Fund and Zhaopin. SEEK SEEK Growth Fund Online Education HR Saas Contingent Labour (1) (2) (3) Zhaopin Formerly Caelum Further information on SEEK’s new structure, including the creation of the SEEK Growth Fund is provided on pages 6 to 7. (1) SEEK acquired a 100% interest in Sourcr in August 2021. (2) SEEK acquired a 10% interest in JobKorea in August 2021. (3) SEEK retains 23.5% equity accounted investment in Zhaopin. ii ii SEEK Limited Annual Report 2021 ACKNOWLEDGEMENT OF COUNTRY SEEK respectfully acknowledges the Traditional Owners of the land on which it operates. We acknowledge Aboriginal and Torres Strait Islander peoples as Australia’s First Peoples, paying respects to their rich cultures, to their Elders past, present and future, and their continuing custodianship of the land, waterways and community on which we all rely. We extend that respect to all Aboriginal and Torres Strait Islander peoples. We recognise and value the ongoing contribution of Aboriginal and Torres Strait Islander people and communities to Australian life and how this enriches us. This report covers SEEK Limited as a consolidated entity consisting of SEEK Limited and its controlled entities (the Company or SEEK). The Financial Report was authorised for issue by the directors on 24 August 2021. 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 principal place of business is: 60 Cremorne Street Cremorne VIC 3121 AUSTRALIA 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 4 to 40. 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 ASX Announcements, reports, presentations and other information are available at our Investor Centre on our website at www.seek.com.au/about/investors/. SEEK Limited Annual Report 2021CONTENTS Message from the Chairman & CEO Directors’ Report Letter from Remuneration Committee Chairman Remuneration Report Auditor’s Independence Declaration Sustainability Report Corporate Governance Statement Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Five Year Financial Summary Corporate Directory iii iii iv 4 23 25 41 42 73 81 146 147 154 156 IBC Contentsiv iv MESSAGE FROM THE CHAIRMAN & CEO SEEK Limited Annual Report 2021v v Dear Shareholder, Wherever you are reading this it is likely that you are still living with some restrictions due to the COVID-19 pandemic. We hope that you are safe and well. Response to COVID-19 Strategic review of SEEK Across the range of countries in which SEEK does business, the pandemic made the 2021 financial year the most volatile in the company’s history. As we navigated the associated economic and social challenges, we benefitted from the strong foundations we have built over years of focusing on long-term value creation and culture. Even as revenue plummeted during the first months of the pandemic, SEEK’s board and management maintained our long-term commitment to prioritise the needs of our people. Initially, at the end of the 2020 financial year, this meant setting up all our people to work from home ahead of government shutdowns, and committing to no reductions in full-time staff numbers, no pay-cuts and no reduced hours. Subsequently, we focused on helping our people deal with the ongoing uncertainties of lockdowns. In some countries, we also helped employees and their families who became ill with COVID-19 access adequate healthcare and vaccinations. In Indonesia for example we have sourced and paid for vaccines for all our staff, in accordance with arrangements encouraged by the government. Commitment to our people and strategic priorities We took these steps because they were the right thing to do for our people and for the long-term strength of the company, even though we knew they would impact short-term profitability. Our commitment to our people led to strong ongoing employee engagement. In Australia SEEK won the Australian Financial Review’s award for Best Place to Work in 2021. And in Asia we saw the biggest lift we have ever seen in our engagement survey. This high engagement, in turn, led to continuing progress on our long-term strategic priorities. Despite the disruptions of the year we maintained our momentum in bringing innovative products to market, completed the roll-out of the biggest ever change to our contract structure in Australia, commenced a bold project to strengthen our competitiveness through the unification of our product and technology platforms across Australia, New Zealand and South-East Asia and made tangible progress on a variety of long-term sustainability priorities. On top of all that we announced (and subsequently completed) a strategic review of the SEEK Investments business, reduced our stake in Zhaopin, and completed a successful internal CEO succession, which is commented upon further in the Chairman’s comments below. The strategic review of SEEK Investments was undertaken by the Board to assess options to provide greater independence to SEEK’s Asia Pacific & Americas (AP&A) and SEEK Investments businesses. In early August, we announced the results of that review, which included the formation of the SEEK Growth Fund. The Fund will comprise most of SEEK’s Early Stage Ventures, as well as Online Education Services. The Fund will be independent of SEEK and will be managed by Andrew Bassat and the SEEK Investments team through a management company. Recognising the potential for a conflict of interest given Andrew’s involvement in the Fund, the review was led by an independent committee of the Board, comprising three Non-Executive Directors. The committee received extensive independent advice on all aspects of the review and the formation of the Fund, including the valuation of the relevant assets, and the fees payable by SEEK to the management company, which are lower than usual market rates, and lower than the rates payable by other investors in the Fund. Your Board is confident that the independence of this new structure, and the alignment of interests between investors and the management team, will accelerate the value creation in the early stage ventures. We are pleased to maintain a high level of economic exposure to the Fund, and have the right but not the obligation to invest in future capital raisings. In practice, we expect our ownership stake to be diluted over time, as the Fund raises more capital. Selldown of Zhaopin The decision to reduce our stake in Zhaopin from 61.1% (undiluted) to 23.5% (fully diluted) resulted from a combination of factors. First, we were aware of significant investor interest in the asset that led to an attractive value realisation opportunity. Second, the incoming investors have significant experience in doing business in China and will be able to add capability to support the next wave of Zhaopin’s growth. Third, your Board felt that the residual exposure provided a better risk/reward balance for SEEK, recognising that the business still has significant upside potential, but that over time it has grown as a proportion of SEEK’s overall portfolio. Message from the Chairman & CEOvi vi Continued focus on AP&A The separation of SEEK Investments and the selldown of the Zhaopin stake allow for greater focus on our core AP&A business. We remain positive about its growth prospects. The combination of underlying economic growth and offline to online migration in Asia, the opportunity to enrich and expand products through unique data, and alignment of our pricing to the value we create gives us an opportunity to double revenue in our core businesses over the next five years, if we execute well and markets are stable. We will need to continue to invest heavily to compete successfully against the large global platforms that are our primary competitors, and are committed to doing so. However, with the business’s strong cashflow generation, and the healthy state of our balance sheet, we believe that we can make the necessary investment in our platforms, brand and data and pricing capability and still achieve positive operating leverage. This will in turn provide the opportunity to pay dividends. We have updated our dividend policy and are now targeting a payout of 75% of cash net profit after tax less capital expenditure. We will continue to prioritise the investment needed for the long- term health of our business. But as long as economic conditions are reasonable, we aim to provide a consistent dividend to shareholders. After deferring the determination of an interim dividend during the financial year due to the uncertainties of the economic environment, we announced a fully franked dividend of 20 cents per share in May following completion of the Zhaopin sell-down, and a fully franked final dividend of a further 20 cents per share with our annual results. Our short-term results will always be dependent on economic conditions, and the 2021 financial year showed us both extremes. The first quarter was weak – volumes in our ANZ business in July 2020 were more than 30% lower than in July 2019. Nine months later, they were at all-time highs. Due to the separation of the AP&A business from our SEEK Investments business, our results for the financial year were split into “continuing operations” (primarily consisting of the AP&A business, our remaining 23.5% interest in Zhaopin, and also including a small number of early stage ventures that SEEK will retain) and “discontinued operations” (being OES, the majority of the early stage ventures, and Zhaopin’s results for the 10 months to 30 April 2021). Relative to the 2020 financial year, revenue in our continuing operations grew 17%, and EBITDA grew 30%. Revenue and EBITDA in our discontinued operations declined 10% and 9% respectively relative to the 2020 financial year, due largely to the accounting treatment of Zhaopin following the sell-down of our stake. OES and our investments in early-stage ventures performed very well. The faster than expected recovery in our business led us to repay all government subsidies we had received in Australia and New Zealand during the early part of the financial year, including $9.6m in JobKeeper payments from the Australian government. Additional comments from the Chairman Board renewal Our ongoing focus on board performance and renewal led to the appointment of Linda Kristjanson AO to the board in October 2020. Linda is a leading figure in the education sector, with an academic career spanning four decades across Australia, Canada and the United States. Most recently she was Vice- Chancellor and President of Swinburne University of Technology from May 2011 until August 2020. She has already contributed a great deal to board discussions on a range of topics. Looking forward As we all know, the path ahead remains unpredictable. When we released our financial results in August, we felt it important to provide some guidance as to our expected performance for the current financial year. That guidance was based on a number of assumptions, each of which could have a material impact. These include the extent of lockdown restrictions across ten markets, the speed and nature of ongoing economic recovery, the level of small business activity (which is particularly relevant for yield) and our ability to source the resource we need to achieve our ambitious investment goals during the year. We will provide an update on how our business is tracking relative to our guidance at the upcoming annual general meeting. One thing that is certain is our ongoing commitment to our people and to long term value creation. We have made clear that even if our revenue growth is below the level we assume, we will continue to invest in building long-term capability, even if that means lower short-term profit. Thank you to everyone who makes SEEK a success We thank all our shareholders for your ongoing support. We also thank millions of job seekers, students and hirers throughout Australasia, Asia and Latin American for the trust they place in our products and services. Finally, and most importantly, we thank SEEK’s people. Their ongoing commitment to SEEK’s purpose, through difficult personal circumstances, has led to another successful year for our business, and positioned us well for the growth opportunities ahead. Graham Goldsmith Chairman Ian Narev CEO Further comments from the Chairman on CEO succession The announcement that Andrew Bassat would retire as SEEK’s CEO was momentous for SEEK. As you are all well aware, Andrew co-founded SEEK, and has since become one of the most widely admired leaders in corporate Australia. Within SEEK he is revered at all levels for his values, the culture he has created, his entrepreneurial flair and his passion and commitment to making SEEK as successful as it can possibly be. The succession of a founder, particularly one of Andrew’s capability and popularity, requires a great deal of care. We are pleased at how well this internal succession has been executed. Beyond his track record as a CEO prior to SEEK, Ian Narev has become well known to, and trusted by, SEEK’s people. His ascension to the CEO role after two years of working in partnership with Andrew in running the AP&A business was seen as logical and unsurprising. Moreover, all of us are delighted that Andrew will continue to add value to SEEK, both as a non-executive director, and as the inaugural Executive Chairman of the SEEK Growth Fund. SEEK Limited Annual Report 2021vii vii Message from the Chairman & CEO2 OUR PURPOSE: We help people live more fulfilling and productive working lives and help organisations succeed. IMAGE RIGHT Pictured: Lumi Shrestha and Lydia Wang. ‘The part of our purpose to help people live more fulfilling and productive working lives is reflected in the way SEEK treats its own people – with care for their feelings, future goals and ambitions.’ - Lydia Wang, Developer at SEEK SEEK Limited Annual Report 2021 3 Directors’ Report4 DIRECTORS’ REPORT Your directors present their report on the consolidated entity consisting of SEEK Limited and the entities it controlled at the end of, or during, the year ended 30 June 2021 (referred to as 'the Company' or 'SEEK'). SEEK is having an impact improving people’s lives across employment and education Principal activities During the year the principal activities of SEEK consisted of: SEEK Continuing Operations(1) online matching of hirers and candidates with career opportunities and other related services; investing in early stage businesses and technologies in the human capital management market; and distribution and provision of higher education courses. Approximately 50m Candidate relationships Approximately 300k Hirer relationships Approximately 900m Population exposure (1) Continuing Operations includes SEEK’s Asia Pacific & Americas businesses and select Early Stage Ventures that will continued to be owned by SEEK under the new structure that is discussed further in this Report. SEEK Limited Annual Report 20215 Business strategies and prospects SEEK’s evolution Focus on Australia and New Zealand (ANZ) online marketplace Founded in Melbourne, Australia in 1997, as a disruptive online employment marketplace, SEEK leveraged the increased access and usage of internet, data and technology to build a low cost and highly effective online employment marketplace. SEEK’s ANZ online marketplace has evolved over the years and continues to be a market leader on key metrics such as monthly visits, brand awareness and placement share. Expansion into international online marketplaces and education SEEK’s international employment marketplace and education expansion commenced in 2005, with the focus being on acquiring and operating international online employment marketplaces, and leveraging SEEK’s online employment assets and capabilities into adjacent education businesses. SEEK has been successful in growing its footprint and creating value mainly via M&A and strategic support as well as incubating new businesses such as Online Education Services (OES) which is now a market leader in online higher education. Product and technology focus SEEK has evolved its online employment marketplaces over time with an increased focus on using data and technology to deliver the most effective search and matching experience and outcomes for candidates and hirers. Investment in artificial intelligence and technology, coupled with SEEK’s strategic assets that include deep relationships, unique data and strong brand, has enabled the creation of innovative products that connect candidates with highly relevant and personalised job opportunities and help hirers find candidates and streamline their recruitment process in a more efficient manner. SEEK continuously invests and innovates to deliver long-term shareholder value c7x TSR vs ASX 200 since IPO despite the economic cycle and aggressive competition 3 Product & Tech Evolution 1,781.3% 2 M&A led growth (Int’l & Education) 1 ANZ led growth Apr-2005 Jan-2008 Sep-2010 Jun-2013 Feb-2016 Nov-2018 Aug-2021 273.2% Directors’ Report6 Business strategies and prospects continued Creation of AP&A and SEEK Investments divisions Since 2018, SEEK has been structured into two main divisions, Asia Pacific and Americas (AP&A) and SEEK Investments. Under this structure, AP&A has focussed on operating and innovating online employment marketplaces and SEEK Investments has focussed on investing and scaling early stage businesses across the themes of Online Education, Contingent Labour and HR Software as a Service (HR SaaS). The divisions comprise of the following: • AP&A - comprises online employment marketplaces in Australia and New Zealand, Hong Kong, South East Asia, Brazil and Mexico • SEEK Investments - comprises Zhaopin, OES and Early Stage Ventures (ESVs) across the key themes of Online Education, Contingent Labour and HR SaaS Creation of the new structure to create greater autonomy In February 2021, SEEK announced its intention to implement changes to provide a greater degree of independence between the AP&A and SEEK Investments businesses. In August 2021 SEEK announced a new structure had been created including the establishment of a new unit trust, referred to as the ‘SEEK Growth Fund’ (the Fund). SEEK will transfer its holdings in OES and 14 ESVs to the Fund as seed assets (being the majority of SEEK Investments’ existing ESV portfolio) in exchange for units in the Fund. Overview of the new structure SEEK SEEK will comprise the core AP&A businesses, and certain portfolio investments, primarily Zhaopin (23.5% interest) and SEEK’s interest in the Fund. SEEK will be led by Ian Narev (as Managing Director (MD) and Chief Executive Officer (CEO) of SEEK) and current members of the AP&A Executive team. The new structure is intended to achieve the following business outcomes for SEEK: • Enables sharper focus on the significant growth opportunities within SEEK’s core businesses; • Generates strong cash flows from these businesses, which will enable ongoing reinvestment in building competitive capability whilst allowing for payment of dividends; and • Provides SEEK with the option, but not the obligation to commit further capital to the Fund. SEEK Investments The Fund will be managed by SEEK Investments, an independent management company. The management team will comprise SEEK’s Co-Founder and former MD and CEO, Andrew Bassat, and the existing team transferring from the legacy SEEK Investments business. The Fund will own SEEK’s interests in OES and 14 ESVs. The new structure is intended to achieve the following business outcomes for SEEK Investments: • Allows it to focus on being an investor and business builder, partnering with emerging leaders to deliver strong long-term returns; • Facilitates greater access to capital that can be used to support both existing and new investments; and • Delivers greater independence to enable aggressive long-term investment decisions. SEEK Limited Annual Report 20217 Growth strategies over the medium- to long-term The new structure enables SEEK to focus on capturing the significant growth opportunities in its core online employment businesses and investing in its key capabilities. SEEK’s growth drivers Significant growth opportunities in our core businesses (ANZ and Asia) Organic growth the focus, but will consider M&A Underlying economic growth and offline to online migration (Asia) Enrichment and expansion of products including through unique data Aligning price to the value we create M&A to enhance capabilities and/or create options in new revenue pools SEEK has the opportunity to double revenue in its core business over the next 5 years (if it executes well and markets are stable) SEEK’s strategic focus areas SEEK Investments strategy In order to capture the significant growth opportunities, SEEK is focussed on investing in four core capabilities: SEEK will continue to have an economic interest in SEEK Investments via the Fund. SEEK Investments is focussed on: Investing in high growth Human Capital Management (HCM) businesses Investing in emerging businesses across the key themes of Online Education, Contingent Labour and HR SaaS. Wide global reach with the Fund's current portfolio while also maintaining the flexibility to invest in businesses at different stages of their evolution (e.g. seed, scaling up). Creating value through active partnerships Working with businesses to provide strategic advice at Founder/ CEO level and supporting management teams on their key strategic initiatives and all aspects of business building including strategic planning and operational execution. Long term and entrepreneurial approach to building big businesses Prioritising building long-term sustainable competitive advantage over short-term financials with a preference to hold for the long- term and appetite to incur significant upfront losses. Open to value realisation where it aligns with the strategic objectives of the business. 1. Scalable, reliable and safe platforms Building a unified flexible platform across Asia-Pacific to provide scale efficiencies, enable rapid innovation and improve reliability and security. 2. Strong brand presence Maintaining the strength of the SEEK brand in Australia and New Zealand. Reinvigorating the brands in Asia to increase candidate reach and attention through brand building initiatives and adding sales capability in Indonesia. 3. Data capture, analysis and application Using structured and unstructured data to continuously add intelligence to the platform. Scale of data combined with local expertise to be used to create a range of products and personalised experiences including tools that add trust and confidence to claims made by hirers and candidates. 4. Pricing to reflect value Ensuring that pricing models better align with the value we create, and provide hirers with a greater range of tools and insights to maximise their return on investment with SEEK (for example, via the new variable pricing model in Australia and New Zealand). Focus on investing in organic capability building, although there is also an appetite for targeted inorganic growth to enhance capabilities and/or access to new revenue pools. Continue to benefit from close ongoing ties with SEEK Investments through the Fund. Expectation for strong revenue growth and increased operating leverage over time, provided SEEK executes well. Directors’ Report8 SEEK Limited Annual Report 2021 OUR VISION: To be the best in the world in online employment by: matching more people with job opportunities than any other organisation in each market in which we operate; AND being the most trusted partner for advice on, and access to, relevant career related education. Review of results and operations Sales revenue from Continuing Operations Sales revenue from Discontinued Operations Total sales revenue EBITDA from Continuing Operations EBITDA from Discontinued Operations Total segment EBITDA(3) Reported profit/(loss) from Continuing Operations Reported profit from Discontinued Operations Total reported profit/(loss) attributable to owners of SEEK Limited (Excluding)/Add back significant items Total profit attributable to owners of SEEK Limited (excluding significant items) 9 Reported currency Constant currency(2) 2021 $m 760.3 830.8 1,591.1 332.0 141.6 473.6 104.9 647.3 752.2 (611.4) 140.8 Restated 2020(1) $m 650.6 926.8 1,577.4 255.1 155.5 410.6 (121.2) 8.1 (113.1) 202.0 88.9 Growth % Growth % 21% (7%) 5% 33% (6%) 18% 17% (10%) 1% 30% (9%) 15% n/m 58% (1) Comparative information has been restated for Discontinued Operations and a change in accounting policy (refer to Note 2 Discontinued operations and Note 29 Changes in accounting policies respectively in the Financial Statements for more information). (2) Constant currency amounts are calculated by retranslating current year data using prior year exchange rates. (3) Segment EBITDA is earnings before interest, tax, depreciation and amortisation and excludes impairment charges, share-based payment expense, share of results of equity accounted investments, gains/losses on investing activities, and other non-operating gains/losses. Changes to presentation of Results As discussed in the ‘Business Strategies and Prospects’ section, SEEK has announced the creation of the SEEK Growth Fund following the completion of a strategic review, which will operate autonomously, with a focus on being an investor and business builder with greater access to third party capital. Additionally, during FY2021 SEEK sold 37.6% of the equity of Zhaopin, the results of which have been deconsolidated from 30 April 2021. For statutory reporting purposes, these two events require that SEEK’s results are presented on a Continuing Operations basis. Continuing and Discontinued Operations To aid in the understanding of SEEK’s overall financial performance, the table above presents the results for Continuing Operations, Discontinued Operations and in aggregate for both FY2021 and the restated FY2020. Continuing Operations comprises the results of: • SEEK’s AP&A businesses and select portfolio investments that will continue to be owned by SEEK under the new structure; and • SEEK’s share of net profit after tax from the 23.5% retained interest in the equity accounted investment now held in Zhaopin for May and June 2021, for which there is no comparative information. Discontinued Operations, as detailed in Note 2 Discontinued operations in the Financial Statements, comprises the results of: • Zhaopin for the ten months to 30 April 2021, including the gain on disposal, and for the 12 months in FY2020; and • Assets which will transfer to the Fund, including OES and a suite of ESVs. The commentary that follows has been prepared on an aggregated basis. Commentary for Continuing and Discontinued Operations separately can be found on pages 10-11 and 12-13, respectively. SEEK aggregated Result In the year ended 30 June 2021 SEEK achieved growth in sales revenue of 1% (5% constant currency) and EBITDA growth of 15% (18% constant currency) compared to the year ended 30 June 2020. Profit attributable to the owners of SEEK Limited was $752.2m (30 June 2020 restated: loss of $113.1m). Significant items FY2021 significant items of $611.4m include the following: • Gain on sale of the sell down of SEEK’s controlling interest in Zhaopin of $628.9m post-tax; and • Gains on changes in ownership of certain investments of $98.6m post-tax; offset by: • Deferred income tax with respect to SEEK’s future interest in the SEEK Growth Fund of $75.2m; • Impairment charges against the carrying values of Brasil Online and Workabroad of $33.6m post-tax; and • Transaction costs relating to the structural separation between SEEK and SEEK Growth Fund of $7.3m post-tax. Amounts recognised as significant items in FY2020 comprised of impairment charges relating to Brasil Online, OCC and minority investments of $198.4m post-tax and refinancing related costs of $3.6m post-tax. Key drivers • Revenue growth of 1% was driven by Continuing Operations, up 17% compared to FY2020, led by a strong recovery from ANZ, with SEEK Asia also recovering but at a slower rate. The growth was partly offset by Discontinued Operations, down 10% compared to FY2020, driven by lower Zhaopin revenue due to deconsolidation. • EBITDA increased 15%, or 17% before impacts of the cloud computing accounting policy change. Continuing Operations EBITDA grew 30%, driven by the recovery in revenue and operating efficiences whilst Discontinued Operations EBITDA decreased 9% mainly due to the deconsolidation of Zhaopin. Significant investment continued in strategic areas across all businesses. • Attributable profit (excluding significant items) for FY2021 improved by 58% to $140.8m, benefitting from higher EBITDA and lower net interest, offset partly by higher depreciation and amortisation due to product and technology investment and leasing costs. Directors’ Report10 Continuing Operations(1) Continuing Operations comprise: The Australia and New Zealand (ANZ) business SEEK Asia Sales revenue - Continuing Operations Asia Pacific and Americas ANZ SEEK Asia Brasil Online OCC AP&A Other Portfolio Investments ESVs(3) EBITDA(4) - Continuing Operations Asia Pacific and Americas ANZ SEEK Asia Brasil Online OCC AP&A Other Corporate costs Portfolio Investments ESVs(3) EBITDA margin (%) - Continuing Operations Asia Pacific and Americas ANZ SEEK Asia Brasil Online OCC Portfolio Investments ESVs(3) The Latin America businesses of Brasil Online and OCC Other entities including Jora and ESVs (including JobAdder) Constant currency(2) Growth % 21% 40% (2%) (21%) (13%) (40%) 10% 33% 47% (27%) n/m (60%) 34% 21% (9%) Growth % 17% 40% (11%) (42%) (24%) (40%) 9% 30% 46% (35%) n/m (67%) 34% 21% (8%) Reported currency 2021 $m 760.3 541.0 145.6 30.5 19.2 1.2 22.8 332.0 322.9 47.4 (1.1) 2.4 (9.5) (26.0) (4.1) 44% 60% 33% (4%) 13% 2020 $m 650.6 387.2 162.9 52.4 25.1 2.0 21.0 255.1 220.5 72.8 5.8 7.2 (14.3) (33.1) (3.8) 39% 57% 45% 11% 29% (18%) (18%) (1) Refer to Note 1 Segment information in the Financial Report for further details on the distinction between Continuing and Discontinued Operations. (2) Constant currency amounts are calculated by retranslating current year data using prior year exchange rates. (3) Includes ESVs that will be retained by SEEK under the new structure and managed by SEEK Investments (e.g. JobAdder), and that have been reported under Portfolio Investments in Note 1 Segment information in the Financial Report. (4) Comparative information has been restated for a change in accounting policy (refer to Note 29 Changes in accounting policies in the Financial Report for more information). Continuing Operations revenue growth of 17% and EBITDA growth of 30% compared to FY2020 were driven by the following: • ANZ: revenue growth of 40% driven by strong recovery from COVID-19 in H2 FY2021, peaking in March 2021 at record ad volumes; • SEEK Asia: strong recovery in Singapore, Hong Kong and Malaysia, however other markets remained weaker; and • Latin America: weak results with COVID-19 continuing to have a significant economic impact. There were signs of recovery in OCC in H2 FY2021. • Reported results were negatively impacted by the appreciation of the Australian dollar against key currencies, including the Hong Kong Dollar and the Malaysian Ringgit. On a constant currency basis, revenue from Continuing Operations increased 21% and EBITDA increased 33% compared to FY2020. SEEK Limited Annual Report 202111 Australia and New Zealand (ANZ) • ANZ recovered well from the COVID-19 lows of FY2020 with Latin America • Financial results in Brasil Online and OCC remained weak with COVID-19 severely impacting the Brazilian and Mexican economies. • Despite the economic impacts, OCC saw recovering volumes in H2 FY2021 (relative to H1 FY2021) that were complemented by a new rate card and higher depth revenue. • Given the severe economic headwinds in Brazil and execution risk associated with the roll-out of a new business model in this market, an aggregate non-cash impairment charge of $19.5m post-tax has been recognised to bring the carrying value of Brasil Online indefinite life intangibles down to $nil, and to write down the carrying value of certain software and website intangibles. • Both businesses are leveraged to the eventual improvement in macro conditions, but this will take time and require successful execution of their strategies. AP&A Other and ESVs AP&A Other and ESVs comprises early stage investments that complement and/or have synergies with the AP&A operating businesses, including: • Jora, which is playing a key role in growing ad scale and supporting new product development, and now has a presence in 36 countries; and • JobAdder, a talent acquisition suite that simplifies the hiring process for recruiter and corporate talent acquisition teams. revenue growth of 40% and EBITDA growth of 46%. • The recovery accelerated in early H2 FY2021, with ad volumes exceeding pre COVID-19 levels in March 2021. Hiring activity from Small to Medium Enterprises (SMEs) was strong, with improving trends also observed across Corporates and Recruiters during H2 FY2021. Depth revenue grew 58% on FY2020 and now comprises 32% of total revenue. • EBITDA margins expanded to 60% (62% before impacts of the cloud computing accounting policy change) benefitting from higher revenue, whilst targeted investment continued in product and technology, analytics, architecture, security and user experience. SEEK continues to be a market leader on key metrics despite strong competition. Key strategic priorities progressed well including: • The roll-out of SEEK’s new pricing model and contract structure to all remaining Australian customers during early FY2021 and the launch in New Zealand in March 2021; • Expansion and enhancement of our product suite to optimise value for our candidates and hirers. SEEK Asia • On a constant currency basis, SEEK Asia revenue declined 2% and EBITDA declined 27% compared to FY2020. • Revenue recovery varied by market, with stronger trends in Singapore, Hong Kong and Malaysia, whilst other markets were weaker reflecting a slower recovery from the impacts of COVID-19. Uptake of depth products continued to improve and now comprises 19% of total revenue. • EBITDA was impacted by lower revenue and an increase in investment across product and technology, and also in marketing as part of a brand refresh to drive improved awareness. Directors’ Report12 Discontinued Operations(1) Discontinued Operations comprise: Zhaopin OES ESVs Consolidated operations to 30 April 2021 (61.1% controlling interest) 80% controlling interest Controlled entities and equity accounted investments Sales revenue - Discontinued Operations Zhaopin(3) OES ESVs(4) EBITDA - Discontinued Operations Zhaopin(3) OES ESVs(4) EBITDA margin (%) - Discontinued Operations Zhaopin(3) OES ESVs(4) Reported currency Constant currency(2) Growth % Growth % (10%) (23%) 40% 55% (9%) (20%) 31% 13% (7%) (19%) 40% 55% (6%) (17%) 31% 13% 2021 $m 830.8 577.1 190.7 63.0 141.6 98.7 45.5 (2.6) 17% 17% 24% (4%) 2020 $m 926.8 749.6 136.6 40.6 155.5 123.7 34.8 (3.0) 17% 17% 25% (7%) (1) Refer to Note 1 Segment information in the Financial Report for further details on the distinction between Continuing and Discontinued Operations. (2) Constant currency amounts are calculated by retranslating current year data using prior year exchange rates. (3) SEEK disposed of 37.6% of the equity of Zhaopin on 30 April 2021. The above revenue and EBITDA represent the results for the ten months in FY2021 and the 12 months in FY2020 that Zhaopin was consolidated as a subsidiary. From 1 May 2021, the remaining 23.5% stake in Zhaopin is accounted for in Continuing Operations as an equity accounted investment. (4) Relates to controlled ESVs that will be transferred to the SEEK Growth Fund. The results from equity accounted ESVs that will be transferred to the SEEK Growth Fund will be accounted for within SEEK’s share of results from equity accounted investments. Discontinued Operations revenue decline of 10% and EBITDA decline of 9% compared to FY2020 were driven by: • Zhaopin: reported results declined due to the deconsolidation which occurred on 30 April 2021 (FY2021 includes ten months of consolidated results compared with a full 12 months in FY2020). The business was significantly impacted by the outbreak of COVID-19 in early 2020, and has experienced a slow but steady recovery on an underlying basis; • OES: benefitted from a significant uplift in COVID-19-related demand for online education; and • ESVs: strong revenue growth and operating results from Sidekicker as this business continues to scale. • Reported results were negatively impacted by the appreciation of the Australian dollar against the Chinese Renminbi (RMB). On a constant currency basis, Discontinued Operations delivered revenue decline of 7% and EBITDA decline of 6%. SEEK Limited Annual Report 202113 Zhaopin • On a constant currency basis, for the full 12 months of FY2021, Zhaopin delivered a revenue result marginally below FY2020 (decline of 1%) and EBITDA growth of 11% compared to FY2020. • Online revenue declined 2% as the business recovered from COVID-19. Adjacent services revenue benefitted from online migration. • Steady EBITDA margin reflects operating efficiencies, offset by increased investment in data and artifical intelligence to improve search and match outcomes. • Zhaopin has many levers for future growth but competition is intense and requires ongoing reinvestment to evolve the product offerings and grow market share. OES • OES delivered revenue growth of 40% with COVID-19 accelerating the demand for online education. • EBITDA growth of 31% benefitted from the increase in revenue. EBITDA margin declined by 1% due to investment in scaling new partnerships and unbundled service offerings. • OES is positioned well for growth and has planned significant investment to scale opportunities across online program management and customised education solutions. Opportunities exist to unlock international growth but significant investment is required. ESVs The portfolio of ESVs comprises investments exposed to high growth structural trends across three key themes comprising Online Education, Contingent Labour and HR SaaS. SEEK Investments has invested in emerging leaders in the three key themes, and actively partners with its investments to leverage its deep online human capital market expertise to accelerate their growth. Some key investments in the portfolio are: Online Education: FutureLearn and Coursera are global leaders in the delivery of Massive Open Online Course content; Contingent Labour: Sidekicker, Jobandtalent and Florence are leading on-demand staffing platforms which in combination provide exposure to a large and growing contingent labour markets across Australia, New Zealand, and eight countries across Europe and Latin America; HR SaaS: GO1 is a leading digital learning platform enabling organisations to source, deliver and track employee training; Employment Hero is a cloud-based HR Information System that helps SMEs to easily manage HR, payroll and employee benefits; HiBob is a HR Information System tailored to mid-large sized businesses, with a focus on employee experience. To date, the portfolio has recovered well from COVID-19 and benefitted from the structural migration to online platforms. Overall ESVs delivered look-through revenue growth of approximately 50%5. (5) Look-through share represents net revenue of investments mutliplied by SEEK’s ownership interest (based on comparable ownership interest across FY2020 and FY2021). Excludes OES and Coursera. Directors’ Report14 Financial position Cash and cash equivalents Other current assets Intangible assets Equity accounted investments Other non-current assets Total assets excluding assets held for sale Assets held for sale Total assets Current borrowings Non-current borrowings Unearned income Lease liabilities Current creditors and provisions Non-current creditors and provisions Shareholders equity Total liabilities and equity excluding liabilities directly associated with the assets held for sale Liabilities directly associated with the assets held for sale Total liabilities and equity 2021 $m 491.8 781.7 1,380.0 562.4 320.2 3,536.1 1,064.5 4,600.6 77.3 1,029.9 129.9 205.2 990.7 179.8 1,918.7 4,531.5 69.1 4,600.6 Restated 2020(1) $m 604.8 212.4 2,538.8 268.3 704.5 4,328.8 - 4,328.8 143.4 1,797.6 350.9 64.0 439.0 158.1 1,375.8 4,328.8 - 4,328.8 (1) Comparative information has been restated for a change in accounting policy (refer to Note 29 Changes in accounting policies in the Financial Report for more information). At 30 June 2021, SEEK had: • Total assets of $4,600.6m of which 30% related to long-life intangible assets (goodwill, brands and licences) arising from business combinations, with the remainder primarily comprised of equity accounted investments, trade and other receivables and cash and cash equivalents; and • Total liabilities of $2,681.9m of which 41% related to borrowings, with the remainder primarily comprised of trade and other payables, unearned income, and lease liabilities. At 30 June 2021, SEEK is in a net asset position of $1,918.7m. Excluding net assets held for sale of $995.4m, SEEK is in a net asset position of $923.3m. Excluding net assets held for sale, SEEK’s current assets exceed its current liabilities by $58.5m. The differences in SEEK’s financial position comparing FY2021 to FY2020 are primarily the result of: • The selldown of SEEK’s controlling interest in Zhaopin, which resulted in the deconsolidation of assets totalling $1,246.5m and liabilities totalling $573.5m, coupled with the recognition of an equity accounted investment of $521.1m for SEEK’s retained 23.5% interest. Refer to Note 2 Discontinued operations, specifically section (b), in the Financial Report for further information; and • The planned separation between SEEK and SEEK Investments. SEEK has designated assets (and associated liabilities) expected to be transferred to SEEK Growth Fund as held for sale. Refer to Note 2 Discontinued operations, specifically section (c)(iii), in the Financial Report, for further details of what comprises these balances at 30 June 2021. SEEK’s share of cash proceeds received in relation to the Zhaopin disposal have been partially used to repay borrowings, and fund the SEEK Limited dividend in May 2021. At 30 June 2021, a number of balances are included within SEEK’s Consolidated Balance Sheet which are attributable to gross funds flows that are expected to occur after year end, relating to both SEEK’s share and the non- controlling interests’ share of proceeds from the Zhaopin disposal, through Zhaopin Limited (SEEK’s holding entity for the Zhaopin operations). Refer to Note 2 Discontinued operations, specifically section (b)(iv), in the Financial Report for further details. SEEK’s remaining share of proceeds from the disposal after the net distributions outstanding is $183.7m. Excluding this receivable, SEEK’s current liabilities exceed its current assets by $125.2m, however by excluding unearned income of $129.9m, which represents non-refundable advances from customers, SEEK would have net current assets of $4.7m, and sufficient liquidity and undrawn borrowings to further support this position. Net debt Net debt at 30 June 2021 was $623.6m ($615.3m net of capitalised borrowing costs) and is further discussed in Note 7 Net debt in the Financial Report. SEEK’s borrowings comprise a combination of debt facilities across SEEK Limited and Zhaopin Limited: • SEEK Limited has an unsecured syndicated bank facility comprising A$612.5m and US$552.5m, and A$225.0m of notes issed under SEEK’s Euro Medium Term Note Programme; and • Zhaopin Limited has entrusted loan facilities of US$58.0m, which are expected to be repaid following further receipt of proceeds as a result of the Zhaopin disposal. At 30 June 2021, $1,115.5m of the total available facitilies were drawn down, with $536.3m available in undrawn capacity. SEEK Limited Annual Report 2021Cash flow Cash generated from Continuing Operations increased to $313.6m and represented an EBITDA conversion ratio(1) of 94%. (1) EBITDA conversion ratio is calculated as cash generated from operations / EBITDA. Cash generated from Continuing Operations Transaction costs Finance costs and taxes paid Net cash from operating activities attributable to Continuing Operations Proceeds from disposal of interest in Zhaopin, net of cash disposed Proceeds from disposal of Zhaopin, to be paid out Proceeds from disposal of equity accounted investment Payments for acquisition of subsidiary, net of acquired cash Payments for acquisition of equity accounted investments Capital expenditure (intangible assets and plant and equipment) Other investing activities Net cash from/(used in) investing activities attributable to Continuing Operations Net change in borrowings Dividends paid to shareholders of SEEK Limited Payments of lease liabilities Payments for additional interest in subsidiary Other financing activities Net cash (used in)/from financing activities attributable to Continuing Operations Net cash used attributable to Discontinued Operations Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the year Less cash and cash equivalents at the end of the year attributable to assets held for sale Cash and cash equivalents at the end of the year attributable to Continuing Operations 2021 $m 313.6 (2.0) (87.5) 224.1 124.1 308.7 6.1 (1.2) - (137.9) 0.6 300.4 (400.8) (116.4) (7.1) (14.2) (30.5) (569.0) (22.5) (67.0) 604.8 (12.4) 525.4 (33.6) 491.8 15 Restated 2020(2) $m 250.3 (1.0) (81.3) 168.0 - - - (4.0) (4.0) (92.8) (4.5) (105.3) 301.7 (47.8) (9.7) - (41.9) 202.3 (29.4) 235.6 382.9 (13.7) 604.8 - 604.8 (2) Comparative information has been restated for Discontinued Operations and a change in accounting policy (refer to Note 2 Discontinued operations and Note 29 Changes in accounting policies respectively in the Financial Report for more information). Key cash flow movements Net cash inflow from investing activities of $300.4m includes $432.8m received in relation to the disposal of Zhaopin, however, $308.7m of cash received will be distributed to non-controlling interests and third parties for transaction costs in future periods. These inflows were partially offset by capital expenditure of $137.9m. Cash outflows from financing activities of $569.0m were primarily driven by: a net decrease in borrowings of $400.8m, which included net repayments of Zhaopin Limited borrowings of $19.3m and net repayments of SEEK Limited borrowings of $381.5m; and payments of dividends of $116.4m, including the FY2020 interim dividend for which payment was deferred to July 2020, and the May 2021 dividend paid following completion of the Zhaopin transaction. Directors’ Report16 Principal risks SEEK actively manages the risks that could materially impact our ability to sustain our future financial performance and deliver our long-term strategy. The following are the key risks and the actions we are taking to manage these risks. Climate change risk is not considered financially material at this time and is addressed separately in SEEK’s Sustainability Report. COVID-19 COVID-19 still presents many uncertainties across our markets. Varying speeds of economic recovery and levels of government intervention will require SEEK to adapt to continually changing conditions in the near term. As the medium- and long-term impacts and trends from COVID-19 begin to emerge, SEEK will monitor their effects on its principal risks, particularly in the areas of cybersecurity, business resiliency, marketplace disruption, workplace culture and attracting and retaining talent. Risk area Impact of the risk Mitigation and monitoring strategies Cybersecurity and business resilience Disruption and competition Data governance and artificial intelligence Culture and talent A major cybersecurity breach could result in the loss of personally identifiable information, proprietary algorithms or sensitive data. A prolonged, unplanned disruption to critical platforms or significant interruptions in the systems of third parties upon which SEEK relies may impair SEEK’s ability to provide services and damage SEEK’s reputation and trust with candidates, hirers and students. Highly skilled cybersecurity and technical experts focus on preventative, detective and responsive capabilities, to identify and respond to the emerging cyber threat landscape. Initiatives to raise employee cyber awareness and vigilance have been implemented and continue to be reinforced. SEEK continues to enhance business continuity and disaster recovery capability and procedures, and the monitoring of critical systems for signs of poor performance, intrusion or interruption. New disruptive business models, competitors entering the market or existing competitors aggressively increasing their market share could erode SEEK’s ability to compete. SEEK may not successfully build and acquire new growth platforms or products that solve candidate, hirer or student needs in the human capital market as quickly or effectively as competitors. SEEK is vigilant in monitoring local and global competitive trends and operating metrics. SEEK’s organisational structure is designed for effective and fast-paced product and technology rollouts to provide market-leading experiences for candidates, hirers and students. Increased investment activity aims to diversify the portfolio and enhance capabilities and value offerings. Failure to use and protect personally identifiable information or sensitive data in breach of data privacy laws or contrary to customer and community expectations may breach customer trust. Loss of confidence would damage SEEK’s reputation and market position and could result in regulatory action. Operating and financial performance is dependent on the ability to attract and retain top talent in a competitive environment, particularly in technology roles, and with changing workplace expectations. The loss of critical people could leave SEEK vulnerable to leadership and capability gaps. SEEK continually invests in cybersecurity and data management practices and procedures. Legal teams monitor developments in data privacy and ethics in relevant jurisdictions. Privacy policies are supported by clear guidance for candidates on how their information is collected, used, protected, and managed when they use SEEK’s services. Investment in our people and culture enables SEEK to attract and retain key talent and maintain a motivated and effective workforce in the face of changing workplace environments. External hiring addresses gaps in experience and capability for more complex roles with cross-geographical responsibility. The senior management remuneration structure is designed to retain key managers in specific geographies and focus them on SEEK’s long-term growth potential. Detailed planning processes underpin adjustments to the operating model designed to respond to customer needs, promote cross- regional collaboration and deliver greater impact on a global scale. Major programs of work have governance structures in place to ensure risks are well understood and managed. Execution effectiveness Changes and integration across the operating model and technology systems are complex particularly across geographies, and anticipated business benefits may not be realised within the desired timeline or at increased costs. SEEK Limited Annual Report 202117 Risk area Impact of the risk Mitigation and monitoring strategies Country and regulatory Economic conditions Environment and community SEEK is exposed to regulatory, legal, political and conduct risks in the countries in which it operates including in the Asia Pacific region and Latin America. Changes in policy or regulation in any country in which SEEK’s employment businesses operate may adversely impact the delivery of services. A prolonged decline in job advertisement volumes and revenue may occur as a result of severe economic downturn impacting employment markets in one or more of SEEK’s countries of operation. SEEK’s policies, or the implementation and governance of those policies, in relation to business conduct and sustainable business practices, including in the areas of modern slavery, bribery and corruption and environmental practices, could fail to meet the expectations of customers, investors and other key stakeholders, resulting in a significant negative impact on reputation and loss of business. Local and corporate management monitor economic and political indicators and changes to legislation. SEEK maintains strong relationships with key stakeholders in these markets, trains relevant employees and participates in industry consultation. SEEK monitors and forecasts its cash flow and revenue to manage its capital position. Additionally, SEEK continues to evolve its business model, products and services. Agile development methodologies enable fast response to challenges and allow SEEK to capitalise on new opportunities as they arise. SEEK engages with stakeholders to understand and meet community expectations regarding candidate safety and climate responsibilities. SEEK monitors its platforms to identify and remove illegitimate hirers or job ads that may lead to fraud or discrimination, or endanger candidates. Employees receive training in anti-bribery and corruption to support internal controls. SEEK also has a climate change strategy including emissions reduction targets. Directors’ Report18 Board of Directors Graham Goldsmith, age 61 Non-Executive Director since October 2012, Chairman from January 2019 Skills and Experience Graham Goldsmith retired in 2012 as Vice Chairman and a Managing Director of Goldman Sachs Australia after a 25 year career with the firm (and its predecessors in Australia), spanning a number of different roles. He was Chancellor of Swinburne University of Technology until 31 January 2019. Graham is a Panel Member of Adara Partners, a director of Stars Foundation Inc and Deputy Chairman of the John and Pauline Gandel Foundation. Other listed company directorships • Djerriwarrh Investments Ltd since April 2013 Board Committee memberships • Chairman of Remuneration Committee • Member of Audit and Risk Management Committee • Chairman of Nomination Committee Qualifications B.Bus (Accounting) (Swinburne), AMP (Harvard), FCPA, FAICD Ian Narev, age 54 Executive Director since 1 July 2021 Skills and Experience Ian has been the Managing Director and CEO of SEEK Limited since 1 July 2021. Ian joined SEEK in April 2019 in the dual roles of Chief Operating Officer and CEO of Asia Pacific and Americas. Prior to joining SEEK, Ian had spent 11 years at Commonwealth Bank of Australia (CBA). He was CBA’s Managing Director and CEO from 2011 until 2018. Ian has non-profit board roles in education and the performing arts, and advisory board roles in private equity and fintech. Other listed company directorships None Qualifications BA LLB (Hons)(Auckland), LLM (International Corporate Law)(Cambridge), LLM (International Relations)(New York) Andrew Bassat, age 55 Non-Executive Director since 1 July 2021 Executive Director between September 1997 and 30 June 2020 Skills and Experience Andrew Bassat is the former Managing Director and CEO of SEEK Limited. He co-founded the company in 1997 and from its inception until stepping down as CEO on 30 June 2021 he was involved in all stages of the development of SEEK’s business. In July 2016 Andrew was appointed as a director of St Kilda Football Club and in December 2018, became President of the Club. Effective 1 July 2021, Andrew commenced as Executive Chairman and CEO of SEEK Growth Fund. Other listed company directorships None Board Committee memberships • Member of Nomination Committee Qualifications BSc (Computer Science) (Melb), LLB (Hons) (Monash), MBA (Melb) Julie Fahey, age 64 Non-Executive Director since July 2014 Skills and Experience Julie Fahey has over 30 years of experience in technology, covering consulting, software vendor and Chief Information Officer roles. In addition, Julie spent 10 years as a partner at KPMG. She is a director of Datacom Group Ltd and CenITex, and a member of the Australian Red Cross Lifeblood Board and the LaTrobe University Council. Other listed company directorships • Australian Foundation Investment Company Ltd since April 2021 • IRESS Ltd since October 2017 • Vocus Group Ltd (February 2018 to July 2021) Board Committee memberships • Member of Audit and Risk Management Committee • Member of Nomination Committee Qualifications BAppSc (RMIT) SEEK Limited Annual Report 202119 Leigh Jasper, age 47 Non-Executive Director since April 2019 Skills and Experience Leigh Jasper co-founded and was the CEO of Aconex, which listed on the ASX in 2014 and was subsequently acquired by Oracle in March 2018. Leigh led Aconex’s global growth, expanding the business into Asia, the Americas, the Middle East and Europe. Leigh is a director of The Macfarlane Burnet Institute for Medical Research and Public Health Limited, Salta Properties Pty Ltd and Buildxact Ltd, and Chair of LaunchVic. Linda Kristjanson, age 66 Non-Executive Director since October 2020 Skills and Experience Linda Kristjanson is a leading figure in the education sector with an academic career spanning four decades across Australia, Canada and the United States. Linda was Vice-Chancellor and President of Swinburne University of Technology until August 2020. Linda is Chairperson of the Board of the Victorian Comprehensive Cancer Centre and a Non-Executive Director of Education Australia Limited and the National Stroke Foundation. Michael Wachtel, age 66 Non-Executive Director since September 2018 Skills and Experience Michael Wachtel has considerable global business experience gained during his 35 year career in the professional services industry. Michael was previously Chairman (Asia Pacific & Oceania) of Ernst & Young (EY) and a member of the EY Global Governance Council and Global Risk Executive Committee. He is currently a Board member of the Future Fund and St Vincent’s Medical Research Institute. Vanessa Wallace, age 57 Non-Executive Director since March 2017 Skills and Experience Vanessa Wallace has over 30 years experience in strategy management consulting. Her former roles at Booz & Company (now known as Strategy&) included Executive Chairman of Booz & Company (Japan) Inc, Senior Partner, member of the global Board, lead of the financial services practice in Global Markets and lead of the strategy practice in ANZSEA. Vanessa is also a member of the Chairman’s Council of the Australian Chamber Orchestra. Other listed company directorships None Board Committee memberships • Member of Remuneration Committee • Member of Nomination Committee Qualifications BE (Hons) (Melb), BSc (Mathematics)(Melb), Dip ML (French) (Melb) Other listed company directorships None Board Committee memberships • Member of Remuneration Committee • Member of Nomination Committee Qualifications BN (Manitoba), MN (Manitoba), PhD (Arizona) FAICD, FTSE Other listed company directorships • Pact Group Holdings Ltd since April 2020 Board Committee memberships • Chairman of Audit and Risk Management Committee • Member of Nomination Committee Qualifications BCom LLB (UCT), LLM (LSE), CTA, FAICD Other listed company directorships • Doctor Care Anywhere Group PLC since September 2020 • Ecofibre Ltd since July 2021 • Wesfarmers Ltd since July 2010 Board Committee memberships • Member of Audit and Risk Management Committee • Member of Remuneration Committee • Member of Nomination Committee Qualifications BCom (UNSW), MBA (IMD, Switzerland) Directors’ Report20 Directors and meetings of directors All persons listed below were directors of SEEK Limited during the year ended 30 June 2021 and up to the date of this report, unless otherwise stated. Andrew Bassat stepped down as MD and CEO on 30 June 2021, and was appointed a Non-Executive Director of SEEK Limited effective 1 July 2021. Ian Narev became MD, CEO and Executive Director of SEEK Limited effective 1 July 2021. The Board acknowledges that Andrew’s contribution to SEEK since its founding has been enormous, and would like to thank Andrew for his vision, leadership and passion. The Directors are pleased to retain his commitment and experience on the Board. The qualifications, experience and special responsibilities of each director, including current and recent directorships, are detailed on pages 18 and 19 of the Directors’ Report. The table below details the number of Board and Committee meetings held and attended by those directors during the year ended 30 June 2021. Board A B Audit and Risk Management Committee A B C Managing Director, Chief Executive Officer and Co-Founder(2) 7 A R Bassat 13 13 - - Non-Executive Directors 13 G B Goldsmith 13 J A Fahey 13 L M Jasper L J Kristjanson(3) 10 13 M H Wachtel 13 V M Wallace 13 13 13 10 13 13 7 7 - - 7 7 7 7 - - 7 7 - - 6 4 - - Remuneration Committee Nomination Committee Ad hoc Committees(1) A - 6 - 6 4 - 6 B - 6 - 5 4 - 6 C 6 - 6 - - 6 - A - 1 1 1 1 1 1 B - 1 1 1 1 1 1 C 1 - - - - - - A 2 8 - - - 8 4 B 2 8 - - - 8 4 C 1 - - - 1 - - A - Meetings held while member held office and was eligible to attend as a member B - Meetings attended C - Meetings attended by invitation (1) Includes the Independent Board Committee announced on 23 February 2021. Ad hoc committee meetings of the Board were convened during the year in relation to financial results and the issue of Subordinated Notes under the Euro Medium Term Note programme. (2) Andrew Bassat was succeeded by Ian Narev as Managing Director and CEO, and was appointed a Non-Executive Director effective 1 July 2021. (3) Linda Kristjanson was appointed a Non-Executive Director effective 9 October 2020. Company Secretary The Company Secretary during the year ended 30 June 2021 was Lynne Jensen. Lynne has over 25 years of international and domestic legal and governance experience, including as a partner of Allens Arthur Robinson and as Group General Counsel and Company Secretary of Grocon. Lynne holds a Bachelor of Laws (Honours) and Bachelor of Arts from the University of Melbourne. Effective 1 July 2021, Rachel Agnew replaced Lynne Jensen as Company Secretary. Rachel was previously a Company Secretary of BHP Group Limited and BHP Group Plc and holds a Bachelor of Laws (Honours) and Bachelor of Commerce from the University of Wollongong. Indemnification and insurance of officers The SEEK Limited Constitution provides that the Company will, to the extent permitted by law, indemnify any current or former director or officer in respect of any liability incurred in that capacity and related legal costs. SEEK Limited has entered into a Deed of Indemnity with each director and a number of senior executives. During the year SEEK Limited paid a premium in respect of an insurance contract which covers the directors and officers against certain liabilities in accordance with the terms of the policy. The insurance contract requires the nature of the liability covered and the amount of the premium paid to be confidential. Interests in shares and options As at the date of the report the directors held the following interests in shares and options: G B Goldsmith I M Narev A R Bassat J A Fahey L M Jasper L J Kristjanson M H Wachtel V M Wallace Shares in SEEK Limited Options over SEEK Limited shares 50,000 116,037 15,001,722 8,888 68,133 1,137 4,000 17,000 - 1,144,201(1) 435,287(1) - - - - - (1) Includes Wealth Sharing Plan Options/Rights (refer to section 6.3 on page 39). Dividends Dividends paid or declared by the Company to shareholders during the financial year are set out in Note 18 Dividends of the Financial Report. SEEK Limited Annual Report 202121 Auditor and non-audit services PricewaterhouseCoopers (PwC) continues in office as auditor of the parent entity (Auditor) in accordance with section 327 of the Corporations Act 2001. It is SEEK’s policy to engage PwC on assignments in addition to their statutory audit duties only where PwC’s expertise and experience with SEEK provide a compelling reason to do so. These assignments are principally other assurance and due diligence reporting on acquisitions. Fees that were paid or payable during the financial year for non- audit services provided by the Auditor and its related practices are disclosed in Note 27 Remuneration of auditors of the Financial Report. The Board 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 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 impartiality and objectivity of the Auditor; and • 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 41. Environmental regulation The operations of the Group are not subject to any particular or significant environmental regulations under a Commonwealth, State or Territory law. Proceedings on behalf of the Company No proceedings have been brought or intervened in on behalf of the Company, nor have any applications for leave to do so been made in respect of the Company, under section 237 of the Corporations Act 2001. Significant changes in the state of affairs In the opinion of the directors, other than the discontinued operations referenced in the operating and financial review of this report, there were no significant changes in the state of affairs of SEEK that occurred during the financial year. Other information The following information also forms part of this Directors’ Report and is located as follows: • Principal activities are set out on pages 4 to 8; • SEEK’s Operating and financial review is set out on pages 9 to 17; and • the Remuneration Report, including an introductory letter from the Chairman of the Remuneration Committee, is set out on pages 23 to 40. Matters subsequent to the end of the financial year SEEK Growth Fund On 11 August 2021, SEEK announced the creation of SEEK Growth Fund following the completion of a strategic review. SEEK’s current holdings in OES and 14 ESVs will be transferred to the Fund as seed assets in exchange for units in the Fund, based on an independently assessed fair value of A$1,215.0m. A management company will be formed to manage the Fund, led by Andrew Bassat and a team of investment professionals from SEEK. The Fund will operate autonomously from SEEK, with greater access to third party capital, allowing it to focus on being an investor and business builder, enabling SEEK to focus on growth opportunities in AP&A whilst retaining its economic exposure to the investment portfolio. On 6 August 2021, SEEK acquired a 26.3% undiluted interest in Hireup Holdings Pty Ltd (Hireup), a provider of online disability support services which connects workers with participants, and a 38.4% undiluted interest in MyTutorWeb Limited (MyTutor), a UK based online tutoring marketplace. SEEK will subsequently sell its interests in Hireup and MyTutor to the Fund. Remittance of proceeds In June 2021, Zhaopin Limited, the holding entity for the Zhaopin operations, received AUD$308.7m of proceeds related to the disposal of Zhaopin. These proceeds had not been distributed to shareholders at balance date and the amount is recorded in Cash and cash equivalents at 30 June 2021. On 5 July 2021, the amount was remitted to SEEK’s co-investors in Zhaopin. There are no other matters or circumstances which have arisen since the end of the financial year that have significantly affected or may significantly affect the operations of SEEK, the results of those operations and the state of affairs of SEEK in subsequent financial periods. Rounding of amounts The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the financial statements. Amounts in the financial statements have been rounded off in accordance with that Corporations Instrument to the nearest hundred thousand dollars, or in certain cases, the nearest dollar. Directors’ Report22 SEEK Limited Annual Report 202123 Letter from Remuneration Committee Chairman Dear Shareholders, On behalf of the Board, I am pleased to present SEEK’s FY2021 Remuneration Report (Report). This letter and the Q&A which follows summarise the remuneration outcomes for FY2021, changes to Executive leadership roles and our Executive KMP, and key changes to the executive remuneration framework as outlined in last year’s Report. COVID-19 and FY2021 Remuneration Outcomes The 2021 financial year was a challenging one, as the health, social and economic consequences of the COVID-19 pandemic presented ongoing uncertainty for our customers and for society at large. Throughout this extraordinary period, we continued to support our customers through relief measures and prioritised the safety, wellbeing and retention of our people. The impact of the pandemic in all markets in which SEEK operates varied considerably and was constantly changing. The signs of economic recovery were closely linked to the status of the virus in each location. Given the business challenges arising from COVID-19, there were no remuneration increases provided to Executives in FY2021. Additionally, for the second successive year, we made no changes to fees for Non-Executive Directors. Given the improvement in SEEK’s business results through the year being reflected in increases in our share price, the FY2019 Wealth Sharing Plan (WSP) fully vested as the 60-day VWAP to 30 June 2021 of $30.76 exceeded the three-year share price hurdle of $24.39. Pleasingly for shareholders, over the three-year vesting period for this award, SEEK’s share price increased by 54%, from $21.53 to $33.14. The vesting of the FY2019 WSP followed the lapsing of the FY2018 WSP in the prior financial year. The strength of recovery in our ANZ business through FY2021 also resulted in our decision to repay to both the Australian and New Zealand governments the COVID related support payments received during FY2021 totaling $9.8 million. FY2022 Separation of the SEEK Investments business and Executive KMP leadership On 11 August 2021, SEEK announced that the Board had finalised a review targeted to provide SEEK Investments with a greater degree of independence, focus and access to third party capital; whilst allowing SEEK to retain significant economic exposure to the investment portfolio. We had also announced that SEEK’s Chief Executive Officer (CEO) and Co-Founder, Andrew Bassat, would step down from this role and lead the Investments business. Ian Narev was appointed as Managing Director and Chief Executive Officer (MD and CEO), effective from 1 July 2021. As I have noted in other communications, Andrew’s contribution to SEEK since its founding has been enormous and we are pleased that we will retain his focus and commitment in his new role and also as a Non-Executive Director of SEEK Limited. Over the last two years, Ian and Andrew have worked closely in partnership, with Ian leading SEEK’s operating businesses during a particularly challenging period. In his new role as MD and CEO, Ian brings a strong track record in public company leadership, digital transformation and strategy and we are fortunate to have such a high calibre leader as successor to Andrew. At the end of FY2021, Geoff Roberts retired as Chief Financial Officer (CFO) after nearly six years at SEEK. The Board appointed Kate Koch as the new CFO and we welcome her to the organisation. I would like to record our thanks and appreciation to Geoff for his commitment and contribution during his time as CFO. FY2022 Executive remuneration framework Ensuring SEEK has the right leadership team in place is critical to its ongoing success. It is also critical to the have right remuneration framework in place – one that is globally competitive, while remaining fair and reasonable in a local context and delivering outcomes that are aligned with the shareholder experience over the long-term. Consequently, SEEK’s executive remuneration framework is structured such that aside from base salary, Executives and other senior leaders do not receive incentive payments in cash. For most senior leaders at SEEK, variable remuneration is delivered entirely through equity, which we believe encourages leaders to focus on building a sustainable business over the long-term and achieves wealth creation for leaders and shareholders alike through ongoing share price growth. Our variable remuneration components are designed to align executive reward with the shareholder experience. The Board is grateful for the support from investors in relation to changes to the WSP introduced in FY2021 and outlined in the FY2020 Remuneration Report. These changes are summarised in the following Q&As and outlined in further detail under section 3.5 of this Report. Recognising the changes introduced last year were well-received, the overall approach to the FY2022 WSP will remain unchanged. However, we have addressed a further area of focus by many for the incoming CEO, by locking in the mix of WSP Options and Rights at 50:50, which is consistent with his recent voluntary choices. It is the Board’s intent to review aspects of executive remuneration on an ongoing basis, to ensure the structure and methodology remain closely aligned with our remuneration principles and support sustainable growth of SEEK’s business. We will continue to share our thinking with you as it evolves and as always, we welcome your feedback. I look forward to engaging with you in FY2022 and thank you for your ongoing support of SEEK. Graham Goldsmith Chairman of the Remuneration Committee Remuneration Report24 Q&A This section addresses questions relating to the remuneration arrangements of Ian Narev as SEEK MD and CEO, the departure arrangements for Andrew Bassat as he steps down, and the changes to the WSP introduced in FY2021. 1) What are Ian Narev’s remuneration arrangements upon appointment as MD and CEO and are they appropriate relative to market? Upon appointment as MD and CEO, Ian Narev’s Total Remuneration Opportunity (TRO) was set at $4,503,000 per annum, the key components of which are: • Fixed Remuneration comprising Base Salary and Superannuation of $1,900,000 – which remained unchanged; • Equity Rights of $950,000 (50% of Fixed Remuneration) – which also remained unchanged; and • WSP Options and Rights of $1,653,000 (87% of Fixed Remuneration) – which was increased in quantum and proportion of TRO. The increase to Ian’s TRO upon appointment as MD and CEO was thus delivered exclusively via an increase in the WSP component, which is entirely ‘at risk’ and closely aligned to the shareholders’ interests. The Board considers the increase to Ian’s TRO upon appointment to the MD and CEO role to be appropriate. Ian’s remuneration is positioned at the median of the primary comparator group (see section 3.2 for further detail on SEEK’s benchmarking methodology) and recognises his skills and experience as demonstrated during his tenure with SEEK and his depth of experience as a seasoned CEO and executive prior to joining. The Board also determined that in relation to Ian’s WSP, 50% of the WSP is to be awarded as Options and 50% is to be awarded as Rights; ensuring the increase to Ian’s TRO is closely aligned with the long-term interests of SEEK’s shareholders. Ian’s TRO at $4,503,000 is 10.4% below Andrew’s TRO at the time of him stepping down as CEO. 2) What were Andrew Bassat’s departure arrangements upon stepping down as CEO? Upon stepping down as CEO, Andrew was not provided with any termination payment or payment in lieu of notice. All on- foot equity awards were treated in accordance with the default provisions of the grants per the plan rules and as approved by shareholders. Andrew’s outstanding WSP awards were pro-rated based on the portion of the respective vesting period served to 30 June 2021 and all WSP awards remaining on-foot will be tested in accordance with the respective vesting conditions in July 2022 (for the FY2020 WSP) and July 2023 (for the FY2021 WSP). As Andrew was appointed as a Non-Executive Director of SEEK effective from 1 July 2021, he will receive the standard Non-Executive Director fee of $160,000, inclusive of superannuation. Under the Nomination Committee Charter, all Non-Executive Directors are members of this Committee, including Andrew. No fees are payable for membership of the Nomination Committee. Andrew will not be a member of any other Board Committee. As a Non-Executive Director, Andrew will not participate in any future EEP or WSP awards. 3) What were the WSP design changes in FY2021 and are these being retained in FY2022? As outlined in SEEK’s 2020 Remuneration Report, the following changes were made to the FY2021 WSP. • Graduated vesting – 50% vesting occurring at a Threshold share price hurdle, 100% vesting occurring at a Stretch share price hurdle and pro-rata vesting taking place between these points. This change addressed feedback received about the ‘all or nothing’ nature of the WSP which previously included a ‘cliff vesting’ design element, and now more closely mirrors the experience of our shareholders. • Share price hurdle – with the introduction of graduated vesting, it was necessary for the Board to set both Threshold and Stretch share price hurdles. For the FY2021 WSP, the Board decided that the Threshold share price hurdle would be based on the 15-year average growth in the ASX All Ordinaries Index (being 3.3%) – applied on a Compound Annual Growth Rate (CAGR) basis to SEEK’s 60-day Volume Weighted Average Price (VWAP) to 30 June 2020 (being $18.61) – resulting in a Threshold hurdle of $20.51. This was consistent with the methodology previously used to set the 100% vesting price. As noted above, at the Threshold share price hurdle, 50% vesting occurs. For the FY2021 WSP, the Board set the Stretch share price hurdle based on a more challenging target of 6.0% CAGR, resulting in a hurdle of $22.16 at which 100% vesting occurs. With the continuation of graduated vesting, for the FY2022 WSP, the Board has determined that: • The 15-year average growth in the ASX All Ordinaries Index (being 3.8%) will be applied on a CAGR basis to SEEK’s 60-day VWAP to 30 June 2021 (being $30.76) to set the Threshold share price hurdle of $34.40 at which 50% vesting will occur; • A 6.0% CAGR target will be applied to set the Stretch share price hurdle of $36.64 at which 100% vesting will occur; and • Between $34.40 and $36.64, pro-rata vesting on a straight- line basis will apply. • Share price input into fair value – the share price input into the external fair valuation of the WSP undertaken for allocation purposes changed from a 1 July spot price to a 60- day VWAP up to and including 30 June. This change reduces the potential impact of share price volatility that originates from using a spot price, aligns with the 60-day VWAP period used for calculating the number of shares allocated under the EEP and mirrors the VWAP periods used with the WSP for purposes of setting and testing the share price hurdle. Given the positive feedback received from investors in relation to these changes, the Board has decided to retain the current WSP design for the FY2022 award. SEEK Limited Annual Report 2021 25 Remuneration Report Introduction and contents This Remuneration Report (Report) sets out SEEK’s Executive remuneration framework, as well as the remuneration arrangements for the Key Management Personnel (KMP) of SEEK for the year ended 30 June 2021. References to Executives in this Report are to both Executive KMP and other Non-KMP Executives who report to the CEO. The Report has been prepared and audited based on the requirements of the Corporations Act 2001 and its Regulations. Section 1 Key Management Personnel 2 FY2021 executive remuneration outcomes and alignment with SEEK’s performance 3 Executive remuneration framework, contractual terms and FY2021 statutory remuneration 4 Remuneration governance framework and related policies 5 Non-Executive Director fees 6 Other KMP disclosures Page 25 27 29 36 37 38 1. Key Management Personnel The KMP roles covered in this report are SEEK’s Non-Executive Directors, Chief Executive Officer (CEO) and Co-Founder, Group Chief Operating Officer and Asia Pacific & Americas CEO (Group COO and AP&A CEO) and Group Chief Financial Officer (CFO). Each of the KMP held their position for the whole of FY2021, unless stated otherwise. Name Position Changes during FY2021 Non-Executive Directors G B Goldsmith Non-Executive Chairman J A Fahey L M Jasper Non-Executive Director Non-Executive Director L J Kristjanson Non-Executive Director Appointed 9 October 2020 M H Wachtel V M Wallace Executive KMP A R Bassat I M Narev G I Roberts Non-Executive Director Non-Executive Director CEO and Co-Founder Stepped down as CEO 30 June 2021 Group COO and AP&A CEO Group CFO Retired 30 June 2021 Since the end of the reporting period: • Effective 1 July 2021, Andrew Bassat transitioned to a new role as Executive Chairman and CEO of the Manager of the SEEK Growth Fund and was appointed a Non-Executive Director of SEEK Limited; • Effective 1 July 2021, Ian Narev was appointed Managing Director and CEO of SEEK (MD and CEO); and • Kate Koch joined SEEK on 10 June 2021 and commenced a period of handover from Geoff Roberts prior to his retirement date. She was officially appointed CFO and KMP effective 1 July 2021. Remuneration Report26 1.1 Executive KMP changes and remuneration arrangements New appointments New MD and CEO Ian Narev was appointed as MD and CEO effective 1 July 2021 and his Total Remuneration Opportunity (TRO) was disclosed in SEEK’s ASX announcement that same day. Ian’s contractual TRO is provided for transparency: New CFO Kate Koch joined SEEK on 10 June 2021 and commenced a period of handover prior to the retirement of Geoff Roberts on 30 June 2021. Kate was officially appointed as CFO and KMP effective 1 July 2021. Her contractual TRO is provided for transparency: 42% 21% 37% 50% 25% 25% Base Salary and Superannuation Executive Equity Plan Equity Right Wealth Sharing Plan Options and Rights(1) Base Salary and Superannuation Executive Equity Plan Equity Right(1) Wealth Sharing Plan Options/Rights(1), (2) $1,900,000 $950,000 $1,653,000 $753,425 $376,712 $376,712 Total Remuneration Opportunity $4,503,000 Total Remuneration Opportunity $1,506,849 (1) The first year Kate is eligible to participate in the Executive Equity Plan and Wealth Sharing Plan is FY2022. (2) The value of Wealth Sharing Plan Options/Rights represents the fair value opportunity for FY2022. There is a choice to receive the award as Options and/or Rights. (1) The value of Wealth Sharing Plan Options and Rights represents the fair value opportunity for FY2022, with 50% to be awarded as Options and 50% to be awarded as Rights. Ian’s Base Salary and Superannuation as well as his Equity Right remained at the same level and have not changed since he joined SEEK on 29 April 2019. The Board determined that in stepping into the MD and CEO role, the increase to TRO would be delivered entirely through the Wealth Sharing Plan (WSP), ensuring the increase is aligned to the long-term interests of shareholders. At the 2021 Annual General Meeting (AGM) on 17 November 2021, shareholders will be asked to approve the grant of an Equity Right and grant of WSP Options and Rights (50%/50%). Departure arrangements Former CEO and Co-Founder Former CFO Upon his retirement from SEEK on 30 June 2021, Geoff Roberts was not provided with any termination payment or payment in lieu of notice. All outstanding EEP and WSP awards were treated in accordance with their plan rules and pro-rated based on the portion of the respective vesting period served to 30 June 2021. All WSP awards remaining on-foot will be tested in accordance with the respective vesting conditions in July 2022 (for the FY2020 WSP) and July 2023 (for the FY2021 WSP). Upon stepping down from the role of CEO, Andrew Bassat was not provided with any termination payment or payment in lieu of notice. All outstanding on-foot equity awards were treated in accordance with the default provisions per the plan rules and as approved by shareholders. Andrew’s outstanding WSP awards were pro-rated based on the portion of the respective vesting period served to 30 June 2021 and will be tested in accordance with the respective vesting conditions in July 2022 (for the FY2020 WSP) and July 2023 (for the FY2021 WSP). As Andrew was appointed a Non-Executive Director of SEEK effective 1 July 2021, he will receive the standard Non-Executive Director fee of $160,000, inclusive of superannuation. All Non-Executive Directors of SEEK are members of the Nomination Committee and no fees are payable for membership of this Committee. Andrew will not be a member of any other Board Committee. As a Non-Executive Director, Andrew will not participate in any future EEP or WSP awards. SEEK Limited Annual Report 20212. FY2021 executive remuneration outcomes and alignment with SEEK’s performance Outlined below is a summary of the FY2021 salary and equity plan vesting outcomes and the extent to which the equity plan outcomes have been aligned with SEEK’s performance. Analysis is presented to show the benefit that Executives have effectively ‘realised’ through the EEP and WSP versus the corresponding shareholder returns delivered from FY2013 to FY2021. This aims to demonstrate the strong correlation between rewards delivered to Executives and SEEK shareholder returns over this period. Executive Remuneration Outcomes Component Base Salary and Superannuation FY2021 Executive Equity Plan FY2019 Wealth Sharing Plan 27 Overall FY2021 salary/equity plan vesting outcomes Reflecting the impact of COVID-19, investor feedback and public sentiment regarding the quantum of executive remuneration, no salary or fee increases were awarded to Executives (including the CEO) or directors during FY2021. Further details regarding the remuneration of Ian Narev and Kate Koch upon appointment as MD and CEO and CFO respectively are provided in section 1.1 of this Report. At the end of the Qualifying Period, the Equity Right granted to each Executive vested in accordance with the terms of the plan. As a result, following the release of SEEK’s FY2021 financial results, the following number of Deferred Shares will be allocated to each Executive KMP: A R Bassat – 67,520 I M Narev – 51,047 G I Roberts – 31,467 The allocated Deferred Shares are subject to a further one-year disposal restriction from 1 July 2021 to 30 June 2022 – during which the value of each Executive’s EEP award remains unrealised and variable based on SEEK’s share price. As Executives are subject to the SEEK Share Trading Policy, in practice, the shares will not be available to trade until one trading day following the release of SEEK’s FY2022 financial results. Under the FY2019 WSP, Executives were given the choice to receive Options, Rights or a 50/50 combination of Options and Rights, with all electing to receive Rights. The FY2019 WSP award was tested following the end of the vesting period on 30 June 2021. In accordance with the plan terms, a 60-day Volume Weighted Average Price (VWAP) up to and including 30 June 2021 was used for testing purposes. The 60-day VWAP was $30.76 which was above the share price hurdle of $24.39. As a result, the FY2019 WSP vested on 1 July 2021 and remains subject to an exercise restriction period until 30 June 2022 – meaning the value of each Executive’s WSP award also remains unrealised and variable based on SEEK’s share price. Once exercised, the following number of shares will be allocated to each Executive KMP: A R Bassat – 129,676 I M Narev – n/a. Not employed at the time of offer G I Roberts – 58,959 Further details have been provided in section 6.3 of this Report. Note, the FY2021 EEP and FY2019 WSP outcomes are shown above as the end of the relevant qualifying/vesting periods for these awards are 30 June 2021with vesting on 1 July 2021. Details of the FY2020 EEP and FY2018 WSP awards that vested and lapsed on 1 July 2020 were provided in the FY2020 Remuneration Report and in section 6 of this Report. One of the guiding principles for executive remuneration is to align reward with SEEK’s strategic intent and the shareholder experience, encouraging Executives to think and act like owners. The following analysis compares the previous equity outcomes ‘realised’ by Executives with the corresponding shareholder returns delivered since FY2013, when the EEP and WSP were introduced. Given the value of the EEP to an Executive is a direct function of SEEK’s share price, there is clear alignment between the benefit received by Executives and growth in SEEK’s Total Shareholder Returns (TSR) over each annual award period. Similarly, when viewing the seven WSP awards tested to date in totality, as was intended by the Board, there is clear alignment between the overall benefit received by Executives and SEEK’s TSR growth over the nine-year period from 1 July 2012. Link between SEEK’s performance with equity outcomes SEEK vs ASX 200 TSR since 1 July 2012 700 600 500 400 300 200 100 ) d e x e d n i ( n r u t e R r e d o h e r a h S l l a t o T 0 Jul 12 ASX 200 TSR 156% 11% p.a. SEEK TSR 510% 22% p.a. Share Price 403% 20% p.a. SEEK’s TSR growth of 510% since 1 July 2012, when the WSP was first introduced, significantly exceeds the ASX 200 index growth of 156% over the same period. During this time, the SEEK share price also increased from $6.53 to $32.86. Assuming an Executive received all seven WSP awards granted since 1 July 2012, the combination of five having vested and two having lapsed has led to the benefit received by an Executive being correlated to but less than the TSR growth experienced by SEEK shareholders. This is an outcome which the Board considers to be fair and reasonable from the perspective of Executive reward and shareholder alignment. Jul 13 Jul 14 Jul 15 Jul 16 Jul 17 Jul 18 Jul 19 Jul 20 Jul 21 SEEK ASX 200 Remuneration Report 28 ) % ( n r u t e R r e d o h e r a h S l l a t o T 200 180 160 140 120 100 80 60 40 20 0 SEEK vs ASX 200 TSR over WSP award periods(1) d e t s e v P S W d e t s e v P S W d e s p a l P S W d e t s e v P S W d e t s e v P S W d e s p a l P S W d e t s e v P S W FY13-FY15 FY14-FY16 FY15-FY17 FY16-FY18 FY17-FY19 FY18-FY20 FY19-FY21 SEEK ASX 200 (1) Vested awards were measured over a four-year period, being the three-year performance period as shown above and an additional one-year exercise restriction period, to reflect the earliest time at which Executives can realise any benefit from the relevant WSP award. Lapsed awards were measured over their three-year performance period only to reflect the time at which the lapsing occurred. Understanding that for some investors relative rather than absolute TSR performance is a key benchmark, the above confirms that in each of the WSP award periods for each vested award and the FY2018 lapsed award, SEEK has significantly outperformed the ASX 200 index. For each WSP award period, vesting only occurred when the SEEK TSR outperformed the ASX200 TSR. Ensuring SEEK has the right leadership team in place has been instrumental to the Company’s outperformance of the Australian market throughout the increasing globalisation of the business, whilst facing local and global competitive threats and new disruptive business models. 2.1 SEEK’s five-year financial performance The following table sets out information about the SEEK’s earnings and movements in shareholder wealth for the past five financial years up to and including FY2021. Share price at year end ($) Weighted 12-month average share price ($) Cumulative Total Shareholder Return (TSR) - Indexed (%)(1) Total dividend (cents per share) Sales revenue (excluding significant items) ($m)(2) EBITDA (excluding significant items) ($m)(2) NPAT (excluding significant items and SEEK Investments ESVs) attributable to SEEK ($m)(2) Basic EPS (excluding significant items and SEEK Investments ESVs) (cents)(2) FY2017 FY2018 FY2019 FY2020 FY2021 16.91 15.76 114.68 44.0 1,040.9 375.8 220.8 63.5 21.81 18.73 151.63 46.0 1,299.5 431.2 212.1 60.5 21.16 19.13 150.64 46.0 1,537.3 455.0 207.5 59.1 21.89 19.76 159.03 13.0 1,577.4 410.6 139.3 39.6 33.14 25.68 242.36 20.0 1,591.1 473.6 147.1 41.7 (1) Cumulative TSR includes dividends and share price appreciation and is indexed from 1 July 2016 (1 July 2016 = 100.00). (2) SEEK’s financial performance for FY2021 is reflective of the aggregate results from both continuing and discontinued operations. SEEK NPAT excludes significant items and the results from ESVs as removal of items that are once-off in nature and the impact from results generated from scaling the ESVs portfolio, provides a more representative view of the underlying operational performance of SEEK. A change in accounting policy means that comparative information for FY2020 EBITDA, NPAT and Basic EPS differs from the corresponding table for the year ended 30 June 2020 (refer to Note 29 Changes in accounting policies in the Financial Statements). SEEK Limited Annual Report 2021 3. Executive remuneration framework, contractual terms and FY2021 statutory remuneration 3.1 Executive remuneration framework snapshot SEEK’s success as a global, people-centric business relies on the Company’s ability to attract, motivate, and retain world-class talent and ap- propriately reward them for the behaviours and actions which result in sustainable, long-term shareholder wealth creation, rather than those focused on short-term gains. SEEK’s Executive remuneration framework for FY2022 remains the same as outlined for FY2021. Guiding Principles for Executive Remuneration 29 Aligns reward with SEEK’s strategic intent and the shareholder experience, encouraging Executives to think and act as owners Is sufficiently competitive and flexible to attract and retain world-class talent in the face of increasing competition Balances the need to be competitive with being fair, reasonable, and appropriately reflective of SEEK’s culture and the external environment Is simple, easy to explain and delivers transparent remuneration outcomes that make sense internally and to SEEK shareholders These principles are reviewed on a regular basis to ensure they remain fit for purpose and are used by the Remuneration Committee in its annual assessment of the effectiveness of SEEK’s remuneration strategy and framework. Objectives The main objective of SEEK’s executive remuneration framework is to ensure close alignment between Executive reward and long- term shareholder returns. With SEEK’s short-term business results closely tied to the broader economy, the equity components, which represent a significant proportion of an Executive’s Total Remuneration Opportunity are designed to ‘see through’ the ups and down of the economic cycle; and encourage Executives to make bold decisions and take actions focused on creating sustainable results over the long-term, leading to wealth creation for SEEK shareholders. Executive Remuneration Framework Component Base Salary and Superannuation Executive Equity Plan Wealth Sharing Plan Purpose and how we achieve this % of Total Remuneration Opportunity for FY2022 Guaranteed Pay Equity - Variable in Value Base Salaries are set at a level that results in Executives’ Total Remuneration Opportunity being positioned between the 50th and 80th percentiles of local companies of comparable size Annual grant of ‘locked-up’ equity that is variable in value as the share price moves; this means that from Day 1 there is ongoing alignment with SEEK shareholders Refer section 3.2 for SEEK’s FY2021 benchmarking approach and section 3.3 for the link to principles Refer section 3.4 for the link to principles and summary of the FY2021 EEP Offer details Performance Based Equity (long-term equity component) Annual grant of ‘at-risk’ equity that is designed to reward for absolute share price growth throughout the economic cycle, in alignment with long-term shareholder returns Refer section 3.5 for the link to principles and summary of the FY2021 WSP Offer details MD and CEO-42% CFO-50% Other Execs- 50-60% MD and CEO-21% CFO-25% Other Execs- 20-25% MD and CEO-37% CFO-25% Other Execs- 20-25% Delivery mechanism Base Salary plus Superannuation One Equity Right that converts into an agreed number of SEEK shares Choice of Options and/or Rights that may be converted into SEEK shares. The FY2022 WSP award for the MD and CEO will be delivered as 50% Options and 50% Rights. Timeframe before reward is realised Immediate Two years Four years Base Salary and Superannuation Equity Right Value is variable based on SEEK share price over the Qualifying Period Disposal Restriction Wealth Sharing Plan Options/Rights Vesting subject to SEEK share price performance over the Vesting Period Exercise Restriction 1 Year 1 Year +1 Year 3 Years +1 Year Remuneration Report30 3.2 SEEK’s approach to determining remuneration Notwithstanding the impact of COVID-19 on the Australian economy, there continues to be an aggressive pursuit of talent with the skills and specific experience of SEEK’s senior leaders. Recognising the critical need to attract, retain and motivate the talent that SEEK needs to succeed, the Board’s objective is to position Executives’ TRO within a target range of the 50th to 80th percentiles of a primary benchmarking comparator group comprising 20 similarly sized ASX-listed companies. FY2021 benchmarking approach The Executive remuneration structure, including the significant weighting towards equity, is guided by SEEK’s remuneration objectives which support SEEK’s focus on building a sustainable business over the long-term (see section 3.1). The quantum of Executive remuneration is guided by several inputs, one of which being external benchmarking. Other inputs include the competitive landscape for Executive talent, internal relativities and the individual’s experience and performance. During FY2021, the Board engaged Ernst & Young to benchmark the quantum of TRO for Executive remuneration with the aim of identifying the competitive positioning of SEEK. Consistent with prior years, three ASX-listed size-based comparator groups were used: Primary comparator group Secondary data sources For consistency with prior years and reflecting proxy advisor feedback that a smaller, more targeted comparator group is generally preferred, SEEK’s FY2021 primary comparator group comprised 20 ASX-listed companies: 10 companies immediately either side of SEEK based on 12-month average market capitalisation to 28 February 2021 of $7,811m. i s e n a p m o C 0 1 + i s e n a p m o C 0 1 - Auckland Int. Airport Limited Mirvac Group Origin Energy Limited Evolution Mining Limited Stockland Lendlease Group GPT Group Aurizon Holdings Limited Spark NZ Limited Wisetech Global Limited SEEK Medibank Private Limited Tabcorp Holdings Limited Coca-Cola Amatil Limited Qantas Airways Limited CIMIC Group Limited Treasury Wine Estates Limited Computershare Limited AusNet Services BlueScope Steel Limited Orica Limited Two additional comparator groups supplemented the FY2021 benchmarking analysis to provide a more complete view of Executive remuneration, reflecting common ASX-listed company benchmarking approaches: i. ASX-listed companies within the range of 50% to 200% of SEEK’s market capitalisation based on a 12-month average market capitalisation to 28 February 2021; and ii. ASX-listed companies with international operations within the range of 50% to 200% of SEEK’s market capitalisation based on a 12-month average market capitalisation to 28 February 2021. Application of benchmarking data Executives’ TROs are determined by the Board with reference to: i. The market positioning of each Executive’s TRO against the primary comparator group; ii. Individual performance, role scope and complexity, and internal relativities amongst the Executives; and iii. Availability of similar skills and experience in the domestic and international marketplace. Based on the FY2021 benchmarking outcomes, the Board determined to increase Ian Narev’s TRO upon appointment as the MD and CEO effective 1 July 2021. The increase was delivered entirely through WSP Options and Rights, aligning Ian’s remuneration to the market median of the primary comparator group. See section 1.1 for further detail. For the CFO and other Executives, the Board is satisfied that the TRO for each individual is positioned appropriately against the primary comparator group. Despite an increasing requirement for the scope of senior roles to expand across multiple geographies, the majority of Executives are based locally and as such, it is appropriate to anchor remuneration primarily to the Australian market. However, given the significant global footprint of SEEK and the associated demands, the ongoing monitoring of market positioning against multi-national and global technology companies will continue to be a focus. 3.3 Base Salary and Superannuation Provision of a competitive Base Salary that appropriately reflects the opportunities and challenges faced by Executives and the expectation of high performance at all times and in all conditions, allows the focus to be on the job at hand. Together with the Equity Rights and WSP Options/Rights, Executives have the confidence they will be fairly and well remunerated for their efforts throughout the business cycle, without this being excessive. Superannuation at SEEK is uncapped, with any amount earned over either the general concessional contributions cap or maximum superannuation contributions base paid as cash and included within ‘cash salary’. Executives are also eligible for cover under the SEEK salary continuance insurance policy available to all permanent employees, as well as on-site car parking. SEEK Limited Annual Report 2021 31 3.4 Equity Rights Equity Rights ensure alignment with shareholders and emphasise the focus on sustainable, long-term shareholder wealth creation. The provision of Equity Rights rather than a traditional STI, encourages Executives to think and act as owners and to channel their actions to sustainably grow the business, rather than focus on short-term financial targets which may not be aligned with SEEK’s long-term objectives. The key features of the EEP are as follows: • Equity Rights vest, subject to continued employment, after a one-year Qualifying Period. Shares allocated are subject to a further one-year Disposal Restriction Period (in total, a two-year ‘lock-up’ period); • The number of shares to be allocated is determined based on a VWAP for the 60 trading days leading up to the start of the Qualifying Period (up to and including 30 June); and • The actual value of each Equity Right is variable during the Qualifying and Disposal Restriction Periods based on the SEEK share price at a given point in time. This means that Executives are always exposed to the same SEEK share price movements, up and down, as shareholders. Terms and duration The terms of the FY2021 Equity Rights award are set out below. There were no design changes from the prior financial year and no changes for FY2022. Equity Rights Objective Ensuring Executives hold substantial equity in SEEK to create shareholder alignment and exposure to movements in SEEK’s share price for the duration of the award. Effective Date 1 July 2020 Grant date Executives: 2 November 2020 CEO: 25 November 2020 Closing share price at 1 July 2020 $21.80 Qualifying Period 1 July 2020 to 30 June 2021 Lapsing condition Equity Rights generally lapse where the Executive ceases employment before the end of the Qualifying Period. In other circumstances, being good leaver events, the Executive’s Equity Right will remain on foot and the number of shares that will be received will be adjusted to take into account the Executive’s service period. The Board retains discretion to determine a different treatment if considered appropriate in the circumstances. Vesting and allocation methodology Vesting is determined following the end of the Qualifying Period with the number of shares allocated to an Executive determined by dividing the Executive’s FY2021 EEP award opportunity by the 60-day SEEK VWAP up to and including 30 June 2020, being $18.61. Exercise price $nil Disposal Restriction Period Dividend and voting entitlements 1 July 2021 to 30 June 2022 During the Disposal Restriction Period, the shares allocated following vesting of an Equity Right are referred to as ‘Deferred Shares’. Executives are entitled to retain their Deferred Shares if employment ceases during the Disposal Restriction Period, subject to the original restriction terms and compliance with post-employment obligations. Executives are entitled to dividends on, and can exercise the voting rights attached to, Deferred Shares. Change of control The Board has discretion to determine an appropriate treatment for unvested Equity Rights and/or Deferred Shares. Malus and clawback Equity Rights and/or Deferred Shares may lapse or be forfeited, at the discretion of the Board, in certain circumstances which include fraudulent behaviour or gross misconduct, material breach of contractual obligations or where equity awards have vested as a result of a material misstatement in the financial statements. Remuneration Report32 3.5 Wealth Sharing Plan Options/Rights Equity awards granted under the SEEK WSP represent the at-risk, long-term equity component of remuneration. The WSP is designed to align Executive reward with long-term shareholder returns and support bold decision making to enhance SEEK’s prospects, in all conditions and in all business cycles. The plan supports the retention of Executives and operates as a true ‘wealth sharing’ arrangement, whereby reward is received only when shareholders have also done well over the same period. The key features of the FY2021 WSP were as follows: • Executives were offered the choice to receive a grant of Options and/or Rights. The number of awards granted to each Executive is dependent on this choice: fewer Rights are offered compared to Options, reflecting the lower allocation value of an Option due to the payment of an exercise price. The CEO, and Group COO and AP&A CEO, and several other participants elected to receive their FY2021 WSP award as 50% Options and 50% Rights, while the remaining participants chose to receive 100% Rights. These different elections demonstrate to the Board that choice is valued and worth retaining as it allows individuals to receive the award that best aligns with their risk profile and personal circumstances. For FY2022, the newly appointed MD and CEO will receive his WSP award as 50% Options and 50% Rights. • Graduated vesting was introduced for the FY2021 WSP which replaced the previous cliff vesting approach. Vesting of Options and Rights is subject to continued employment and achievement of the Threshold share price hurdle (Threshold Price). The Threshold Price requires the SEEK share price to outperform the historical average of the Australian market applied on a Compound Annual Growth Rate (CAGR) basis for vesting to occur. If the Threshold Price is not met, no vesting occurs and all Options and Rights lapse. The Threshold Price also serves as the exercise price for Options. • If the Threshold Price is met, the actual number of Options and Rights that vest will be determined based on the graduated vesting schedule. Full vesting occurs at the Stretch share price hurdle (Stretch Price) with pro-rata vesting between Threshold Price and Stretch Price. Upfront disclosure of the Threshold Price and Stretch Price enable both Executives and shareholders to easily monitor actual performance against hurdles at any time during the vesting period. • While the plan has the potential to result in substantial reward for Executives, the requirement for absolute share price growth ensures a clear link to the value created for shareholders over the vesting period. While the share price performance hurdle is a purely capital hurdle, which excludes dividends, shareholders receive the benefit of any dividends paid to them in addition to any capital returns. In other words, any reward delivered to Executives under this plan is closely aligned with the experience of SEEK’s shareholders. • Awards have a three-year vesting period followed by a one-year exercise restriction. This means that even after awards have vested, the value that may be realised by Executives remains subject to movements in the SEEK share price. Exposure to a further year of share price variability means that if SEEK’s share price decreases following achievement of the share price hurdle, Executives will experience the same downside as shareholders (and vice versa). SEEK Limited Annual Report 20213.5 Wealth Sharing Plan Options/Rights continued Terms and duration The terms of the FY2021 Wealth Sharing Plan award (including the design changes introduced for FY2021) are set out below. There were no design changes from the prior financial year and no changes for FY2022. 33 Objective Effective Date Grant date Vesting period Testing date Wealth Sharing Plan Options/Rights Ensuring Executives focus on sustainable absolute increases in shareholder value over the long-term. 1 July 2020 CEO: 25 November 2020 Executives: 2 November 2020 1 July 2020 to 30 June 2023 30 June 2023 Exercise restriction period 1 July 2023 to 30 June 2024 Exercise period Expiry date Fair value at Effective Date (allocation value)(1) Fair value at grant date (accounting value)(1) 1 July 2024 to 30 June 2025 30 June 2025 Option: $2.90; Right: $8.78 CEO: Option: $7.69 and Right: $19.09 at 25 November 2020 Executives: Option: $4.26 and Right: $11.96 at 2 November 2020 Closing share price at grant date(2) CEO: $26.18 at 25 November 2020 Executives: $21.33 at 2 November 2020 Exercise price Option: $20.51; Right: $nil Performance conditions Lapsing condition Vesting will only occur if the Testing Date Price achieves the Threshold Price, and once met the proportion of the award that vests is dependent on the extent of achievement against the Stretch Price. The Testing Date Price is the 60-day SEEK VWAP up to and including 30 June 2023. Threshold Price is $20.51 calculated by applying the CAGR of ASX All Ordinaries Index15-year average growth (3.30% for FY2021) to the 60-day SEEK VWAP up to and including 30 June 2020 ($18.61 for FY2021), over the three-year vesting period. Calculation: (1+0.033)^3-year period x $18.61 = $20.51 Stretch Price is $22.16 calculated by applying a CAGR of 6.00% to SEEK’s VWAP for the 60 trading days up to and including 30 June 2020, over the three-year vesting period. Calculation: (1+0.060)^3 year period x $18.61 = $22.16 Options/Rights will lapse, subject to Board discretion, where the Executive ceases employment before the testing date as a result of summary dismissal, or less than one year has elapsed between the Effective Date and the date of cessation. In other circumstances, the Executive’s Options/Rights will be pro-rated based on service period and remain on foot, subject to their original terms, unless the Board determines otherwise. Vesting schedule If the Threshold Price is met, the actual number of Options and Rights that vest will be determined based on the graduated vesting schedule per below and no re-testing will occur. If the Testing Date Price is Less than the Threshold Price At the Threshold Price ($20.51, 3.30% CAGR) Proportion of award that vests 0% 50% Between Threshold Price and Stretch Price Pro-rata vesting on a straight-line basis At or above the Stretch Price ($22.16, 6.00% CAGR) 100% Prior to the FY2021 award, cliff vesting rather than the above graduated vesting applied. Options/Rights vested where the share price hurdle, calculated based the methodology referenced above for the Threshold Price, was achieved. The number of Options/Rights granted to an Executive was determined by dividing the Executive’s FY2021 WSP award opportunity by the fair value of the Options/Rights as at the Effective Date. For the FY2021 award, the fair value was based on a 60-day VWAP up to an and including 30 June 2020 and was determined independently by Ernst & Young using a Monte-Carlo simulation model, which takes into consideration factors such as the performance hurdle, probability of the hurdle being achieved, share price volatility, expected life of the award, dividend yield and risk-free rate. Allocation methodology Change of control Malus and clawback The Board has discretion to determine an appropriate treatment for unvested and/or vested, but unexercised Options/ Rights. Unvested and vested, but unexercised Options/Rights may lapse or be forfeited, at the discretion of the Board, in certain circumstances which include fraudulent behaviour or gross misconduct, material breach of contractual obligations or where equity awards have vested as a result of a material misstatement in the financial statements. (1) A fair value per Option/Right was determined based on the 60-day VWAP up to but excluding the Effective Date, 1 July 2020 for purposes of calculating the number of Options/Rights to be allocated to the CEO and other Executives. (2) WSP Options/Rights were granted to Executives on 2 November 2020; and to the CEO on 25 November 2020 following shareholder approval of the CEO’s FY2021 WSP award at SEEK’s 2020 AGM. The closing share prices and fair values at grant date therefore reflect SEEK’s share price and the fair value per Option/Right as at the respective grant dates. The fair values at grant date are the values attributed to the CEO and Executives’ FY2021 WSP Options/Rights for accounting purposes, as shown in section 6.3. Remuneration Report34 Value of the CEO’s FY2021 Wealth Sharing Plan award The Board acknowledges that some shareholders and proxy advisors have a preference to convert the fair value of the CEO’s WSP award into an equivalent face value amount. The CEO elected to receive his FY2021 WSP award as 50% Options and 50% Rights. While the Options component is difficult to translate into a face value equivalent as Options have an exercise price attached, for transparency, a conversion of the Rights component is provided below. Andrew Bassat 71,558 $628,279 $1,331,694 Number of Rights Fair value of Rights Face value of Rights The CEO’s FY2021 WSP award was equal to 25% of his TRO. Following shareholder approval at SEEK’s 2020 AGM, this resulted in 216,649 Options being granted at a fair value for allocation purposes of $2.90 (determined by Ernst & Young at the start of the performance period, 1 July 2020) and 71,558 Rights being granted at a fair value of $8.78. The equivalent face value of the WSP Rights, based on SEEK’s 60-day VWAP up to and including 30 June 2020, was $18.61. The difference between the fair and face value of WSP Rights reflects the degree of difficulty associated with achieving full vesting under the plan: a combination of SEEK having a share price performance hurdle that requires absolute share price growth over the vesting period irrespective of any external conditions; and the graduated vesting approach. The fair value also takes into account dividends foregone during the vesting period. 3.6 Executive performance evaluations SEEK’s leaders are held to a high standard of performance in relation to their behaviours and outcomes expected of them. The performance of each Executive including the CEO is assessed annually, with quality feedback conversations conducted on an ongoing basis throughout the year. The CEO’s performance assessment is conducted by the Board, followed by a one-on-one discussion between the Chairman and the CEO, which considers the operational and financial results achieved, management of principal risks, demonstrated leadership behaviours and the culture fostered within the organisation. Executives’ performance is assessed by the CEO and presented to the Board for discussion and review. Discussions about CEO and Executive performance also occurs at Board and Committee meetings on a regular basis throughout the year. Performance assessments for all SEEK employees are undertaken primarily against SEEK’s performance framework, referred to as ‘This is SEEK’. The framework considers both the individual and collective outcomes achieved, along with how well each individual has demonstrated the SEEK values and attributes when achieving these. For the CEO, Executives and other senior leaders, other inputs into their performance assessment include formal ‘360 degree’ feedback and the results and insights from engagement surveys. 3.7 Executive contractual terms Executives’ remuneration and other key employment terms are formalised in individual employee agreements. Each of these agreements provides for Base Salary and Superannuation, the Equity Right and WSP Options/Rights. Executives’ TROs are reviewed on an annual basis. The table below outlines contractual arrangements for the CEO and Executives. Individual Contract term Notice period - employer Notice period - employee Post-employment restraints CEO and other Executives Ongoing Six months Six months 12-month non-competition period across all markets in which SEEK operates Prior to the appointment of an Executive, SEEK undertakes references and background checks to validate the candidate’s experience and character. SEEK has the option to terminate employment with a payment in lieu of notice. Any payment in lieu of notice is not to exceed average annual base salary as defined by the Corporations Act 2001. SEEK may terminate employment immediately for cause, in which case the Executive is not entitled to any payment in lieu of notice. . SEEK Limited Annual Report 2021n i s t n u o m a e h t , h c u s s A . s d r a d n a t S g n i t n u o c c A n a i l a r t s u A h t i w e c n a d r o c c a n i d e r a p e r p , 1 2 0 2 Y F r o f P M K e v i t u c e x E r o f s e r u s o c s d n o i t a r e n u m e r i l y r o t u t a t s e h t s e d v o r p e b a t g n w o i l i l l o f e h T 0 2 0 2 Y F d n a 1 2 0 2 Y F r o f n o i t a r e n u m e r y r o t u t a t s e v i t u c e x E 8 3 . g n i t n u o c c a e h t o t e u d y n a m e s i r a s e c n e r e f f i D l i . . . 5 3 o t 1 3 s n o i t c e s n i d e n i l t u o k r o w e m a r f n o i t a r e n u m e r e h t l f o s t n e m e e e h t d n a s O R T 1 2 0 2 Y F ’ s P M K e v i t u c e x E e h t m o r f r e f f i d y a m e b a t s h t l i s d r a d n a t S g n i t n u o c c A n a i l a r t s u A , y l l i a c fi c e p S i i . ) s t h g R / s n o i t p O P S W d n a s t h g R y t i u q E ( s t n e m y a p d e s a b - e r a h s d n a ) e v a e l i e c v r e s g n o l d n a l i l a u n n a g n d u c n i ( s t fi e n e b m r e t - 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0 2 0 2 e h t , r o f 0 0 0 5 2 $ f o p a c s n o i t u b i r t n o c l i a n o s s e c n o c l a r e n e g e h t r e v o t n u o m a n o i t a u n n a r e p u s y n a d n a y r a a s e s a b e d u c n l l i i l d e s o c s d s t n u o m A ) 1 ( 35 n o i t a r e n u m e R 2 2 0 2 Y F e h t n i l d e s o c s d e b i l l i w n o i t a r e n u m e r y r o t u t a t s s e t a K ’ . 1 2 0 2 e n u J 0 1 n o K E E S g n n o i i j i e c n s s t r e b o R f f o e G m o r f l r e v o d n a h f o d o i r e p a r e t f a 1 2 0 2 y u J 1 e v i t c e f f e P M K a s a d e c n e m m o c h c o K e t a K . 1 2 0 2 e n u J 0 3 e v i t c e f f e P M K s a d e s a e c d n a d e r i t e r s t r e b o R f f o e G ) 0 1 ( . . 1 1 n o i t c e s n i l d e s o c s d s i i O R T l a u t c a r t n o c r e h , y c n e r a p s n a r t r o F . t r o p e R d n a s n o i t p O P S W s a d e t n a r g s d r i h t - o w i i t g n n a m e r e h t h t i w i , t h g R y t i u q E n a s a d e t n a r g s a w d r a w a e h t f o d r i h t - e n O . 9 1 0 2 l i r p A 9 2 n o K E E S h t i w t n e m e c n e m m o c g n w o i l l o f v e r a N n a I o t d e t n a r g d r a w a y t i u q e n o - n g s f f o - e n o e h t i r o f e s n e p x e g n i t n u o c c a e h t . n e k a t t o n t u b d e u r c c a e v a e l l a u n n a d n a e v a e l i e c v r e s g n o l l t c e fl e r d e s o c s d s t n u o m A i l t c e fl e r d e s o c s d s t n u o m A i l . ’ y r a a s h s a c ‘ i n h t i w d e d u c n l i d n a h s a c s a d a p s i i l ) e b a c i l p p a e r e h w ( e s a b s n o i t u b i r t n o c n o i t a u n n a r e p u s m u m x a m i r o p a c s n o i t u b i r t n o c l i a n o s s e c n o c l a r e n e g e h t r e v o d e n r a e t n u o m a n o i t a u n n a r e p u s y n A . e c n a r u s n i n o i t c e t o r p e m o c n i d n a s t fi e n e b g n k r a p r a c e d u c n l i i s t fi e n e b y r a t e n o m - n o N i s t h g R d n a s n o i t p O P S W d n a t h g R y t i u q E e h t i f o n o i t a s i t r o m a o t e u d 1 2 0 2 Y F d n a 0 2 0 2 Y F o t d e t u b i r t t a n e e b s a h h c h w e u a v g n i t n u o c c a e h t i l w o h s s e r u s o c s d e h t l i , i n e h t e c n s e d a m n e e b e v a h s t n e m y a p d e s a b - 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n o N d e t n o p p a s a w e H i . 1 2 0 2 e n u J 0 3 e v i t c e f f e O E C s a n w o d d e p p e t s t a s s a B w e r d n A ) 2 ( ) 3 ( ) 4 ( ) 5 ( ) 6 ( ) 7 ( ) 8 ( ) 9 ( Remuneration Report 36 4. Remuneration governance framework and related policies SEEK’s remuneration governance framework and related policies ensure that integrity of the remuneration strategy is upheld, and the desired outcomes are delivered. The diagram below illustrates SEEK’s remuneration governance framework, key roles of the Board and Remuneration Committee (Committee) and related policies. Board Reviews, challenges and as appropriate, approves the Committee’s recommendations Assesses performance of the CEO and approves CEO remuneration Remuneration Committee Comprised entirely of independent Non-Executive Directors: Graham Goldsmith (Chairman), Leigh Jasper, Linda Kristjanson (from 9 October 2020), Vanessa Wallace Non-Executive Directors who are not Committee members attend Committee meetings by invitation, ensuring decisions are not made in isolation Reviews and makes recommendations to the Board on remuneration quantum and structure for the CEO and Executives, and Non-Executive Director fees Ensures the SEEK remuneration approach aligns with and supports SEEK’s purpose, values, strategic objectives and risk appetite Ensures remuneration is sufficiently competitive and flexible to attract and retain appropriately qualified, experienced Executives Malus and clawback: Should the circumstances require(1), makes recommendations to the Board to apply malus or clawback for unvested and/or vested but restricted or unexercised equity awards for Executives per the SEEK Equity Plan rules Independent remuneration advisors Engaged from time to time to provide relevant information or an external perspective to assist with Committee decision making(2) Engaged by the Committee, independent of management, where a recommendation is provided. For FY2021, no recommendation was made by a remuneration consultant as defined in the Corporations Act 2001. Ernst & Young was engaged to provide Executive benchmarking data to inform the Committee of current market positioning (see section 3.2) and to provide market practice and insights to support SEEK’s WSP review Management Regularly reports to the Committee and provides information on issues that may impact their decisions Attends meetings by invitation, but do not participate in decisions regarding their own remuneration arrangements Related Policies SEEK Share Trading Policy – Restricts dealing in SEEK securities by directors, Executives, other senior leaders and selected SEEK employees (Designated Persons) and prohibits Designated Persons from entering into arrangements which have the effect of limiting the economic risk related to an unvested or vested but restricted equity awarded under a SEEK employee incentive scheme. All KMP, Executives and certain other senior leaders are also restricted from entering into margin loans in respect to SEEK’s securities, unless approved by the Chairman. No margin loans were entered into by KMP during FY2021 and none are currently on foot. The Share Trading Policy can be found on the Corporate Governance page in the Investors section of SEEK’s website at https://www.seek.com.au/about/investors/corporate-governance. SEEK Minimum Shareholding Policy – Promotes the alignment of interests of Executives and Non-Executive Directors with the interests of shareholders. The relevant amount of SEEK equity required to be held under the policy and the time to comply is as follows: Category CEO Executives Non-Executive Director Annual base salary and superannuation or annual fee Acquisition timeframe for new appointees Equity included to meet requirement 200% 100% 100% Over 3 years Shares, vested WSP Options/Rights and unvested Equity Rights Over 5 years, 20% each year until requirement achieved Shares (including shares held by a controlled entity or beneficially) In FY2021, the CEO, Executives and Non-Executive Directors met or are on track to meet, their minimum shareholding requirements as outlined above. (1) Circumstances include instances of fraudulent behaviour or gross misconduct, material breach of contractual obligations or where equity awards have vested as a result of a misstatement in the financial statements. Information sought includes market movements, trends, and regulatory developments to assist the Board to determine the right approach for SEEK. (2) SEEK Limited Annual Report 2021 37 5. Non-Executive Director fees SEEK’s Non-Executive Director fees aim to appropriately recognise the time, contribution, and expertise of each director. The following sections set out how SEEK’s director fees are determined and details the actual Non-Executive Director fees paid in FY2021. 5.1 Non-Executive Director fee policy The following table outlines SEEK’s Non-Executive Director fee policy and terms: Aggregate Non-Executive Director fee limit Non-Executive Director fees are determined within a yearly aggregate directors’ fee limit. The current aggregate fee limit of $1,800,000 per annum was approved by shareholders at the 2016 AGM. Non-Executive Director fee reviews Non-Executive Director fees and payments are reviewed annually by the Committee, and approved by the Board, to ensure fees are appropriately positioned in the market to attract and retain high calibre Non-Executive Directors. In FY2021 Board and Committee fees remained unchanged for the second consecutive year from their FY2019 levels considering the business challenges arising from COVID-19. Non-Executive Director fees FY2022 In FY2021, independent remuneration consultants (Ernst & Young) provided the Remuneration Committee with a comparative benchmarking analysis on director fees. The analysis highlighted SEEK’s fees had generally fallen below market rates relative to the primary comparator group due to SEEK’s modest increases in fees since 2016 (when the last review was conducted by Ernst & Young) compared to SEEK’s growth in market capitalisation over the same period. Based on this analysis, the Board determined increases to director fees effective 1 July 2021 as set out below. Chairman of the Board(1) Non-Executive Directors Additional fees are paid for the following roles: Chairman of the Audit and Risk Management Committee Member of the Audit and Risk Management Committee Chairman of the Remuneration Committee(1) Member of the Remuneration Committee Member of the Nomination Committee(1) FY2021 $410,000 $154,000 FY2022 $424,000 $160,000 Increase 3.4% 3.9% $38,000 $19,500 $31,000 $15,500 $0 $39,500 $19,500 $32,000 $16,000 $0 3.9% 0% 3.2% 3.2% n/a Superannuation The fees set out above include superannuation payments in accordance with relevant statutory requirements. Any superannuation amount earned over the general concessional contributions cap is paid as cash and included within ‘cash salary’. Non-Executive Director shareholding requirement All Non-Executive Directors are required to hold SEEK shares equivalent to one year of their annual base director fee. Refer to section 4 for further detail. Performance-based remuneration Non-Executive Directors do not receive share options or rights or any performance-based remuneration. (1) No Remuneration Committee Chair, or other Committee, fees are payable to the Chairman of the Board. Remuneration Report38 5.2 Non-Executive Director fees Details of the actual fees paid to each Non-Executive Director of SEEK Limited for FY2021 and FY2020 are set out in the following table. The total Non-Executive Director fees paid for FY2021 were $1,263,272, which is below the current annual aggregate fee limit of $1,800,000. G B Goldsmith J A Fahey L M Jasper L J Kristjanson(2) M H Wachtel V M Wallace Former Non-Executive Director D I Bradley(3) Total Short-term benefits SEEK Limited director fees $ 384,339 386,211 158,448 158,448 154,795 154,795 122,571 - 175,342 175,342 172,603 172,603 - 116,096 1,168,098 1,163,495 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 Non-monetary benefits(1) $ 5,792 5,815 - - - - - - - - - - - - 5,792 5,815 Post-employment benefits Superannuation $ 25,661 23,789 15,052 15,052 14,705 14,705 909 - 16,658 16,658 16,397 16,397 Total $ 415,792 415,815 173,500 173,500 169,500 169,500 123,480 - 192,000 192,000 189,000 189,000 - 11,029 - 127,125 89,382 1,263,272 1,266,940 97,630 (1) Non-monetary benefits relate to car parking benefits. (2) Linda Kristjanson was appointed as a Non-Executive Director and a member of the Remuneration Committee effective 9 October 2020. (3) Denise Bradley ceased to be a Non-Executive Director effective 20 March 2020. Effective 1 July 2021, Andrew Bassat was appointed as a Non-Executive Director and will receive the associated fee from this time. He will not be a member of a Board Committee other than the Nomination Committee, and hence will not receive any Committee Fees. 6. Other KMP disclosures 6.1 Ordinary shareholdings – SEEK Limited The number of ordinary shares in SEEK Limited held during FY2021 by each KMP, including their personally related parties, is set out below. No shares were granted during the reporting period as compensation. FY2021 - SEEK Limited shares Non-Executive Directors G B Goldsmith J A Fahey L M Jasper L J Kristjanson(2) M H Wachtel V M Wallace Executive KMP A R Bassat I M Narev G I Roberts Balance at the start of the year Received during the year on exercise of WSP Rights Received during the year on exercise of ongoing Equity Rights(1) Purchase of shares Sale of shares Other changes during the year Balance at the end of the year 50,000 8,888 68,133 - 4,000 17,000 - - - - - - - - - - - - - - - 1,137 - - - - - - - - 14,756,293 68,179 189,021 182,126 - 88,603 63,303 47,858 29,501 - - - - - (161,043) - - - - - - - - - 50,000 8,888 68,133 1,137 4,000 17,000 15,001,722 116,037 146,082 (1) Relates to the FY2020 EEP award which vested following the end of the Qualifying Period on 30 June 2020. The shares allocated during FY2021 remained subject to a disposal restriction until 1 July 2021. (2) Linda Kristjanson commenced as a Non-Executive Director on 9 October 2020. The nil balance reported as at the start of the financial year reflects that she did not hold SEEK shares as at the date of appointment. SEEK Limited Annual Report 202139 6.2 Other equity holdings The number of Options and Rights over Ordinary shares in SEEK Limited held during FY2021 by each Executive KMP (as a result of Equity Rights grants or awards made under the WSP), including their personally related parties, are set out below. Balance at the start of the year Granted during the year as compensation Exercised during the year Forfeited during the year Balance at the end of the year Vested and exercisable at the end of the year Vested and unexercisable at the end of the year Unvested at the end of the year 554,336 206,187 297,008 71,558 54,100 66,697 (182,126) - (88,603) (243,147) - (150,018) 200,621 260,287 125,084 243,520 720,121 216,649 163,793 1 1 1 1 1 1 - - (1) (1) (1) (225,503) - 234,666 883,914 - - - 1 1 1 - - - - - - - - - - - - - - - - 200,621 260,287 125,084 234,666 883,914 1 1 1 FY2021 WSP Rights(1) A R Bassat I M Narev G I Roberts WSP Options(1) A R Bassat I M Narev Equity Rights A R Bassat I M Narev G I Roberts (1) For FY2021, Andrew Bassat and Ian Narev elected to receive their WSP award as 50% WSP Options and 50% WSP Rights. 6.3 Equity grants on foot during FY2021 The required statutory disclosures of equity grants for SEEK’s KMP are set out below. Executive KMP A R Bassat(2) I M Narev G I Roberts Vesting period Grant date 1 Jul 2016 - 30 Jun 2019 (3) 1 Jul 2017 - 30 Jun 2020 (4) 1 Jul 2018 - 30 Jun 2019 (5) 1 Jul 2018 - 30 Jun 2021 (6) 1 Jul 2019 - 30 Jun 2020 (7) 1 Jul 2019 - 30 Jun 2022 (8) 1 Jul 2019 - 30 Jun 2022 (8) 1 Jul 2020 - 30 Jun 2021 (9) 1 Jul 2020 - 30 Jun 2023 (8) 1 Jul 2020 - 30 Jun 2023 (8) 1 Jul 2018 - 30 June 2019 (5) 29 Apr 2019 - 28 Apr 2020 (10) 29 Apr 2019 - 28 Apr 2022 (10) 29 Apr 2019 - 28 Apr 2022 (10) 1 Jul 2019 - 30 Jun 2020 (7) 1 Jul 2019 - 30 Jun 2022 (8) 1 Jul 2019 - 30 Jun 2022 (8) 1 Jul 2020 - 30 Jun 2021 (9) 1 Jul 2020 - 30 Jun 2023 (8) 1 Jul 2020 - 30 Jun 2023 (8) 1 Jul 2016 - 30 Jun 2019 (3) 1 Jul 2017 - 30 Jun 2020 (4) 1 Jul 2018 - 30 Jun 2019 (5) 1 Jul 2018 - 30 Jun 2021 (6) 1 Jul 2019 - 30 Jun 2020 (7) 1 Jul 2019 - 30 Jun 2022 (8) 1 Jul 2020 - 30 Jun 2021 (9) 1 Jul 2020 - 30 Jun 2023 (8) 19 Dec 2016 4 Dec 2017 6 Dec 2018 6 Dec 2018 29 Nov 2019 29 Nov 2019 29 Nov 2019 25 Nov 2020 25 Nov 2020 25 Nov 2020 11 Jun 2019 11 Jun 2019 11 Jun 2019 11 Jun 2019 23 Sep 2019 23 Sep 2019 23 Sep 2019 2 Nov 2020 2 Nov 2020 2 Nov 2020 3 Oct 2016 17 Oct 2017 16 Oct 2018 16 Oct 2018 23 Sep 2019 23 Sep 2019 2 Nov 2020 2 Nov 2020 # of options and rights granted Fair value of options and rights at grant date(1) Exercise price Vested % Vested # Forfeited / lapsed % 182,126 171,941 1 129,676 1 243,520 70,593 1 216,649 71,558 1 1 536,013 152,817 1 184,108 53,370 1 163,793 54,100 88,603 83,648 1 58,959 1 65,798 1 66,697 $0.00 $0.00 $0.00 $0.00 $0.00 $23.18 $0.00 $0.00 $20.51 $0.00 $0.00 $0.00 $20.95 $0.00 $0.00 $23.18 $0.00 $0.00 $20.51 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $994,408 $1,547,469 $1,256,565 $510,923 $1,256,565 $869,366 $849,940 $1,256,565 $1,666,031 $1,366,042 $164,422 $1,066,667 $1,801,004 $1,671,818 $950,000 $533,913 $531,565 $950,000 $697,758 $647,036 $571,489 $714,354 $571,320 $364,367 $585,603 $655,348 $585,603 $797,696 100% - 100% 100% 100% n/a n/a 100% n/a n/a 100% 100% n/a n/a 100% n/a n/a 100% n/a n/a 100% - 100% 100% 100% n/a 100% n/a 182,126 - 1 129,676 1 n/a n/a 1 n/a n/a 1 1 n/a n/a 1 n/a n/a 1 n/a n/a 88,603 - 1 58,959 1 n/a 1 n/a 0% 100% 0% 0% 0% 33% 33% 0% 67% 67% 0% 0% n/a n/a 0% n/a n/a 0% n/a n/a 0% 100% 0% 0% 0% 33% 0% 67% (1) For Equity Rights, fair value is the allocated value of the Equity Right. For WSP Options/Rights, fair value is the accounting fair value at grant. (2) For Andrew Bassat, equity grants were made subsequent to obtaining shareholder approval at the relevant AGM per ASX Listing Rule 10.14. (3) The FY2017 WSP award vested in full during FY2020 and these rights were exercised during FY2021, following the exercise restriction period that ended on 30 June 2020. (4) The FY2018 WSP award lapsed during FY2021. Lapsing occurred following the testing date of 30 June 2020 as the share price hurdle of $19.79 had not been achieved. (5) The FY2019 Equity Right vested in full during FY2020 (with restrictions lifted on resulting shares in FY2021). (6) The FY2019 WSP award vested during FY2022. Vesting occurred following the testing date of 30 June 2021 as the share price hurdle of $24.39 had been achieved. (7) The FY2020 Equity Right vested in full during FY2021 (with restrictions lifted on resulting shares in FY2022). (8) As per prior year WSP awards, if the share price hurdle for the FY2020 and FY2021 award is met and the awards subsequently vest, vested awards will be subject to a one-year exercise restriction period. Participants will then have a one-year exercise period within which to exercise their vested awards, including WSP Options which require payment of an exercise price. (9) The FY2021 Equity Right vested in full during FY2022 (with restrictions lifting on resulting shares in FY2023). (10) During FY2019, Ian Narev received a one-off sign-on equity award comprising one Equity Right with an allocation value of $1,066,667 which vested in FY2020, 152,817 WSP Rights with an allocation value of $6.98 per Right and 536,013 WSP Options with an allocation value of $1.99 and an exercise price of $20.95 per Option. Vesting of the WSP Rights and Options is subject to achievement of a three-year share price hurdle. Remuneration Report 40 6.4 Shares under option Unissued Ordinary shares of SEEK Limited under option at the date of this Report are as follows: Date granted CEO Options/Rights 6 December 2018 29 November 2019 29 November 2019 25 November 2020 25 November 2020 Other Options/Rights 16 October 2018 11 June 2019 11 June 2019 23 September 2019 23 September 2019 6 March 2020 2 November 2020 2 November 2020 12 March 2021 Total shares under option(2) Expiry date Exercise price(1) Number of shares under option 1 July 2023 1 July 2024 1 July 2024 1 July 2025 1 July 2025 1 July 2023 28 April 2024 28 April 2024 1 July 2024 1 July 2024 1 July 2024 1 July 2025 1 July 2025 1 July 2025 $0.00 $23.18 $0.00 $20.51 $0.00 $0.00 $20.95 $0.00 $23.18 $0.00 $0.00 $20.51 $0.00 $20.51 129,676 162,450 47,092 72,216 23,853 340,523 536,013 152,817 211,392 396,607 28,313 220,858 525,857 14,612 2,862,279 (1) Unlike Options, Rights do not have an Exercise Price. (2) Balance excludes Equity Rights and Performance Rights which vested on 1 July 2021. Corresponding fulfilment of these shares will occur by early September 2021. 6.5 Shares or options over shares in subsidiaries KMP do not hold any shares or options over shares in any subsidiaries of SEEK. 6.6 Loans to KMP There were no loans to KMP during FY2021 (FY2020: $nil). 6.7 Other transactions with KMP Some of the Non-Executive Directors hold directorships or positions in other companies or organisations. From time to time, SEEK may provide or receive services from these companies or organisations on arm’s length terms. None of the Non-Executive Directors were, or are, involved in any procurement or Board decision-making regarding the companies or organisations with which they have an association. There were no other transactions with KMP during FY2021. This Directors’ Report is made in accordance with a resolution of the directors. Graham Goldsmith Chairman Melbourne 24 August 2021 SEEK Limited Annual Report 2021AUDITOR’S INDEPENDENCE DECLARATION 41 Auditor’s Independence Declaration As lead auditor for the audit of SEEK Limited for the year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been: (a) no contraventions of the auditor independence requirements of the Corporations 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 respect of SEEK Limited and the entities it controlled during the period. Chris Dodd Partner PricewaterhouseCoopers Melbourne 24 August 2021 PricewaterhouseCoopers, ABN 52 780 433 757 2 Riverside Quay, 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. Auditor’s Independence Declaration 42 Message from the Chief Executive I am pleased to introduce SEEK’s 2021 Sustainability Report. Since its inception, SEEK has been guided by its purpose: to help people live more fulfilling and productive working lives and to help organisations succeed. We strive always to think and act with long-term goals in mind. Like all businesses we aspire to attract, motivate and develop great people. Our history shows us that if we focus first on our people, they will create distinctive value for our customers. That will in turn translate into long-term returns for our shareholders. Thinking long-term also requires us to consider our impact on the communities in which we operate, and to identify areas where we can apply our capabilities for broader public good. We want to achieve, and hold ourselves accountable for, positive outcomes for all our stakeholders. The past year has been dominated by the continuing challenges associated with the COVID-19 pandemic. In all countries in which we operate, our priority is keeping our people physically and emotionally safe. Our first actions following the onset of the pandemic concentrated on understanding and following health advice relating to the way our people work, and assuring our permanent employees there would be no COVID-19 related job cuts, even in the early days of the pandemic when revenue more than halved. We also identified ways we could support our customers and took appropriate action. Despite a much stronger than expected economic recovery late in FY2021, particularly in Australia, we are still dealing with the impact of the pandemic daily, especially in some of our Asian and Latin American businesses. Whilst COVID-19 was the dominant theme of the year, we were still able to progress a number of other important initiatives. Most notably, we: • Clarified and made practical SEEK’s commitment to fair hiring on SEEK’s employment platforms through our focus on candidate safety and responsible job advertising, particularly in South East Asia. • Accelerated and broadened the scope of our program to assess modern slavery beyond SEEK’s supply chains by examining the risks to candidates responding to job ads on SEEK’s employment platforms. • Continued to learn about, and implement, leading practices for mitigating key artificial intelligence ethics and bias risks when connecting millions of candidates with job opportunities on SEEK’s employment platforms. • Committed to identify, disclose and manage climate-related risks in line with the Recommendations of the Task Force on Climate-related Financial Disclosures. Initiatives that focus on long-term wellbeing by definition take time. In all of the above areas, whilst we have made tangible progress and built momentum, a great deal of hard work lies ahead. Over the next year, goals that we have set ourselves include: • Increasing awareness by SEEK’s hirers, candidates and employees in South East Asia about candidate safety and responsible job advertising. • Taking measurable steps to improve gender balance in SEEK’s hiring outcomes. • Finalising and implementing a detailed emissions reductions strategy addressing SEEK’s global carbon emissions. • Deepening our relationships with Aboriginal and Torres Strait Islander communities throughout Australia to enable us to proactively support those communities in relation to our products and services, our supply chain and our general business practices. We look forward to reporting on our progress on these initiatives during the year and specifically in next year’s report. Ian Narev Chief Executive Officer SEEK Limited Annual Report 2021SUSTAINABILITY REPORT Reporting topics 43 46 47 49 50 52 55 56 58 62 63 65 66 67 69 71 Social Customers • Data trust and data privacy • Use of data • Business resilience • Cybersecurity • Customer experience Community • Social impact • Social contribution Employees • Our people • Workplace health and safety • Diversity and inclusion Environment • Responding to climate change • Energy and emissions • Task Force on Climate-related Financial Disclosures Governance • Protecting human rights and labour standards • Promoting responsible and ethical business practices ESG accountability and oversight The Board through the Audit and Risk Management Committee is responsible for oversight and management of non-financial risks, including ESG risks. All directors receive the Audit and Risk Management Committee papers and generally attend the meetings which are then reported the Board. The Board devotes considerable time to material ESG risks and also receives periodic updates on emerging ESG matters relevant to SEEK. The Board approves internal Risk Appetite Statements and SEEK’s ‘Principal risks’ disclosure and, after consideration of stakeholder expectations, approves the ESG reporting topics and subsequently this Report. The Chief Financial Officer is accountable for sustainability reporting supported by senior management working in key areas of ESG risk, as well as employees with specialist ESG skills. Reporting what matters Sustainability reporting is increasingly in focus as investors, potential employees and customers look at how a company performs well beyond its financial statements. During the year there has been continued interest from investors in SEEK’s performance in key environmental, social and governance (“ESG”) areas, particularly the response to climate change. SEEK’s sustainability reporting describes performance and initiatives across key non-financial risks. Through increased transparency the aim is to further build trust with investors, customers and the community about how SEEK manages its ESG risks and opportunities. The topics covered in this report are the ESG risks that could impact SEEK’s ability to sustain future financial performance, deliver the long-term strategy and have the positive impact embodied in SEEK’s Purpose. Topic selection was guided by a materiality assessment and informed by stakeholders, both internal and external, combining feedback from investors, SEEK leaders and subject matter experts. Selection of reporting topics involved close consideration of the external environment, the ASX Corporate Governance Principles and Recommendations, the Sustainability Accounting Standards Board (SASB) materiality map and the Group Reporting Initiative (GRI) Standards. Topic weighting was informed by a self-assessment of the impact of the ESG topics on SEEK’s customers, employees and investors. Report scope and boundary SEEK was founded in 1997 and is headquartered in Melbourne, Australia. Since then, growth through the acquisition of online employment marketplaces in South East Asia and Hong Kong (“SEEK Asia”) and Latin America has expanded SEEK’s global footprint. This report addresses the business activities of SEEK Limited (“SEEK”) which are material ESG topics. SEEK’s ESG approach is evolving across the global footprint. This report describes the global approach where it is applied across SEEK, particularly in the areas of “Governance” and “Environment”. “Social” topics relating to product, technology and customer reflect the approach in Australia and New Zealand (“SEEK ANZ”). This is transitioning from a localised to a unified approach. The current focus, called Market Unification, is to leverage the SEEK ANZ product and technology capability to drive efficiencies and growth for SEEK Asia. Management of related ESG risks is being unified to the SEEK ANZ standard which is the standard described in this report. Investments by SEEK that are not under its operational control do not form part of the disclosures. Sustainability Report 44 United Nations Sustainable Development Goals SEEK supports the United Nations Sustainable Development Goals (SDGs), a blueprint to achieve a better and more sustainable future for all. SEEK contributes to the goals that are most relevant to its business strategy and operations. SEEK’s Purpose: To help people live more fulfilling and productive working lives and help organisations succeed. SEEK’s Belief: Having a positive impact on society. SEEK’s Approach: Responsible and ethical business practices. Goal SDG Target SEEK’s contribution towards the Target 8.5 8.7 5.5 By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value As a leader in online employment marketplaces, SEEK delivers access to employment opportunities to millions of people. Economic growth is positively associated with job creation. SEEK provides its employees with meaningful work and equal access to opportunities leading to high employee engagement. SEEK is committed to an inclusive culture which values diversity of thought, opinion and background. Take immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms SEEK is committed to doing what it can to ensure that its employment platforms do not enable or facilitate unfair or unethical hiring practices or modern slavery of any kind. SEEK is working to ensure candidate interactions with the platforms result in safe and fair employment outcomes. SEEK is increasing its focus on supply chain integrity and social procurement, including environmental and human rights considerations. Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life SEEK recognises that achieving diversity in all forms is important for an innovative and high performing business. SEEK has a specific focus on gender balance given the significant under-representation of women in professional roles in the technology industry. 13.1 Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries SEEK is committed to supporting the transition to a lower-carbon economy. This is demonstrated through a commitment to achieving carbon neutrality across global operations including the development of an emissions reduction strategy targeting net-zero by 2030. 17.17 Encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships SEEK believes in working collaboratively to support the communities in which it operates. SEEK invests to connect volunteers to opportunities with not-for-profit organisations, works with charity partners to provide financial and in-kind support and is a long-term sponsor of LBGTIQA+ community events. SEEK Limited Annual Report 202145 Stakeholder expectations and engagement Stakeholders provide valuable insights into how SEEK is performing in delivering on its Purpose and inform SEEK’s approach to the management of sustainability issues and reporting. Stakeholder ESG expectations of SEEK How SEEK engages on ESG matters Customers • candidates • hirers • Employment services that enhance productive working lives • Safe and reliable access to online services • Open communication and remedying of mistakes • Protection of Personally Identifiable Information (PII) • Reasonable cost for services • Clear explanation on the SEEK employment platforms for candidates about their data, privacy and online security • Corporate reporting including the Sustainability Report • Fair pricing and flexible contracts for customers Employees • Meaningful employment including fair pay, career opportunities and training • Safe working environment • Diversity and inclusion • Observe anti-discrimination and other employment laws Internal engagement surveys Induction and ongoing training • Regular communications including All-Staff meetings • • • Code of Conduct and other employee policies • Talent attraction and retention strategy Shareholders • Information about material non-financial risks and key ESG topics to inform decision making • Response to climate change risk • Sound corporate governance practices • Annual corporate reporting including the Sustainability Report and Corporate Governance Statement • Annual General Meeting • Investor relations program • Participation in investor surveys • Continuous disclosure to the ASX supplemented by the SEEK Company website Community • Responsible business conduct • Compliance with the law • Payment of corporate taxes • Responsible environmental performance • Sustainability Report • Corporate Governance Statement • Tax Transparency Report Government and regulators • Compliance with the law • Engagement with regulators on relevant proposals • Payment of corporate taxes • Engagement with governments on policy development in the employment and technology sectors • Governance disclosures in the Sustainability Report • Tax Transparency Report Partners, suppliers and financiers • Conduct business fairly, ethically and lawfully • Communicate openly and honestly • Responsible supply chains • As above • Supplier Code of Conduct This report for the year ended 30 June 2021 has been approved by the Board and is current as at 9 September 2021. Looking to future reports Evolving community expectations of environmental, social and governance standards for businesses will inform our approach to sustainability. In this context SEEK continually improves its sustainability performance and reporting. Current foundations On the horizon • Increasing transparency for stakeholders on sustainability issues • Broader assessment of sustainability impacts across SEEK’s global businesses • Reporting topics based on materiality • Updated ESG materiality assessment to reflect SEEK’s • Climate risk disclosures aligned with the Task force on Climate Related Financial Disclosures (TCFD) reporting framework • Greenhouse gas inventory for SEEK ANZ business strategy • Progress reports on SEEK’s response to climate change • Enhanced metrics and relevant targets for material ESG risks • External verification of sustainability disclosures Sustainability Report 46 Data trust When customers provide their information, they trust SEEK to protect their privacy and to use their data ethically and for their benefit. Data and insights form the foundation for SEEK’s products and services. As candidates share more information about themselves, SEEK is better placed to provide the most relevant career and education insights to help them to fulfil their career aspirations. For hirers, the breadth and depth of data that SEEK captures improves the efficiency and effectiveness of hiring. Protecting data privacy Providing information is an essential part of the job search process and helps candidates to stand out to employers. When candidates provide their personal information to SEEK, they expect their data will remain secure and be used appropriately. SEEK is committed to meeting these expectations and complying with privacy legislation. SEEK aims to be transparent about how candidate information is collected, used and protected and how candidates can manage their personal information when using SEEK. SEEK’s platforms display Privacy Statements explaining how personal information is collected and used and how privacy is protected. On the SEEK jobs website this is supported by a concise plain language section titled ‘My Privacy’. For questions or concerns about privacy of personal information, SEEK provides customers with a dedicated contact point. Candidates create their SEEK Profile by submitting their personal information directly to the SEEK platform. Candidates have control over the data they submit with access to edit or delete their SEEK Profile at any time online. Candidates can control the visibility of their SEEK Profile to hirers on SEEK’s Talent Search platform and whether they are approachable for job opportunities. They can also unsubscribe from receiving job recommendations and career advice at any time. Information about candidates’ job seeking intentions is also collected by SEEK through analysis of their interactions with the SEEK website or app. Some data collected provides career and recruitment insights for SEEK based on how candidates use the SEEK employment platforms. This is also used to improve platform performance or make business decisions. Data used in this way it is always aggregated and anonymised. SEEK invests heavily to protect candidate, hirer and student personal information and SEEK’s networks and applications from unauthorised access. This involves a combination of technical solutions, cybersecurity controls and internal processes. SEEK Profile To use the services on SEEK’s employment platforms candidates provide their details, including employment and educational history and preferred employment location. This is used to create a candidate’s SEEK Profile which provides access to customised tools, services and resources to assist them in finding a job. Candidates can edit their SEEK Profile at any time. SEEK utilises the candidate information in the SEEK Profile to meet candidate and hirer needs such as: • Enabling candidates to apply for a role on the platform using their SEEK Profile, providing hirers with relevant and structured data • Enabling hirers to proactively search for and connect with candidates • Making job recommendations to candidates • Enabling candidates to stand out to hirers with structured claims about their experience and verified credentials from Certsy SEEK has a Data Classification Policy and Data Sharing Standard which together establish robust processes governing sharing of data internally and outside of SEEK. Online training for all employees was made available during FY2021 to ensure understanding of their responsibilities to support SEEK’s data principles. Awareness training on changes to privacy law in New Zealand was provided to relevant employees during FY2021. Procedures are in place for external data processing and storage, in particular for Personally Identifiable Information (PII). This is data which could reasonably be used to establish the identity of an individual to whom the data belongs. Prior to entering into any arrangement with a third party that involves sharing any PII, the terms of that arrangement are reviewed by the legal and security teams and a data handling and security assessment of the third party is undertaken. SEEK has not received any substantiated complaints regarding customer privacy or encountered any notifiable data breach under the Privacy Act 1988 (Cth) during the reporting period. SEEK Limited Annual Report 2021Use of data 47 Leveraging data and artificial technology improves outcomes for candidates and hirers. In evolving this capability SEEK takes an ethical and risk-based approach with a focus on user trust. Data and technology, including the use of artificial intelligence, assist hirers and candidates by improving transparency and efficiency in the recruitment process. ‘Talent Search’ is an example, enabling hirers to access and search for SEEK Profiles and connect with candidates using data from candidate profiles and search algorithms to identify candidates who may not otherwise have applied for their role. Artificial intelligence SEEK’s platforms connect millions of candidates with job opportunities. Leveraging the data from these interactions through innovation and artificial intelligence capability is critical to enabling SEEK to match candidates quickly with all the relevant job opportunities. To ensure they discover the right opportunities, candidates provide SEEK with information about their experience, qualifications and preferences, and hirers provide SEEK with information about their job opportunities and requirements. SEEK also collects and analyses data about candidates’ and hirers’ interactions with the platform to better understand job seeking and recruitment preferences. These are used in products and artificial intelligence algorithms to understand the intent of the candidate and the hirer and to enable them to connect with all the relevant job opportunities in less time. Experience has shown that data and artificial intelligence can materially reduce cost and effort for candidate and hirers. SEEK recognises that this brings risks and opportunities. If not carefully managed, potential exists for artificial intelligence to introduce and embed discriminatory bias in human behaviour. Conversely using data and artificial intelligence to augment the human process of recruitment can reduce bias and create fairer outcomes. Bias is reduced through the focus on structured requirements and capabilities, as well as the option to remove potential signals of human bias in selection decisions from datasets and predictions. Ensuring responsible and ethical use of artificial intelligence is critical. SEEK’s approach is based on clear principles and standards that go beyond legal obligations. The artificial intelligence ethics principles state that artificial intelligence services should be beneficial to society, fair in the outcomes they deliver, transparent and defendable to the public and reliable. SEEK’s governance approach ensures that all artificial intelligence services align with the principles before they are deployed to production. The Ethical Artificial Intelligence Framework and governance process are externally audited via SEEK’s existing audit process. Sustainability Report 48 Smarter Search Search technology is constantly evolving. As it does, consumers have higher expectations about the relevance of search results returned to them. SEEK’s search engine ‘Smarter Search’ has improved the relevance of search results to help candidates find the right opportunities faster. Smarter Search was launched in early 2019 across SEEK ANZ and was a major contributor to a 20 per cent increase in job applications per candidate session. Smarter Search has been designed as a scalable global platform. Roll out across SEEK Asia was completed in FY2021. Future outlook Expectations for data privacy motivate the business to further develop and mature controls. Continued focus on data governance reflects the importance of customer trust, particularly when using data for commercial benefit. SEEK’s Ethical Artificial Intelligence Framework helps to mitigate key artificial intelligence ethics and bias risks. This is a complex and dynamic space, and SEEK will continue to refine its approach as consumer expectations and industry scrutiny increases. The Smarter Search algorithms learn which jobs have higher relevance for candidates by applying artificial intelligence and candidate preference to improve accuracy and continually learn new patterns and trends. Search results are personalised to show the most relevant new ads for the candidate regardless of when they last searched or when a specific ad was posted. Smarter Search also responds to and learns from the candidate’s interactions to offer personalised recommendations for job opportunities. Artificial intelligence enables SEEK to surface the most relevant roles for a candidate even where titles vary for similar jobs (such as ‘early childhood’ and ‘kindergarten’ teacher) or where similar titles apply to jobs across industries (‘project manager’ or ‘architect’ in the construction and information technology industries). SEEK’s search engine aims to make all job opportunities available to a candidate without exclusion. The job search is smarter because it delivers the most relevant results first to satisfy the candidate’s intent. SEEK Limited Annual Report 2021Business resilience 49 SEEK’s critical services deliver job advertisements to millions of people. Customers expect these services to be reliably available. To meet this expectation SEEK’s systems, infrastructure and processes are managed for resilience. Business resilience is a priority for SEEK. Managing resilience across systems, infrastructure and processes is a key aspect of SEEK’s Risk Management Framework. The SEEK Business Continuity Plan was established in line with the requirements of ISO 22301. Four broad business continuity scenarios cover loss of technology, building, staff and critical third parties and operate in conjunction with SEEK’s Crisis Management Plan. Critical technologies, business processes and third-party systems are identified for recovery in the event of disruption. The disaster recovery program ensures that systems and data services remain available or are recoverable in the case of a disaster or systems failure. This is accomplished through building a robust technical environment, creating and testing disaster recovery plans and developing back-up and restoration capabilities which are tested regularly. As the COVID-19 threat emerged, SEEK enacted its Business Continuity Plan. From mid-March 2020, business critical processes and systems were successfully maintained in a fully remote working environment until a hybrid model of remote and office-based working was established in early 2021. The framework for business continuity is overseen by the Chief Risk Officer and reviewed periodically by the Audit and Risk Management Committee. Business continuity testing and audits are conducted to identify areas for improvement. In FY2021 the Crisis Management Plan was tested through a cybersecurity crisis exercise affecting SEEK ANZ and SEEK Asia and involved the Executive Leadership Team. This simulated scenario informed valuable improvements to the Crisis Management Plan. Future outlook • Strengthening incident and problem management capacity to improve resiliency and prevent system failures. • Formalising employee and external communications plans in the event of a crisis to ensure continuity. Sustainability Report 50 Cybersecurity As the operator of online employment marketplaces with large scale data from customers, SEEK significantly invests in security across people, processes and technology. SEEK performs targeted internal and external penetration testing and simulated hacking, referred to as red teaming engagements, to build upon defence capabilities. This is augmented by continuous monitoring of SEEK’s internet facing systems that scan for configuration weaknesses or newly discoverable vulnerabilities. SEEK participates in threat intelligence sharing services with private organisations and government agencies. The security researcher community is encouraged to legally attack and report security vulnerabilities in SEEK’s systems and products through the ongoing public Bug Bounty program. This allows public researchers to test applications for security weaknesses and be rewarded based on the severity of the issues found. SEEK’s infrastructure operates using cloud services leveraging Amazon Web Services (AWS) infrastructure and physical data centres in Australia, the United States and Singapore. These facilities are physically secure, geographically separated, Tier III, and ISO 27001 compliant. SEEK’s AWS production environments leverage a continuous security monitoring and threat detection capability. The cybersecurity control environment is a key aspect of SEEK’s Risk Management Framework. The Board, through the Audit and Risk Management Committee, is regularly briefed on the state of cybersecurity controls at SEEK. seekurity Management of SEEK’s cybersecurity risks is a major priority for everyone at SEEK. This is done by staying at the forefront of emerging cyber threats and understanding everyone’s role in the safekeeping of customer data, business data and systems. Cyber safe practices and policies are an important part of upholding the trust of customers. SEEK has adopted an approach leveraging multiple frameworks to address cybersecurity, focused on implementing a layered defence-in-depth security program across people, process and technology. This is assessed against ISO27001 standards, aligned to the National Institute of Standards and Technology (NIST) Cybersecurity Framework and supported by the SEEK Information Security Policy. Cybersecurity is managed by an experienced security team led by the Chief Information Security Officer. In a competitive market for cybersecurity skills and talent, SEEK has recruited and retained high quality cybersecurity talent with membership and influence in a number of multi-company and industry security forums. As a technology company, SEEK has an internal cybersecurity talent pipeline and is able to integrate its employees as part of defensive cyber control capabilities. SEEK leverages an external managed security operations centre to augment internal staff capabilities and provide an additional layer of defence for 24x7 security alert monitoring and response. This service includes regular threat hunting to proactively search for any signs that would require a further investigation or analysis. During FY2021, SEEK further enhanced detection and response capabilities and increased automated responses to security events through security orchestration and automation. SEEK’s security program applies a risk-based approach to tackling current and emerging cybersecurity threats and vulnerabilities. The Security team regularly assesses cybersecurity controls based on changes to the threat landscape by identifying and investigating cybersecurity themed incidents and breaches affecting other organisations. SEEK monitors its third-party providers, such as cloud service providers, for incidents by receiving and responding to alerts. SEEK Limited Annual Report 202151 Continuing the evolution of customer safeguards, during FY2021 SEEK began implementing multi-factor authentication (MFA) for hirer accounts providing an additional layer of protection during login. SEEK’s cybersecurity strategy is enabled by security awareness initiatives for all employees including: Hackers Mind: Training to understand how attackers may execute a targeted attack Security On-Boarding: For new SEEK users Phishing: Periodic simulated targeting of SEEK users to build alertness to real-world attacks Password Manager: Good password hygiene at work and in life using the corporate password manager Security Scorecard: SEEK users receive a monthly personalised report linked to their cyber safety performance Future outlook SEEK will continue to invest in its cybersecurity capabilities against the backdrop of acceleration of cloud services and enablement of business initiatives such as Marketplace Unification. A strategic focus is continuing to build on data analytics and machine learning capabilities to inform the view of emerging threats and trends. Sustainability Report Customers interacting with SEEK’s employment platforms expect their job searching experience to be efficient, safe and secure. SEEK’s success relies on the delivery of meaningful services and positive interactions for these customers. SEEK has systems and processes in place to ensure hirers and job ads are legal, accurate and legitimate. A dedicated team screens the SEEK ANZ employment platforms to detect suspicious job advertisements and hirers, and immediately removes them. Every job advertisement posted by a first time hirer is manually reviewed to ensure legitimacy and to verify that a genuine, paid employment opportunity exists. To protect and warn candidates, simulated candidate profiles are used to apply for fraudulent job ads to build understanding of fraudulent activity. Information is also provided to candidates on protecting themselves online from fraudulent job advertisements, phishing, trojans, scams and spam. Advice on safe job searching is provided on the home page of the SEEK website and updated as employment scams and other threats emerge. SEEK liaises with Scamwatch, part of the Australian Competition and Consumer Commission, to identify and warn the public about job and employment scams. Candidates are encouraged to use SEEK’s free platform Certsy rather than provide sensitive personal documents with job applications. 52 Customer experience Candidate security and online fraud SEEK is committed to ensuring that all job advertisements on the SEEK employment platforms are for legitimate job opportunities and to making job searching safe and secure. A key condition of advertising on SEEK is that the employment opportunity is in respect of a genuine, paid employment opportunity that is current at the time of posting. Employment platforms are subject to potential fraud by external parties, for example job advertisements that ask candidates for personal and financial information or recruit for illegal activities such as money laundering. Malicious cyber activity targeting individuals and organisations across Australia and New Zealand increased from early 2020 with COVID-19 themed scams and phishing emails. Safe job searching in Asia SEEK operates employment platforms in South East Asia and Hong Kong under the brands JobsDB and Jobstreet. These platforms operate in six countries including the Philippines, Indonesia, Thailand and Malaysia where there are increased inherent risks to candidates when job searching. Candidates may encounter fraudulent job ads, expectations to pay for jobs and deceptive recruitment including the risk of modern slavery. SEEK strives to ensure that its employment platforms do not enable or facilitate unfair or unethical hiring practices or modern slavery of any kind. A strategy was initiated during FY2021 to build candidate trust at scale, with a particular focus on South East Asia. Continued investment in candidate safety will ensure that SEEK’s global employment platforms are recognised as the most trusted and legitimate. SEEK will continue to leverage technology and improve its systems to drive safe and fair employment outcomes for candidates interacting with the platforms. SEEK has a long-term vision for an end to unethical hiring practices and modern slavery in the regions in which it operates. SEEK Limited Annual Report 202153 Certsy Hirers usually verify work credentials as a pre-hiring background check, but find it useful to have verified information earlier in the hiring process. Candidates want to stand out when applying for jobs, but they worry about the online security and privacy risks of sharing sensitive documents with each job application. Certsy was created by SEEK as a secure and free way for candidates to demonstrate they hold the credentials to meet a job’s requirements. As a ‘career passport’, Certsy enables candidates to securely upload evidence for verification and then share only the verified result – not their sensitive documents – with hirers on SEEK’s Australian employment platforms. Verified results are visible to hirers through the candidate’s SEEK Profile and can be easily re-used by the candidate in multiple applications. In FY2021, Certsy increased its range of verified credentials to five and launched three online assessments for common software and business skills including Excel Basics. Certsy also further improved its user experience, data security and privacy. Over one million candidates have now used Certsy to add verified credentials to their SEEK Profile. Certsy can verify candidates’: Right to Work in Australia Australian Driver’s Licence Working with Children Check Recent Police Check AHPRA (Australian Health Practitioner Regulation Agency) Registration Certsy is also an accredited provider of Australian nationally coordinated criminal history checks, also known as national police checks. Customer centred product development Customers are at the core of SEEK’s product strategy. To improve the customer experience, SEEK identifies the most important needs of customers and any underserviced needs. SEEK has identified that the most important needs of candidates are to know that a job is genuine and still available and to hear back about their application. To meet these expectations, SEEK has a strong focus on candidate security and online fraud. To help candidates understand more about the progress of their application, SEEK has introduced ‘candidate notifications’. When a hirer is managing applications within the SEEK platform, this signals to the candidate that the hirer has opened an application or deemed the candidate not suitable. Hirers need to quickly identify the best candidate for the role, easily review candidate information and ensure the job ad is seen by a large number of potential candidates. To meet these customer needs, SEEK has developed products such as SEEK Profile and Talent Search and uses artificial intelligence techniques to surface suitable candidates. SEEK sources feedback, insights and data from customers to tailor improvements to services. In FY2021, SEEK invested in an external “voice of the customer” platform to centralise and improve the collection and analysis of data. With these deeper insights SEEK is able to improve the customer experience. As a result of the continued evolution of customer-centered services, SEEK ANZ continues to be a market leader. SEEK will be first choice for nearly half of the Australian workforce intending to look for a new job in the next 12 months and SEEK is the number one place to go for future jobseekers in New Zealand. Inclusive Design Principles SEEK strives to make online job searching accessible and welcoming for candidates, regardless of ability and background. • Accessibility for visually impaired customers is front of mind when designing SEEK websites, applications and products • Diversity is represented and celebrated in illustrations, photos and language • SEEK websites, applications and products are designed for varying levels of online experience to support less tech savvy people Sustainability Report 54 Customer satisfaction SEEK uses the Net Promoter Score (NPS) and a range of other metrics to understand customer satisfaction. NPS is a common loyalty metric that measures the propensity to recommend an organisation or brand to others. SEEK undertakes research amongst Australians that have changed or started a new job in the previous 12 months, or who intend to change jobs in the next 12 months. The NPS for candidates is 15 points higher than SEEK’s nearest competitor and nearly 7 out of 10 candidates who found their job on SEEK would go to SEEK first to find their next job. To understand hirer satisfaction, SEEK asks employers to reflect on their last two hiring occasions. SEEK experienced record job advertisements in March and April 2021 followed by continued high levels of advertisements for the remainder of FY2021. Hirer satisfaction was impacted by low numbers of applications per advertisement caused by the reduced labour supply and cautious candidate sentiment following a turbulent year. Customer support SEEK offers multiple channels for customer support and concerns. Customer service teams are located locally in Australia and New Zealand. To ensure that candidates’ and hirers’ enquiries are fully addressed, customer service teams take a customer-first approach and targets are focused on first time resolution for queries via phone, email or live chat. This year customers relied on support from SEEK to help them navigate the volatility of employment markets caused by the unique impacts of COVID-19. Time spent with candidates on calls increased significantly as they sought advice and guidance. Customer service teams were upskilled to provide well-being support during interactions with vulnerable candidates. SEEK developed a referral relationship with Beyond Blue to help those in need of additional support. Hirers, many with reduced internal recruitment capacity, turned to SEEK for technical help such as writing job ads and sourcing talent. To further support hirers, SEEK dedicates a support team to help optimise their investment in SEEK products. This team worked with over 2,000 businesses in a variety of ways including group seminars, customised business workshops and 1:1 sessions. A video content hub was created providing hirers with easy and any time access to information. SEEK extended its support of ANZ hirers impacted by COVID-19 into FY2021. Businesses and recruitment agencies experienced variable hiring activity as states and territories recovered at different rates from the low point in April 2020. Support shifted from extending pre-paid products to crediting job advertisements no longer required due to snap lockdowns. Financial relief to hirers in ANZ was worth approximately $2 million in addition to relief provided in late FY2020 of approximately $12 million. Helping hirers affected by extreme climate events Increasing shocks caused by extreme climate and natural events have affected labour markets across Australia and New Zealand. Building on the experience of helping hirers through the Australian bushfires in summer 2019- 2020, SEEK has established principles about the impact of such events on the community and businesses. These principles predict the support hirers may require in future events enabling responsive decision making. The introduction of variable pricing and flexible customer contracts provide SEEK with mechanisms to respond to hirer’s needs quickly in difficult times. SEEK Limited Annual Report 2021Social impact 55 Employment markets have been variable and volatile. SEEK has helped people and organisations to navigate changes to working lives. Hiring advice and market insights This year organisations were faced with unique and difficult employment decisions. Many hiring teams were working on smaller budgets and the speed of hiring was impacted by the unpredictable external environment. SEEK’s Hiring Advice and Market Insights portals provided hirers with reliable information to help them adapt recruitment strategies and make the hiring process more efficient. Content provided tips on how recruiters could equip themselves for change, how to onboard new employees remotely and how to make team members feel valued and included when workforces are remote and dispersed. The Hiring Advice and Market Insights portal attracted 700,000 visits in FY2021, of which 54% were first time visits. Employment insights and career advice The events of the past year led many people to reassess their career and working life. Whether looking for a career change or focusing on job security, SEEK’s rich data and insights helped candidates make important career and employment decisions. SEEK’s Career Advice portal supports candidates through the career journey by providing tailored advice and career options. Content is curated to help the candidate achieve their goal including practical tips or resume writing, interviewing, remote working, in demand jobs, and workplace wellbeing. Career Advice attracted over 18 million visits in FY2021, of which 51% were first time visits. Engaging with Indigenous communities During FY2021, SEEK established cross-business working groups with mandates to engage broadly with external Aboriginal and Torres Strait Islander stakeholders in three areas: • • • tailoring SEEK’s products and services to better meet the needs of Indigenous customers, especially job-seekers finding opportunities for Indigenous owned and managed businesses in SEEK’s supply chain appropriately acknowledging and respecting the custodianship of the traditional owners of each SEEK location, in particular the new headquarters in Cremorne Each of these working groups reports directly to the Chief Executive. These working groups will deliver tangible outcomes during FY2022, which will be included in the next Sustainability Report. Education improving employability Education helps people live more fulfilling and productive working lives. Through technology and innovation, accessibility to quality education at scale continues to improve. With face-to-face training and education impacted by COVID-19, people turned to online platforms to up-skill and re-skill to meet changes in labour markets. SEEK Learning, on the SEEK employment platform in Australia, is freely available to help individuals find the right course to progress their career. SEEK Learning surfaces the career outcomes for each course, such as potential roles, job satisfaction levels, most common salary and how many jobs are available on the SEEK employment platform. In FY2021 SEEK Learning worked with providers to meet the increased demand for short courses and connected 280,000 individuals with education providers. Understanding transferrable skills Understanding transferrable skills is a key factor in helping candidates make effective career decisions. SEEK uses data driven insights to provide information on in-demand industries and roles, necessary skills for those roles and the salaries on offer. Recognising that the most basic skills can lead to a new and exciting opportunity, SEEK introduced a new skills explorer feature. In FY2021 the skills explorer helped over 337,000 unique candidates understand their skills, evaluate opportunities to further develop their skills and to uncover new career and job opportunities. Careers through business ownership For many, a fulfilling and productive working life means buying or selling a business. SEEK Business helps people pursue careers in business ownership by matching them with relevant businesses for sale. In FY2021, SEEK Business generated 177,000 connections to sellers, a 33% increase from the previous year. This signals a continuing increase in demand for career pathways in business ownership. Sustainability Report 56 Social contribution Drawing on the experience of the successful SEEK employment platform, SEEK Volunteer is a free online volunteer platform connecting people to volunteer opportunities that enrich their communities, lives and careers. SEEK also supports its charity partners and employee volunteering. SEEK Volunteer For 21 years, SEEK has invested in SEEK Volunteer leveraging its expertise and technology platforms to connect people with volunteer opportunities in Australia and New Zealand. SEEK Volunteer replicates SEEK’s approach to online privacy and continual efforts to make searching for a volunteer opportunity safe and secure. The impacts of COVID-19 on volunteering were widespread, affecting the operations of three quarters of volunteer programs in Australia during FY2021. The number of volunteer opportunities available on SEEK Volunteer was 50% less than previous years for the majority of FY2021 due to the lengthy COVID-19 lockdowns, particularly in Melbourne. As a result, there was a 15% decline in the number of people who applied for a volunteer opportunity through SEEK Volunteer. This was despite an increase in remote and online volunteering, with 10% of total volunteer opportunities in Australia and 4% in New Zealand available remotely during FY2021. In 2017, SEEK Volunteer developed a volunteer recruitment portal for the NSW Government. Leveraging SEEK Volunteer’s technology, experience and existing relationships with community organisations, the portal launched with over 2,000 opportunities. Since launching, 34,000 individuals have applied for a volunteer opportunity. Individuals who applied for a volunteer opportunity Registered not-for-profit organisations offering volunteering Volunteer opportunities listed as at 30 June 2021 2020 2019 143,383 169,178 130,256 Combined Australia and New Zealand numbers, excluding NSW Government portal numbers 12,258 11,410 10,127 9,392 6,497 12,910 Employee volunteering SEEK encourages individual employees and teams to volunteer by providing employees with an annual day of volunteer leave. An additional five days of personal flexi-leave available annually to employees may also be used for volunteering. In FY2021, SEEK employees recorded 133 hours of volunteering in the community, significantly less than in prior years. This was the result of the extended COVID-19 lockdowns in Melbourne which limited access to volunteering opportunities. A group of SEEK employees volunteered their strategy and finance skills to help Courage to Care. Delivering “active bystander” training in schools, Courage to Care, through its Upstander Program, encourages children to take positive action to combat discrimination. The volunteers assessed potential new markets and presented a business case. SEEK employee volunteers contributed significant value to Courage to Care’s future business. SEEK Limited Annual Report 202157 Small Change workplace giving With some charities experiencing an unprecedented demand for their services, yet unable to implement traditional fundraising campaigns due to COVID-19 restrictions, workplace giving is more important than ever. ‘Small Change’ is SEEK’s workplace giving program which delivers funding to ten charity partners. Employees participate through pre-tax donations deducted directly from their pay which SEEK matches dollar for dollar uncapped. Small Change operates on an ‘opt-in’ basis for all employees, with over half of SEEK’s full and part time workforce participating in the program. Given the unprecedented fundraising challenges of FY2021, SEEK provided $30,000 in additional direct financial support shared equally between its ten charity partners. STREAT STREAT is a social enterprise that provides disadvantaged young people with the life skills, work experience and training to start a career in the hospitality or horticulture industries. As one of SEEK’s Small Change charity partners, SEEK works with STREAT to create value beyond matched workplace giving donations. In FY2021, SEEK held a virtual ‘Cooking Show’ to connect employees who were working from home due to COVID-19 restrictions. As part of this event, SEEK made a short film to showcase STREAT. SEEK also promoted to employees a virtual workshop “Building a workforce of Allies – Gender and Sexual Diversity in the workplace” run by STREAT’s co-founder to help employees gain the skills and confidence to become an ally for LBGTQIA+ peers, friends and family members. SEEK’s Small Change charity partners • Alannah and Madelaine Foundation • Australian Wildlife Conservancy • CanTeen • Cathy Freeman Foundation • Lifeline • Lort Smith Animal Hospital • Starlight Children’s Foundation • STREAT • The Big Issue • The Smith Family Sustainability Report 58 Our People SEEK’s purpose driven and value-based culture This is SEEK is the codification of SEEK’s culture. It comprises SEEK’s purpose and vision, as well as identifying beliefs and attributes that define the traits that SEEK looks for in its best people. This is SEEK is constantly referred to in day-to-day activities, and guides behaviours, decisions and actions. It is also an important point of reference for recruitment, development, performance management and reward. Recently announced corporate structure changes of SEEK create an opportunity to review and update This is SEEK, which will be done during FY2022. SEEK expects the essence to remain the same. SEEK Purpose We help people live more fulfilling and productive working lives and help organisations succeed. SEEK Vision Being the best in the world in online employment by: • Matching more people with job opportunities than any other organisation in each market in which we operate; • Being the most trusted partner for advice on, and access to, relevant career related education. SEEK Beliefs I At SEEK we believe in... • Having a positive impact on society • Focusing on business fundamentals and customer outcomes rather than short-term financials • Always striving, challenging and remaining productively paranoid SEEK’s culture is on based on trust, accountability and passion to achieve the company purpose which is critical to SEEK’s long term success. Inherent in This is SEEK is a culture of trust, innovation, empowerment and collaboration, which manifests in various ways. This can be seen in everyday examples such as the use of the OKR framework, while innovation and collaboration are encouraged in bi-annual Hackathons. OKR framework SEEK has continued to embed the Objectives and Key Results “OKR” framework through FY2021, using it to define and measure the critical priorities for the business. The objectives capture inspirational business goals, while key results define measurable and quantifiable outcomes to deliver on the objectives. The OKR framework provides clarity and alignment for teams at the organisational level, to ensure everyone understands the collective company goals and can work towards their achievement together. • Doing the right thing for SEEK, not what is popular or easy Hackathons • Doing the right amount of thinking upfront • Persevering through obstacles to get it done • Creating a community where individuals are valued SEEK Attributes I Our best people… • Are passionate about SEEK and our customers • Show great judgement and decision making ability • Know their stuff – professional skills (for everyone) and leadership skills (for leaders) • Deliver outcomes for SEEK SEEK’s bi-annual three-day Hackathons provide employees with opportunities to collaborate cross-functionally, through developing and testing ideas for products, customer solutions or internal innovations. Products developed during Hackathons are often immediately deployed on the platforms, and in other cases developed subsequently into major product releases. The December 2020 Hackathon was run jointly across ANZ and SEEK Asia and, due to COVID-19, was adapted to be completely virtual. SEEK Limited Annual Report 2021 59 Attraction and retention This is SEEK continues to play a central role in building a high-performance culture and attracting and retaining talent within the highly competitive technology industry. The company has a robust recruitment process and the This is SEEK framework forms a core part of how potential new employees are evaluated. In the second half of FY2021, SEEK was faced with a candidate-short market. Job ads on SEEK’s Australian and New Zealand employment platforms were at historically high levels and candidate applications per role were lower compared to the same period prior to the pandemic. This dynamic, coupled with the inability to source talent internationally due to immigration constraints, created a highly competitive market for technology talent. SEEK responded by compressing hiring processes and fast-tracking high calibre talent, where possible. SEEK will continue to identify opportunities in response to market challenges to ensure SEEK hires the best candidates. SEEK retained over 90% of ANZ based permanent employees in FY2021. This is well above industry norms and reflects SEEK’s continued dedication to a people-first culture and an inclusive work environment. During FY2021, providing certainty for people at SEEK during a period of significant ambiguity was a high priority. Consistent with SEEK’s commitment to long-term business goals, there were no redundancy programs and no reductions were made to salaries or working hours for permanent staff. Employee feedback indicated that the reassurance about job security provided by management was viewed as highly valuable. In April 2021, SEEK received the highest award in the Australia Financial Review BOSS Magazine’s Best Places to Work program, along with the best employer award within the industry. SEEK was named overall winner for Best Place to Work in Australasia and also Best Place to Work within the technology industry. These awards recognised SEEK for the outstanding culture, work practices and environment which have been built over many years and which enable people to do their best work. This recognition was positive for SEEK’s recruitment brand and was also appreciated internally. SEEK continues to work to sustain and improve its culture. Workforce profile SEEK’s ANZ workforce grew 11% during FY2021. The majority of employees were employed permanently, with 9% employed on either a fixed- term or casual basis. Across the employee population, 11% of employees had a part time working arrangement. SEEK ANZ workforce* 30 June 2021 30 June 2020 Permanent employees 1,030 Fixed term Casual Total 941 74 5 96 2 1,128 1,020 * Excludes subsidiaries which are operated as independent businesses To enable SEEK to scale for growth, a contingent workforce was maintained to provide flexibility to meet business requirements. This contingent workforce provided skills and capability in areas which were critical for specific projects or for peak periods in operating the business. In addition to the ANZ business, SEEK operates employment platforms in South East Asia, Hong Kong, Brazil and Mexico; which exist under different brands within these markets. SEEK’s global workforce 30 June 2021 30 June 2020 Asia (JobsDB & JobStreet) 1,103 1,084 Brazil (Catho) Mexico (OCC) 724 307 783 283 Total 2,134 2,150 Sustainability Report 60 Career and talent development Regular This Is SEEK performance conversations ensure every employee knows how they are performing. Performance is measured against agreed outcomes specific to an individual’s role and the SEEK Attributes, which outline performance expectations from a behavioural perspective. In FY2021 there was continued focus on career development at SEEK. Building on the work previously done with employees, SEEK continued to focus on strengthening leader capability, ensuring they have the tools, resources and skills to support their team members to navigate their careers. There also continues to be bespoke learning and development initiatives, covering topics such as Gallup strengths, coaching and leading through change. For the top 80 leaders across SEEK, the bi-annual talent and succession management cycle for executive and senior leaders continued in FY2021. This provided a strong understanding of SEEK’s leadership profile, and enabled proactive management of the highest potential employees and associated key person risk. Employee satisfaction and engagement SEEK maintains its focus on strong employee engagement. Measurement continues to include one full engagement survey and one check-in survey during the year. This enables a six- monthly sense check of engagement and progress for identified focus areas, whilst allowing a year between full surveys to action and assess more meaningful changes. The full year survey was conducted in October 2020 and the overall engagement score remained strong, consistent with previous years. Whilst there were many changes in FY2021 due to COVID-19, the engagement survey indicated that people believed that SEEK prioritised their safety and demonstrated genuine care for their wellbeing. A check-in survey was conducted in April 2021 which also measured employee engagement, with a slightly lower result than October. This was indicative of the amount of activity and change as SEEK embarks on the Market Unification project and a range of other corporate activity, as well as the way people were feeling after the challenges of the past year. Employee benefits Employees are engaged on independent contracts for predominately professional roles. Remuneration is competitive to attract and retain high performing talent, and in most cases is above external market medians. When deciding on salary, there are several factors that SEEK considers, including external market rates, internal relativity, minimum requirements and hours worked. An internal review was conducted in FY2021 to ensure payroll compliance requirements for award-covered employees in ANZ. A range of benefits is provided to employees, based on what they value most. Financial benefits for permanent employees comprise an annual profit share opportunity, an employee share purchase plan, salary continuance insurance and travel insurance for both personal and business travel. Employees are also paid statutory superannuation to the superannuation or pension fund of their choice, with discounted premiums available for life and disability insurance via the default superannuation fund. Alongside this, the work environment at SEEK continues to be flexible and people are encouraged to come forward and discuss their personal needs to achieve the best balance for their own personal life and work commitments. A range of generous leave provisions is available, as well as programs and initiatives to support physical and mental wellbeing. Employees and their families also have access to various offers related to health insurance, fitness and food, travel and accommodation. SEEK Limited Annual Report 202161 Workplace and flexibility SEEK is committed to creating a flexible work environment that considers the needs of the individual, the leader, the team and the organisation. Flexibility is important in helping employees balance work with caring responsibilities, community involvement and personal development, and allows individuals to meet their personal lifestyle needs. With the significant challenges created by the pandemic, this was especially important for people during FY2021. Flexibility options include ad hoc flexibility, allowing employees to vary their work schedule from time to time through informal arrangements, and formal flexibility arrangements between an employee and their leader. Part- time work arrangements are accommodated where this aligns to an individual’s request and the requirements of the business. A range of virtual collaboration tools is available to facilitate remote working and to support team harmony and cohesion. In response to the pandemic, SEEK also updated workplace flexibility guidelines to extend the definition of carer’s leave, providing coverage for employees to provide remote education and home childcare. As SEEK ANZ offices re-opened after COVID-19 lockdowns in accordance with government guidelines, employees were encouraged to work and collaborate at SEEK offices, in accordance with individual team arrangements. A hybrid working model has been adopted, with employees combining office-based work and working from home. To support employees working from home, SEEK provided a one-off reimbursement allowance to employees to provide for home office equipment which has now become a permanent offering for all new joiners. SEEK provides ‘Personal Flexi-Leave’ of five days paid leave per year in addition to other leave entitlements, to attend to any personal matters during the working week. Employees are also provided with up to six weeks paid carer’s leave, in addition to the statutory entitlement. SEEK offers 14 weeks paid parental leave for the primary carer and two weeks paid partner leave. Employees can take parental leave up to 18 months after their child is born, encouraging each parent to be with the child as primary carer. Enabling parents with the option to alternate the role of primary carer after 12 months has been beneficial in supporting the parent who was initially the nominated primary carer to transition back to work. Specialist coaching services are provided by SEEK to support the employee and manager with the transition prior to leave, during leave and when returning to the workplace. SEEK’s approach has driven greater gender balance in the taking of paid parental leave. During FY2021, 87 employees were on parental leave as the primary carer, comprising 68% females and 32% males. This is a 5% increase on the number of male employees who took parental leave as the primary carer during the previous financial year. In addition, 31 employees took paid partner leave during FY2021. Workplace behaviours Workplace Behaviour Guidelines sit alongside SEEK’s Code of Conduct for employees and, together with This is SEEK, clearly outline the behavioural expectations for employees. Ensuring the standards of behaviour are well articulated and well understood upholds and strengthens SEEK’s workplace culture and supports the ongoing success of the business. Expected workplace behaviours are included as part of induction for new employees, during which they learn about This is SEEK and the business and meet senior leaders. To further build understanding, employees are required to complete mandatory online training modules on commencement at SEEK, and then every two years. The modules comprise Anti-Bribery and Anti- Corruption, Data Sharing, Equal Employment Opportunity and Workplace Health and Safety with completion rates monitored. Senior leaders at SEEK are expected to be role models and to take appropriate action when the expected standards of behaviour are not upheld. People are encouraged to provide direct and open feedback in the moment, whilst formal grievance channels also exist within SEEK to ensure confidentiality and sensitivity when required. Collective agreements and freedom of association Collective agreements are not customary in the industry in which SEEK operates, as employees are engaged under individual contracts in predominantly professional roles. SEEK employees are not restricted in their entitlement to freedom of association. Of the 87 employees on parental leave and due to return to work in FY2021, only three resigned, which was a return rate of 96% Sustainability Report 62 Workplace health and safety SEEK continues to maintain a strong focus on health and safety initiatives. Safety performance SEEK continued its commitment to ensuring the health and safety of its employees, contractors and external visitors and conducted business in accordance with all workplace health and safety laws, standards and codes of practice. When compared to FY2020, whilst the annual number of incidents was similar in FY2021, the nature of the incidents that occurred required significantly more time away from work, resulting in an increase in total lost time injuries. There was also an increase in Workcover claims year to year, however a total of four claims recorded in FY2021 was not significant in proportion to SEEK’s overall ANZ workforce. Throughout the year, SEEK continued to focus on a wide range of health and safety initiatives to provide a safe and productive work environment. Lost time injury frequency rate* (per million hours worked) Lost time injury incident rate (per 100 employees) Number of Workcover claims *Where the following day could not be worked due to injury FY2021 FY2020 1.8 0.35 4 0.5 0.1 1 The Wellbeing at SEEK program supports employees to actively foster their health and wellbeing through a range of initiatives including: • SEEKer Support program, which enables employees to access professional counselling services via an employee assistance program provider or a counsellor of their choice. • Annual Wellbeing Week, involving speakers, webinars, curated resources, online learning and special offers is focused on building everyday habits to positively influence wellbeing. • Leader resources and workshops, including a guide for leaders on support for mental health and wellbeing in teams. • Virtual presentations by an external psychologist to support emotional and mental health through COVID-19. • Ongoing wellbeing webinars for all employees covering mental wellbeing topics and an updated content portal with wellbeing and mental health resources. Managing the impact of COVID-19 As the pandemic evolves, the health and wellbeing of employees remains a high priority and at the forefront of decision making. In FY2021, the business sought professional advice of relevant health authorities and observed high standards of care for employees. SEEK closed offices and mandated working from home in response to government restrictions and communicated extensively with employees across multiple channels as restrictions on offices were updated. When it was possible for the offices to remain open, social distancing measures were implemented, employee attendance was monitored and the workplace was cleaned and sanitised regularly. Employees have engaged in minimal business travel since the beginning of the pandemic, which has only occurred where necessary for business operations and in adherence with government restrictions. Support initiatives are available as employees navigate hybrid working and repeated office closures. SEEK’s focus has been to provide support and reassurance for people, treat people with respect and communicate management decisions that impacted people early and with clarity. Support continues as employees adapt to SEEK’s hybrid working model. As employees grappled with high levels of work activity and the personal challenges due to the pandemic, SEEK announced the SEEK Switch Off Day for 2 July 2021. The purpose of this was to provide a day of paid leave for employees across the company to simultaneously disconnect from work to focus on rest and recovery. SEEK Limited Annual Report 2021Diversity and inclusion 63 SEEK is committed to providing equal opportunities to employees and maintaining an inclusive culture, which values diversity of thought, opinion and background. SEEK strives to foster an environment that recognises and respects the qualities that are unique to individuals such as gender, language, ethnicity, age, religion, disability and sexual orientation. Having a diverse workforce of people leads to greater diversity of thought, a better workplace and better business outcomes for SEEK’s customers. SEEK has an overarching focus on fostering an inclusive workforce and aims to create a culture where everyone feels they can belong. Initiatives under the banner of workplace inclusion include: • SEEK’s sponsorship of Midsumma, Melbourne’s premier LGBTIQA+ community event, for the seventh consecutive year. • delivery of cultural awareness sessions to support the unification of APAC teams. • research into the concept of belonging, providing insight into employees’ experience of belonging and inclusion in the workplace. SEEK’s Wellbeing, Diversity and Inclusion Strategy outlines the objectives and priority areas of focus, which include gender diversity, workplace inclusion and employee wellbeing. SEEK’s Diversity and Inclusion Policy is available on the Corporate Governance page in the Investors section of the Company’s website. Female representation at SEEK There has been a positive shift in female representation for executives and the total workforce since FY2020. The increase in female representation on the Executive Leadership Team reflects one additional male executive and one additional female executive hired in FY2021. Following corporate structure changes which came into effect on 1 July 2021, the female direct reports to the CEO now represent 57%. The slight changes at the Senior Manager level and the workforce metrics more broadly were partly reflective of a lower female voluntary attrition rate. Female Representation % 30 June 2021 30 June 2020 Group Executives of SEEK Limited - direct reports to the CEO Senior managers* Workforce - all employees 25% 22% 47% 17% 23% 45% * This is defined based on job title, level and seniority attributed to role, as per information captured in SEEK’s HR Information System. International Women’s Day SEEK celebrated International Women’s Day with a keynote speaker sharing her experiences as a migrant from a culturally diverse background. Her professional insights and expertise in inclusive workplace practices resonated strongly with the virtual audience. Sustainability Report 64 Gender diversity — working towards a balanced workforce SEEK recognises that achieving diversity, in all its forms, is important for an innovative and high performing business. SEEK has a particular focus on the attraction, development and retention of women within the organisation, due to the significant under representation of female talent in professional roles in the technology industry. Engaging women in technology The Women in Technology Steering Committee seeks to attract female talent to SEEK, grow their careers and support more women to have careers in the technology industry. The Steering Committee is comprised of senior technology leaders and representatives from SEEK’s Women in Technology community. Achieving gender balance in hiring The focus in FY2021 was on the following key initiatives: Hiring decisions take into consideration suitability for the role and gender representation within teams. SEEK places great importance on gender representation throughout the recruitment process. In FY2021, continued focus on gender diversity in hiring practices resulted in a 5% increase in overall female new hires into the organisation. Achieving gender balance in hiring outcomes is particularly challenging for technology roles, due to under representation of female candidates in the market. A proactive focus to attract and foster a compelling work environment for women resulted in a 3% increase since FY2020 in the number of female hires in technology roles, including the leader of the technology function, SEEK’s most senior technology executive. Female new hires, as a % of total new hires Gender pay equity FY2021 FY2020 49% 44% Principles of gender pay equity are proactively upheld. SEEK is committed to ensuring gender pay equity across all levels for comparable roles. In Australia and New Zealand, there are robust processes to ensure equitable pay outcomes are achieved for similar roles, irrespective of gender. These include: • Transparency of remuneration policies and practices • Education workshops for leaders about the potential for gender bias in recruitment • Utilising both internal and external remuneration data when hiring external talent Each year SEEK undertakes detailed analysis of individual pay outcomes and identifies any potential gender pay gaps across the ANZ business during the salary review period. Although no salary review was completed for FY2021 due to the impact of COVID-19 on SEEK’s business, SEEK undertook pay parity analysis to identify any gender pay gaps. While some differences were identified based on role type and level within the organisation, there was no indication of systemic issues in relation to gender. Where some differences were identified between the average salary of males and females, this gap was largely attributable to higher representation of male employees in higher paying technical or senior roles, rather than inequities in pay on a like-for-like basis. SEEK remains committed to increasing the representation of women in technology roles and increasing female participation in senior roles, as outlined in the sections above. Overall, SEEK is confident that through education of leaders and by monitoring pay decisions during the critical points in the lifecycle of an employee, any risk of gender pay inequity in decision making remains low. • A pilot on inclusive ways of working involving the Neuro Leadership Institute and SEEK’s Artificial Intelligence and Platform Services team; and • An employee-led project focused on career progression and increasing representation of women in leadership roles. The discovery phase was completed and solutions are being designed for piloting in FY2022. Increasing female participation in senior roles The third Females at SEEK Thrive (FAST) program, which commenced in FY2020, was completed in FY2021 with a cohort of 26 women employees. The FAST program continues to be an important step to increasing female participation within senior roles by investing in high performing women employees and fostering their individual career progression. SEEK is currently preparing for the next FAST intake in FY2022. Improving the talent pipeline through long-term investment in female talent SEEK’s Graduate Program was expanded in FY2021 from technology positions to also include opportunities in strategy and operations. SEEK launched a scholarship for Women in Strategy aimed at promoting equal opportunities by providing successful applicants with exposure to career opportunities and support with their further studies. Five females and four males were extended offers across the graduate program streams. The high proportion of female offers reflects SEEK’s campaign strategy of strong female representation within the candidate pool and an equitable gender split at assessment days. CAMP SEEK Camp SEEK is an initiative to address the shortage of female talent within the technology industry, by sparking the interest of young women to choose a future career in technology. The aim of Camp SEEK is to introduce year 9 and 10 girls and non-binary young people to the varied careers within the technology industry and inspire them to take up future study and career choices in STEM. In September 2020, SEEK held its sixth consecutive Camp SEEK. Due to COVID-19 restrictions, this was hosted virtually for the first time. SEEK partnered with The Smith Family to engage with students from underprivileged backgrounds and encourage them to participate in Camp SEEK. SEEK Limited Annual Report 2021ENVIRONMENT Through measuring and striving to minimise energy use and emissions, SEEK aims to reduce its impact on climate change. 65 Responding to climate change SEEK’s carbon commitments Bushfires, floods and other extreme weather events are physical reminders of the effects of climate change. Beyond these immediate impacts, climate change is increasingly impacting the economy by shaping investment flows, policy, and employee and consumer behaviour. SEEK supports the objective of the Paris Agreement to transition to a net zero emissions economy, keeping global warming below pre-industrial levels. As an online business, SEEK is an energy taker with a relatively low emissions profile compared with most ASX listed companies. Regardless, as a responsive and responsible business, SEEK takes accountability for its impact on climate change and its role in the transition to the low carbon economy. SEEK supports the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and is committed to enhancing its disclosures in line with the TCFD recommendations. This report details SEEK’s approach to identifying and managing its climate-related risks and opportunities, including a TCFD implementation roadmap on page 68. Minimising environmental impact SEEK’s offices are managed with a commitment to minimising waste and energy use. The new headquarters in Melbourne is located close to major public transport hubs, while ‘end of trip’ facilities encourage and facilitate bike commuting. SEEK continues to widely implement technologies to connect SEEK offices, partners and service providers which assists with reducing business travel. With the aim of minimising waste, SEEK has a program for the disposal of electronic hardware that can no longer be deployed within the business. Once cleansed of data, hardware is either offered to employees at market value or provided to a charity for use within their organisation. Hardware which is not in a useable condition is securely disposed through certified e-waste providers. SEEK’s carbon offset program SEEK has pre-purchased carbon offsets that will be retired to achieve SEEK’s carbon neutral commitments. The blend of carbon offsets predominantly comprises high-impact land based projects, including biodiversity conservation in Australia and forestry habitat protection in Indonesia. 1. Achieve carbon neutrality for SEEK ANZ for FY2021 under Climate Active in FY2022. This will include offsetting the scope 3 emissions related to the fit-out of the new Melbourne headquarters. 2. Formalise an emissions reduction strategy for SEEK in FY2022. 3. Achieve carbon neutrality for SEEK’s global footprint for FY2022 under Climate Active in FY2023. This reflects SEEK’s commitment to measuring its global emissions in order to comprehensively address emissions reduction. SEEK’s carbon targets SEEK has the following targets, which it will further refine in FY2022 as it formalises its emissions reduction strategy: • Pathway to achieve net zero across all scope emissions by 2030 • Develop a science-aligned target by 2025 Data centres SEEK predominantly stores its data in cloud-based platforms and also at dedicated external data centres in Australia, the United States and Singapore. Cloud-based data storage uses fewer servers and less power resulting in lower carbon emissions compared with data centres. During FY2021 SEEK further increased the proportion of cloud-based data storage to approximately 90%. Cloud and external data centres help mitigate SEEK’s business continuity risks by providing the excess capacity necessary to ensure agreed power, temperature and humidity levels are met, even during an energy outage or heatwave. Atmospheric controlling and powering at these data centres is a significant use of energy attributed to SEEK. Where possible, SEEK selects data centres that are pro- active in reducing energy consumption and dependence on non- renewable energy sources. SEEK utilises NEXTDC’s M1 data centre in Melbourne, which has a 5 star NABERS rating for energy efficiency with a 400kW solar rooftop array. NEXTDC’s operations are certified carbon neutral under the Climate Active program and have a low Power Usage Effectiveness (PUE) rating of 1.35 where the ideal ratio is 1.00 and the industry average is 1.70. Sustainability Report 66 Energy and emissions Notes SEEK measures and discloses the energy consumption and greenhouse gas emissions associated with its activities in Australia and New Zealand. Greenhouse gas emissions by scope SEEK Australia and New Zealand operations • COVID-19 restrictions were the primary driver behind multiple material year on year variances including working from home emissions (+359%), business travel (-94%) and purchased electricity (-40%). • Scope 1 emissions are direct emissions from operations that are owned or controlled by the reporting entity. SEEK does not have operational control over any activities that result in material scope 1 emissions. • Scope 2 emissions are indirect emissions from the purchased (tonnes CO2-equivalent) FY2021 FY2020 electricity consumed by the reporting entity. Scope 1 - direct emissions 0 0 Scope 2 - electricity-related emissions 687 1,141 Scope 3 - indirect emissions 5,245 6,329 Total emissions 5,932 7,470 Scope 3 - indirect emissions (Melbourne headquarters fit-out) 7,550 0 Total emissions 13,482 7,470 Energy consumption SEEK Australia and New Zealand operations (GJ) FY2021 FY2020 Electricity (offices) 2,701 4,231 Energy (via purchased services) 11,859 24,704 • Scope 3 emissions are indirect emissions (not included in scope 2) that occur in the value chain of the reporting entity including both upstream and downstream emissions where relevant to SEEK’s operations. SEEK’s Scope 3 emissions include: emissions associated with employees working from home (“WFH”), base-building services (electricity and natural gas), waste generated in activities, purchased goods and services (primarily international and local data services and office supplies), employee commuting, business travel (flights and vehicles), embodied carbon in capital goods (IT equipment) and the new Melbourne headquarters fit-out, and full fuel cycle emissions for fossil fuels and electricity consumed. • Table includes SEEK Limited subsidiaries OES, JobAdder and Sidekicker. • Energy (via purchased services) includes business travel (flights and vehicles), base-building services (electricity and natural gas) and purchased data services. • The corporate reporting protocol adopted by SEEK is the World Business Council for Sustainable Development Greenhouse Gas Protocol based on the company’s operational control of its sites. Reference has also been made to Australia’s Climate Active Standard for Organisations. • The methodology (energy and emission factors) used for estimating Scope 1, 2 and 3 emission sources is from Australia’s National Greenhouse Accounts (NGA) unless otherwise specified. Working from home emissions were determined using Climate Active’s certified calculator. Total energy consumption 14,560 28,935 • The SEEK Group falls below the threshold for National Greenhouse and Energy Reporting (NGER) mandatory annual reporting. Figure 1 SEEK ANZ key emission sources FY21 Total t CO2 -e FY20 Total t CO2 -e e - 2 O C t 3000 2000 1000 0 WFH emissions Leased premises Data services Waste generated in operations Electricity purchased Business travel Emission sources The Melbourne headquarters of SEEK relocated to a purpose-built office in the Melbourne suburb of Cremorne in August 2021. The office fit-out during FY2021 contributed 7,550 tonnes of CO2-equivalent which includes the embodied emissions of workspace fixtures and fittings, office furniture, materials and technology. This emission source is not represented in figure 1. SEEK Limited Annual Report 2021 67 Task Force on Climate-related Financial Disclosures In line with the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), this report provides information about SEEK’s approach to managing its climate-related risks and opportunities, including a TCFD implementation roadmap. Governance Risk management SEEK’s Board is responsible for overseeing SEEK’s social, governance and environmental responsibilities, including climate change. Climate change is currently considered an emerging risk for SEEK, and will receive continued assessment by the Board. The Board ensures that SEEK has appropriate risk management strategies and internal controls in place. The Audit and Risk Management Committee supports the Board by monitoring SEEK’s risk management against the Risk Management Framework and reviewing the Group’s key risks, controls and mitigation measures to deal with identified risks. This year SEEK has committed to the TCFD recommendations, engaged an external consultant to run several workshops on climate related content involving executives and senior leaders and assigned an executive to act as climate change champion and the key communicator to the Board on climate related issues. Looking forward, SEEK will: • Continue to include climate change as a regular item on Board meeting agendas • Assign internal responsibilities for managing climate change within the organisation • Appoint experienced professionals to support the Board and management in implementing SEEK’s climate strategy. Strategy In FY2021, SEEK further explored the impact of climate change on the business, which resulted in the identification of key risks and opportunities that may impact SEEK over the short, medium and long-term. SEEK’s current climate change strategy is to support the transition to a low carbon economy through: • Assessing and managing the risks arising from climate change and future carbon constraints relevant to the business • Collaborating with industry, investors and other stakeholders to share knowledge and build capacity • Management of SEEK’s carbon footprint SEEK will engage with climate experts and perform climate scenario analysis to better understand how exposures to climate change impacts will evolve over time under different emission scenarios. SEEK’s climate change strategy will evolve in response to emerging potential impacts of climate change on business operations. SEEK considers climate change and its impacts within the existing risk management strategy and framework. SEEK is committed to reducing emissions and responding to stakeholder concerns when considering the risks of climate change. As a result, SEEK remains in communication with its key stakeholders to ensure that it is alert and responsive to their expectations. In FY2022, the focus will be on embedding climate considerate decision making across the business and addressing the specific key risks and opportunities that SEEK has identified. This will be achieved through: • Launch of an internal communications plan that encourages employees to engage with emissions reduction activities and build further capability to understand and manage climate related risks and exposures • Review of relevant policies and procedures, particularly relating to business travel • Further exploration of the short, medium and long-term impacts of climate change on the business. Identifying climate risks and opportunities Key climate-related risks, including physical risks and transition risks, were identified in FY2021 for SEEK’s global operations through the following process: 1: Risk and opportunity identification • Internal strategy and risk assessments • Review of industry specific global standards and best practice reports • Research into industry and peer activity 2: Executive interviews — Gathered perspectives and insights from cross-divisional management and executive business functions 3: Prioritisation and validation — A team of executives and senior leaders leveraged their knowledge of SEEK and its business context to identify key areas of climate-related risk and opportunity with the greatest potential financial impact over the short, medium and long-term. Sustainability Report 68 SEEK has identified the following climate related risks and opportunities. RISKS Operations Operations may be disrupted by business continuity failure of cloud service providers or data infrastructure due to extreme heat or unreliable supply of electricity. SEEK facilities and employee homes may be impacted by similar physical constraints disrupting productivity and impacting employee satisfaction. SEEK’s employment platforms may lack sufficient exposure to relevant hirers and candidates to meet the demand shift to green jobs impacting market share and revenues. Employees The health and safety of employees may be impacted when working from home or at SEEK’s offices, and commuting to and from offices, due to extreme temperatures and weather events such as severe storms and flooding. SEEK’s climate response may not align with employee values on climate change or support employee retention and attraction affecting employee loyalty and SEEK’s ability to attract key talent. Stakeholders Investors may respond negatively to companies that demonstrate insufficient climate responsiveness impacting access to capital and reputation. OPPORTUNITIES Operations SEEK is positioned to take proactive steps to reduce carbon emissions and move swiftly towards carbon neutrality. SEEK’s employment platforms may aid the efficient shift to green jobs increasing market share and revenues. What happens next? SEEK’s TCFD Implementation Roadmap Action SEEK’s climate commitments SEEK is committed to deliver on three carbon commitments in relation to its relevant scope 1, 2 and 3 emissions. 1. Achieve carbon neutrality for SEEK ANZ for FY2021 under Climate Active in FY2022. SEEK aims first to reduce carbon emissions then offset the remaining unavoidable emissions to achieve carbon neutrality. Where SEEK offsets its emissions, it is committed to purchasing offset units that are deemed eligible under Australia’s governing standard, Climate Active, with a focus on higher impact land- based projects. 2. Formalise an emissions reduction strategy for SEEK in FY2022. This fundamental step to reduce SEEK’s emissions will provide a clearer perspective on the targets to support the global warming objectives of the Paris Agreement. SEEK has the following initial targets which it will further refine through the emissions reduction strategy: • Pathway to achieve net zero across all scope emissions by 2030 • Develop a science-aligned target by 2025 3. Achieve carbon neutrality for SEEK’s global footprint for FY2022 under Climate Active in FY2023. This reflects SEEK’s commitment to measuring its global emissions in order to comprehensively address emissions reduction. Governance: Disclose the organisation’s governance around climate-related risks and opportunities • Assign internal responsibilities and engage resources to support the Board and management to implement SEEK’s climate strategy • Develop an internal communications plan on SEEK’s climate change position and strategy • Develop an assurance program for sustainability and climate change related data Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning where such information is material • Develop an emissions reduction strategy across scope 1, 2 and 3 emission sources • Achieve carbon neutrality for SEEK ANZ then SEEK’s global operations under Climate Active • Perform climate scenario analysis • Monitor potential climate impacts and integrate into risk management Risk management: Disclose how the organisation identifies, assesses and manages climate-related risks • Develop and implement actions to address priority risks and opportunities • Integrate climate change into relevant SEEK policies and procedures • Develop an assurance program for sustainability and climate change related data Metrics & targets: Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material • Disclose scope 1, 2 and 3 greenhouse gas emissions for SEEK ‘s global operations • Develop and disclose metrics for performance against targets to address climate-related risks and opportunities • Monitor and report progress against established climate-related targets SEEK Limited Annual Report 2021GOVERNANCE SEEK is committed to conducting business in an honest, ethical and accountable way. 69 Protecting human rights and labour standards Modern slavery SEEK is opposed to slavery in all forms. SEEK’s employment platforms in Australia and New Zealand advertised the largest pool of unique job advertisements for over 200,000 unique hirers during FY2021, and many more across SEEK’s Asian and Latin American businesses. SEEK acknowledges its role and responsibility to safeguard against the risk of modern slavery in advertising job opportunities that could be deceptive recruiting for forced or bonded labour including human trafficking. SEEK applies significant resources to ensure that all job advertisements on the employment platforms are for legitimate job opportunities and removes any which are suspicious. In November 2020 SEEK issued a Modern Slavery Statement covering SEEK and OES which is also a reporting entity. This is available on the Australian Government Modern Slavery Statements Register and on the SEEK corporate website. The Statement explains the actions that SEEK has taken to assess and address potential modern slavery risks related to SEEK’s operations and supply chains during FY2020. No instances of modern slavery were identified during the due diligence assessments of modern slavery risk on SEEK’s employment platforms and supply chains. During FY2021 SEEK re-assessed the inherent risks that jobs advertised on employment platforms across SEEK may be linked to modern slavery practices. This assessment resulted in analysis of the employment platforms JobStreet Indonesia and JobsDB Thailand. Outcomes of the risk assessment will be reported in the FY2021 SEEK Modern Slavery Statement, together with the actions to assess and address modern slavery risks in SEEK’s supply chains. Fair hiring The fair hiring initiative reflects SEEK’s commitment to consider the risks to candidate working lives when engaging with SEEK’s employment marketplaces. These risks arise, particularly in South East Asia, when job ads are placed that might: • Expose candidates to illegitimate or illegal jobs, for example fraud or migration scams • Unlawfully charge or not disclose candidate placement fees so that the worker pays for a job • Discriminate against or disadvantage some candidates The fair hiring initiative involves close examination of SEEK’s processes and systems through the lens of these risks to identify platform weaknesses and vulnerabilities that could be exploited by unscrupulous actors. This has identified various existing controls across SEEK Asia that address these vulnerabilities. These will be strengthened through leveraging SEEK ANZ product and technology capability as part of the move to a single platform through Market Unification. SEEK Asia is working to provide candidates with clarity and awareness of their rights and warnings about known unfair hiring practices, particularly affecting migrant, manual and domestic workers. The aspiration is for candidate interactions with SEEK’s employment platforms to result in safe and fair employment outcomes. Contingent labour platforms SEEK Growth Fund has investments in tech-enabled marketplaces including Jobandtalent in Europe and Latin America, Sidekicker in Australia and New Zealand and Florence in the United Kingdom. These are leading on-demand temp staffing platforms that service large and growing contingent labour markets. SEEK’s approach is primarily to invest where the staffing platform manager is the “employer of record”, retaining responsibility to ensure wage compliance, including applicable wage rates, and payment of superannuation and tax. Sustainability Report 70 Responsible procurement SEEK believes that third party spend must be well-governed, transparent and reflect SEEK’s ethical and social responsibilities. Accordingly, the objective of SEEK’s procurement function is to ‘help SEEKers move quickly, maximise value and balance risk’ when engaging third parties. As a technology business, SEEK’s principal categories of spend are technology, marketing and business services. These categories frequently involve inherent commercial, data protection, security and business continuity risks and, accordingly are subject to SEEK’s Procurement Policy and underpinned by SEEK’s digital purchasing platform, Coupa. Inherent risk factors and total value drive a series of automated approvals and due diligence workflows to ensure that relevant risks, such as information security and legal, are subject to review by risk experts. Together these systems, policies and processes promote a healthy control environment. SEEK’s procurement team has continued to increase the maturity of spend and procurement practices during FY2021, including: • On-boarding of new and legacy suppliers to SEEK’s Supplier Code of Conduct and tracking acceptance. • Monitoring SEEK’s payment of invoices from small and medium businesses which represents approximately 15% of the spend by SEEK ANZ. SEEK pays the vast majority of these invoices within 30 days and promotes timely payment in accordance with the new Payment Times Reporting Act 2020 (Commonwealth). • An internal risk management forum to proactively escalate key risks associated with engaging, managing and off-boarding third parties. Looking ahead, SEEK will increase its focus on supply chain integrity, including environmental and human rights considerations, and indigenous and social procurement. The SEEK Modern Slavery Statement 2020 explains the actions that SEEK has taken to assess and address potential modern slavery risks related to the supply chains during FY2020. In FY2021 SEEK continued to expand and enhance its due diligence and risk assessment activities throughout the supply chain and established a formal working group to monitor progress and share practices. Outcomes will be reported in the FY2021 SEEK Modern Slavery Statement. SEEK Limited Annual Report 202171 Promoting responsible and ethical business practices SEEK is committed to conducting business in an honest, ethical and accountable way. Through This is SEEK, the Company’s Purpose and Vision are aligned with a clearly defined set of Beliefs and Attributes. Together, these reflect SEEK’s values, codify its culture and reinforce the desired behaviours and ways of working at SEEK. This is SEEK is described on page 58. Code of conduct SEEK’s Code of Conduct for Employees establishes a standard of performance, behaviour, professionalism and integrity for employees, contractors and directors with respect to their conduct. Workplace Behaviour Guidelines sit alongside the Code of Conduct and, together with This is SEEK, set out the standards of expected behaviour for employees. Whistleblower protection The Whistleblower Protection Policy covers all SEEK businesses and complies with the whistleblower legal regime in Australia. The policy encourages employees and stakeholders to report concerns of wrongdoing, and explains how to speak up, what protections a person who reports wrongdoing will receive and SEEK’s processes for dealing with reports of wrongdoing. Independent channels for whistleblower reports are available, including through Deloitte Halo in Australia and New Zealand. This enables SEEK to protect the confidentiality of a whistleblower report and the reporter’s identity. Despite awareness-raising about the availability of whistleblower channels, low numbers of whistleblower reports have been received across SEEK, particularly during the COVID-19 office closures in 2020 and 2021. The Board, through the Audit and Risk Management Committee, receives regular updates on any matters reported through SEEK’s whistleblower channels. Anti-bribery and corruption Competition and consumer law compliance Competition laws are designed to promote and maintain market competition by regulating anti-competitive conduct. Consumer laws set general standards of business conduct and prohibit unfair trading. SEEK participates lawfully and ethically in all market competitive activities and observes consumer protection laws. SEEK is committed to conducting business in compliance with anti- bribery and anti-corruption laws in all countries in which it operates. SEEK’s legal team is responsible for advising, monitoring and reporting on competition and consumer law compliance. The SEEK Anti-Bribery and Anti-Corruption Policy sets out SEEK’s requirements in relation to interactions with officials and third parties, and is supplemented by the SEEK Gifts and Entertainment Policy. Awareness and understanding of the policy requirements are promoted through mandatory employee training across SEEK. Reporting of suspected breaches of the policy is encouraged, including through the whistleblower channels. Compliance officers have been appointed across the SEEK businesses. Any material violation of the policy would be reported to the Board through the Audit and Risk Management Committee. Insider trading prohibitions The purpose of the Share Trading Policy is to ensure that officers and employees of SEEK have a clear understanding of insider trading laws and the rules that apply to them and to their associates in relation to dealing in SEEK securities. Under the Share Trading Policy, officers and employees are prohibited from dealing in SEEK securities if they are in possession of inside information. Additional dealing restrictions apply to directors, executives and other SEEK employees who may be exposed to inside information. These people are not permitted to deal in SEEK securities during defined blackout periods and must obtain clearance to deal at other times. Taxation transparency SEEK releases an annual Tax Transparency Report detailing the tax strategy, governance and tax contributions made during the year to global revenue authorities, including the Australian Taxation Office. The information is provided on a voluntary basis in accordance with the recommendations and guidelines contained in the Voluntary Tax Transparency Code released by the Australian Government. More on Governance Each year SEEK prepares a Corporate Governance Statement which is released to the Australian Securities Exchange and appears on the following pages. This is also available on the SEEK Company website in the Corporate Governance section, alongside Board charters and key policies that underpin SEEK’s corporate governance practices. Sustainability Report 72 SEEK Limited Annual Report 2021Corporate Governance Statement 73 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, ensuring that the workplace is fair, equitable and respectful of its employees, and protecting the interests of other stakeholders. The Board is committed to fulfilling its corporate governance responsibilities in the best interests of SEEK and its stakeholders. This statement describes the principal governance arrangements which operated across SEEK Limited (‘SEEK’) during FY2021 to ensure effective decision-making and accountability. The fourth edition of the ASX Corporate Governance Principles and Recommendations (‘ASX Recommendations’) has been fully reflected in SEEK’s governance throughout FY2021. This Corporate Governance Statement has been approved by the Board and is current as at 9 September 2021. Corporate governance policies and charters SEEK maintains a Corporate Governance section on its website making available the governance policies, Code of Conduct and the Board and Committee charters referred to in this statement. This is located in the Investors section and can be accessed at https://www.seek.com.au/about/investors/corporate-governance/ Board of Directors Director Position and independence Graham Goldsmith Chairman since January 2019 Independent Non-Executive Director Appointment as director October 2012 Ian Narev Managing Director and Chief Executive Officer July 2021 Andrew Bassat Non-Executive Director (not independent) Executive director from September 1997- June 2021 Non-Executive Director from July 2021 Julie Fahey Leigh Jasper Linda Kristjanson Michael Wachtel Vanessa Wallace Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director July 2014 April 2019 October 2020 September 2018 March 2017 74 SEEK Limited Annual Report 2021 Board structure Board Delegation Reporting & accountability Board committees Nomination Committee Audit and Risk Management Committee Remuneration Committee • External auditor • Internal audit • Risk management framework • Chief Risk Officer CEO n o i t a g e e D l & g n i t r o p e R y t i l i b a t n u o c c a Executives Role of Board The Board is accountable to shareholders for the performance of SEEK. The Board meets regularly to set strategy, monitor risk and review SEEK’s performance and progress against its strategic direction and business plans. It approves and monitors capital management including major capital expenditure, acquisitions and divestments. The Board also ensures SEEK has in place appropriate internal controls, corporate reporting systems and risk management. The Board is responsible for the evaluation of the performance of the CEO, establishment and review of his or her remuneration and ensuring succession plans for key executive roles are in place. The Board operates in accordance with the SEEK Board Charter which sets out the functions reserved for the Board and its key responsibilities. The Board reviews the Board Charter periodically to ensure it remains consistent with the Board’s objectives. The Board Charter delegates authority to the CEO for the management of SEEK, subject to established financial and other limitations. The CEO has overall responsibility for the operational, financial and business performance of SEEK and manages the organisation. In accordance with its Charter, the Board has established standards encouraging responsible and ethical behaviour for all SEEK employees, officers and directors, including the Code of Conduct, Whistleblower Protection Policy and Anti-Bribery and Anti- Corruption Policy. This is SEEK is SEEK’s culture statement, which aligns SEEK’s Purpose and Vision with a clearly defined set of Beliefs and Attributes. A summary can be found in the Sustainability Report. Chairman Graham Goldsmith became Chairman in January 2019 having served for six years on the Board and as Chairman of the Audit and Risk Management Committee. He is an independent director and devotes significant time to his chairmanship. The Board Charter describes his responsibilities which involve working closely with the CEO as the primary link between the Board and management. He leads the Board in discharging its responsibilities and is supported by the Company Secretary in ensuring effective Board governance and meetings. Company Secretary The Company Secretary until 30 June 2021 was Lynne Jensen, followed by Rachel Agnew from 1 July 2021. The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with corporate governance and the proper functioning of the Board. Each director has access to advice and support of the Company Secretary. Corporate Governance Statement 75 Board committees The Board has established three standing committees which provide efficient and effective mechanisms to focus on key areas of Board responsibility. On occasion the Board has also established ad hoc committees to provide specific oversight of time-critical matters. During FY2021, the Board established an ad hoc Independent Board Committee comprised of Graham Goldsmith, Michael Wachtel and Vanessa Wallace, to advise and make recommendations to the Board in relation to the review of the separation of SEEK’s investment business1. The Committee was delegated authority by the Board and considered such matters as appointment of advisors, the commercial negotiations and terms, continuous disclosure, dealing with conflicts of interest and related party considerations. Committee Membership Key roles and responsibilities Audit and Risk Management Committee Michael Wachtel (Chairman) Julie Fahey Graham Goldsmith Vanessa Wallace The Committee supports the Board by: • reviewing and recommending the statutory financial reports; • making recommendations in relation to SEEK’s accounting and financial controls; • • • • • recommending the appointment of the external auditor and assessing the provision of non-audit services and external auditor independence; reviewing the internal audit plan, reporting on significant findings, management’s actions to remediate findings and the adequacy of SEEK’s processes for managing risk; reviewing and recommending the Risk Management Framework and Risk Appetite Statements, monitoring SEEK’s risk management against the Risk Management Framework and overseeing the insurance program; reviewing SEEK’s key risks (including environmental, social and governance risks) and controls and mitigation measures to deal with those risks; and receiving periodic reports from management on the operation of the Whistleblower Protection Policy and Anti-Bribery and Anti-Corruption Policy. Remuneration Committee Graham Goldsmith (Chairman) Leigh Jasper Linda Kristjanson (from October 2020) Vanessa Wallace The Committee supports the Board by reviewing and recommending: • SEEK’s remuneration strategy, framework and design; • allocation of the pool of non-executive director fees; • the remuneration structure, outcomes and termination arrangements for the CEO and the Executive Leadership Team; Nomination Committee Graham Goldsmith (Chairman) All other Non-Executive Directors • the design of equity-based plans; and • SEEK’s Diversity and Inclusion Policy, gender pay equity, diversity measurable objectives and annual progress against these objectives. The Committee supports the Board by: • reviewing the size and composition of the Board and its Committees; • reviewing director succession and recommending the selection and appointment of new directors and retirement and re-election; • developing and implementing the process for evaluating Board, Committee, Chairman of the Board and individual director performance; and • ensuring there is a director induction program and professional development for the Board. Committee composition • Members are independent non-executive directors, except for the Nomination Committee, where all non-executive directors including Andrew Bassat are members. • Minimum of three members. • Chaired by an independent non-executive director. The Audit and Risk Management Committee Chairman may not be the Chairman of the Board. • The relevant financial qualifications and experience of the members of the Audit and Risk Management Committee are set out on in the Directors’ Report in the FY2021 Appendix 4E and Statutory Accounts. The number of times each Committee met during the reporting period and the individual attendances of the members at those meetings is set out in the Directors’ Report. 1 As announced by SEEK on 11 August 2021, the SEEK Growth Fund, which is a newly formed unit trust, was established and will be seeded with Online Education Services and the majority of SEEK’s Early Stage Ventures. SEEK has also committed A$200 million of capital to the Fund. SEEK will own a c84.5% interest in the Fund, which will be managed by an independent management company (SEEK Investments), led by Andrew Bassat. 76 SEEK Limited Annual Report 2021 Board composition In determining the composition of the Board, the directors consider the size of the Board by reference to the Constitution and Board Charter, the needs of SEEK for director skills and experience, orderly succession planning and diversity. As at the date of this report, the Board comprises seven non-executive directors and a managing director. Six of the seven non- executive directors of SEEK are independent, and all non-executive directors regularly confer as a group without management present. From 1 July 2021, Ian Narev (as Managing Director and CEO) and Andrew Bassat (as the former Managing Director and CEO) are the only directors not considered independent. Board skills matrix The skills and experience of SEEK’s non-executive directors reflect SEEK’s strategy and principal activities globally. In assessing its skills and experience mix and identifying any gaps in its collective skills, the Board applies a skills matrix. The results of the most recent survey assessing the Board’s collective skills and experience is shown in the matrix below. The criteria each individual non-executive director meets to be considered to have the skill is a rating of ‘experienced or competent’ or ‘expert or significant operational experience’. Board renewal will continue to appoint directors, through vacancy or as additional Board members, to assist the Board to take into account any desired skills or experience, and address existing and emerging business and governance issues relevant to SEEK’s operations, markets and strategy. Number of non-executive directors with these skills 1 2 3 4 5 6 7 Skill area Description Information technology/Digital Technology industry, digital platform, e-commerce, technology strategy, technology infrastructure, information monetisation, digital disruption Education and employment Customer and marketing Executive/Senior management leadership Listed company governance Higher education, online education, education policy, employment policy, recruitment and employment related industries Key relationships with customer base and industry participants; customer marketing strategies, consumer marketing, business development Senior executive level role in an organisation of similar scale Non-executive directorship or CEO of a listed company, related shareholder and investor relationships and corporate governance Financial acumen and risk management Assessment of financial performance of significant businesses, financial accounting and reporting, audit, oversight of risk management and internal controls Business mergers and acquisitions Mergers and acquisitions and business integration Corporate finance Capital management; debt and equity raising Global perspective Exposure to or responsibility for international operations or global markets Strategy and innovation Developing strategic business objectives, execution of strategy, business transformation, driving long term change and growth Board diversity SEEK is committed to an inclusive culture that values diversity. This is reflected in the Board’s considerations on its composition which extends beyond ensuring the directors bring the right skills and experience for SEEK’s current business and emerging challenges. Diversity of background and experiences brings different perspectives and thought which enhances decision-making. The Board reflects gender balance, a broad tenure and age range, and diverse educational and geographic backgrounds. Measurable objectives The SEEK Board intends to maintain the level of female directors above 30%. The measurable objectives established by the Board pursuant to SEEK’s Diversity and Inclusion Policy for achieving gender diversity in the composition of senior executives and the workforce generally and its progress towards achieving those objectives is described in the ‘Diversity and inclusion’ section of the Sustainability Report on pages 63 and 64, together with the respective proportions of women and men in executive and senior manager positions and across the whole workforce. Corporate Governance Statement 77 37.5% Female directors of SEEK Limited 47-66 years Age range of directors 63% Directors have obtained higher education qualifications outside Australia 0.2 to 8.9 years Range of tenure of SEEK’s non-executive directors 3.8 years Average tenure of SEEK’s non-executive directors* *Andrew Bassat’s tenure as a non-executive director is calculated from 1 July 2021. 78 SEEK Limited Annual Report 2021 Appointment of new directors The Nomination Committee performs Board succession planning. To fill vacancies or where a need for an additional Director has been identified, the Nomination Committee will identify suitable candidates to bring specific skills to complement the existing Board. Where appropriate, external search consultants may be engaged to assist. The Nomination Committee will assess a candidate against a range of criteria including experience, professional qualifications, personal qualities and cultural fit with the Board and SEEK. It also considers the candidate’s other significant time commitments, if any, to ensure that the candidate will have capacity to fulfil his or her responsibilities as a director of SEEK. Where a candidate is recommended by the Nomination Committee, the Company Secretary initiates detailed checks into the candidate’s background and experience. Before the Board resolves to appoint the candidate as a director, an independence assessment is also conducted using the detailed analysis which is applied annually in respect of each non-executive director. A newly appointed director will stand for election at the annual general meeting (‘AGM’) following their appointment, as required under the Constitution. The notice of meeting will contain a detailed biography, including other directorships and significant commitments, and any other material information relevant to a shareholder’s decision whether to elect the director. A new director is provided an induction program and materials designed to introduce the director to all aspects of SEEK’s business and strategy. This will include meetings with the Chairman and the other directors, the CEO and senior management to gain insight into the business. The induction program also incorporates information tailored to the director’s Committee work, knowledge, experience and particular area of expertise. Directors’ responsibilities and obligations Written agreement with each director Upon appointment each director is provided with a letter of appointment which details the terms of their directorship and the Board’s expectations. The letter of appointment is with the director personally, and places specific obligations on the director in terms of time commitment, independence, disclosure of material interests and potential conflicts of interest and minimum shareholdings in SEEK. It also requires the director to consult with the Chairman before accepting any appointment which may affect a director’s ability to meet the time commitment to SEEK. Independence The Board requires that non-executive directors bring views and judgement to Board deliberations which are independent of management or any substantial shareholder and free from interests, positions or other relationships which could interfere with the exercise of independent judgement. The Board’s approach to the assessment of independence is set out in its Director Independence Guidelines, and is also informed by the ASX Recommendations, the Corporations Act 2001 (Cth) and the Australian Accounting Standards. Each year the Board considers and assesses each non-executive director’s independence in light of the director’s positions, relationships and interests and the materiality guidelines set out in the Director Independence Guidelines. The Board requires non- executive directors to provide relevant information to enable it to make the assessment. The Board has reviewed the positions and relationships of all the non-executive directors in office as at the date of this statement. The Board has determined that, except for Andrew Bassat, each of the non-executive directors is independent and free of any interest, position or relationship that could materially interfere with their capacity for independent judgement and to act in the best interests of SEEK as a whole. The Board considers that whilst Andrew Bassat is not considered an independent director, his extensive knowledge of the SEEK business, and his skills and experience in the markets in which SEEK operates will be extremely valuable to retain on the SEEK Board. The Board also noted that some non-executive directors are involved in other companies or professional firms which may from time to time have immaterial dealings with SEEK, including as customers of SEEK’s jobs websites. Details of offices held by directors with other listed companies are in the Directors’ Report on page 18 and 19. Retirement and re-election Under the Constitution, directors cannot hold office without re- election for more than three years or past the third AGM after their appointment, whichever is longer. In addition, the Constitution provides that any director appointed by the Board holds office until the next AGM when they are eligible for election. Andrew Bassat will stand for election and Graham Goldsmith and Michael Wachtel will stand for re-election at the 2021 AGM. If no director is in a position requiring them to stand for election or re-election in the normal rotation, then one director must retire and stand for re-election at the AGM, as selected under the rules of the Constitution. In the notice of meeting security holders are provided with all material information relevant to their decision on whether or not to re-elect a director. Ian Narev is exempt from retirement and re-election while he holds the position of Managing Director. Minimum shareholding requirements for Directors To align the Board experience with that of shareholders, the Board has adopted a minimum shareholding policy which is described in the Remuneration Report on page 36. Arrangements with SEEK Growth A policy has been put in place to identify and manage any potential conflicts of interest arising as a result of Andrew Bassat’s dual role as a non-executive director of SEEK and his involvement in the SEEK Growth Fund as a director of the trustee and manager of and investor in the Fund. Directors’ development and support Professional development In addition to the induction program for new directors, there is a program of presentations and briefings on matters impacting the strategy and operations of SEEK. Directors are also provided with legal compliance training on matters such as continuous disclosure and anti-bribery and anti- corruption and briefings on key changes to laws and accounting standards affecting SEEK. Periodically a review is undertaken to assess whether further professional development is required for directors to assist them to maintain the skills and knowledge necessary to perform their roles effectively. To assist directors in better understanding SEEK’s international, strategic and operational objectives, the Board and individual directors visit various overseas operations of SEEK from time to time. For FY2021, due to COVID restrictions, there has been no such travel, however director and Board visits will resume when it is safe and possible to do so. Corporate Governance Statement 79 considerations, SEEK’s financial position and organisational culture. SEEK’s approach to risk management is to identify and minimise the potential for loss and implement appropriate controls, whilst also maximising strategic opportunities for growth. SEEK monitors its exposure to all risks to the business including operational, financial and non-financial risks. SEEK’s Principal Risks are described on pages 16 and 17. The Sustainability Report outlines SEEK’s approach to environmental, social and governance risks. The Audit and Risk Management Committee monitors SEEK’s management of risk against the Risk Management Framework, including whether it is operating within the risk appetite set by the Board. The Committee reviewed the Risk Management Framework during FY2021. Risk reporting across SEEK is aggregated for reporting to the Audit and Risk Management Committee. The Audit and Risk Management Committee approves the Internal Audit Plan and receives regular reporting on internal audit findings and the status of management actions with a focus on findings rated high. SEEK’s Risk and Assurance function incorporates the internal audit function and is responsible for delivering assurance projects including internal audits. Assurance projects may be undertaken internally by members of the Risk and Assurance function or in conjunction with external service providers. The Chief Risk Officer reports to the CFO and has unfettered access to the Chairman of the Board and to the Chairman of the Audit and Risk Management Committee and attends all meetings of the Audit and Risk Management Committee. ESG Accountability & Oversight The Board through the Audit and Risk Management Committee is responsible for oversight and management of non-financial risks, including ESG risks. All directors generally attend the Audit & Risk Management Committee meetings and have access to the papers, and meeting reports are provided to the Board. In addition, the Board receives periodic updates on and considers ESG matters relevant to SEEK. The Board approves SEEK’s Risk Appetite Statements and Principal risks and, after consideration of stakeholder expectations, approves the ESG reporting topics and the Sustainability Report. Access to Information In addition to comprehensive Board papers and briefings at Board meetings, directors are able to access the CEO and management to request relevant information. Directors receive access to all Committee papers and the minutes of each Committee meeting. In addition, the Chairman of each Committee provides an update at the following Board meeting on the activities of the Committee. All directors have a standing invitation to, and generally do, attend any Committee meeting. Independent professional advice Directors are entitled to seek independent professional advice at SEEK’s expense relating to their role as a director of SEEK, subject to prior written approval by the Chairman. Board performance evaluation The Board reviews its performance each year, including assessing the operation of the Board, Committees and individual directors as well as Board reporting and processes. The aim of the Board performance review is to ensure that individual directors and the Board as a whole work effectively in meeting the responsibilities described in the Board Charter. The Board performance evaluations are led by the Chairman. In FY2021, the Chairman sought structured feedback from each non-executive director and the CEO on the operation of the Board, Committees and individual non-executive directors. The Board undertakes externally facilitated performance reviews periodically, with the aim to conduct such reviews in every third year. These reviews incorporate feedback from executives and other stakeholders beyond the Board. The Board conducted an externally facilitated performance review in FY2018. The scheduled FY2021 externally facilitated review has been deferred to FY2022. The Board considered that there would be more value obtained from an externally facilitated review next year, given the recent change of CEO and Managing Director, internal reorganisation within the business and the separation of SEEK’s investment business. Risk management and assurance The Board views effective risk management as essential to achieving its operational and strategic objectives. The Board has overall responsibility for SEEK’s risk management and has established the Risk Management Framework which it reviews annually to satisfy itself that it continues to be sound. Through SEEK’s Risk Appetite Statements, the Board determines SEEK’s appetite for risk after taking into account SEEK’s strategic objectives and other factors including regulatory and legal requirements, stakeholder expectations (including shareholders and customers), environmental, social and governance Remuneration of Directors and Executives The following matters are discussed in detail in the Remuneration Report. • Executives’ contractual arrangements and remuneration • Prohibitions on executives hedging equity based structure for FY2021 remuneration contained in the Share Trading Policy • Executive performance evaluations • Non-Executive Director remuneration policy and • Malus and clawback policies • Minimum shareholding requirements structure for FY2021 • Checks undertaken on Executives prior to appointment 80 SEEK Limited Annual Report 2021 Corporate reporting and assurance SEEK has in place processes to verify the integrity of corporate reporting. The Audit and Risk Management Committee provides the Board with independent oversight of the corporate reporting processes. Its membership includes accounting and financial experts. The Committee reviews the financial reports and the related representations provided by management. It meets with the external auditor to discuss the financial reports including without management present. The Committee recommends to the Board the appointment of the external auditor and the matters associated with the external auditor including rotation of the audit engagement partner, fees for audit and non-audit services and the scope of the external audit. The CEO and CFO have for FY2021 assured the Board that the annual declaration provided in accordance with section 295A of the Corporations Act 2001 (Cth) and the equivalent declaration at half year are founded on a sound system of risk management and internal controls which is operating effectively. SEEK has in place processes to verify the integrity of any unaudited periodic corporate report it releases to the market to satisfy itself that the report is materially accurate and balanced. The unaudited corporate reports include this Corporate Governance Statement, the Sustainability Report and the Tax Transparency Report. These are prepared by the relevant subject matter experts and content sign-off is provided by responsible senior management. The CFO reviews each report in full prior to review and approval by the Board. All material quantitative and qualitative statements are supported with verifiable evidence, and certain elements receive independent verification, such as the energy consumption and emissions data in the Sustainability Report. Under its Charter, the Audit and Risk Management Committee provides the Board with independent oversight of this process. Market disclosure SEEK is committed to accurate, balanced and timely disclosure to ensure the efficient operation of the securities market and is committed to promoting stakeholder and investor confidence through its continuous disclosure practices. The Continuous Disclosure Policy aims to ensure that the management and delivery of price sensitive information by SEEK complies with SEEK’s continuous disclosure obligations under the ASX Listing Rules and the Corporations Act 2001 (Cth). The Continuous Disclosure Policy sets out SEEK’s legal obligations, provides guidance for the identification of material information that may require disclosure to the market and sets out the roles and responsibilities of SEEK personnel. The Board has ultimate responsibility for ensuring that SEEK complies with its continuous disclosure obligations and is responsible for implementing and overseeing compliance with the Continuous Disclosure Policy. The Board has delegated certain responsibilities relating to SEEK’s continuous disclosure obligations to a Disclosure Committee which comprises the CEO, CFO and Company Secretary. The Disclosure Committee is responsible for considering potentially price sensitive information, determining whether it requires disclosure and approving the form of that disclosure, other than on certain matters reserved to the Board for approval. The Board receives copies of all market releases immediately after they are released to the market. Significant market releases are considered and approved by the Board prior to release to the market. When SEEK gives an investor or analyst presentation, this is released to the market ahead of the presentation. Shareholders and stakeholder engagement 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 SEEK. The channel for shareholders to access information about SEEK is the ‘About SEEK’ section of the SEEK website which provides information about SEEK generally and includes: • a dedicated area for Investors including a Corporate Governance section; • ASX announcements, including the AGM Notice of Meeting, Chairman’s address, CEO’s presentation and voting results; • • • reports and presentations including the Annual Report, the Sustainability Report, the Tax Transparency Report, financial results and accompanying presentations to the market; information about key dates, the share price and dividends; links to and contact details for SEEK’s share registry, Computershare; and • contact details for enquiries by shareholders, analysts and media. Shareholders may send and receive communications with SEEK and Computershare electronically. Investors and other stakeholders may sign up on the SEEK website to receive news and investor updates by email. SEEK is committed to dealing with shareholder queries in a respectful and timely manner whenever they are received by the Company. The AGM is a key opportunity for shareholders to hear the CEO and Chairman provide updates on SEEK’s performance, ask questions of the Board, and to express a view and vote on a poll on the various matters of SEEK business. Shareholders may also ask questions of the external auditor during the meeting. SEEK encourages its shareholders to attend its AGM. SEEK has an active investor engagement program in Australia that includes scheduled briefings following half-yearly and annual results reporting and during the AGM period. Other ad hoc briefings are held throughout the year with institutional investors, private investors, analysts and the media. These briefings and presentations provide an opportunity for two- way communication between SEEK and these stakeholders. SEEK ensures provision of equal access to material information by observing the following: • all discussions with investors and analysts are conducted by or with the sanction of the CEO or the CFO, and are limited to explanation of previously disclosed material; • where information is likely to be price sensitive then, in line with its legal obligations and Continuous Disclosure Policy, SEEK immediately discloses the information to the market; • all SEEK investor and analyst presentations are released to the market prior to delivery; and • meetings with analysts to discuss financial results are not held between 1 January and the release of the half-year results, or between 1 July and the release of the full-year results. FINANCIAL REPORT Financial Statements Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Balance Sheet Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Financial instruments and fair value measurement Segment information Notes to the Financial Statements Performance Note 1 Note 2 Discontinued operations Note 3 Revenue Note 4 Other income and expenses Earnings per share Note 5 Note 6 Income tax Financing and risk management Note 7 Net debt Note 8 Notes to the cash flow statement Note 9 Note 10 Financial risk management Assets and liabilities Note 11 Trade and other receivables Note 12 Intangible assets Note 13 Trade and other payables Note 14 Leases Note 15 Provisions Equity Note 16 Share capital Note 17 Reserves Note 18 Dividends Group structure Note 19 Interests in controlled entities Note 20 Interests in equity accounted investments Note 21 Parent entity financial information Unrecognised items Note 22 Commitments for expenditure Note 23 Contingent liabilities Note 24 Events occurring after balance sheet date Other information Note 25 Share-based payments Note 26 Related party transactions Note 27 Remuneration of auditors Note 28 Other significant accounting policies Note 29 Changes in accounting policies 81 Page 82 83 84 85 86 87 91 96 97 98 100 104 107 109 112 118 119 124 124 127 128 129 130 131 132 134 135 136 136 137 141 142 143 144 Basis of preparation SEEK Limited is a for-profit entity for the purpose of preparing financial statements. These financial statements: • are general purpose financial statements; • are for the consolidated entity consisting of SEEK Limited and its controlled entities; • have been prepared in accordance with Australian Accounting Standards (AASBs) and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001; • comply with International Financial Reporting Standards as issued by the International Accounting Standards Board; • have been prepared on a historical cost basis except for the revaluation of financial assets and liabilities (including derivative instruments) measured at fair value through profit and loss; and • are presented in Australian dollars with all values rounded to the nearest hundred thousand dollars, or in certain cases, the nearest dollar, in accordance with the Australian Securities and Investments Commission Corporations Instrument 2016/191. Accounting policies adopted are consistent with those of the previous financial year, with the exception of the areas described in Note 29 Changes in accounting policies. The Directors have included information in this report that they deem to be material and relevant to the understanding of the financial statements. Disclosure may be considered material and relevant if the dollar amount is significant due to size or nature, or the information is important to understand: • SEEK’s current year results; • impact of significant changes in SEEK’s business; or • aspects of SEEK’s operations that are important to future performance. In accordance with accounting standards, where appropriate, the Primary Financial Statements and Notes to the financial statements have been presented for continuing operations only, including restatement of prior year numbers, as a result of the Zhaopin disposal and the pending divestment of the SEEK Growth Fund disposal group. Additionally, the Consolidated Balance Sheet includes the presentation of assets held for sale and liabilities directly associated with those assets held for sale of the SEEK Growth Fund disposal group. Refer to Note 1 Segment information and Note 2 Discontinued operations for the detail of these two transactions, an understanding of which is critical for users of the Financial Report in order to understand the overall financial performance and position of SEEK for the financial year ended 30 June 2021. The financial statements have been prepared on a going concern basis. The Directors have made this assessment on the basis that SEEK has sufficient liquidity, undrawn borrowing facilities and an active and ongoing capital management strategy which enables it to meet its obligations and pay its debts as and when they fall due. The Basis of preparation forms part of the Notes to the financial statements. Financial Report82 Consolidated Income Statement for the year ended 30 June 2021 Revenue Other income Operating expenses Direct cost of services Employee benefits expenses Marketing related expenses Technology, product and development expenses Operations and administration expenses Depreciation and amortisation expenses Finance costs Transaction costs Total operating expenses Impairment loss Share of results of equity accounted investments Profit/(loss) before income tax expense Income tax expense Profit/(loss) from continuing operations Profit from discontinued operations Profit/(loss) for the year Profit/(loss) is attributable to owners of SEEK Limited: From continuing operations From discontinued operations Profit/(loss) is attributable to non-controlling interest: From continuing operations From discontinued operations Notes 3 4(a) 4(b) 12(a)(iii) 20(b) 6(a) 2 2 5 5 5 5 2021 $m 760.3 3.0 (4.4) (275.0) (50.3) (55.0) (65.2) (83.9) (48.1) (0.3) (582.2) (46.9) 4.1 138.3 (33.8) 104.5 669.4 773.9 104.9 647.3 752.2 (0.4) 22.1 21.7 Cents 29.7 29.6 Cents 213.0 211.6 Restated 2020 $m 650.6 13.6 (4.4) (234.6) (57.0) (46.1) (76.0) (76.7) (58.2) (1.7) (554.7) (203.1) (8.8) (102.4) (20.9) (123.3) 31.1 (92.2) (121.2) 8.1 (113.1) (2.1) 23.0 20.9 Cents (34.3) (34.2) Cents (32.1) (33.0) Earnings/(loss) per share for profit from continuing operations attributable to the owners of SEEK Limited: Basic earnings per share Diluted earnings per share Earnings/(loss) per share attributable to the owners of SEEK Limited: Basic earnings per share Diluted earnings per share The above Consolidated Income Statement has been restated for discontinued operations (refer to Note 2 Discontinued operations) and a change in accounting policy (refer to Note 29 Changes in accounting policies), and should be read in conjunction with the accompanying notes. SEEK Limited Annual Report 2021Consolidated Statement of Comprehensive Income for the year ended 30 June 2021 Profit/(loss) for the year Other comprehensive income/(loss) Items that may be reclassified to profit or loss: Exchange differences on translation of foreign controlled entities Exchange differences on translation of foreign equity accounted investments Share of reserves movement of equity accounted investments Losses on cash flow hedges Losses on net investment hedges Reserves recycled on disposal of subsidiaries Reserves recycled on disposal of equity accounted investments Income tax recognised in other comprehensive income From continuing operations Exchange differences on translation of foreign controlled entities Exchange differences on translation of foreign equity accounted investments Share of reserves movement of equity accounted investments Gain/(loss) on net investment hedges Gain on cost of hedging reserve Recycling of foreign currency translation reserve Recycling of net investment hedge reserve From discontinued operations Items that will not be reclassified to profit or loss: Change in equity instruments held at fair value From continuing operations Gain/(loss) on fair value hedges Change in equity instruments held at fair value Income tax recognised on equity instruments held at fair value From discontinued operations Other comprehensive income/(loss) for the year From continuing operations From discontinued operations 83 Notes 2021 $m 773.9 Restated 2020 $m (92.2) 6(b) (62.3) 14.3 0.1 (0.6) (2.2) 0.2 (0.3) 0.2 (50.6) 8.0 (2.0) (4.5) 0.8 1.2 (82.6) 99.5 20.4 (0.8) (0.8) 2.5 90.0 (32.7) 59.8 (51.4) 80.2 (49.9) (3.0) 2.7 (5.1) (9.5) - - 2.4 (62.4) (20.8) (8.0) 3.0 (22.8) - - - (48.6) 1.2 1.2 (0.9) 22.0 - 21.1 (61.2) (27.5) Total comprehensive income/(loss) for the year 802.7 (180.9) Total comprehensive income/(loss) for the year attributable to: Owners of SEEK Limited Non-controlling interests Total comprehensive income/(loss) for the year attributable to owners of SEEK Limited: From continuing operations From discontinued operations 776.6 26.1 802.7 53.5 723.1 776.6 (194.4) 13.5 (180.9) (182.2) (12.2) (194.4) The above Consolidated Statement of Comprehensive Income has been restated for discontinued operations (refer to Note 2 Discontinued operations) and a change in accounting policy (refer to Note 29 Changes in accounting policies), and should be read in conjunction with the accompanying notes. Financial Report84 Consolidated Balance Sheet as at 30 June 2021 Current assets Cash and cash equivalents Trade and other receivables Other financial assets Current tax assets Total current assets from continuing operations Assets held for sale Total current assets Non-current assets Investments accounted for using the equity method Plant and equipment Intangible assets Right-of-use assets Other receivables Other financial assets Deferred tax assets Total non-current assets Total assets Current liabilities Trade and other payables Borrowings Unearned income Lease liabilities Other financial liabilities Current tax liabilities Provisions Total current liabilities from continuing operations Liabilities directly associated with the assets held for sale Total current liabilities Non-current liabilities Borrowings Lease liabilities Other financial liabilities Deferred tax liabilities Provisions Total non-current liabilities Total liabilities Net assets Equity Share capital Foreign currency translation reserve Hedging reserves Other reserves Retained profits Non-controlling interests Total equity Notes 7(a) 11 9(b) 6(a)(iii) 2(c)(iii) 20(b) 12 14(a)(i) 11 9(b) 6(c)(i) 13 7(b) 14(a)(ii) 9(b) 6(a)(iii) 15 2(c)(iii) 7(b) 14(a)(ii) 9(b) 6(c)(i) 15 16 17(a) 17(b) 2021 $m 491.8 771.1 4.3 6.3 1,273.5 1,064.5 2,338.0 562.4 67.3 1,380.0 192.9 - 11.2 48.8 2,262.6 4,600.6 831.1 77.3 129.9 17.1 60.6 69.5 29.5 1,215.0 69.1 1,284.1 1,029.9 188.1 0.9 158.0 20.9 1,397.8 2,681.9 Restated 2020 $m 604.8 151.6 57.6 3.2 817.2 - 817.2 268.3 35.5 2,538.8 55.5 114.9 436.4 62.2 3,511.6 4,328.8 307.3 143.4 350.9 28.0 70.0 25.2 36.5 961.3 - 961.3 1,797.6 36.0 3.1 127.5 27.5 1,991.7 2,953.0 1,918.7 1,375.8 269.2 (73.6) (55.7) 147.8 1,546.6 84.4 1,918.7 269.2 60.8 (158.0) 16.1 886.7 301.0 1,375.8 The above Consolidated Balance Sheet has been restated for a change in accounting policy (refer to Note 29 Changes in accounting policies), and should be read in conjunction with the accompanying notes. SEEK Limited Annual Report 2021 85 Consolidated Statement of Changes in Equity for the year ended 30 June 2021 Notes 29(a) Balance as at 1 July 2019 Impact of change in accounting policy Adjusted balance at 1 July 2019 Loss for the year from continuing operations Profit for the year from discontinued operations Other comprehensive (loss)/income for the year from continuing operations Other comprehensive (loss)/income for the year from discontinued operations Total comprehensive (loss)/income for the year Transactions with owners: Dividends provided for or paid Employee share options scheme Tax associated with employee share schemes Share of reserve movement of equity accounted investments Balance at 30 June 2020 18 6(b) Profit/(loss) for the year from continuing operations Profit for the year from discontinued operations Other comprehensive loss for the year from continuing operations Other comprehensive (loss)/income for the year from discontinued operations Total comprehensive (loss)/income for the year 18 6(b) 20(b) Transactions with owners: Dividends provided for or paid Employee share options scheme Tax associated with employee share schemes Share of reserve movement of equity accounted investments Acquisition of subsidiaries Change in ownership of subsidiaries and equity accounted investments Disposal of interest in Zhaopin Reserves reclassified to retained earnings on disposal of Zhaopin Reserves reclassified to retained earnings on disposal of equity accounted investments Utilisation of put option reserve Transfer of reserves Balance at 30 June 2021 Attributable to equity holders of the parent Foreign currency translation reserve $m Hedging reserves $m Other reserves $m Retained profits $m 127.6 - 127.6 (120.3) - (120.3) (10.6) - (10.6) 1,127.3 (6.3) 1,121.0 Share capital $m 269.2 - 269.2 Non- controlling interests $m 293.4 - 293.4 Total $m 1,393.2 (6.3) 1,386.9 Total equity $m 1,686.6 (6.3) 1,680.3 - - - - - - - - - - - - - - (121.2) (121.2) (2.1) (123.3) 8.1 8.1 23.0 31.1 (49.2) (13.1) 1.3 - (61.0) (0.2) (61.2) (17.6) (66.8) (24.6) (37.7) 21.9 23.2 - (113.1) (20.3) (194.4) (7.2) 13.5 (27.5) (180.9) - - - - - - - 9.7 (0.6) (123.2) - (123.2) 9.7 (7.4) 1.5 (130.6) 11.2 2.4 1.8 - 1.8 - 269.2 - 60.8 - (158.0) (5.6) 16.1 (0.4) 886.7 (6.0) 1,074.8 - 301.0 (6.0) 1,375.8 - - - - - - - - - - - - - - - - - - - 104.9 104.9 (0.4) 104.5 647.3 647.3 22.1 669.4 (48.0) (2.6) (0.8) - (51.4) - (51.4) (86.4) (134.4) 104.9 102.3 57.3 56.5 - 752.2 75.8 776.6 4.4 26.1 80.2 802.7 - - - - - - - - - - - - - - - - - 22.4 4.4 1.8 - (2.7) - (70.6) - 2.1 - - - - (70.6) 22.4 6.5 1.8 - (2.7) - - 2.7 - - 8.4 (70.6) 25.1 6.5 1.8 8.4 8.5 (253.7) 5.8 (253.7) 31.6 (23.0) 8.6 (8.6) - - - - 269.2 - - - (73.6) - - - (55.7) 1.5 16.9 (0.7) 147.8 (1.5) - 0.7 1,546.6 - 16.9 - 1,834.3 - - - 84.4 - 16.9 - 1,918.7 The above Consolidated Statement of Changes in Equity has been restated for discontinued operations (refer to Note 2 Discontinued operations) and a change in accounting policy (refer to Note 29 Changes in accounting policies), and should be read in conjunction with the accompanying notes. Financial Report86 Consolidated Statement of Cash Flows for the year ended 30 June 2021 Cash flows from operating activities Receipts from customers (inclusive of goods and services tax) Payments to suppliers and employees (inclusive of goods and services tax) Interest received Interest paid Transaction costs Income taxes paid Net cash inflow from operating activities attributable to continuing operations Cash inflow from operating activities attributable to discontinued operations Net cash inflow from operating activities Cash flows from investing activities Proceeds from disposal of interest in Zhaopin, net of cash disposed Proceeds from disposal of Zhaopin, to be paid out Payments for acquisition of subsidiary, net of cash acquired Payments for interests in equity accounted investments Proceeds from disposal of equity accounted investments Dividends and distributions received from equity accounted investments Payments for investment in financial assets Payments for intangible assets Payments for plant and equipment Payments for convertible loans Net cash inflow/(outflow) from investing activities attributable to continuing operations Cash outflow from investing activities attributable to discontinued operations Net cash inflow/(outflow) from investing activities Cash flows from financing activities Proceeds from borrowings Repayments of borrowings Transaction costs on establishment of debt facilities Settlement of share options in subsidiaries Dividends paid to members of the parent Payments for additional interest in subsidiary Payments of lease liabilities Net payment for other financing arrangements Net cash (outflow)/inflow from financing activities attributable to continuing operations Cash inflow/(outflow) from financing activities attributable to discontinued operations Net cash (outflow)/inflow from financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the year Less cash and cash equivalents at the end of the year transferred to assets held for sale Cash and cash equivalents at the end of the year attributable to continuing operations Notes 6(a)(iii) 2(a) 2(b)(ii) 2(b)(iv) 2(a) 2(a) 2(c)(iii) 2021 $m 742.5 (428.9) 313.6 2.5 (47.3) (2.0) (42.7) 224.1 122.4 346.5 124.1 308.7 (1.2) - 6.1 1.0 - (83.7) (54.2) (0.4) 300.4 (191.3) 109.1 230.2 (631.0) (1.0) - (116.4) (14.2) (7.1) (29.5) (569.0) 46.4 (522.6) (67.0) 604.8 (12.4) 525.4 (33.6) 491.8 Restated 2020 $m 709.7 (459.4) 250.3 4.1 (47.2) (1.0) (38.2) 168.0 132.0 300.0 - - (4.0) (4.0) - - (3.3) (85.7) (7.1) (1.2) (105.3) (151.3) (256.6) 486.8 (185.1) (4.6) (6.5) (47.8) - (9.7) (30.8) 202.3 (10.1) 192.2 235.6 382.9 (13.7) 604.8 - 604.8 The above Consolidated Statement of Cash Flows has been restated for discontinued operations (refer to Note 2 Discontinued operations) and a change in accounting policy (refer to Note 29 Changes in accounting policies), and should be read in conjunction with the accompanying notes. SEEK Limited Annual Report 202187 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2021 Performance 1. Segment information Accounting Policy Operating segments, which have not been aggregated, 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. 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 results of equity accounted investments, amortisation of share-based payments and long-term incentives, gains/losses on investing activities, and other non-operating gains/losses. Change to operating segments A change has been made to SEEK’s operating segments in FY2021 as a result of the transactions outlined below. Zhaopin On 23 February 2021, SEEK announced that it had entered into an agreement to sell down its controlling interest in Zhaopin. As a result, Zhaopin was deconsolidated from SEEK from 1 May 2021 and is reported as a discontinued operation for the year. Refer to Note 2 Discontinued operations for further information. SEEK has retained a 23.5% equity accounted investment in Zhaopin effective from 1 May 2021, and has also retained its 61.1% controlling interest in Zhaopin Ltd (the holding entity for the Zhaopin operations) as at 30 June 2021. The combined results of these interests have been reported within continuing operations, with no comparative information for these operations. Refer to Note 2 Discontinued operations (specifically section (b)(iv)) for further details on balances held in Zhaopin Ltd. SEEK Growth Fund On 11 August 2021, SEEK announced the creation of SEEK Growth Fund (the Fund), following the completion of a strategic review that had been announced in February 2021. SEEK’s current holdings in Online Education Services (OES) and 14 Early Stage Ventures (ESVs) will be transferred to the Fund as seed assets in exchange for units in the Fund. The combined results of OES and the ESVs that will be transferred to the Fund have been presented as a discontinued operation in FY2021 (referred to as ‘SEEK Growth Fund’), with associated assets and related liabilities of the disposal group deemed to be held for sale at 30 June 2021. The presentation of assets and associated liabilities that will be transferred to the Fund as held for sale, and recognition of the results of the disposal group as a discontinued operation, as at 30 June 2021, requires judgement. The key factor in determining these presentations is SEEK’s intention and advanced stage of planning for deconsolidation of the Fund in the future, and for the Fund to run autonomously despite SEEK holding a majority financial interest. Financial Report88 1. Segment information continued The operating segments of the continuing operations are as described below. SEEK Asia Pacific & Americas (AP&A) Portfolio Investments(1) Corporate Costs ANZ SEEK Asia Brasil Online OCC AP&A Other Zhaopin ESVs Operating segment Nature of operations Primary source of revenue Geographical location ANZ SEEK Asia Online employment marketplace services Job advertising Australia and New Zealand Online employment marketplace services Job advertising Brasil Online Online employment marketplace services OCC AP&A Other Zhaopin(2) ESVs(3) Online employment marketplace services A portfolio of early stage investments that complement and/or have synergies with the AP&A operating businesses Online employment marketplace services and provision of other offline services A portfolio of early stage investments which are managed as standalone entities Candidate services and job advertising Job advertising Various Seven countries across South East Asia Brazil Mexico Various Job and banner advertising China Various Various (1) Portfolio Investments refers to the legacy SEEK Investments segment, and in FY2021 comprises the continuing operations of Zhaopin (for which there is no comparative) and results from a small portfolio of ESVs that will not be transferred to SEEK Growth Fund. (2) SEEK has retained a 23.5% equity accounted investment in Zhaopin, as well as its 61.1% controlling interest in the holding company Zhaopin Limited. This has been reported within continuing operations. (3) SEEK continues to manage a small portfolio of ESVs that will not be transferred to SEEK Growth Fund. The results of these portfolio investments have been reported within continuing operations. SEEK Limited Annual Report 2021. 8 3 0 9 . 2 7 7 . 3 8 8 6 . 3 8 3 1 . ) 7 7 8 ( ) 7 1 ( . ) 1 7 ( . 4 5 . . 7 7 2 2 . ) 5 3 1 ( ) 3 1 ( . . ) 5 4 3 ( . 7 0 1 . 3 6 6 2 l a t o T s n o i t a r e p o d e u n i t n o c s D i l a t o T i g n u n i t n o c s n o i t a r e p o s t s o C e t a r o p r o C s t n e m t s e v n I o i l o f t r o P m $ . 6 2 4 1 1 , . 8 3 9 1 . 5 5 2 1 . 2 9 2 1 . 1 1 9 5 1 , . ) 5 2 4 ( . ) 8 0 9 ( . ) 9 6 4 ( . ) 3 7 4 ( . 6 3 7 4 . ) 3 3 2 ( d n u F m $ . 0 3 6 . 7 0 9 1 - - . 7 3 5 2 ) 1 2 ( . . 9 2 4 . ) 4 2 1 ( - 4 0 . 1 0 . h t w o r G K E E S ) 6 4 ( . ) 7 8 ( . ) 6 8 ( . . 3 5 6 - . 9 8 2 6 ) 3 8 ( . . 3 5 6 - - m $ . 7 3 2 3 - . 5 5 2 1 . 9 7 2 1 . 1 7 7 5 . 7 8 9 . ) 7 7 1 ( . ) 2 7 1 ( - ) 6 1 ( . i n p o a h Z m $ . 9 5 5 7 1 3 . - 3 1 . . 3 0 6 7 . ) 7 2 2 ( . ) 2 1 6 ( . ) 9 6 4 ( . ) 1 6 4 ( . 0 2 3 3 - - - - - m $ ) 8 4 ( . ) 6 2 ( . ) 2 3 ( . . ) 0 6 2 ( . ) 2 2 4 ( ) 8 2 ( . . ) 6 0 2 ( ) 6 8 ( . - - - - . 9 8 2 6 1 4 . - ) 3 0 ( . - - - - ) 3 0 ( . - - l a t o T m $ 5 1 . . 3 1 2 - - m $ 5 1 . . 3 1 2 - - . 8 2 2 . 8 2 2 ) 1 4 ( . ) 2 1 ( . ) 9 0 ( . - ) 4 0 ( . ) 3 0 ( . 2 5 . - - - - ) 0 4 ( . ) 2 1 ( . ) 9 0 ( . - ) 3 0 ( . ) 3 0 ( . ) 4 0 ( . - - - - - - - - - m $ - - - ) 1 0 ( . ) 1 0 ( . - 6 5 . - - - - m $ . 6 4 3 7 6 1 . - 3 1 . . 5 7 3 7 . ) 7 6 1 ( . ) 7 7 5 ( . ) 7 3 4 ( ) 5 3 ( . . 1 2 6 3 . ) 7 1 1 ( m $ 5 0 . - - 7 0 . 2 1 . ) 5 9 ( . ) 1 0 ( . ) 2 3 ( . - - - ) 1 1 ( . ) 1 1 ( . - - - - - - - 4 0 . s V S E i ) 2 ( n p o a h Z l a t o T r e h t O C C O m $ . 2 9 1 - - - - - - l i s a r B e n i l n O m $ . 5 0 3 . 2 9 1 . 5 0 3 s a c i r e m A & c fi c a P a s A i i 4 2 . ) 4 1 ( . ) 2 2 ( . - 1 0 . ) 2 0 ( . - - - - - ) 1 1 ( . ) 0 1 ( . ) 4 2 ( . . ) 6 9 2 ( - - - - - - i a s A K E E S m $ . 0 5 4 1 - - . 6 0 . 6 5 4 1 ) 8 5 ( . . 4 7 4 . ) 6 0 1 ( . ) 1 4 1 ( ) 4 1 ( . - ) 4 0 ( . - - ) 4 0 ( . ) 2 1 ( . ) 2 3 ( . . 2 3 Z N A m $ 6 1 . . 4 9 3 5 - - . 0 1 4 5 3 ) 4 8 ( . . ) 3 9 3 ( . 9 2 2 3 - ) 2 2 ( . ) 9 9 ( . - - - - 2 1 ) b ( 5 2 ) b ( 0 2 ) b ( 2 s e t o N 1 2 0 2 e n u J 0 3 d e d n e r a e Y l s e c a p t e k r a m t n e m y o p m e e n l i l n O r e h t o d n a s t n e m y a p d e s a b - e r a h S e m o c n i / ) e s n e p x e ( t s e r e t n i t e N y t i u q e f o s t l u s e r f o e r a h S s t n e m t s e v n i d e t n u o c c a s I T L s s o l t n e m r i a p m I i n o i t a c e r p e D n o i t a s i t r o m A ) 1 ( I A D T B E t n e m g e S e u n e v e r s e a s r e h t O l e u n e v e r s e a S l y t i u q e f o l i a s o p s d n o n a G / ) s s o L ( i s t n e m t s e v n i d e t n u o c c a s t s o c n o i t c a s n a r T i g n c r u o s t u o s s e c o r p s s e n s u B i n o i t a c u d E x a t e m o c n i e r o f e b ) s s o l ( / t fi o r P e s n e p x e n o i t a r e p o r e h t O i d e u n i t n o c s d f o e a s n o n a G i l M D O C e h t o t d e d v o r p n o i t a m r o f n i i t n e m g e S ) a ( . ) 9 9 2 1 ( . 9 3 7 7 ) 2 6 ( . . ) 4 3 8 ( . ) 7 2 1 ( . 6 5 7 6 . ) 8 3 3 ( . 5 4 0 1 . 7 7 2 . ) 0 0 6 ( 3 0 . ) 4 1 ( . 3 0 . ) 8 6 ( . . ) 7 1 2 ( ) 9 3 ( . . ) 2 8 1 ( 4 0 . - 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Sales revenue is allocated to a country based on the geographical location of the customers. Non-current assets are allocated to a country based on the geographical location of the asset. Intangible assets that relate only to one country have been allocated to that country. Intangible assets acquired as part of the JobsDB and JobStreet acquisitions (goodwill, brands and other intangible assets) relate to several countries and have been shown as “South East Asia” as they cannot practically be split between the individual country locations. This is consistent with the approach for impairment testing (refer to Note 12 Intangible assets). Australia China South East Asia Brazil New Zealand Mexico United Kingdom and Europe Rest of the world Total for continuing operations Sales revenue Segment assets(2) 2021 $m 509.1 - 146.1 30.4 54.0 20.7 - - 760.3 Restated 2020(1) $m 360.1 - 163.7 53.5 42.7 27.4 2.0 1.2 650.6 2021 $m 458.2 - 1,131.5 8.1 5.7 35.9 - 0.8 1,640.2 2020(3) $m 583.0 740.5 1,225.1 37.8 6.1 35.1 1.9 0.3 2,629.8 (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. (2) Segment assets include plant and equipment, intangible assets and right-of-use assets. (3) See Note 29 Changes in accounting policies - SEEK revised its accounting policy regarding upfront configuration costs incurred in implementing cloud computing arrangements. Comparative information has been restated to account for the impact of the change retrospectively. 2. Discontinued operations (a) Summary of discontinued operations As outlined in Note 1 Segment information, SEEK has two discontinued operations for the year ended 30 June 2021, being the disposal of Zhaopin, and the recognition of a disposal group for the assets that will be transfered to SEEK Growth Fund. This section aggregates the key results for FY2021 from those two operations, with more detailed information provided on the individual transactions in sections (b) and (c) of this Note, respectively. 2021 Financial performance of discontinued operations Profit/(Loss) from discontinued operations after gain on sale after income tax Profit/(Loss) from discontinued operations, attributable to owners of SEEK Limited Zhaopin $m SEEK Growth Fund $m 675.6 657.4 (6.2) (10.1) Total $m 669.4 647.3 Other comprehensive income, attributable to owners of SEEK Limited 19.5 56.3 75.8 Basic earnings per share (cents per share) Diluted earnings per share (cents per share) Cash flows of discontinued operations Net cash inflow from operating activities Net cash outflow from investing activities incurred in the ordinary course of business Net cash inflow from financing activities 186.2 184.8 88.1 (22.6) 42.8 (2.9) (2.8) 183.3 182.0 34.3 (168.7) 3.6 122.4 (191.3) 46.4 Financial Report 92 2. Discontinued operations continued (b) Zhaopin On 23 February 2021, SEEK announced that it had entered into an agreement to sell down its controlling interest in Zhaopin. The decision to reduce SEEK’s ownership interest is a continuation of SEEK’s portfolio management strategy and to create the right structure to support Zhaopin’s long-term growth aspirations. Effective from 1 May 2021, SEEK has retained a 23.5% equity accounted investment in Zhaopin, as well as retaining its 61.1% controlling interest in the holding company, Zhaopin Limited. This has been reported within continuing operations. (i) Financial performance The financial performance presented is for the ten months ended 30 April 2021 and the year ended 30 June 2020 for the operations of Zhaopin, including the holding company. Sales revenue Other income Operating expenses Profit from discontinued operation before income tax Income tax expense Profit from discontinued operation after income tax Gain on sale from discontinued operation, after income tax Profit from discontinued operation after gain on sale after income tax Non-controlling interests Profit from discontinued operation, attributable to owners of SEEK Limited Exchange differences on translation of discontinued operation Reclassification of foreign currency translation reserve on discontinued operation Gains/(losses) on net investment hedges of discontinued operation Reclassification of net investment hedge reserve of discontinued operation Other comprehensive income from discontinued operation, attributable to owners of SEEK Limited 30 Apr 2021 $m 30 Jun 2020 $m 577.1 12.6 (530.3) 59.4 (12.7) 46.7 628.9 675.6 (18.2) 657.4 3.0 (86.3) 1.0 101.8 19.5 749.6 19.5 (698.9) 70.2 (15.7) 54.5 - 54.5 (21.0) 33.5 (20.8) - (21.8) - (42.6) Earnings per share from profit from discontinued operation, attributable to the owners of SEEK Limited Basic earnings per share (cents per share) Diluted earnings per share (cents per share) 186.2 184.8 9.5 8.3 (ii) Cash flow of discontinued operation The cash flow information presented is for the ten months ended 30 April 2021 and the year ended 30 June 2020. Net cash inflow from operating activities Net cash inflow/(outflow) from investing activities Net cash flows incurred in the ordinary course of business Proceeds from disposal of Zhaopin, net of cash disposed Net cash inflow from financing activities Net increase in cash generated by the discontinued operation 30 Apr 2021 $m 30 Jun 2020 $m 88.1 109.4 (22.6) 124.1 42.8 232.4 (33.9) - 27.8 103.3 SEEK Limited Annual Report 2021(iii) Assets and liabilities of discontinued operation at date of sale The carrying amounts of assets and liabilities at the date of disposal (30 April 2021) were as follows: Cash and cash equivalents Trade and other receivables Plant and equipment Intangible assets Right-of-use assets Other financial assets Deferred tax assets Total assets Trade and other payables Borrowings Unearned income Lease liabilities Current tax liabilities Deferred tax liabilities Total liabilities Net assets Less non-controlling interest Carrying amount of net assets sold (iv) Details of consideration Consideration received or receivable Cash received Cash receivable Fair value of retained equity accounted investment Total disposal consideration Carrying amount of net assets sold (net of non-controlling interest) Transaction costs Gain on sale before income tax and reclassification of reserves Recycling of foreign currency translation reserve Recycling of net investment hedge reserve Income tax expense Gain on sale after income tax and reclassification of reserves Fair value of retained equity accounted investment Percentage retained of net assets of subsidiary Indicative gain on retained equity accounted investment 93 30 Apr 2021 $m 313.5 36.4 9.7 682.1 21.3 230.3 30.8 1,324.1 268.9 74.7 238.4 23.8 1.9 43.3 651.0 673.1 (253.7) 419.4 Notes 30 Apr 2021 $m 20 20 497.7 198.6 521.1 1,217.4 (419.4) (14.5) 783.5 86.3 (101.8) (139.1) 628.9 521.1 (158.1) 363.0 There are gross funds flows which are expected to occur after 30 June 2021, relating to both SEEK’s share and the non-controlling interests’ share of the Zhaopin disposal, through Zhaopin Ltd (SEEK’s holding entity for the Zhaopin continuing operations). These are recognised in SEEK’s Consolidated Balance Sheet (with impacts on the Consolidated Statement of Cash Flows also) at 30 June 2021 as outlined below: • Cash and cash equivalents: $308.7m of cash proceeds were received shortly before year end but not yet distributed, to settle amounts owing to both the non-controlling interests and to third parties for transaction costs; • Trade and other receivables: $671.6m of proceeds from investors (net of taxes) is an outstanding receivable (refer to Note 11 Trade and other receivables); • Trade and other payables: $(719.3)m is payable to non-controlling interests and third parties for transaction costs (refer to Note 13 Trade and other payables); • Bank borrowings: $(77.3)m of transaction proceeds will be used to settle the remaining pre-transaction debt in Zhaopin Limited (refer to Note 7 Net debt). As a result of the above, SEEK’s remaining share of proceeds from the net distribution outstanding is $183.7m. Financial Report94 2. Discontinued operations continued Following distribution of all consideration in respect of the transaction, there is the potential that SEEK may receive further ‘special dividends’ from Zhaopin over a period of time, in priority to other shareholders. The dividends are dependent on the satisfaction of a number of conditions in the future. As at 30 June 2021, the likelihood of a future dividend was deemed to be sufficiently uncertain and as a result no receivable has been recognised. (c) SEEK Growth Fund (i) Financial performance On 11 August 2021, SEEK announced the creation of SEEK Growth Fund, following the completion of a strategic review that had been announced in February 2021. SEEK’s current holdings in OES and 14 ESVs will be transferred to the Fund as seed assets in exchange for units in the Fund. The combined results of OES and the ESVs that will be transferred to the Fund have been presented as a discontinued operation for the year (referred to as ‘SEEK Growth Fund’), with associated assets and related liabilities of the disposal group deemed to be held for sale at year end. The financial performance presented is for the year ended 30 June 2020 and the year ended 30 June 2021: Sales revenue Other income Operating expenses Share of results of equity accounted investments Profit/(loss) from discontinued operation before income tax Income tax expense Loss from discontinued operation after income tax Non-controlling interests Loss from discontinued operation, attributable to owners of SEEK Limited Exchange differences on translation of foreign controlled entities Exchange differences on translation of foreign equity accounted investments Share of reserve movements of equity accounted investments Loss on net investment hedges Gain/(loss) on fair value hedges Gain/(loss) on cost of hedging Changes in fair value of equity instruments Income tax recognised on equity instruments held at fair value Foreign currency translation reserve recycled on disposal of equity accounted investment Net investment hedge reserve recycled on disposal of equity accounted investment Other comprehensive income from discontinued operation, attributable to owners of SEEK Limited Earnings per share from profit from discontinued operations attributable to the owners of SEEK Limited Basic earnings per share (cents per share) Diluted earnings per share (cents per share) 30 Jun 2021 $m 30 Jun 2020 $m 253.7 66.4 (234.2) (8.7) 77.2 (83.4) (6.2) (3.9) (10.1) (0.2) (2.0) (4.5) 0.8 2.5 1.2 90.0 (32.7) 3.6 (2.4) 56.3 (2.9) (2.8) 177.2 2.6 (164.8) (31.1) (16.1) (7.3) (23.4) (2.0) (25.4) 0.1 (8.0) 3.0 (1.9) (0.9) - 22.0 - - - 14.3 (7.2) (7.0) (ii) Cash flow of discontinued operation The cash flow information presented is for the year ended 30 June 2021 and the year ended 30 June 2020: Net cash inflow from operating activities Net cash outflow from investing activities Net cash inflow/(outflow) from financing activities Net decrease in cash generated by the held for sale group 30 Jun 2021 $m 30 Jun 2020 $m 34.3 (168.7) 3.6 (130.8) 22.5 (117.4) (37.9) (132.8) SEEK Limited Annual Report 202195 (iii) Assets and associated liabilities of discontinued operation presented as held for sale The carrying amounts of assets held for sale and liabilities directly associated with the assets held for sale at 30 June 2021 are as follows: Cash and cash equivalents Trade and other receivables Other financial assets(1) Investments accounted for using the equity method Deferred tax assets Plant and equipment Intangible assets Right-of-use assets Total assets held for sale Trade and other payables Borrowings Unearned income Lease liabilities Deferred tax liabilities Provisions Total liabilities directly associated with the assets held for sale 30 Jun 2021 $m 33.6 31.1 324.4 295.5 7.0 1.9 368.8 2.2 1,064.5 34.9 5.2 4.6 2.5 1.8 20.1 69.1 (1) Other financial assets consists of equity instruments held at fair value through other comprehensive income and convertible loans. On disposal of SEEK Growth Fund, there are accumulated balances, such as foreign currency translation, hedging and investment revaluation reserves recorded within other comprehensive income which will be reclassified to earnings. The balance to be reclassified will be determined on the date of disposal. Financial Report96 3. Revenue Accounting Policy Recognition criteria Revenue is measured at the fair value of the consideration received or receivable and is shown net of sales taxes (such as GST and VAT) and amounts collected on behalf of third parties. SEEK recognises revenue when the contract has been identified, it is probable that the entity will collect the consideration to which it is entitled and specific criteria have been met as described below for the material classes of revenue. Class of revenue Online employment marketplaces Job advertisements CV search/download CV online Education Provision of education services to students Business process outsourcing HR agent services Labour outsourcing services Labour dispatch services Recognition criteria over the period in which the advertisements are placed. If it is expected that the customer will not use all the services they are entitled to, the excess is recognised in the same pattern as for the services that the customer does use. over the period in which the searches/downloads occur. If it is expected that the customer will not use all the services they are entitled to, the excess is recognised in the same pattern as for the services that the customer does use. over the period in which the jobseeker can access the services. over the period in which the student studies a particular unit. For Higher Education it is typically four months. For Vocational Education (VET), the length of time to complete units can vary so an estimate is made. when the service is provided to the customer. Revenue is recognised on a net basis as the business operates as the agent under the terms and conditions of the contractual arrangement. when the service is provided to the customer. Revenue is recognised on a gross basis as the business operates as the principal under the terms and conditions of the contractual arrangement. when the service is provided to the customer. Revenue was recognised on a gross basis when the business operated as the principal under the terms and conditions of contractual arrangements. Commencing from Q3 FY2020, the standardised contractual terms and conditions were revised for new contracts. The revisions to the contract provide a refined scope of services with the customer now bearing any potential employment risks associated with the contract. Upon transition to the new agreement, the business operates as an agent and revenue is recognised on a net basis. Other sales revenue Campus recruitment services Provision of training services when the service is provided to the customer. when the service is provided to the customer. Allocation of transaction price to services in a bundled contract Where a contract identifies multiple services (performance obligations) that can be used independently of one another, the consideration is allocated between them on the basis of their relative standalone selling prices. This is usually the price at which the service is sold separately. Contract costs Costs incurred in the acquisition of contracts, predominantly sales commissions, are considered to be recoverable. Applying the practical expedient in paragraph 94 of AASB 15 Revenue from Contracts with Customers, SEEK recognises the incremental costs of obtaining contracts as an expense when incurred because the amortisation period of the assets that SEEK otherwise would have recognised is one year or less. Variable consideration Certain education contracts include variable amounts of consideration dependent on the occurrence or non-occurrence of future events. SEEK estimates the amount of revenue to be recognised based on historical and forecast information. The estimated amount is included in the transaction price to the extent it is highly probable that a change in the revenue estimation would not result in a significant reversal of the cumulative revenue recognised. SEEK Limited Annual Report 2021Online employment marketplaces Education Other sales revenue Total sales revenue from continuing operations 97 2021 $m 755.9 3.1 1.3 760.3 Restated 2020(1) $m 642.8 5.1 2.7 650.6 (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. Sales revenue recognised during the financial year ended 30 June 2021 includes $130.3m (2020: $149.3m) that was included in the opening balance of unearned income at the beginning of the corresponding period. At 30 June 2021, SEEK is party to contracts with customers for services that have not yet been delivered (or fully delivered) at that date. Some amounts have already been invoiced to the customer in line with the terms of the contract, and are therefore recognised within unearned income, whereas other amounts are yet to be invoiced. SEEK has chosen to apply the practical expedient in paragraph 121 of AASB 15 Revenue from Contracts with Customers and therefore has not disclosed information about contracts that are expected to be completed in one year or less. Of the contracts with a duration of more than one year, SEEK expects to recognise future revenue of $0.2m (2020: $0.8m). SEEK has provided further customer relief in response to COVID-19 by its investment in hirer support packages including reducing minimum contracted commitments, extending contract lives and providing credits for job advertisements no longer required from hirers who are in financial hardship. 4. Other income and expenses (a) Other income Government grants (i) Interest income Total other income from continuing operations 2021 $m 1.7 1.3 3.0 Restated 2020(1) $m 8.4 5.2 13.6 (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. (i) Government grants In FY2021, SEEK has recognised subsidy payments from South East Asia $1.7m (2020: $0.2m). This government support is due to the ongoing economic impacts of COVID-19. During the year, SEEK voluntarily repaid $9.8m of COVID-19 subsidies received from the Australian and New Zealand governments. In accordance with AASB 120 Accounting for Government Grants and Disclosure of Government Grants, SEEK has elected to present government grants received in FY2021 as other income. Financial Report98 4. Other income and expenses continued (b) Finance costs Interest expense Interest expense on lease liabilities Borrowing costs written off Other finance charges paid/payable Total finance costs from continuing operations Notes 14(b) 2021 $m 43.9 3.5 - 0.7 48.1 Restated 2020(1) $m 55.4 1.2 0.9 0.7 58.2 (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. (c) Other gains/(losses) Profit/(loss) before income tax expense includes net gains on foreign exchange movements of $10.9m (2020: $2.7m gain), which are classified as ‘Operations and administration’ costs in the Consolidated Income Statement. 5. Earnings per share Accounting Policy Diluted Earnings Per Share (EPS) reflects the following adjustments: • • the impact on profit if the subsidiaries’ outstanding employee options were fully exercised, resulting in SEEK’s ownership being diluted; and the effect of employee options and rights in SEEK Limited, calculated by comparing the number of shares that would be issued if all options/rights were exercised with the number of shares the Company could hypothetically buy back on market using the exercise price (the dilutive impact being the difference between the two). Employee options and rights are only treated as dilutive when their conversion to ordinary shares would decrease EPS or increase the loss per share. Basic earnings per share From continuing operations From discontinued operations(2) Diluted earnings per share From continuing operations From discontinued operations(2) (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. (2) Excluding the gain on sale related to Zhaopin, both the basic and dilulted earnings per share from discontinued operations would be 5.2 cents. 2021 Cents 29.7 183.3 213.0 29.6 182.0 211.6 Restated 2020(1) Cents (34.3) 2.2 (32.1) (34.2) 1.2 (33.0) SEEK Limited Annual Report 2021(a) Reconciliation of earnings used in calculating EPS Profit attributable to owners of SEEK Limited (for basic EPS) From continuing operations From discontinued operations Potential dilutive adjustment for subsidiary option plans From continuing operations From discontinued operations Adjusted profit attributable to owners of SEEK Limited (for diluted EPS) From continuing operations From discontinued operations 99 Restated 2020(1)(2) $m (121.2) 8.1 (113.1) 0.4 (3.6) (3.2) (120.8) 4.5 (116.3) 2021 $m 104.9 647.3 752.2 0.2 0.3 0.5 105.1 647.6 752.7 (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. (2) See Note 29 Changes in accounting policies - SEEK revised its accounting policy regarding upfront configuration costs incurred in implementing cloud computing arrangements. Comparative information has been restated to account for the impact of the change retrospectively. (b) Weighted average number of shares Weighted average number of shares used as denominator in calculating basic EPS Weighted average of potential dilutive ordinary shares: - WSP Options - WSP Rights - Equity Rights and Performance Rights Weighted average number of shares used as the denominator in calculating diluted EPS 2021 number 2020 number 353,102,683 352,082,752 166,666 1,843,404 533,882 355,646,635 - - - 352,082,752 In the prior year, the weighted average of potential ordinary shares excludes Wealth Sharing Plan (WSP) Options which had an exercise price that was higher than the average share price for the period. Therefore, these Options are considered potentially antidilutive and have been excluded from the earnings per share calculation. Also in the prior year, the conversion of Rights would decrease the loss per share for the financial year ended 30 June 2020, and therefore the impact of these were excluded from the diluted earnings per share calculation. Financial Report100 6. Income tax Critical accounting estimates and assumptions Uncertain tax positions Research and development incentive SEEK applies its current understanding of the tax law to estimate tax liabilities where the ultimate tax position is uncertain. When the tax position is ultimately determined or tax laws change, the actual tax liability may differ from this current estimate. The research and development incentive available to SEEK is estimated in the accounts because a full assessment of the position cannot be made by the reporting date. It is the policy of SEEK to only bring to account the preliminary portion of expenses that is reasonably expected to be claimable at reporting date. Accounting Policy Each entity in SEEK uses the tax laws in place or those that have been substantively enacted at reporting date in the relevant jurisdiction to calculate income tax. For deferred income tax, the entity also considers whether these laws are expected to be in place when the related asset is realised or the liability is settled. Deferred tax assets and liabilities are recognised on all deductible and taxable temporary differences respectively, except for: • the initial recognition of goodwill; • any undistributed profits of the Company’s subsidiaries, associates or joint ventures where either the distribution of those profits would not give rise to a tax liability or the directors consider they have the ability to control the timing of the reversal of the temporary differences and it is probable that the temporary difference will not reverse in the foreseeable future; and • the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction affects neither accounting profit nor taxable profit or loss. Deferred tax assets: • are recognised only to the extent that it is probable that there are sufficient future taxable profits to recover these assets. This assessment is reviewed at each reporting date; • are offset against deferred tax liabilities in the same tax jurisdiction, when there is a legally enforceable right to do so and they relate to taxes levied by the same taxation authority; and • 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. If the changed circumstances existed at the acquisition date, it would be treated as a reduction to goodwill (as long as it does not exceed goodwill), otherwise through profit or loss. SEEK Limited and its wholly-owned Australian subsidiaries formed an Australian income tax consolidated group in 2004. These entities have tax sharing and tax funding agreements in place. Refer to Note 21 Parent entity financial information for further information. Adoption of Voluntary Tax Transparency Code On 3 May 2016, the Australian Treasurer released a Voluntary Tax Transparency Code (the Voluntary Code). The Voluntary Code recommends additional tax information be publicly disclosed to help educate the public about the corporate sector’s compliance with Australia’s tax laws. SEEK fully supports and signed up to this Voluntary Code from FY2016. Accordingly, the income tax disclosures in this note include the recommended additional disclosures under Part A of the Voluntary Code. SEEK’s latest Tax Transparency Report can be found on the Reports & Presentations page in the Investors section of the Company’s website at https://www.seek.com.au/about/investors/reports- presentations. SEEK Limited Annual Report 2021(a) Income tax expense Current tax Deferred tax (Over)/under provision in prior years (current tax) Under/(over) provision in prior years (deferred tax) Income tax expense in the Consolidated Income Statement Deferred income tax expense included in income tax expense comprises: Increase in deferred tax assets Decrease in deferred tax liabilities 6(a)(i) (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. (i) Reconciliation of income tax expense Profit/(loss) before income tax expense Continuing operations Income tax calculated @ 30% (2020: 30%) Increase/(decrease) in income tax expense due to: Impairment loss Post-tax share of results of equity accounted investments Financing, transaction and legal costs Research and development incentive Overseas tax rate differential (Over)/under provision in prior years Other Income tax expense in the Consolidated Income Statement (a) (b) (c) (d) (e) (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. 101 Restated 2020(1) $m 32.1 (11.6) 0.6 (0.2) 20.9 (6.6) (5.2) (11.8) Restated 2020(1) $m (102.4) (30.7) 57.5 2.6 1.0 (3.3) (8.4) 0.4 1.8 20.9 2021 $m 57.1 (22.1) (1.7) 0.5 33.8 (14.7) (6.9) (21.6) 2021 $m 138.3 41.5 4.2 (1.2) 0.4 (3.1) (7.1) (1.2) 0.3 33.8 Explanation of key items: (a) (b) (c) (d) (e) Non-deductible accounting impairment loss with respect to WorkAbroad (an investment held within SEEK Asia) (see Note 12 Intangible assets, specifically section (a) Impairment). SEEK’s share of equity accounted investments’ results is taken up net of equity accounted investments’ tax expense. Non-deductible financing, transaction and legal costs throughout SEEK. Research and development incentives utilised throughout SEEK. SEEK’s international profits are taxed at local rates which vary from the Australian corporate tax rate. This includes utilisation of Malaysia’s Principal Hub Incentive by JobStreet.com Shared Services Sdn. Bhd. (ii) Effective tax rate Profit/(loss) before income tax expense Add: Impairment loss (Subtract)/add: Post-tax share of results of equity accounted investments (A) Adjusted profit before income tax expense(3) (B) Income tax expense(4) Effective tax rate (B/A) SEEK Australian operations(2) 2021 $m 138.3 14.1 (4.1) 148.3 33.8 22.8% Restated 2020(1) $m (102.4) 203.1 8.8 109.5 20.9 19.1% 2021 $m 158.1 - 1.3 159.4 39.9 25.0% Restated 2020(1) $m 41.8 - 15.8 57.6 15.9 27.6% (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. (2) Excludes intra-group dividends within SEEK. (3) Impairment loss and post-tax share of results from SEEK’s equity accounted investments have been excluded from the effective tax rate calculation to better reflect SEEK’s taxable profit. (4) Does not include Australian income tax expense of $48.5m relating to the Zhaopin disposal (see Note 2 Discontinued operations). If included, the SEEK Australian operations effective tax rate would be 55.5% (calculated as $88.4m / $159.4m). Financial Report 102 6. Income tax continued (iii) Reconciliation of income tax expense to net current tax liabilities Income tax expense in the Consolidated Income Statement Add: Deferred tax assets credited to income Deferred tax liabilities credited to income Current tax included in income tax expense Add/(subtract): Net restated opening balance carried forward Tax payments made to tax authorities Current tax recognised directly in equity Australian current income tax expense relating to the Zhaopin disposal Foreign exchange Other Net current tax liabilities Net current tax liabilities comprises: Current tax assets in the Consolidated Balance Sheet Current tax liabilities in the Consolidated Balance Sheet Net current tax liabilities 2021 $m 33.8 14.7 6.9 55.4 5.1 (42.7) (2.1) 48.5 (0.2) (0.8) 63.2 (6.3) 69.5 63.2 Restated 2020(1) $m 20.9 6.6 5.2 32.7 14.2 (38.2) (2.4) - 1.6 (2.8) 5.1 (3.2) 8.3 5.1 (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. (b) Amounts recognised directly in equity Tax relating to certain taxable or deductible items are recognised in other comprehensive income or directly in equity rather than through the Consolidated Income Statement. Relating to items recognised in other comprehensive income: Deferred tax credited directly to foreign currency translation reserve Deferred tax credited directly to cash flow hedge reserve Total tax recognised in other comprehensive income Relating to items recognised directly in equity: Deferred tax credited directly to retained profits Deferred tax credited/(debited) directly to share-based payment reserve Current tax credited directly to retained profits on issuance of new shares Total tax recognised directly in equity (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. 2021 $m - 0.2 0.2 3.5 4.4 2.1 10.0 Restated 2020(1) $m 0.9 1.5 2.4 0.8 (0.6) 2.4 2.6 SEEK Limited Annual Report 2021(c) Deferred taxes (i) Deferred tax balances Deferred tax balances in the Consolidated Balance Sheet comprise temporary differences attributable to the following items: As at 30 June Share-based payments Provisions and accruals Employee benefits Unrealised foreign exchange Research and development incentive Tax losses recognised Property, plant and equipment(1) Cash flow hedge Other Deferred tax assets Intangible assets Withholding tax on undistributed profits Future interest in the SEEK Growth Fund(2) Other Deferred tax liabilities Net deferred tax liabilities 2021 $m 12.6 5.7 15.7 4.6 (27.0) 15.4 13.4 5.5 2.9 48.8 36.1 15.1 107.9 (1.1) 158.0 109.2 103 2020 $m 7.0 28.5 11.0 9.5 (24.9) 11.2 9.6 5.3 5.0 62.2 86.6 35.0 - 5.9 127.5 65.3 (1) See Note 29 Changes in accounting policies - SEEK revised its accounting policy regarding upfront configuration costs incurred in implementing cloud computing arrangements. Comparative information has been restated to account for the impact of the change retrospectively. (2) A deferred tax liability is required to be recognised with respect to the potential future income tax liability that would arise if SEEK disposed of its interest in the SEEK Growth Fund (see Note 2 Discontinued Operations, specifically section (c) for more information). Certain deferred tax liability balances are shown as part of deferred tax assets, as they originate in the same jurisdiction as, and can be offset against, other deferred tax assets. (ii) Deferred taxes credited to income For the year ended 30 June Share-based payments Provisions and accruals Employee benefits Unrealised foreign exchange Research and development incentive Tax losses recognised Property, plant and equipment Other Deferred tax assets Intangible assets Withholding tax on undistributed profits Other Deferred tax liabilities Net deferred tax credited to income (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. 2021 $m (1.1) (1.3) (6.8) 4.9 2.2 (5.4) (8.9) 1.7 (14.7) (7.0) 0.2 (0.1) (6.9) Restated 2020(1) $m 0.4 (1.5) 1.7 (6.0) - (1.7) (2.3) 2.8 (6.6) (4.3) (0.4) (0.5) (5.2) (21.6) (11.8) Financial Report 104 6. Income tax continued (iii) Deferred tax movements For the year ended 30 June Opening net deferred tax liabilities(1) Credited to income(1) Credited to other comprehensive income and equity Exchange differences Transfer to discontinued operations Closing net deferred tax liabilities 2021 $m 65.3 (21.6) (8.1) (2.0) 75.6 109.2 2020 $m 89.8 (17.6) (3.0) (3.9) - 65.3 (1) See Note 29 Changes in accounting policies - SEEK revised its accounting policy regarding upfront configuration costs incurred in implementing cloud computing arrangements. Comparative information has been restated to account for the impact of the change retrospectively. Financing and risk management 7. Net debt Accounting Policy Borrowings are initially recognised net of transaction costs incurred. Fees paid on the establishment of loan facilities are recognised as transaction costs where it is probable that some or all the facility will be drawn down. The fee is deferred until the drawdown occurs and is amortised on a straight-line basis over the entire life of the facility. Transaction costs include the discount on the July 2020 issuance of Capital Markets Debt, that is amortised to the first date on which SEEK has the right to repay the debt. Borrowings are classified as current liabilities unless the Group has the right to defer settlement of the liability for at least 12 months after the reporting period. Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, and 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. (a) Cash and cash equivalents Cash and short-term deposits held in certain Asian countries (including China) are subject to local exchange control regulations which place restrictions on exporting capital from these countries other than through normal dividends. These balances at 30 June are disclosed as ‘cash not freely converted’, representing cash that cannot be freely converted into other currencies for transfer throughout SEEK. Cash freely converted Cash not freely converted Short-term deposits Total cash and cash equivalents (b) Borrowings Bank loans - unsecured Bank loans - secured Capital markets debt - unsecured Less: transaction costs capitalised Total borrowings SEEK had access to $536.3m in undrawn facilities at 30 June 2021 (2020: $322.5m). 2021 $m 475.4 0.3 16.1 491.8 2020 $m 532.4 8.5 63.9 604.8 Current Non-current 2021 $m - 77.3 - - 77.3 2020 $m 59.8 83.6 - - 143.4 2021 $m 813.2 - 225.0 (8.3) 1,029.9 2020 $m 1,156.7 323.3 325.0 (7.4) 1,797.6 SEEK Limited Annual Report 2021 105 (c) Net debt SEEK’s net cash/(debt) position is defined as Borrowings, offset by: • Cash and cash equivalents - Note 7(a) • Short-term investments - Note 9 (b) • Funds on deposit for entrusted loan facilities - Note 7(e) Year ended 30 June 2021 Facility limit Borrowings $m Note 7(b) Cash (i) $m Note 7(a) Short-term investments $m Note 9(b) Funds on deposit $m Note 7(e) Net cash/ (debt) $m SEEK Limited A$ bank debt SEEK Limited US$ bank debt SEEK Limited A$ Subordinated Floating Rate Notes SEEK Limited Borrower Group(1) A$612.5m US$552.5m A$225.0m (345.0) (468.2) (225.0) (1,038.2) 174.8 Zhaopin Limited (ii) US$58.0m (77.3) 317.0 SEEK Less: transaction costs capitalised Per Consolidated Balance Sheet A$1,651.8m 491.8 (1,115.5) 8.3 (1,107.2) Consolidated net interest cover: EBITDA(2) / Net interest Consolidated net leverage ratio: Net debt / EBITDA(2) 0.1 - 0.1 - - - (863.3) 239.7 (623.6) 7.2 1.9 (1) Borrower Group EBITDA for the year ended 30 June 2021 inclusive of cash dividends from excluded entities of $137.7m (2020: $41.3m) was $458.6m (2020: $310.3m). (2) EBITDA is defined and reconciled to consolidated profit before income tax expense for total continuing operations in Note 1 Segment information. (i) Cash As at 30 June 2020, SEEK reported cash held in Jobadder, OES and Sidekicker as ‘Other’ cash. As at 30 June 2021, cash balances held in JobAdder have been included in the cash balance held by the SEEK Limited Borrower Group for the first time, following an increase in ownership. Cash balances held in OES and Sidekicker have been transferred to assets held for sale, and therefore continue to be excluded from the cash balances held by the SEEK Limited Borrower Group. (ii) Zhaopin Limited Bank borrowings: $77.3m of transaction proceeds will be used to settle the remaining pre-transaction debt in Zhaopin Limited (refer to Note 2 Discontinued operations). Cash and cash equivalents: $308.7m of cash proceeds were received shortly before year end but not yet distributed, to settle amounts owing to both the non-controlling interests and to third parties for transaction costs (refer to Note 2 Discontinued operations). Year ended 30 June 2020 SEEK Limited A$ bank debt SEEK Limited US$ bank debt SEEK Limited A$ Floating Rate Notes SEEK Limited A$ Subordinated Floating Rate Notes SEEK Limited Borrower Group Zhaopin Limited Zhaopin Limited Other SEEK Less: transaction costs capitalised Per Consolidated Balance Sheet Facility limit A$612.5m US$552.5m A$175.0m A$150.0m RMB309.9m US$322.5m A$2,270.9m Borrowings $m Note 7(b) Cash $m Note 7(a) Short-term investments $m Note 9(b) Funds on deposit $m Note 7(e) Net cash/ (debt) $m (467.5) (689.2) (175.0) (150.0) (1,481.7) (59.8) (406.9) (466.7) - (1,948.4) 7.4 (1,941.0) 337.7 0.1 - (1,143.9) 245.8 21.3 604.8 - 0.1 0.2 442.8 - 221.9 21.4 442.8 (900.6) Consolidated net interest cover: EBITDA / Net interest Consolidated net leverage ratio: Net debt / EBITDA 7.0 2.2 Financial Report106 7. Net debt continued (d) Financing and credit facilities The overall funding structure of SEEK includes bank loans and capital markets debt funding as follows: Facility Type Maturity Drawn Undrawn 2021 $m 2020 $m 2021 $m 2020 $m Total 2021 $m 2020 $m SEEK Limited - Non-current Bank facilities - unsecured (i) Tranche A (Revolving) Tranche B (Revolving) Tranche C (Revolving) Tranche D (Term Loan) Tranche E (Term Loan) Capital Markets Debt (ii) A$ Floating Rate Notes A$ Subordinated Floating Rate Notes Zhaopin Limited - Current Bank facilities - secured (iii) Loan Facility Revolving Credit Facility Nov 2022 Nov 2023 Nov 2024 Nov 2023 Nov 2024 A$300.5m A$44.5m US$51.0m US$100.0m US$200.0m A$362.5m A$105.0m US$175.3m US$100.0m US$200.0m A$62.0m A$205.5m US$201.5m - - - A$145.0m US$77.2m - - A$362.5m A$250.0m US$252.5m US$100.0m US$200.0m A$362.5m A$250.0m US$252.5m US$100.0m US$200.0m Apr 2022 Jun 2026 - A$225.0m A$175.0m A$150.0m Dec 2021 Dec 2021 US$55.0m US$3.0m US$70.0m - - - - - - - - A$225.0m A$175.0m A$150.0m - US$40.0m US55.0m US$3.0m US$70.0m US$40.0m (i) Bank facilities - unsecured As at 30 June 2021 A$813.2m principal had been drawn down against the facility, comprising A$345.0m and US$351.0m (30 June 2020: A$1,156.7m, comprising A$467.5m and US$475.3m). The SEEK Limited Borrower Group includes SEEK Limited and all subsidiaries in which its ownership is at least 90%. (ii) Capital Markets Debt A Guaranteed Euro Medium Term Note (EMTN) Programme was originally established in March 2017 with a programme limit of EUR 1 billion. Under the programme the Group may from time to time issue notes denominated in any currency, with funds raised under the programme to be used for general corporate purposes. In December 2019, the Group issued A$150.0m of A$ Subordinated Floating Rate Notes with a maturity date of June 2026 and a first optional redemption date of June 2023. The Group initiated a redemption of the April 2022 A$175.0m Floating Rate Notes in June 2020, that completed in July 2020 and was funded from available cash balances. The Group also completed an A$75.0m “tap” issuance of the June 2026 A$ Subordinated Floating Rate Notes in July 2020, increasing the total outstanding to A$225.0m. These notes are unsecured and subordinate to SEEK’s existing unsecured bank debt. (iii) Bank facilities - secured The facilities held in Zhaopin Limited are supported by funds on deposit that are no longer on the Consolidated Balance Sheet due to the disposal of Zhaopin, and are non-recourse to the SEEK Limited Borrower Group. Zhaopin Limited has undrawn facilities of US$37.0m available but these are not expected to be drawn upon. (e) Funds on deposit for entrusted loan facilities The following table shows the Zhaopin funds on deposit to support entrusted loan facilities: Opening funds on deposit as at 1 July 2020 Cash movement on deposits to support entrused loan facilities Movement in interest received/receivable Movement in foreign exchange Disposal of Zhaopin (i) Closing funds on deposit as at 30 June 2021 (i) Disposal of Zhaopin Other financial assets - Note 9(b) Other receivables - Note 11 Current Non-current $m $m Current Non-current $m $m 43.3 (39.8) (4.1) 0.6 - - 237.2 (233.1) - (0.9) (3.2) - - 47.4 (46.4) (0.4) (0.6) - - 114.9 2.9 (0.2) (2.5) (115.1) - Total $m 442.8 (316.4) (5.6) (5.7) (115.1) - As at 30 June 2021 there were no funds on deposit for entrusted facilities following the deconsolidation of Zhaopin during the period. SEEK Limited Annual Report 2021107 8. Notes to the cash flow statement (a) Reconciliation of profit for the year to net cash inflow from operating activities The table below shows the reconciliation of profit after tax to operating cash flow. Operating cash flow is, broadly speaking, the net cash amount of receipts from our customers and payments to our suppliers. The difference between profit and operating cash flow is generally due to: • items included in profit which have no cash impact (e.g. depreciation, amortisation, share of results from equity accounted investments and impairment); • items included in profit which are not related to operations (e.g. fair value changes in financial assets); • payments/receipts being made in the current financial year in relation to previous or future financial years (e.g. opening balances on debtor/creditor accounts); and • foreign exchange movements which cause operating assets and liabilities balances to fluctuate. Profit/(loss) for the year(1) Non-cash items Impairment loss Depreciation and amortisation(1) Share of results of equity accounted investments Share-based payments expense Aggregated tax amounts arising in the reporting period recognised directly in equity Net (gain)/loss on derivative instruments at fair value through profit and loss Other Non-operating items Gain on sale of discontinued operation Fair value gain on financial asset Write-off of borrowing costs Change in operating assets and liabilities: (Increase)/decrease in trade and other receivables (Increase)/decrease in current tax assets (Increase)/decrease in deferred tax assets(1) Increase/(decrease) in trade and other payables Increase/(decrease) in unearned income Increase/(decrease) in current tax liabilities Increase/(decrease) in provisions Increase/(decrease) in deferred tax liabilities Exchange gains on translation of foreign operations Net cash inflow from operating activities 2021 $m 773.9 46.9 133.3 4.6 21.1 (6.5) (31.7) 11.9 (628.9) (65.3) - (90.8) (3.1) (24.4) 115.6 22.1 46.2 6.5 (6.7) 21.8 346.5 2020 $m (92.2) 203.1 131.7 39.9 17.2 (1.8) 14.8 5.5 - - 1.0 44.0 0.4 (13.4) 3.6 (50.2) (5.8) 2.9 (11.1) 10.4 300.0 (1) See Note 29 Changes in accounting policies - SEEK revised its accounting policy regarding upfront configuration costs incurred in implementing cloud computing arrangements. Comparative information has been restated to account for the impact of the change retrospectively. Financial Report108 8. Notes to the cash flow statement continued (b) Changes in assets/liabilities arising from financing activities This disclosure, which is a requirement of AASB 107 Statement of Cash Flows, allows users to understand changes in the balance of certain liabilities such as borrowings. It also includes certain assets where cash flows have been, or will be, included in cash flows from financing activities. The disclosure identifies changes from cash flows as well as non-cash changes such as acquisitions and exchange differences. Trade and other receivables Funds on deposit for entrusted loan facilities $m 151.5 15.4 (2.9) - - - - (1.7) 162.3 Movement type Cash Non-cash Non-cash Non-cash Non-cash Non-cash Non-cash Other financial assets Borrowings Other financial liabilities Funds on deposit for entrusted loan facilities $m Short-term investments $m Derivative assets $m Total Borrowings $m Put option $m Derivative liabilities $m 0.1 0.1 - - - - - - 0.2 314.7 (33.6) 2.7 - - - - (3.3) 280.5 8.3 - - - 3.6 (6.2) - - 5.7 1,599.7 19.2 33.5 322.0 - - 10.6 4.5 1.0 3.2 1,941.0 - - - - - - - 19.2 (15.0) - - 26.6 4.1 - - 49.2 Cash - - - - (401.8) (14.2) 15.0 Cash Non-cash Non-cash Non-cash Non-cash Non-cash Non-cash Non-cash Non-cash (43.5) (0.6) - - - - (115.1) - (3.1) - - - - - - - - (0.1) - 0.1 (272.9) (5.0) - - - - - - (2.6) - - - - (1.5) - - - - - 4.2 (258.9) - 5.7 (34.4) (31.3) - (74.7) - (38.4) 1,107.2 - - - - - (2.8) - - - 2.2 - - - (10.3) (0.5) - - - - 53.4 2020 Opening balance Net cash flows from financing activities Interest received/receivable Amortisation Fair value through OCI Fair value through profit and loss Write-off borrowing costs Foreign exchange movements Closing balance 2021 Net cash flows from financing activities - continuing operations Net cash flows from financing activities - discontinued operations Interest received/receivable Amortisation Fair value through OCI Fair value through profit and loss Put option liability Disposal of interest in subsidiary Transfer to assets held for sale Foreign exchange movements Closing balance SEEK Limited Annual Report 2021109 9. Financial instruments and fair value measurement Accounting Policy Derivatives are initially recognised at fair value on the date the contract is entered into and are subsequently remeasured to their fair value at each reporting period. (i) Derivatives that qualify for hedge accounting Hedge effectiveness is determined at the establishment of the hedge relationship. This relates to the extent that the hedging instrument (derivative) offsets the changes in value of the hedged item (asset, liability or future transaction that is being hedged). It is measured through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and the hedging instrument. SEEK uses the hypothetical derivative method and the critical terms match method to assess effectiveness of its hedge arrangements. SEEK designates certain derivatives as either: Cash flow hedge Risk that is being hedged The risk of uncertain cash flows attributable to a particular risk associated with an asset, liability or future transaction. Treatment of gains or losses The effective portion of changes in the fair value is recognised in other comprehensive income and accumulated in reserves in equity. Treatment if the hedge relationship finishes The gain or loss relating to the ineffective portion is recognised immediately in profit or loss within 'operations and administration expenses’. The hedge relationship will end when the hedging instrument expires or is sold or terminated, or when it no longer meets the criteria for hedge accounting, or when the hedged risk occurs. Gains and losses accumulated in equity remain in equity until the hedged item affects profit or loss. At this time, the accumulated gain or loss is reclassified to profit or loss within: • • ‘finance costs’ for interest rate derivatives hedging variable rate borrowings; and ‘operations and administration expenses’ for other derivative instruments, where the underlying exposure is not related to funding the Company. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss. The risk of changes in the fair value of a financial asset, liability or unrecognised firm commitment. Where the hedged item is an equity instrument for which an election has been made to present changes in fair value in other comprehensive income, the effective portion of changes in the fair value of the hedging instrument is recognised in other comprehensive income and accumulated in reserves in equity, otherwise it is recognised in profit or loss. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss within ‘operations and administration expenses’. Where the hedged item is an equity instrument for which an election has been made to present changes in fair value in other comprehensive income, the ineffective portion shall remain in other comprehensive income. The hedge relationship will end when the hedging instrument expires or is sold or terminated, or when it no longer meets the criteria for hedge accounting, or when the hedged item is disposed of. Gains and losses accumulated in equity remain in equity until the hedged item affects profit or loss. If the hedged item is an equity instrument for which an election has been made to present changes in fair value in other comprehensive income, those amounts shall remain in other comprehensive income. The risk of changes in foreign currency when net assets of a foreign operation are translated from their functional currency to Australian dollars. Fair value hedge Risk that is being hedged Treatment of gains or losses Treatment if the hedge relationship finishes Net investment hedge Risk that is being hedged Treatment of gains or losses The effective portion of changes in the fair value 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 ‘operations and administration expenses’. Treatment if the hedge relationship finishes The hedge relationship will end when the hedging instrument expires or is sold or terminated, or when it no longer meets the criteria for hedge accounting, or when the hedged item is disposed of. Gains and losses accumulated in equity remain in equity until the foreign operation ceases to be consolidated. At this time, the accumulated gain or loss is recognised in profit or loss as part of the gain or loss on disposal. (ii) Derivatives that do not qualify for hedge accounting Derivatives are only used for economic hedging purposes and not as speculative investments. However, certain derivative instruments do not qualify for hedge accounting or are not designated for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify or is not designated for hedge accounting are recognised immediately in profit or loss and are included in ‘operations and administration expenses’ or ‘finance costs’. Financial Report110 9. Financial instruments and fair value measurement continued This note provides information about SEEK's financial instruments, including: (a) Valuation methodology of financial instruments; (b) Composition of financial instruments held by SEEK; and (c) Derivative financial instruments. (a) Valuation methodology of financial instruments For financial instruments measured and carried at fair value, SEEK uses the following fair value measurement hierarchy: Level 1: fair value is calculated using quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and Level 3: fair value is estimated using inputs for the asset or liability that are not based on observable market data (unobservable inputs). (b) Composition of SEEK's financial instruments Financial instruments Cash and cash equivalents Trade and other receivables Funds on deposit for entrusted loan facilities Other financial assets Trade and other payables Lease liabilities Borrowings Other financial liabilities Valuation method Notes Amortised cost Amortised cost Amortised cost Various Amortised cost Amortised cost Amortised cost Various 7(a) 11 7(e) 9(b) 13 14(a)(ii) 7(b) 9(b) Current Non-current 2021 $m 491.8 750.0 - 4.3 (831.1) (17.1) (77.3) (60.6) 2020 $m 604.8 46.6 47.4 57.6 (307.3) (28.0) (143.4) (70.0) 2021 $m - - - 11.2 - (188.1) (1,029.9) (0.9) 2020 $m - - 114.9 436.4 - (36.0) (1,797.6) (3.1) Further information regarding SEEK's other financial assets and liabilities is provided below. Current Non-current Hierarchy level Notes 2021 $m Other financial assets Financial assets held at amortised cost Funds on deposit for entrusted loan facilities Short-term investments Security deposits Financial assets at fair value through profit and loss (FVPL) Investment in equity instruments Convertible loans Derivative financial instruments Financial assets at fair value through other comprehensive income (FVOCI) Investment in equity instruments Investment in equity instruments Derivative financial instruments Total other financial assets Other financial liabilities Financial liabilities at fair value through profit and loss (FVPL) Derivative financial instruments Put option Contingent consideration Financial liabilities at fair value through other comprehensive income (FVOCI) Derivative financial instruments Total other financial liabilities n/a n/a n/a Level 3 Level 3 Level 2 Level 2 Level 3 Level 2 Hierarchy level Level 2 Level 3 Level 3 9(b)(i) 9(b)(ii) 9(c) 9(b)(i) 9(b)(i) 9(c) Notes 9(c) 9(b)(iii) Level 2 9(c) 2020 $m 43.3 0.2 - - 8.4 1.3 - - 4.4 57.6 2021 $m - - 0.9 - - - - 10.3 - 11.2 2020 $m 237.2 - 1.4 113.6 1.2 - 82.0 1.0 - 436.4 - 0.1 - - - 1.3 - - 2.9 4.3 Current Non-current 2021 $m 2020 $m 2021 $m 2020 $m (9.0) (2.2) (5.0) (44.4) (60.6) (10.0) (19.2) (1.6) (39.2) (70.0) - - (0.9) - (0.9) - - (3.1) - (3.1) SEEK Limited Annual Report 2021111 Other financial assets and liabilities held by SEEK as at 30 June 2021 are carried at an amount which closely approximates their fair value. SEEK's exposure to various risks associated with financial instruments is discussed in Note 10 Financial risk management. (i) Investment in equity instruments As part of its overall investment strategy, SEEK holds various investments in equity instruments that do not meet the requirements of either consolidation or equity accounting, and which are not held for the purposes of trading. They are therefore held at fair value. The following table shows the summary of changes in the fair value of SEEK's investment in equity instruments: Opening fair value 1 July 2019 Additions Change in equity instruments held at fair value Foreign exchange movements Closing fair value as at 30 June 2020 Additions Transfer from equity accounted investments Disposal of interest in Zhaopin Change in equity instruments held at fair value Foreign exchange movements Transfer to assets held for sale Closing fair value as at 30 June 2021 (ii) Convertible loans FVPL $m 102.2 12.6 - (1.2) 113.6 2.8 - (113.9) - (2.5) - - FVOCI $m 56.5 3.3 23.2 - 83.0 4.0 139.8 - 89.2 - (305.7) 10.3 Total $m 158.7 15.9 23.2 (1.2) 196.6 6.8 139.8 (113.9) 89.2 (2.5) (305.7) 10.3 In the current year, all convertible loans have either been converted or transferred to liabilities directly associated with the assets held for sale, resulting in a $nil balance. In prior years, SEEK has extended convertible loans to certain ESVs. These loans were interest- bearing and subject to various terms and conditions. (iii) Put option A put option has been recognised relating to the remaining shares held by non-controlling interests in JobAdder. Movements in the estimated exercise value of this put option are recognised in the Consolidated Income Statement. During the period, a portion of non-controlling interests exercised the put option and SEEK acquired a further 36.2% interest in JobAdder for cash consideration of $14.2m. (c) Derivative financial instruments SEEK is party to derivative financial instruments (forward foreign exchange contracts, options and swaps) in the normal course of business in order to hedge exposure to fluctuations in interest and foreign exchange rates in accordance with SEEK's treasury policies. Derivatives are only used for economic hedging purposes and not as speculative instruments. SEEK has the following derivative instruments: Current assets Current liabilities Derivative instrument Derivatives designated as cash flow hedges Forward foreign exchange contracts and options Interest rate options and swaptions contracts Interest rate swap contracts Derivatives designated as net investment hedges Forward foreign exchange contracts Foreign exchange options Cross currency interest rate swap contracts Derivatives designated as fair value hedges Cross currency interest rate swap contracts Derivatives not designated as hedges Forward foreign exchange contracts and options Cross currency interest rate swap contracts Interest rate options and swap contracts Total derivative financial instruments 2021 $m 2020 $m - - - - - - 2.9 0.2 1.1 - 4.2 0.2 - - 0.9 - 3.3 - 1.3 - - 5.7 2021 $m - (5.7) (12.7) - (16.7) (9.3) 2020 $m - (2.5) (0.4) - (23.3) (13.0) - - (9.0) - - (53.4) (6.8) (1.7) (1.5) (49.2) Financial Report112 10. Financial risk management SEEK maintains a capital structure to ensure sufficient liquidity and support to fund business operations, maintain shareholder and market confidence, provide strong stakeholder returns, and position the business for future growth. SEEK’s ongoing capital management approach is characterised by: • Rolling cash flow forecast analyses and detailed budgeting processes which, combined with continual development of relationships with banks and investors, is directed at providing a sound financial positioning for SEEK’s operations and financial management activities; • A capital structure that provides adequate funding for SEEK’s potential acquisition and investment strategies in order to build future growth in shareholder value; and • Investment criteria that consider earnings accretion and risk adjusted rate of return requirements based on overall strategic goals. SEEK’s financial risk management is carried out by a central treasury department (SEEK Treasury) under policies approved by the Board of Directors. SEEK Treasury identifies, evaluates and hedges financial risks in close cooperation with SEEK’s operating units. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as use of derivative financial instruments and investment of excess liquidity. Exposure to risks SEEK’s capital structure, global operations and the nature of the business activities result in exposure to operational risks and a number of financial risks including: Risk Exposure arising from Management Foreign exchange risk - the risk that fluctuations in foreign exchange rates may impact SEEK results Interest rate risk – the risk that fluctuations in interest rates may impact SEEK results Liquidity risk – the risk that SEEK might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities Translation risk - the risk of unfavourable foreign exchange movements in the translation of the profits, assets and liabilities of overseas subsidiaries operating in functional currencies other than Australian dollars Transaction risk - the risk that unfavourable foreign exchange movements may have an adverse impact on future cash flows which are committed to in foreign currencies Long-term borrowings at variable interest rates Creating a natural hedge by matching debt with underlying local currency earnings and investments Where a natural hedge is not possible, creating synthetic debt (via cross currency interest rate swaps) to hedge some underlying earnings and balance sheet exposures When international cash inflows and outflows are certain, use forward foreign exchange contracts or options to hedge inflows/outflows Where appropriate, adopt interest rate swaps or options to fix some interest rates Borrowings and other liabilities Availability of cash, and committed and uncommitted borrowing facilities Credit risk – the risk that default by a counterparty (debtor or creditor) could impact SEEK’s financial position and results Cash and cash equivalents, and derivative financial instruments Use of financial institutions with an investment grade rating Trade receivables Credit limits and credit checks A summary of SEEK's derivative financial instruments and its application of hedge accounting is outlined in Note 9 Financial instruments and fair value measurement. SEEK Limited Annual Report 2021113 SEEK also manages the foreign currency exposure on USD debt which is not designated as a net investment hedge and other foreign currency exposures that are revalued to profit and loss, by entering foreign exchange forward and option contracts. At 30 June 2021, there is a net liability on these derivatives of $8.8m (2020: net liability $5.5m). Material exposures and sensitivities As noted above, SEEK has significant offshore operations. In addition to the revenue and earnings for these operations as set out in Note 1 Segment information and other related disclosures, there are also significant assets which are subject to foreign exchange fluctuations, as set out in Note 12 Intangible assets, Note 19 Interests in controlled entities and Note 20 Interest in equity accounted investments. The method for translating SEEK’s offshore results, assets and liabilities is described in Note 28 Other significant accounting policies. A sensitivity analysis has been performed over possible movements in relevant foreign currencies against the underlying functional currencies in the short-term subsequent to 30 June 2021. Utilising a range of +5% to -5%, the analysis showed that the impact to the profit and loss would be less than $1.0m for each of the common currency pairings. At 30 June 2021, SEEK’s largest exposure to foreign currency exchange risk is in regards to the USD denominated borrowings. This is the largest exposure that SEEK has in relation to a foreign currency denominated asset or liability as it is repayable in USD but held by an Australian entity which operates in Australian dollars. At 30 June 2021, the amount of USD borrowings drawn down on SEEK Limited’s USD bank debt was US$351.0m (2020: US$475.3m). US$265.0m of this loan has been designated as a net investment hedge with a further US$35.0m designated as a fair value hedge for accounting purposes and therefore movements are taken directly to equity, rather than impacting profit or loss. The remaining US$51.0m of this loan has been economically hedged by cross currency interest rate swap contracts, forward foreign exchange contracts and USD denominated assets. (a) Foreign exchange risk SEEK operates internationally and is therefore exposed to foreign exchange risk arising from various currencies, predominantly the US Dollar (USD), Chinese Renminbi (RMB), Hong Kong Dollar (HKD), Malaysian Ringgit (MYR), Philippine Peso (PHP), Singapore Dollar (SGD), Brazilian Real (BRL) and Mexican Peso (MXN). As a result of this international presence, SEEK is exposed to both translation and transaction risk. Risk management policy SEEK’s foreign exchange risk management policy is to hedge up to 100% of anticipated significant cash flows in foreign currencies (for example for one-off significant transactions) for up to a six month period using external forward currency contracts. The derivative instruments used for hedging these types of exposures are forward foreign exchange contracts and purchased net forward exchange option contracts. The forward foreign exchange contracts taken up by SEEK are regularly reassessed. If funding of equity in foreign subsidiaries is material, SEEK Treasury will attempt to match the asset with borrowings in the currency of that subsidiary to form a natural hedge to protect the balance sheet. Where a natural hedge is not possible, synthetic debt may be created using a cross currency interest rate swap. Whilst SEEK’s reported profits are subject to foreign exchange translation risk, the current policy is not to specifically hedge reported profits on the basis that: • there can be significant cost associated with hedging some currencies, particularly in ‘emerging markets’ where SEEK has significant exposures; • profits do not always align with cash flow, and to the extent that there is a mismatch between profits and cash flow, hedging can create mismatches; and • the level of balance sheet (translation) and cash flow (transaction) hedging undertaken already provides a degree of protection against profit and loss translation risk. Material arrangements in place at reporting date SEEK has foreign exchange options in hedging relationships against the USD denominated portion of SEEK’s syndicated facility intended to limit the cost of making the repayments. SEEK has foreign exchange options, forwards and cross currency swaps in hedging relationships to hedge SEEK's RMB, SGD, EUR and GBP net investments. At 30 June 2021, there is a net liability on the foreign exchange options of $16.7m (2020: net liability of $23.3m). Cross currency interest rate swap contracts have a net liability of $6.4m (2020: net liability of $9.7m). Financial Report114 10. Financial risk management continued (b) Interest rate risk SEEK’s main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose SEEK to cash flow interest rate risk. Risk management policy To protect part of its borrowings from exposure to fluctuations in interest rates, SEEK's Treasury policy prescribes the use of interest rate swaps and options. Material arrangements in place at reporting date SEEK has entered into interest rate swaps and options under which it receives or pays interest at variable and fixed rates. As shown in the table below, swaps and options in place at 30 June 2021 cover approximately 14% (2020: 26%) of the variable loan principal outstanding on the SEEK's loan facility. 2021 2020 AUD denominated borrowings Bank loans - principal Subordinated note Senior Euro Medium Term Note Less amounts covered by interest rate swaps USD denominated borrowings Bank loan - principal Entrusted loan facilities Less amounts covered by interest rate swaps or options RMB denominated borrowings Loan facility(1) Less amounts covered by interest rate swaps Total SEEK borrowings Total borrowings Less amounts covered by interest rate swaps Weighted average interest rate % 2.4% 4.3% - 1.5% 2.7% 1.7% 2.5% 3.8% n/a 2.7% 1.7% Weighted average interest rate % 2.5% 4.5% 3.1% 1.9% 3.6% 3.2% 2.6% 3.9% n/a 3.2% 2.0% $m 345.0 225.0 - (126.3) 443.7 468.2 77.3 (33.3) 512.2 - - - 1,115.5 (159.6) 955.9 $m 467.5 150.0 175.0 (435.0) 357.5 689.2 406.9 (72.5) 1,023.6 59.8 - 59.8 1,948.4 (507.5) 1,440.9 (1) As at 30 June 2021 there were no RMB facilities following the deconsolidation of Zhaopin during the period. As at 30 June 2021, SEEK has a net liability on its interest rate swaps, swaptions and options of $18.4m (2020: net liability $4.4m). Material exposures and sensitivities The weighted average interest rate for the year ended 30 June 2021 was 2.7% (2020: 3.2%). If the weighted average interest rate had been 10% higher or 10% lower, interest expense would increase/decrease by $4.4m. While SEEK’s bank accounts are predominantly interest bearing accounts, funds that are in excess of short-term liquidity requirements are generally invested in short-term deposits. Where excess funds are significantly in excess of short-term requirements, they are then applied to reduce the syndicated loan facility balance. Given this, at 30 June 2021, there is not a material interest rate risk relating to SEEK’s cash balances. SEEK Limited Annual Report 2021115 (c) Liquidity risk Prudent liquidity risk management requires maintaining sufficient cash and ensuring that all term deposits can be converted to funds at call. Risk management policy Due to the dynamic nature of the underlying businesses, SEEK Treasury aims to maintain flexibility in funding by keeping the cash reserves of the business accessible. SEEK maintains borrowing facilities to enable SEEK to borrow funds when necessary. For details of these facilities, refer to Note 7 Net debt. Material arrangements in place at reporting date At 30 June 2021, SEEK had access to borrowing facilities totalling $77.3m expiring within one year and $1,574.5m expiring beyond one year (2020: $147.2m expiring within one year and $2,123.7m expiring beyond one year). The table below outlines the level of drawn and undrawn debt at the balance sheet date. Floating rate Expiring within one year Expiring beyond one year Drawn 2021 $m 77.3 1,038.2 1,115.5 2020 $m 143.4 1,805.0 1,948.4 Undrawn 2021 $m - 536.3 536.3 2020 $m 3.8 318.7 322.5 Total 2021 $m 77.3 1,574.5 1,651.8 2020 $m 147.2 2,123.7 2,270.9 Subject to continuing to meet certain financial covenants, certain revolving bank loan facilities may be drawn down at any time. SEEK is not subject to externally imposed capital requirements, other than the contractual banking covenants and obligations. SEEK obtained certain temporary amendments to its key covenant limits in its senior syndicated debt facility that applied until April 2021. SEEK has complied with all bank lending requirements during the year and at the date of this report. Material exposures The below graph outlines the contractual undiscounted maturities of SEEK's borrowing portfolio as at 30 June 2021 and prior to the redemption and new issue activities set out in Note 7 Net debt: m $ 700 600 500 400 300 200 100 0 Less than 1 year 1–2 years 2–3 years 3–4 years >4 years SEEK Limited - bank debt SEEK Limited - EMTN Zhaopin SEEK Limited - undrawn Financial Report116 10. Financial risk management continued Maturities of financial liabilities The table below analyses SEEK's financial liabilities into relevant maturity groupings based on their contractual undiscounted maturities for: (a) all non-derivative financial liabilities, and (b) net and gross settled derivative financial instruments. Contractual maturities of financial liabilities Less than 6 months $m Between 6 and 12 months $m Between 1 and 2 years $m Between 2 and 5 years Over 5 years $m $m Total contractual (inflows)/ outflows $m Carrying amount (assets)/ liabilities $m - 8.8 - - 9.9 18.7 2.5 0.4 - - (166.8) 172.9 9.0 Between 6 and 12 months $m - 13.3 8.7 - 21.8 43.8 At 30 June 2021 Non-derivatives Trade and other payables Lease liabilities Put option Contingent consideration Borrowings Total non-derivatives Derivatives Net settled Interest rate swaps Gross settled Interest rate derivatives Forward foreign exchange contracts/options - (inflow) - outflow Cross currency interest rate swaps - (inflow) - outflow Total derivatives 831.1 8.5 2.2 5.0 87.4 934.2 2.5 0.4 (142.5) 145.6 (1.0) 1.7 6.7 Contractual maturities of financial liabilities Less than 6 months $m At 30 June 2020 Non-derivatives Trade and other payables Lease liabilities Put option Contingent consideration Borrowings Total non-derivatives Derivatives Net settled Interest rate swaps Gross settled Forward foreign exchange contracts/options - (inflow) - outflow Cross currency interest rate swaps - (inflow) - outflow Total derivatives - 18.9 - 0.9 318.5 338.3 4.2 0.6 - - 134.3 (136.5) 2.6 - 49.0 - - 774.2 823.2 - 174.6 - - - 174.6 831.1 259.8 2.2 5.9 1,190.0 2,289.0 831.1 205.2 2.2 5.9 1,115.5 2,159.9 4.3 - - - - - 4.3 - - - - - - - 13.5 15.7 1.4 1.4 (142.5) 145.6 (33.5) 38.1 22.6 25.7 10.6 53.4 Total contractual (inflows)/ outflows $m Carrying amount (assets)/ liabilities $m Between 1 and 2 years $m Between 2 and 5 years Over 5 years $m $m 307.3 14.8 10.5 1.6 166.8 501.0 - 20.8 - 1.9 217.8 240.5 - 18.9 - 1.2 1,530.1 1,550.2 - - - - 155.7 155.7 307.3 67.8 19.2 4.7 2,092.2 2,491.2 307.3 64.0 19.2 4.7 1,948.4 2,343.6 (14.5) 0.8 9.0 5.4 (320.2) 324.8 (1.5) 2.2 (9.2) (18.7) 18.6 (90.7) 92.8 2.8 - - (80.9) 86.5 14.6 - - (111.7) 120.3 14.0 - - - - - - 0.7 1.2 (338.9) 343.4 (284.8) 301.8 22.2 30.2 17.8 49.2 SEEK Limited Annual Report 2021117 (d) Credit risk SEEK’s exposure to credit risk arises from the potential default of SEEK’s trade and other receivables as well as the institutions in which SEEK’s cash and cash equivalents are deposited, and with whom derivative instruments are traded, with a maximum exposure equal to the carrying amounts of these assets. Risk management policy Credit risk in relation to trade and other receivables is managed in the following ways: • The provision of credit is covered by a risk assessment process for all customers (e.g. appropriate credit history, credit limits, past experience); and • Concentrations of credit risk are minimised by undertaking transactions with a large number of customers. Credit risk arising from the deposit of SEEK's cash and cash equivalents is managed under SEEK’s treasury policy which only authorises dealings with financial institutions that have an investment grade rating. Material exposures Cash and cash equivalents at 30 June 2021 were $491.8m (2020: $604.8m). All amounts are invested with financial institutions that have an investment grade rating. Trade receivables at 30 June 2021 were $76.5m (2020: $52.2m). SEEK 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. The exposure to credit risk is relatively low due to the credit terms provided and the large and diverse customer base. Net trade receivables During the year, a total expense of $1.7m (2020: $3.7m) was recognised in the Consolidated Income Statement in relation to the provision for doubtful debts and credit notes. The following table shows the ageing of SEEK’s net trade receivables at 30 June. Not past due Past due less than 30 days Past due 30 - 60 days Past due 61 - 90 days Past due 91 - 120 days Past due 120+ days Closing balance 2021 $m 48.0 15.1 5.8 1.4 1.0 0.8 72.1 2020 $m 29.7 7.7 3.0 2.1 3.0 1.1 46.6 Financial Report118 Assets and liabilities 11. Trade and other receivables Critical accounting estimates and assumptions Expected credit losses (ECLs) The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is an estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. SEEK’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future. Accounting Policy Trade receivables are recognised initially at the amount stated on the invoice and subsequently at the amount considered receivable from the customer (amortised cost using the effective interest method), less a provision for expected credit losses. These receivables are interest-free and are generally due for settlement within 30 days. SEEK has applied a provision matrix to capture the ECLs for trade receivables for different customer segments, based on days past due. The ECL calculation is performed at each reporting period, with historical credit loss experience adjusted for forward-looking information that is anticipated to impact the ability of customers to settle their balances. Information on SEEK’s credits risk exposure and ageing of trade receivables is disclosed in Note 10 (d). Amounts recognised as revenue, which are not yet able to be invoiced to the customer, are recognised in the Consolidated Balance Sheet as contract assets. Once the amount is unconditionally payable by the customer, it is invoiced and reclassified from contracts assets to trade receivables. The creation or release of the provision for doubtful debts has been included in ‘operations and administration’ expenses in the Consolidated Income Statement and the creation or the release of the credit note provision has been included within sales revenue. Amounts charged to the provision are generally written off when there is no expectation of recovering additional cash. Trade receivables Less: loss allowance Net trade receivables Contract assets Other receivables (i) Funds on deposit for entrusted loan facilities Prepayments Total trade and other receivables Current Non-current Notes 7(e) 2021 $m 76.5 (4.4) 72.1 0.1 677.9 - 21.0 771.1 2020 $m 52.2 (5.6) 46.6 8.0 17.2 47.4 32.4 151.6 2021 $m - - - - - - - - 2020 $m - - - - - 114.9 - 114.9 (i) Other receivable The other receivables balance includes proceeds owing from investors (net of taxes) as a result of the Zhaopin disposal, with a related balance in other payables (refer to Note 2 Discontinued operations and Note 13 Trade and other payables). SEEK Limited Annual Report 2021119 12. Intangible assets Critical accounting estimates and assumptions Management has determined that some of the intangible assets (brands and licences) recognised as part of business combinations have indefinite useful lives. This means that the value of these assets do not reduce over time and therefore they are not amortised. These assets have no legal or contractual expiry date and are integral to future revenue generation. Management intends to continue to promote, maintain and defend the brands and licences to the extent necessary to maintain their values for the foreseeable future. Management assesses the useful lives of SEEK’s intangible assets at the end of each reporting period. If an intangible asset is no longer considered to have an indefinite useful life, this change is accounted for prospectively. Configuration and customisation in cloud computing arrangements Some customisation and configuration activities undertaken in implementing cloud computing arrangements entail the development of software code that enhances or modifies, or creates additional capacity to, existing on-premise systems. Judgement is applied in determining whether the benefits from these costs meet the definition of and recognition criteria for an intangible asset in AASB 138 Intangible Assets. Cost that do not result in intangible assets are expensed as incurred, unless they are paid to the suppliers of the cloud computing arrangement to significantly customise the cloud-based software for SEEK, in which case the costs are recorded as a prepayment for services and amortised over the expected renewable term of the arrangement. Accounting Policy Intangible assets are non-physical assets held by SEEK in order to generate revenue and profit. These assets include goodwill, brands and licences, software and website development and work in progress. They are recognised either at the cost SEEK has paid for them or at their fair value if they are acquired as part of a business combination. They are amortised over their expected useful life unless they are considered to have an indefinite useful life. Type of intangible asset Valuation method Amortisation method Estimated useful life Goodwill Brands and licences Customer relationships Software and website development Initially measured at cost. The excess of consideration paid and the amount of any non-controlling interest in a business combination over the fair value of the net identifiable assets acquired is recognised as goodwill Initially at cost, or fair value if acquired as part of a business combination Not amortised, reviewed for impairment at least annually n/a Finite life brands, straight-line. Indefinite life brands not amortised, reviewed for impairment at least annually Specific to circumstances Initially at fair value at date of business combination Initially at cost, or fair value if acquired as part of a business combination, and subsequently at cost less accumulated amortisation Straight-line Straight-line 1 to 5 years 3 to 5 years Work in progress Cost Not amortised as not ready for use n/a (i) Goodwill Goodwill relates to the portion of amounts paid to acquire other entities which cannot be identified as separate assets but instead represents expected future economic benefits. Goodwill on acquisition of subsidiaries is included in intangible assets whilst goodwill on acquisitions of associates and joint ventures is included in the carrying amount of the investment. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. (ii) 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 SEEK 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. (iii) Work in progress Work in progress (WIP) represents intangible assets of other classes not yet put into use. These assets are transferred to another class of assets, normally software and website development, on the date of completion. Financial Report120 12. Intangible assets continued Accounting policy continued (iv) Cloud computing arrangements The Group has a number of cloud computing arrangements that provide it with the right to access the cloud-based software over a contracted period. Costs incurred to configure or customise, and the ongoing fees to obtain access to such software, are recognised as operating expenses when the services are received. Some additional costs are incurred for the development of software code that enhances or modifies, or creates additional capability to existing systems and meets the definition of and recognition criteria for an intangible asset, as a software and website development asset. Please refer to Note 29 Changes in accounting policies for the impact of the change from this new policy. Notes Goodwill $m Brands and licences $m Customer relationships $m Software and website development $m Work in progress $m 2020 Cost Opening balance at 1 July 2019(1) Additions(1) Acquisition of subsidiaries Disposals Exchange differences Transfers Closing balance at 30 June 2020(1) Amortisation(1) Opening balance at 1 July 2019 Amortisation charge Disposals Impairment loss Exchange differences Closing balance at 30 June 2020(1) Carrying value at 30 June 2020(1) 2021 Cost Opening balance at 1 July 2020 (1) Additions Acquisition of subsidiaries Disposals Disposal of Zhaopin Exchange differences Transfers Transfer to assets held for sale Closing balance at 30 June 2021 Amortisation Opening balance at 1 July 2020 (1) Amortisation charge Disposals Disposal of Zhaopin Impairment loss Exchange differences Transfer to assets held for sale Closing balance at 30 June 2021 Carrying value at 30 June 2021 2,312.9 - 0.6 - (77.6) - 2,235.9 (192.0) - - (129.0) 45.4 (275.6) 376.4 - - - (17.7) - 358.7 (3.8) (0.6) - (11.4) 0.1 (15.7) 1,960.3 343.0 2,235.9 - 11.0 - (508.6) (73.3) - (352.8) 1,312.2 (275.6) - - - (12.7) (6.3) - (294.6) 1,017.6 358.7 - - - (146.6) (11.6) - - 200.5 (15.7) - - 2.6 (27.1) - - (40.2) 160.3 99.4 - - - (1.2) - 98.2 (83.7) (7.1) - - 1.2 (89.6) 8.6 98.2 - 2.5 - (11.0) (3.0) - (33.3) 53.4 (89.6) (7.3) - 11.0 - 3.1 29.4 (53.4) - 389.8 6.7 - (1.2) (7.7) 92.1 479.7 (218.2) (80.0) 0.7 - 5.7 (291.8) 187.9 479.7 4.4 - (2.2) (95.1) (2.2) 78.6 (25.7) 437.5 (291.8) (83.5) 2.2 66.4 (3.9) 2.4 14.9 (293.3) 144.2 2(b) 2(c) 2(b) 12(a)(iii) 2(c) Total $m 3,208.1 109.8 0.6 (1.2) (105.8) - 3,211.5 (497.7) (87.7) 0.7 (140.4) 52.4 (672.7) 29.6 103.1 - - (1.6) (92.1) 39.0 - - - - - - 39.0 2,538.8 39.0 101.7 - - (0.8) (2.1) (78.6) (1.3) 57.9 - - - - - - - - 57.9 3,211.5 106.1 13.5 (2.2) (762.1) (92.2) - (413.1) 2,061.5 (672.7) (90.8) 2.2 80.0 (43.7) (0.8) 44.3 (681.5) 1,380.0 (1) See Note 29 Changes in accounting policies - SEEK revised its accounting policy regarding upfront configuration costs incurred in implementing cloud computing arrangements. Comparative information has been restated to account for the impact of the retrospectively. SEEK Limited Annual Report 2021121 (a) Impairment Critical accounting estimates and assumptions Goodwill and intangible assets with indefinite useful lives are allocated to a cash-generating unit (CGU) or group of CGUs and tested annually for impairment. The recoverable amounts of the CGU or group of CGUs is based on the higher of its value-in-use (expected future cash flows from operating the asset/CGU) and fair value less costs of disposal (expected net proceeds if the asset/CGU were sold). These calculations are performed based on cash flow projections and other supplementary information which, given their forward looking nature, require the adoption of assumptions and estimates. Impairment is recognised where the recoverable amount of an asset or CGU has fallen below the carrying amount. For certain CGUs, the determination of recoverable amount requires the estimation and discounting of future cashflows. These estimates include establishing forecasts of future financial performance, terminal value growth rates and post-tax discount rates. Each of these assumptions and estimates is based on a ‘best estimate’ at the time of performing the valuation and therefore, any changes to expected future financial performance, discount rates or terminal growth rates can alter the recoverable amount of a CGU or group of CGUs. (i) Cash-generating units Goodwill and other intangible assets are allocated to CGUs for the purpose of impairment testing. Asia Pacific & Americas SEEK Australia (i) SEEK New Zealand SEEK Asia (ii) WorkAbroad (iii) Brasil Online OCC Jora GradConnection (i) SEEK Investments Zhaopin (iv) OES (v) JobAdder Sidekicker (v) Total intangibles assets from continuing operations Assets held for sale SEEK Growth Fund disposal group (v) 2021 2020 Intangible assets with indefinite useful lives $m 1.4 - 136.2 - - 17.7 - n/a n/a n/a 5.0 n/a 160.3 Goodwill 14.7 5.7 974.4 - - 9.1 1.1 n/a n/a n/a 12.6 n/a 1,017.6 Intangible assets with indefinite useful lives $m - - 146.9 n/a 25.7 16.8 - 1.4 147.2 - 5.0 - 343.0 Goodwill $m - 5.7 1,055.4 n/a - 8.6 1.1 14.7 520.4 336.1 12.6 5.7 1,960.3 352.8 - n/a n/a (i) SEEK Australia In 2019, SEEK acquired a 100% interest in GradConnection Holdings Pty Ltd (together with its consolidated subsidiaries, ‘GradConnection’) an Australian graduate recruitment job platform. The intention was for GradConnection to operate independently post acquisition and gradually integrate with the SEEK Australia platform over time. Given the degree of post-acquisition integration achieved as at 30 June 2021, management determined that GradConnection’s cash flows were no longer largely independent of the cash flows of the SEEK Australia CGU. As such, GradConnection’s goodwill and intangible assets with indefinite useful lives were assessed for impairment as part of the SEEK Australia CGU for the year ended 30 June 2021. Financial Report122 12. Intangible assets continued (ii) SEEK Asia SEEK Asia is a leading provider of online employment marketplaces operating across seven countries throughout South East Asia and Hong Kong. The goodwill and intangible assets with indefinite useful lives relating to SEEK Asia are a significant component of the Consolidated Balance Sheet. The goodwill for this business is attributable to the strong market position it holds and the high growth potential in these emerging markets. For the purpose of impairment testing, goodwill and intangible asset balances are assessed on the following basis: • Goodwill is tested across the group of CGUs that comprise SEEK Asia as the goodwill balance contributes to the generation of cash flows across the whole business; and • The JobsDB and JobStreet brands are tested across the group of CGUs that comprise SEEK Asia as a high level of integration has been achieved in the period post acquisition of JobStreet in November 2014, with management having exercised its ability to direct cash flows from one brand to the other. (iii) WorkAbroad In 2016, SEEK Asia acquired a 100% interest in an online employment marketplace, WorkAbroad. WorkAbroad is a Philippines based job site that specialises in placing Filipino candidates in overseas roles. The results of the operations of WorkAbroad are included within the SEEK Asia operating segment. In FY2020, the carrying amount of goodwill and intangible assets with indefinite useful lives in WorkAbroad were assessed for impairment as part of the SEEK Asia CGU. In FY2021, management reassessed the composition of the SEEK Asia CGU with reference to the Platform Unification program of work where JobStreet and JobsDB businesses are being brought onto the ANZ technology platform. Whilst the operations of JobStreet and JobsDB will continue to be highly integrated once Platform Unification is complete, WorkAbroad is expected to operate more independently. As such, management identified WorkAbroad as a separate CGU for the purposes of its impairment assessment as at 30 June 2021. (iv) Zhaopin Following the disposal and deconsolidation of Zhaopin in FY2021, SEEK no longer recognises any goodwill or intangible assets with indefinite useful lives relating to this business as at 30 June 2021 (refer to Note 2 Discontinued Operations). (v) SEEK Growth Fund disposal group As at 30 June 2021, OES and Sidekicker formed part of the SEEK Growth Fund disposal group and were classified as Discontinued Operations, (refer to Note 2 Discontinued Operations). In accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations, management tested the goodwill in OES and Sidekicker for impairment with reference to the disposal group as a whole, the net assets for which are recognised at the lower of carrying value or fair value. (ii) Impairment testing and key assumptions Key assumptions Management determines the carrying value of certain CGUs/Groups of CGUs based on discounted future cash flow projections which include estimates relating to: revenue, operating costs, capital expenditure, working capital, leases and tax, in addition to the terminal growth rate and discount rates noted in the table below. Cash flow forecasts include next year’s budgeted results, with the remaining years based on judgement and management’s best estimates with reference to key structural and market factors, and have been derived under a consistent approach to the prior year impairment assessment, utilising past experience, external data and internal analysis. The key structural and market factors considered in relation to the online employment businesses comprise labour market growth, rising internet penetration, continued structural migration of advertising expenditure from print to online channels and GDP growth. Management also anticipates growth from market penetration and continued evolution of products and services. CGU / Group of CGUs Valuation method SEEK Australia (i) Fair value less costs of disposal SEEK New Zealand Fair value less costs of disposal SEEK Asia Fair value less costs of disposal WorkAbroad Fair value less costs of disposal Brasil Online Fair value less costs of disposal OCC Fair value less costs of disposal Fair value less costs of disposal JobAdder (ii) SEEK Growth Fund disposal group (iii) Fair value less costs of disposal Years of cash flow projection Terminal growth rate % Post-tax discount rate % 2021 2020 2021 2020 n/a 5 10 10 10 10 n/a n/a n/a 1.8 2.4 2.4 3.5 3.0 n/a n/a n/a 1.8 2.4 n/a 3.5 3.0 n/a n/a n/a 9.5 11.5 11.5 16.0 13.5 n/a n/a n/a 9.5 11.5 n/a 16.0 13.5 n/a n/a SEEK Limited Annual Report 2021123 (i) SEEK Australia As at at 30 June 2021, the recoverable amount of SEEK Australia has been determined based on a ‘sum-of-the-parts’ approach with reference to SEEK’s market capitalisation and reported net debt, adjusted for the aggregate recoverable amount of all other assets/ CGU’s. (ii) JobAdder As at 30 June 2021, the recoverable amount of JobAdder has been determined based on market based multiples and consideration of previous transactions in which SEEK has increased its ownership interest. (iii) SEEK Growth Fund disposal group In determining the estimated recoverable amount for the SEEK Growth Fund disposal group, management referenced an independently assessed fair value of the seed assets that will be transferred from SEEK to the Fund of $1,215.0m. This valuation has subsequently been used by external parties in determining their level of subscription in the Fund as part of the Fund’s first capital raise which is expected to be completed in September 2021. (iii) Impairment losses recognised during the year For the financial year ended 30 June 2021, SEEK recognised a total non-cash impairment loss of $43.7m (2020: $203.1m) in relation to Brasil Online and WorkAbroad. A further non-cash impairment of $3.2m was recognised on SEEK’s lease portfolio (refer to Note 14 Leases for more information). The total impairment loss of $46.9m recognised in the Consolidated Income Statement is before the unwind of deferred tax liabilities relating to impaired brand, software and website intangibles in Brasil Online ($10.1m) and impaired right-of-use assets in SEEK Australia ($1.0m). Year ended 30 June 2021 Goodwill Brands and licences Software and website Leases Total impairment loss (per Consolidated Income Statement) Unwind of deferred tax liabilities Net impairment charge (post-tax) Corporate Costs $m WorkAbroad (i) $m Brasil Online (ii) $m Notes 14(a)(i) - - - 3.2 3.2 (1.0) 2.2 12.7 1.4 - - 14.1 - 14.1 - 25.7 3.9 - 29.6 (10.1) 19.5 Total $m 12.7 27.1 3.9 3.2 46.9 (11.1) 35.8 (i) WorkAbroad As part of management’s impairment testing for the year ended 30 June 2021, the carrying amount of the goodwill and other indefinite life intangible assets in WorkAbroad were compared to the recoverable amount using a fair value less cost of disposal (FVLCD) discounted cash flow (DCF) model. Due to ongoing COVID-19 restrictions, which have limited the ability for candidates to travel and work overseas, Workabroad’s financial performance and outlook has declined significantly versus previous expectations. As a result, management determined that the carrying amount of WorkAbroad is no longer recoverable and an impairment charge (post-tax) of $14.1m was recognised as at 30 June 2021. This impairment charge is included within the results of the SEEK Asia operating segment. (ii) Brasil Online In FY2020, a net impairment loss of $96.8m was recorded in relation to Brasil Online with the business severely impacted by COVID-19. During FY2021, the significant impacts of COVID-19 have continued resulting in depressed economic and employment conditions. Despite this, SEEK remains committed to the business and the execution of the new business model. The remaining carrying amount of indefinite life intangible assets in Brasil Online are tested across the aggregate Brasil Online CGU, as they contribute to the generation of cash flows across the whole of the business. As part of management’s impairment testing for the year ended 30 June 2021, these carrying amounts were compared to the recoverable amount using a FVLCD DCF model. As a result of the combination of weak economic and employment conditions, and the early stages of the current business model transformation, management has determined that the carrying value exceeded the recoverable amount. Management has also written down the value of software and website intangibles. An aggregate impairment charge (post-tax) of $19.5m was recognised as at 30 June 2021. Financial Report124 13. Trade and other payables Trade payables Accruals Dividend payable (i) GST and other value added taxes payable Other payables (ii) Total trade and other payables 2021 $m 8.6 102.7 - 6.6 713.2 831.1 2020 $m 16.4 221.7 45.8 5.5 17.9 307.3 (i) Dividend payable In the prior year, on 6 April 2020, SEEK announced that it had deferred payment of the 2020 interim dividend until 23 July 2020. (ii) Other payables The other payables balance includes consideration owing to the non-controlling interest, transaction costs payable to third parties, and taxes, as a result of the Zhaopin disposal, with a related balance in other receivables (refer to Note 2 Discontinued operations and Note 11 Trade and other receivables). These payables are expected to be settled following the receipt of proceeds. 14. Leases Critical accounting estimates and assumptions Incremental borrowing rate (IBR) Lease payments are discounted using the IBR, being the rate of interest that SEEK ‘would have to pay’ to borrow over a similar term, with a similar security, the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment. The IBR therefore requires estimation, and SEEK uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by SEEK, and makes adjustments specific to the lease (i.e Term, country, currency and security). Extension and termination options SEEK has several lease contracts that include extension and termination options. SEEK determines the lease term as the non- cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised (or not terminated), at the commencement date of the lease. Significant judgement is required in determining if it is reasonably certain that the extension options will be exercised or not. After the commencement date, SEEK reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate. SEEK Limited Annual Report 2021125 Accounting Policy At inception of a contract, SEEK assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. SEEK separates the lease and non-lease components of the contract and accounts for these separately. The consideration in the contract is then allocated to each component on the basis of their relative stand-alone prices. Leases as a lessee SEEK recognises a right-of-use asset and a lease liability at the commencement date of the lease. The asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, an estimate of make-good costs, and initial direct costs incurred, less any lease incentives received. Subsequently, the asset is depreciated using the straight-line method from commencement date to the earlier of the end of its useful life and the lease term. Periodically, the asset is reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. Lease liabilities include the net present value of the following lease payments: • Fixed payments (including in-substance fixed payments), less any lease incentives receivable; and • Variable lease payments that are based on an index or rate, initially measured using the index or rate as at the commencement date. Subsequently, the lease liability is increased by the interest cost on the lease liability and decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate or a change in the assessment of whether renewal or termination options contained within the contract are reasonably certain to be exercised. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset. Any excess is recorded in the Consolidated Income Statement. Lease payments are allocated between principal and finance cost. The finance cost is recorded in the Consolidated Income Statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. SEEK does not recognise right-of-use assets and lease liabilities for low-value assets (<$5,000). These leases are recognised as incurred and treated as an expense in the Consolidated Income Statement. (a) Amounts recognised in the Consolidated Balance sheet (i) Right-of-use assets SEEK leases various offices under non-cancellable agreements which primarily expire within one to five years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the lease are negotiated. The following movements in the right-of-use asset have been recorded to 30 June: Balance recognised on date of transition to AASB 16 Opening balance Additions to right-of-use assets(1) Disposals of right-of-use assets Depreciation charge for the year - continuing operations Depreciation charge for the year - discontinued operations Disposal of interest in subsidiary Impairment of right-of-use assets(2) Transfer to assets held for sale Foreign exchange movements Total right-of-use assets Property leases 2021 $m - 55.5 206.2 (13.8) (14.3) (13.3) (21.5) (3.2) (2.2) (0.5) 192.9 2020 $m 56.7 - 30.7 (3.6) (9.1) (17.4) - - - (1.8) 55.5 (1) The additions to right-of-use assets in current year largely relates to the lease signed for SEEK’s new global headquarters in Melbourne. SEEK has also incurred $49.9m in fit out costs in relation to this lease, which are classified within WIP in the plant and equipment balance at 30 June 2021. (2) Impairment expense of $3.2m has been recognised as a result of an agreement to sub-lease of a portion of an office for an amount less than the rent being paid to the head lessor. Financial Report126 14. Leases continued (ii) Lease liabilities Current Non-current Total lease liabilities Extension options 2021 $m 17.1 188.1 205.2 2020 $m 28.0 36.0 64.0 As at 30 June 2021, potential future undiscounted cash outflows of $236.9m (2020: $6.5m) have not been included in the lease liability because it is not reasonably certain that the leases will be extended (or not terminated). SEEK reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant changes in circumstances within its control. During the current financial year, the financial effect of revising lease terms to reflect the effect of exercising extension and termination options was an increase in recognised lease liabilities and right-of-use assets of $3.4m (2020: $13.4m). (b) Amounts recognised in the Consolidated Income Statement The following amounts relating to leases were recognised in the Consolidated Income Statement during the year ended 30 June: Depreciation - right-of-use assets Interest expense on lease liabilities - (in 'finance costs') (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. 2021 $m 14.3 3.5 Restated 2020(1) $m 9.1 1.2 Impact of COVID-19 SEEK has adopted the practical expedient in paragraph 46A of AASB 16 Leases and elected not to account for any rent concessions granted as a result of the COVID-19 pandemic as a lease modification. The amount recognised in profit or loss due to changes in lease payments arising from such concessions was $0.1m (2020: $0.9m). (c) Amounts recognised in the Consolidated Statement of Cash Flows The following amounts relating to cash outflows for leases were recognised in the Consolidated Statement of Cash Flows during the year ended 30 June: Interest expense on lease liabilities - (in 'operating activities') Principal elements of lease liabilities - (in 'financing activities') Total cash outflow for lease liabilities 2021 $m 3.5 7.0 10.5 Restated 2020(1) $m 1.2 9.7 10.9 (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. The future cash outflows relating to leases that have not yet commenced are disclosed in Note 22 Commitments for expenditure. SEEK Limited Annual Report 2021127 15. Provisions Critical accounting estimates and assumptions Following the guidance in AASB 3 Business Combinations, SEEK has recognised a provision for contingent liabilities acquired in various business combinations. At acquisition, the provisions were measured at the fair value of the contingent liabilities, which reflected the range of possible outcomes across the portfolio of contingent liabilities and is adjusted for risk. The carrying amount of the provision has been reassessed in each subsequent reporting period. The settlement of these contingent liabilities is uncertain and the difference between the settlement amounts and the amounts provided for may be material. Accounting Policy Provisions are recognised when: • SEEK has a present legal or constructive obligation as a result of past events; • it is probable that an outflow of resources (usually cash or other assets) will be required to settle the obligation; and • the amount can be reliably estimated. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering those similar obligations together. A provision is recognised in aggregate even if the likelihood of an outflow with respect to any one item is small. 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. Employee benefits provision Other provisions Total provisions The movement in other provisions during the financial year is set out below: Balance at 1 July 2020 Additional provision recognised in the year Credited to the Consolidated Income Statement Utilisation during the year Effect of movement in foreign exchange Transfer to liabilities directly associated with assets held for sale Balance at 30 June 2021 Current Non-current Make good provision $m 2.7 0.1 (0.1) (0.4) (0.1) - 2.2 2.0 0.2 Current Non-current 2021 $m 26.5 3.0 29.5 2020 $m 27.1 9.4 36.5 Acquired contingent liabilities $m Tax cases provision (i) $m 6.5 - (2.8) - (0.1) (0.6) 3.0 1.0 2.0 7.2 0.7 - (0.7) - - 7.2 - 7.2 2021 $m 10.7 10.2 20.9 Other $m 4.6 4.4 - (6.3) - (1.9) 0.8 - 0.8 2020 $m 15.9 11.6 27.5 Total $m 21.0 5.2 (2.9) (7.4) (0.2) (2.5) 13.2 3.0 10.2 (i) Tax cases provision Brasil Online is subject to a number of tax infraction notices from Brazilian tax authorities. These tax infractions are either open, subject to legal proceedings, or under appeal. Based on advice from leading Brazilian external legal counsel, Brasil Online has estimated the most likely amounts payable including penalties and interest and has recognised this amount as a provision. Unrecognised contingent liabilities relating to uncertain tax positions applicable to Brasil Online are discussed further in Note 23 Contingent liabilities. Financial Report128 Equity 16. Share capital Movement of shares on issue No. of Shares No. of Shares No. of Shares Ordinary shares (excluding Treasury shares) Treasury shares Total Share capital Balance at 30 June 2019 Issue of shares to satisfy future rights exercises Exercise of rights Release of restricted shares Balance at 30 June 2020 Issue of shares to satisfy future rights exercises Exercise of rights Release of restricted shares Balance at 30 June 2021 350,731,425 - 662,215 389,832 351,783,472 - 369,573 450,825 352,603,870 1,279,457 1,019,308 (662,215) (389,832) 1,246,718 540,000 (369,573) (450,825) 966,320 352,010,882 1,019,308 - - 353,030,190 540,000 - - 353,570,190 $m 269.2 - - - 269.2 - - - 269.2 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. Treasury shares are shares in the Company that are held by the Employee Share Trust for the purpose of future allocation to employees under the SEEK Equity Plan, and shares held by the Employee Share Trust that have been allocated to employees but are subject to a disposal restriction. SEEK Limited Annual Report 202117. Reserves Nature and purpose of reserves Cash flow hedge reserve The Cash flow hedge reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that is recognised directly in equity, as described in Note 9 Financial instruments and fair value measurement. Net investment hedge reserve The Net investment hedge reserve is used to record gains or losses on a hedging instrument in a net investment hedge that is recognised directly in equity, as described in Note 9 Financial instruments and fair value measurement. Fair value hedge reserve The Fair value hedge reserve is used to record gains or losses on a hedging instrument in a fair value hedge that is recognised directly in equity, as described in Note 9 Financial instruments and fair value measurement. Cost of hedging reserve The Cost of hedging reserve is used to record gains or losses on the forward element of a hedging instrument where the cost of hedging approach is applied. Share-based payments reserve The Share-based payments reserve is used to recognise the grant date fair value of shares issued to employees. (a) Hedging reserves Cash flow hedge reserve Net investment hedge reserve (i) Fair value hedge reserve Cost of hedging reserve Total hedging reserve 129 Put option reserve This reserve relates to a put option over the remaining shares held by a non-controlling interest in JobAdder. SEEK has recognised a financial liability for the estimated exercise value of that option, as described in Note 9 Financial instruments and fair value measurement. Equity instruments revaluation reserve The Equity instruments revaluation reserve is used to record changes in the fair value of investments in equity instruments that are not held for trading, for which SEEK elected, at initial recognition, to present gains and losses in other comprehensive income. Transactions with non-controlling interests reserve This reserve is used to record differences arising as a result of transactions with a non-controlling interest that do not result in a loss of control. Upon disposal of interests in that entity this reserve would be transferred to retained earnings. Transfers under common control reserve The Transfers under common control reserve is used to record the net impact on the equity attributable to the shareholders of SEEK in the event of a transfer of an entity under common control. Upon disposal of all interests in that entity this reserve would be transferred to retained earnings. 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 28 Other significant accounting policies. 2021 $m (11.5) (46.3) 1.7 0.4 (55.7) 2020 $m (11.1) (145.2) (0.8) (0.9) (158.0) SEEK’s approach to hedging is described in Note 9 Financial instruments and fair value measurement. (i) Net investment hedge reserve The movement of $98.9m (2020: $33.2m) in the Net investment hedge reserve for the year was mainly due to reserves recycled through other comprehensive income on disposal of its interest in Zhaopin. Please refer to Note 2 Discontinued operations for further information. Financial Report130 17. Reserves continued (b) Other reserves Share-based payments reserve Put option reserve (i) Equity instruments revaluation reserve (ii) Transactions with non-controlling interests reserve (iii) Transfers under common control reserve Other reserves Total other reserves (i) Put option reserve 2021 $m 121.9 (1.4) 78.0 (50.4) - (0.3) 147.8 2020 $m 110.8 (18.3) 21.4 (93.2) (4.6) - 16.1 SEEK acquired a further 36.2% interest in JobAdder, resulting in a partial utilisation of the Put option reserve and a related movement in the Transactions with non-controlling interest reserve. (ii) Equity instruments revaluation reserve The movement of $56.6m in the Equity instruments revaluation reserve is primarily due to changes in the fair value of financial assets at fair value through other comprehensive income (FVOCI). (iii) Transactions with non-controlling interest reserve During the period SEEK disposed of its interest in Zhaopin resulting in a transfer from the Transaction with non-controlling interest reserve to retained earnings. 18. Dividends 2020 2019 final dividend 2020 interim dividend(1) Total dividends provided for or paid for the year ending 30 June 2020 2021 2021 dividend(2) Total dividend paid for the year ending 30 June 2021 Payment date Amount per share Franked amount per share Total dividend 3 October 2019 23 July 2020 22.0 cents 13.0 cents 22.0 cents 13.0 cents 24 May 2021 20.0 cents 20.0 cents $77.4m $45.8m $123.2m $70.6m $70.6m Dividends determined by the Board of the Company after the financial year (to be paid out of retained profits at 30 June 2021): 2021 final dividend 5 October 2021 20.0 cents 20.0 cents $70.7m (1) On 6th April 2020, SEEK announced that it had deferred payment of the 2020 interim dividend until 23 July 2020. (2) SEEK did not pay a 2021 interim dividend, due to the macroeconomic challenges across its key markets arising from COVID-19. Instead, the Board determined that SEEK would pay a dividend as per the details above, following signing and completion of the Zhaopin transaction. The balance of the franking account of the SEEK Australian income tax consolidated group, adjusted for franking credits that will arise from the payment of its current tax liability, is $111.1m at 30 June 2021 (2020: $48.0m) based on a tax rate of 30% (2020: 30%). The dividend payment on 5 October 2021 will be fully franked using this balance, and will reduce the franking credits available by $30.3m for the SEEK Australian income tax consolidated group. SEEK Limited Annual Report 2021131 Group structure 19. Interests in controlled entities (a) Material subsidiaries Critical accounting estimates and assumptions SEEK has fully consolidated a number of entities in the SEEK Asia group despite not holding the majority of equity. A list of these entities is shown below in section (b). Unless otherwise stated, the following subsidiaries have share capital consisting solely of ordinary shares that are held by SEEK, and the proportion of ownership interests held equals the voting rights of SEEK. Name of entity SEEK (NZ) Limited SEEK Learning Pty Ltd Country of incorporation New Zealand Australia SEEKAsia Ltd(1) (together with its consolidated subsidiaries, ‘SEEK Asia’) Cayman Islands Jobs DB Hong Kong Limited Jobs DB Singapore Pte Limited Jobs DB Malaysia Sdn. Bhd. Jobs DB Recruitment (Thailand) Limited PT. Jobs DB Indonesia Jobs DB Philippines Inc. SEEK Asia Investments Pte. Ltd. JobStreet.com Pte Ltd JobStreet.com Shared Services Sdn. Bhd. JobStreet.com Philippines, Inc PT. JobStreet Indonesia JobStreet Company Limited Catho Online, Ltda (together with its parent and other subsidiaries, ‘Brasil Online’) Online Career Center Mexico, S.A.P.I de CV (OCC) Zhaopin Limited(2) Job Adder Operations Pty Ltd Hong Kong Singapore Malaysia Thailand Indonesia Philippines Singapore Singapore Malaysia Philippines Indonesia Vietnam Brazil Mexico Cayman Islands Australia Equity holding 2021 % Equity holding 2020 % 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 98.2 61.1 96.2 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 98.2 61.1 60 (1) Certain entities in these groups are fully consolidated despite not holding the majority of equity. See section (b) for further details. (2) The operations of Zhaopin were deconsolidated from SEEK from 1 May 2021 (see Note 2 Discontinued operations). At 30 June 2021, SEEK retains a 61.1% interest in the parent, Zhaopin Limited, which holds the 23.5% interest in the Zhaopin equity accounted investment, with the results of each of these included in continuing operations. The non-controlling interest related to Zhaopin has also been derecognised to reflect SEEK’s economic interest in its operations, and therefore no summarised financial information relating to this has been disclosed. (b) Entities fully consolidated despite not holding majority of equity SEEK has fully consolidated a number of entities in the SEEK Asia group despite not holding the majority of equity or direct ownership interest. Through existing contractual agreements, SEEK is able to exercise effective control over the financial and operating policies of these businesses and receive substantially all of the economic benefits and returns SEEK Asia entities 88 Karat Sdn. Bhd. Agensi Pekerjaan JS Staffing Services Sdn. Bhd. Jobs DB Assets (Thailand) Ltd Agensi Pekerjaan JobStreet.com Sdn. Bhd. Financial Report132 19. Interests in controlled entities continued (c) Transactions with non-controlling interests On 1 May 2021, SEEK disposed of 37.6% of the equity of Zhaopin (the Zhaopin discontinued operation), retaining a 23.5% equity accounted investment, as well as a 61.1% interest in the holding company, Zhaopin Limited (together referred to as the Zhaopin continuing operations). Please refer to Note 2(b) for details of this disposal during the period. During the period, the Group acquired a further 36.2% interest in JobAdder for cash consideration of $14.2m. (d) Summarised financial information for subsidiaries with non-controlling interests As at 30 June 2021, the carrying amount of non-controlling interests from continuing operations was $1.0m (2020: $5.4m). Loss from continuing operations allocated to non-controlling interests for the year ended 30 June 2021 was $0.5m (2020: $2.1m). The closing balances of non-controlling interests no longer represent a material balance to SEEK’s continuing operations and accordingly, no summarised financial information has been presented. 20. Interests in equity accounted investments Critical accounting estimates and assumptions SEEK’s investment in its associates are reviewed for impairment on an annual basis or when events or circumstances indicate that the carrying amount of the investment may not be recoverable. As required by current Accounting Standards, SEEK has evaluated, among other factors, the financial health of and business outlook of its associates and has assessed the carrying value of its investments against current estimated fair value. (a) Interests in associates Set out below is the additional information about some of SEEK’s material interests in associates as at 30 June 2021. Name of entity Principal activity Country of Incorporation Beijing Wangpin Consulting Co. Ltd (Zhaopin)(1) Online job/education platform in China China Ownership interest Nature of relationship Associate 2021 % 23.5 2020 % n/a BDJOBS.com Limited (BDjobs) Online employment focused business that helps job seekers manage their career more efficiently, including job search, training and assessment (1) This represents the continuing operations of SEEK’s retained equity accounted investment in Zhaopin. Bangladesh Associate 35.0 35.0 SEEK Limited Annual Report 2021 (b) Movement in carrying amount of equity accounted investments The carrying amount of equity accounted investments has changed as follows for the year ended 30 June 2021: For the year ended 30 June 2021 Carrying amount at 1 July 2020 Acquisition of interest Disposal of interest and/or transfer to equity instruments Fair value of equity accounted investment retained upon disposal of subsidiary Share of results - continuing operations Share of results - discontinued operations Share of other comprehensive income - continuing operations Share of other comprehensive income - discontinued operations Dividends received or declared Share of movement in other reserves Transfer to assets held for sale Carrying amount at 30 June 2021 SEEK Investments AP&A Zhaopin $m Other $m Sub-total $m Other $m - - - 521.1 5.6 - 15.4 - - - - 542.1 261.3 143.0 (73.2) - (0.4) (8.7) (1.0) (6.5) (0.3) 1.7 (295.6) 20.3 261.3 143.0 (73.2) 521.1 5.2 (8.7) 14.4 (6.5) (0.3) 1.7 (295.6) 562.4 7.0 - (6.0) - (1.1) - - - - 0.1 - - (c) Summarised financial information for equity accounted investments Summarised financial information has been presented for continuing operations only. 133 Total $m 268.3 143.0 (79.2) 521.1 4.1 (8.7) 14.4 (6.5) (0.3) 1.8 (295.6) 562.4 For the year ended 30 June 2021 Summarised balance sheet (100%) Current assets Non-current assets Current liabilities Non-current liabilities NCI share of net assets Net assets SEEK interest SEEK's share of net assets Goodwill Carrying amount Summarised statement of comprehensive income (100%) Gross revenue Interest income Depreciation and amortisation Other operating costs Interest expense Income tax expense Non-controlling interest Profit/(loss) for the period Other comprehensive income Total comprehensive income/(loss) SEEK Investments AP&A Zhaopin $m Other $m Sub-total $m Other $m Total $m 432.5 283.3 (611.7) (12.5) (3.4) 88.2 20.7 521.4 542.1 132.7 0.5 (6.1) (99.3) - (3.7) (0.2) 23.9 - 23.9 18.6 1.4 (4.5) (0.1) - 15.4 3.1 17.2 20.3 7.5 0.2 (0.1) (13.3) (0.2) (0.3) - (6.2) 0.9 (5.3) 451.1 284.7 (616.2) (12.6) (3.4) 103.6 23.8 538.6 562.4 140.2 0.7 (6.2) (112.6) (0.2) (4.0) (0.2) 17.7 0.9 18.6 - - - - - - - - - - - - - - - - - - - 451.1 284.7 (616.2) (12.6) (3.4) 103.6 23.8 538.6 562.4 140.2 0.7 (6.2) (112.6) (0.2) (4.0) (0.2) 17.7 0.9 18.6 Financial Report134 21. Parent entity financial information Accounting Policy The financial information for the parent entity, SEEK Limited, 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 when its right to receive the dividend is established, rather than being deducted from the carrying amount of these investments. (ii) Income tax consolidation legislation SEEK Limited and its wholly-owned Australian subsidiaries have elected to form an Australian income tax consolidated group. The entities in the arrangement each account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the arrangement continues to be a standalone taxpayer in its own right. In addition to its own current and deferred tax amounts, SEEK Limited also recognises the current tax assets/liabilities and the deferred tax assets arising from unused tax losses and unused tax credits assumed from the other entities in the arrangement. As a result, the entities in the Australian income tax consolidated group have entered into a tax funding agreement under which they: • fully compensate SEEK Limited for any current tax liabilities assumed; and • are compensated by SEEK Limited for any current tax assets and deferred tax assets relating to unused tax losses or unused tax credits that are assumed by SEEK Limited under the Australian income tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in each entity’s financial statements. Assets or liabilities arising under the tax funding agreement are recognised as current amounts receivable from or payable to SEEK Limited. (iii) Financial guarantees Where SEEK Limited 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. (a) Summary financial information The individual financial statements for the parent entity, SEEK Limited, show the following aggregate amounts: Balance sheet Current assets Total assets(2) Current liabilities Total liabilities Net assets Equity Issued capital Reserves Cash flow hedge reserve Put option reserve Share-based payments reserve Retained earnings(2) Total equity Profit for the year(2) Total comprehensive income(2) 2021 $m 115.5 2,274.9 (262.1) (1,473.9) 801.0 Restated 2020(1) $m 252.6 2,405.6 (222.2) (1,700.9) 704.7 269.2 269.2 (11.5) - 118.7 424.6 801.0 124.2 164.7 (11.1) (18.3) 96.1 368.8 704.7 217.5 226.9 (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. (2) See Note 29 Changes in accounting policies - SEEK revised its accounting policy regarding upfront configuration costs incurred in implementing cloud computing arrangements. Comparative information has been restated to account for the impact of the retrospectively. SEEK Limited Annual Report 2021135 (b) Significant transactions during the financial year As disclosed in Note 14 Leases, SEEK recognised an impairment of $3.2m against right-of-use assets at 30 June 2021 as a result of an agreement to sub-lease a portion of an office for an amount less that the rent being paid to the lessor. (c) Guarantees entered into by the parent entity The parent entity and certain subsidiaries have given unsecured guarantees in respect of the syndicated loan facility of A$612.5m and US$552.5m. As at 30 June 2021, A$813.2m principal had been drawn down against the facility, comprising A$345.0m and US$351.0m (2020: $1,156.7m, comprising A$467.5m and US$475.3m). Refer to Note 7 Net debt. The parent entity and certain subsidiaries have also given unsecured guarantees in respect of any debt issued under the EMTN Programme by Jobstreet.com Pte Ltd (Singapore) and Job DB Hong Kong Limited. As at 30 June 2021, no such debt has been issued. The parent entity has provided an unsecured guarantee in repect of a working capital facility to Lend Me A Hand Pty Ltd, a subsidiary of the Sidekicker Group. The parent entity is also the guarantor in respect of a number of subsidiaries’ operating leases. (d) Contingent liabilities of the parent entity The parent entity did not have any contingent liabilities as at 30 June 2021 (2020: nil). (e) Contractual commitments Other commitments for the payment of IT and professional services, car parks under long-term contracts in existence totalled $1.9m (2020: $3.2m). Unrecognised Items 22. Commitments for expenditure Within one year Later than one year but not later than five years More than five years Total 2021 $m 6.0 1.8 - 7.8 2020 $m 4.3 2.2 0.1 6.6 SEEK has commitments for the payment of IT and professional services, and car parks under long-term contracts in existence at the reporting date but not recognised as liabilities payable. Financial Report136 23. Contingent liabilities Unrecognised contingent liabilities represent the possible (but not probable) cash outflow in excess of any provision. They do not represent management’s expectation of likely outflow and are not recognised on the balance sheet. Uncertain tax positions As mentioned in Note 15 Provisions, Brasil Online is subject to a number of tax infraction notices from Brazilian tax authorities. Based on advice from leading Brazilian external legal counsel, Brasil Online has estimated the most likely amounts payable including penalties and interest and has recognised this amount as a provision. For tax infraction notices where it is not probable that an outflow of resources will be required, a provision has not been raised. Unrecognised contingent liabilities at 30 June 2021 amounted to BRL 145.1m (A$38.8m) (2020: BRL 148.9m (A$39.8m)) including penalties and interest. Other matters From time to time, SEEK is subject to legal claims. The majority of these are subsequently proven to be without merit and resolved with no cash outflow. At 30 June 2021, in addition to the provisions recognised in Note 15 Provisions, SEEK has unrecognised contingent liabilities of $3.6m (2020: $2.2m) which relate to labour and civil cases in Brasil Online. 24. Events occurring after balance sheet date (a) SEEK Growth Fund On 11 August 2021, SEEK announced the creation of SEEK Growth Fund following the completion of a strategic review. SEEK’s current holdings in OES and 14 ESVs will be transferred to the Fund as seed assets in exchange for units in the Fund, based on an independently assessed fair value of A$1,2150.m. A management company will be formed to manage the Fund, led by Andrew Bassat and a team of investment professionals from SEEK. The Fund will operate autonomously from SEEK, with greater access to third party capital, allowing it to focus on being an investor and business builder, enabling SEEK to focus on growth opportunities in AP&A whilst retaining its economic exposure to the investment portfolio. On 6 August 2021, SEEK acquired a 26.3% undiluted interest in Hireup Holdings Pty Ltd (Hireup), a provider of online disability support services which connects workers with participants, and a 38.4% undiluted interest in MyTutorWeb Limited (MyTutor), a UK based online tutoring marketplace. SEEK will subsequently sell its interests in Hireup and MyTutor to the Fund. (b) Remittance of proceeds from the sale of Zhaopin to SEEK’s co-investors In June 2021, Zhaopin Limited, the holding entity for the Zhaopin operations, received AUD$308.7m of proceeds related to the disposal of Zhaopin. These proceeds had not been distributed to shareholders at balance date and the amount is recorded in Cash and cash equivalents at 30 June 2021. On 5 July 2021, the amount was remitted to SEEK’s co-investors in Zhaopin. SEEK Limited Annual Report 2021137 Other information 25. Share-based payments Critical accounting estimates and assumptions Calculating the fair value SEEK estimates the fair value of its share-based payment arrangements at grant date, with the assistance of independent consultants, using the Monte-Carlo simulation or similar option pricing models to value options and rights. The estimations include any market performance conditions and the impact of non-vesting conditions. Accounting Policy The cost of share-based payments is recognised by expensing the fair value of options or rights granted, over the period during which the employees become unconditionally entitled to these benefits. The impact of any service conditions and non-market vesting conditions is excluded from the estimation of fair value, and instead included in assumptions about the number of options that are expected to vest. These assumptions are reviewed at the end of each reporting period. Where the plan will be settled by: • issuing equity, the corresponding entry is an increase in the share -based payment reserve; and • a payment in cash, the corresponding entry is a liability. (a) Types of share-based payments • SEEK Limited: Share-based benefits are provided to SEEK Limited Executives and certain employees via Performance Rights, Equity Rights, Restricted Rights and/or Wealth Sharing Plan Options/Rights. • OCC: The options are held over the ordinary share capital of Online Career Centre Mexico, S.A.P.I de CV. • JobAdder: The options are held over the ordinary share capital of JobAdder Operations Pty Ltd. If the options granted by OCC or JobAdder were to be exercised and satisfied by issuing new shares, SEEK’s interest in the respective businesses would be diluted. (b) Financial impact of share-based payment transactions The table below summarises the share-based payment expense recognised during the year as part of the employee benefits: 2021 2020(1) AP&A ESVs Corporate Costs $m 9.7 0.2 0.8 1.0 11.7 $m - 0.3 - - 0.3 $m 7.9 - - 0.7 8.6 Total $m 17.6 0.5 0.8 1.7 20.6 AP&A $m 8.4 - 0.4 0.6 9.4 Corporate Costs $m 4.9 - - 0.5 5.4 ESVs $m - - - - - Total $m 13.3 - 0.4 1.1 14.8 SEEK Limited options and rights Subsidiary plans Cash-settled share-based payments Other associated costs Total share-based payments expense (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. Financial Report138 25. Share-based payments continued (c) Options and rights - SEEK Limited SEEK Limited Executives and selected senior level employees receive one Equity Right or one Performance Right as part of their Total Remuneration Opportunity each year. Equity Rights and Performance Rights vest and convert into a number of shares following the end of the financial year based on a pre-determined allocation price which references the SEEK Limited share price. For Performance Rights, vesting is also linked to the performance of the individual over the relevant financial year. Shares allocated are subject to a 12-month disposal restriction following vesting. A limited number of senior level employees may receive a one-off grant of Restricted Rights. Vesting of Restricted Rights is subject to the performance of the individual and continued employment over the vesting period. Upon vesting, each Restricted Right converts into one share and the resulting shares are not subject to a disposal restriction period. SEEK Limited Executives and a small number of selected senior level employees also receive Wealth Sharing Plan Options and/ or Rights at their election. Vesting of Wealth Sharing Plan Options and Rights is subject to the achievement of a three year share price hurdle performance condition. Vested Wealth Sharing Plan Options and Rights are subject to a 12-month exercise restriction, following which they can be exercised (Rights at nil cost; Options upon payment of an exercise price equivalent to the share price hurdle) and convert into an equivalent number of shares. 2021 Grant date Expiry date (years) Exercise price Opening balance Granted during the year Exercised during the year Lapsed during the year Forfeited during the year Closing balance Vested and exercisable at 30 June Number of options or rights Wealth Sharing Plan Options 11 June 2019 Sep 2019 - Nov 2019 2 November 2020 25 November 2020 12 March 2021 Total Wealth Sharing Plan Rights Oct 2016 - Dec 2016 Oct 2017 - Dec 2017 Oct 2018 - Jun 2019 Sep 2019 - Mar 2020 2 November 2020 25 November 2020 Total Restricted Rights 25 February 2021 25 February 2021 Total Equity Rights Oct 2019 - Mar 2020 2 November 2020 25 November 2020 Total Performance Rights Oct 2019 - Apr 2020 2 November 2020 25 February 2021 12 March 2021 Total Total All Plans 5 5 5 5 5 5 5 5 5 5 5 1 2 2 2 2 2 2 2 2 $20.95 $23.18 $20.51 $20.51 $20.51 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 536,013 468,216 - - - 1,004,229 369,082 598,107 627,325 546,112 - - 2,140,626 - - - 7 - - 7 - - 234,651 216,649 14,612 465,912 - - - - 579,999 71,558 651,557 3,094 3,094 6,188 - 7 1 8 - - - - - - - - - - - - - (94,374) (13,793) (144,433) - (252,600) 536,013 373,842 220,858 72,216 14,612 1,217,541 (369,082) - - - - - (369,082) - (598,107) - - - - (598,107) - - (4,309) (74,100) (54,142) (47,705) (180,256) - - 623,016 472,012 525,857 23,853 1,644,738 - - - (7) - - (7) - - - - - - - - - - - - - - 3,094 3,094 6,188 - 7 1 8 69 - - - 69 3,144,931 - 66 2 2 70 1,123,735 (69) - - - (69) (369,158) - - - - - (598,107) - (5) - - (5) (432,861) - 61 2 2 65 2,868,540 - - - - - - - - - - - - - - - - - - - - - - - - - - SEEK Limited Annual Report 2021139 2020 Grant date Expiry date (years) Exercise price Opening balance Granted during the year Exercised during the year Lapsed during the year Forfeited during the year Closing balance Vested and exercisable at 30 June Number of options or rights Wealth Sharing Plan Options 11 June 2019 Sep 2019 - Nov 2019 Total 5 5 $20.95 $23.18 536,013 - 536,013 - 468,216 468,216 - - - Wealth Sharing Plan Rights Oct 2015 - May 2016 Oct 2016 - Dec 2016 Oct 2017 - Dec 2017 Oct 2018 - Jun 2019 Sept 2019 - Mar 2020 Total Equity Rights Oct 2018 - Jun 2019 Oct 2019 - Mar 2020 Total Performance Rights Oct 2018 - Jun 2019 Oct 2019 - Apr 2020 Total Total All Plans 5 5 5 5 5 2 2 2 2 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 488,034 543,263 616,292 691,182 - 2,338,771 - - - - 555,100 555,100 (488,034) (174,181) - - - (662,215) 9 - 9 - 7 7 (9) - (9) 58 - 58 2,874,851 - 73 73 1,023,396 (58) - (58) (662,282) - - - - - - - - - - - - - - - - - - - 536,013 468,216 1,004,229 - - (18,185) (63,857) (8,988) (91,030) - 369,082 598,107 627,325 546,112 2,140,626 - - - - 7 7 - (4) (4) (91,034) - 69 69 3,144,931 - - - - - - - - - - - - - - - - The following table summarises the weighted average exercise price for the SEEK Limited plans: : 2021 - SEEK Limited Opening balance Granted during the year Exercised during the year Lapsed during the year Forfeited during the year Closing balance Vested and exercisable at 30 June Weighted average exercise price $7.02 $8.50 2020 - SEEK Limited Weighted average exercise price $3.91 $10.61 - - - $12.55 $9.14 - - $7.02 - - The weighted average share price at the date of exercise of options exercised during the year ended 30 June 2021 was $27.94 (2020: $19.39). The weighted average remaining contractual life of share options outstanding at the end of the year was 3.1 years (2020: 3.1 years) Financial Report140 25. Share-based payments continued The following table shows the inputs for Wealth Sharing Plan Rights and Options granted during the year: Grant date 2021 2 November 2020 25 November 2020 12 March 2021 2020 23 September 2019 29 November 2019 6 March 2020 Expected price volatility of the company's shares Share price at grant date Expected dividend yield Expiry date 30 June 2025 30 June 2025 30 June 2025 $21.33 $26.18 $27.25 30 June 2024 30 June 2024 30 June 2024 $21.69 $23.19 $20.31 29% 29% 29% 25% 25% 25% 1.2% 0.9% 1.0% 1.7% 1.7% 1.7% Risk-free interest rate Rights Options 0.17% 0.17% n/a 0.21% 0.22% 0.39% Rights Options 0.74% 0.67% 0.38% 0.76% 0.69% n/a (d) Share option plans - OCC The table below summarises the movements in options over shares of Online Career Centre Mexico, S.A.P.I de CV. 2021 - OCC Number of options Grant date Schemes issued prior to FY2014 12 May 2014 Balance at 30 June 2021 Weighted average exercise price 2020 - OCC Schemes issued prior to FY2014 12 May 2014 Balance at 30 June 2020 Weighted average exercise price Expiry date (years) Exercise price (US$) 10 $145.00 10 $145.00 Opening balance 6,460 2,951 9,411 $124.44 6,460 2,951 9,411 $124.44 - - n/a - - n/a - - n/a - - n/a Granted during the year Exercised during the year Lapsed during the year Vested and exercisable at balance date 2,038 - 2,038 $144.56 Closing balance 2,038 - 2,038 $144.56 (4,422) (2,951) (7,373) $118.88 - - n/a 6,460 2,951 9,411 $124.44 6,460 2,951 9,411 $124.44 The weighted average remaining contractual life of share options outstanding at the end of the year was 1.0 years (2020: 1.9 years). (e) Share option plans - JobAdder The table below summarises the movements in options over shares of JobAdder Operations Pty Ltd. 2021 - JobAdder Number of options Grant date 1 July 2020 Balance at 30 June 2021 Weighted average exercise price Expiry date (years) Exercise price (AUD$) Opening balance Granted during the year Exercised during the year 4 $1,208.50 - - n/a 521 521 $1,208.50 - - n/a Expired/ lapsed during the year - n/a Closing balance 521 521 $1,208.50 Vested and exercisable at balance date - - n/a The weighted average remaining contractual life of share options outstanding at the end of the year was 3.0 years. SEEK Limited Annual Report 2021141 26. Related party transactions SEEK has identified the parties it considers to be related and the transactions conducted with those parties. Other than those disclosed below, no other related party transactions have been identified. (a) Transactions with equity accounted investments Dividends and distributions received from equity accounted investments Convertible loans advanced to equity accounted investments (i) Convertible loans repaid or converted to equity Revenue generated from equity accounted investments Interest expense from equity accounted investments Interest income from equity accounted investments 2021 $ 447,473 439,629 1,641,794 1,546,840 - 131,219 Restated 2020(1) $ 610,380 1,141,579 10,074,862 970,380 78,213 15,744 (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. (i) Convertible loans advanced to equity accounted investments Convertible loans have been advanced to certain equity accounted investments in SEEK. These loans are interest-bearing and, if converted, would convert to additional equity interests in existing investments. (b) Amounts outstanding from equity accounted investments Amounts receivable from equity accounted investments Provision for doubtful debts related to amounts receivable from equity accounted investments Amounts payable to equity accounted investments (1) See Note 2 Discontinued operations - comparative information has been restated due to the discontinued operations of Zhaopin and SEEK Growth Fund. (c) Transactions with key management personnel Short-term employee benefits Post-employment benefits Share-based employee benefits Other long-term benefits 2021 $ 1,489,033 61,374 1,123,618 Restated 2020(1) $ 1,803,848 - 1,380,722 2021 $ 6,715,370 164,382 7,114,111 499,847 14,493,710 2020 $ 6,600,930 172,630 6,277,142 278,383 13,329,085 (d) Transactions with Director related parties Some of the Non-Executive Directors hold directorships or positions in other companies or organisations. From time to time, SEEK may provide or receive services from these companies or organisations on arm’s length terms. None of the Non-Executive Directors were, or are, involved in any procurement or Board decision-making regarding the companies or organisations with which they have an association. Financial Report142 27. Remuneration of auditors During the year the following fees were paid or payable for services provided by the Auditor, its related practices and non-related audit firms: Audit services Audit services PricewaterhouseCoopers Australia Network firms of PricewaterhouseCoopers Australia Total remuneration for audit services Non-audit services Other assurance services PricewaterhouseCoopers Australia Total remuneration for other assurance services Taxation services PricewaterhouseCoopers Australia - compliance services Network firms of PricewaterhouseCoopers Australia - compliance services Network firms of PricewaterhouseCoopers Australia - due diligence services Total remuneration for taxation services Other services(1) PricewaterhouseCoopers Australia Network firms of PricewaterhouseCoopers Australia Total remuneration for other services Total remuneration for non-audit services 2021 $ 2020 $ 1,709,703 1,059,883 2,769,586 1,329,060 1,806,011 3,135,071 29,600 29,600 216,804 216,804 2,250 63,638 76,874 142,762 280,500 226,575 507,075 679,437 11,618 63,363 - 74,981 203,000 - 203,000 494,785 Total remuneration of Auditor 3,449,023 3,629,856 Non-PwC audit firms - services provided to Online Education Services Pty Ltd Audit services Other non-audit services Total remuneration of non-PwC audit firms(2) - - - - 3,600 3,600 (1) Other services provided by PwC comprises mainly due diligence services. (2) During the year the auditor of Online Education Services Pty Ltd was also engaged to provide non-audit services to other SEEK Group companies. 28. Other significant accounting policies (a) Principles of consolidation Subsidiaries are all entities (including structured entities) over which SEEK has control. SEEK controls an entity when SEEK is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to SEEK. They are deconsolidated from the date that control ceases. Joint ventures are all entities over which SEEK has joint control with one or more other investors. Joint control exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Investments in joint ventures are accounted for using the equity method of accounting, after initially being recognised at cost. Under the equity method, the investment is shown in one line on the balance sheet, with SEEK’s share of post-acquisition profits or losses recognised in profit or loss. Associates are all entities over which SEEK has significant influence but not control or joint control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are also accounted for using the equity method. Accounting policies of subsidiaries, associates and joint ventures have been changed where necessary to ensure consistency with the policies adopted by SEEK. SEEK Limited Annual Report 2021143 (b) Foreign currency translation (i) Functional and presentation currency Items included in the financial statements of each of SEEK’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 rate on that day. Non-monetary assets and liabilities are maintained at the exchange rate on the date of the transaction. Monetary assets and liabilities are translated into the functional currency at the year end exchange rate. Where there is a movement in the exchange rate between the date of the transaction and the date of settlement or the year end, a foreign exchange gain or loss may arise. This is recognised in the Consolidated Income Statement (within finance costs), unless the asset or liability is a qualifying cash flow hedge or net investment hedge, in which case it is deferred in equity. (iii) Group companies The results and financial position of all SEEK 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 (including goodwill and other fair value adjustments arising on acquisition) 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 using monthly average exchange rates; and • all resulting exchange differences are recognised in other comprehensive income. When a foreign operation is sold, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale. (c) Goods and Services Tax (GST) and Value Added Tax (VAT) Revenues, expenses and assets are recognised net of the amount of associated GST and VAT, unless the GST and VAT 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 and VAT receivable or payable. The net amount of GST and VAT 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. (d) Impairment of assets Assets other than goodwill and intangible 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 (which is the higher of the asset’s fair value less costs of disposal 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 (cash-generating units). (e) New and amended Accounting Standards and Interpretations (i) New and amended Accounting Standards and Interpretations issued and effective Refer to Note 29 Changes in accounting policies for the new Accounting Standards and Interpretations which became effective from 1 July 2020 and the corresponding impact of those changes on SEEK’s financial results. Apart from these changes, SEEK has not adopted any new or amended Accounting Standards and Interpretations this year that have had a material impact on the Company. (ii) Accounting Standards and Interpretations issued but not yet effective A number of new accounting standards, amendments to standards and interpretations, have also been issued and will be applicable in future periods. While these remain subject to ongoing assessment, no significant impacts on the financial statements of the Company have been identified to date. These standards have not been applied in the preparation of these Financial Statements. Financial Report144 29. Changes in accounting policies (a) Capitalisation of customisation and configuration costs incurred in implementing cloud computing arrangements During the year, the Group revised its accounting policy in relation to upfront configuration and customisation costs incurred in implementing cloud computing arrangements, in response to the International Accounting Standards Board (IASB) agenda decision clarifying its interpretation of AASB 138 Intangible Assets. The new accounting policy is presented in Note 12 Intangible assets. Historical financial information has been restated to account for the impact of the change retrospectively. (i) Consolidated Balance sheet as at 30 June 2020 Intangible assets Deferred tax asset Net assets Retained profits Total equity (ii) Consolidated Balance sheet as at 30 June 2019 Intangible assets Deferred tax asset Net assets Retained profits Total equity Published $m Adjustments $m 2,550.0 58.7 1,383.5 894.4 1,383.5 (2.1) 0.7 (1.4) (1.4) (1.4) Published $m Adjustments $m 2,719.5 46.0 1,694.4 1,133.3 1,694.4 (9.1) 2.8 (6.3) (6.3) (6.3) (iii) Consolidated Income Statement/ Statement of Comprehensive Income as at 30 June 2020 Total operating expenses Loss before income tax expenses Income tax expense Loss for the year (iv) Earnings per share at 30 June 2020 Published $m Adjustments $m (1,416.3) (46.2) (44.6) (90.8) (2.1) (2.1) 0.7 (1.4) Restated $m 2,547.9 59.4 1,382.1 893.0 1,382.1 Restated $m 2,710.4 48.8 1,688.1 1,127.0 1,688.1 Restated $m (1,418.4) (48.3) (43.9) (92.2) Basic earnings per share Diluted earnings per share (v) Consolidated Statement of Cash Flows as at 30 June 2020 Payments to suppliers and employees (inclusive of goods and services tax) Net cash inflow from operating activities Payment for intangible assets Net cash outflow from investing activities Published $m Adjustments $m (31.7) (32.6) (0.4) (0.4) Restated $m (32.1) (33.0) Published $m Adjustments $m (1,259.9) 304.3 (114.3) (260.9) (4.3) (4.3) 4.3 4.3 Restated $m (1,264.2) 300.0 (110.0) (256.6) SEEK Limited Annual Report 2021145 The financial statements have been prepared on the basis of accounting consistent with those applied in the 30 June 2020 Annual Report, with the exception of the following new standards and amendments, which became effective from 1 July 2020: • AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material (AASB 101 and AASB 108) • AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business (AASB 3) • AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform (AASB 9, AASB 139 and AASB 7) • AASB 2019-5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRS Standards Not Yet issued in Australia (AASB 1054) • Conceptual Framework for Financial Reporting and AASB 2019-1 Amendments to Australian Accounting Standards – References to the Conceptual Framework. Apart from as disclosed below, amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods. Interest Rate Benchmark Reform A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as ‘IBOR reform’). SEEK has exposures to IBORs on its financial instruments that will be replaced or reformed as part of these marketwide initiatives. There is uncertainty over the timing and the methods of transition in some jurisdictions that SEEK operates in. SEEK anticipates that IBOR reform will impact its risk management and hedge accounting. SEEK Treasury is managing SEEK’s IBOR transition plan. The greatest change will be amendments to the contractual terms of SEEK’s syndicated debt facility, which contains AUD BBSW and USD LIBOR-referenced floating-rate debt, and the associated interest rate swaps and corresponding update of hedge designations. SEEK expects that change to the interest rate benchmarks will not result in any significant modification gains or losses. However, the changed reference rate may also affect other systems, processes, risk and valuation models, as well as having tax and accounting implications. Relief applied SEEK has applied the following reliefs that were introduced by the amendments made to AASB 9 Financial Instruments in October 2019: • When considering the ‘highly probable’ requirement, SEEK has assumed that the IBOR interest rates on which SEEK’s hedged debt is based do not change as a result of IBOR reform. • In assessing whether the hedge is expected to be highly effective on a forward-looking basis, SEEK has assumed that the interest rates on which the cash flows of the hedged debt and the interest rate swaps that hedge it are based are not altered by IBOR reforms. • SEEK has not recycled the cash flow hedge reserve relating to the period after the reforms are expected to take effect. In calculating the change in fair value attributable to the hedged risk of floating-rate debt, SEEK has made the following assumptions that reflect its current expectations: • The floating-rate debt will move to the new IBOR rates during 2022 and the spread will be similar to the spread included in the interest rate swap used as the hedging instrument. • No other changes to the terms of the floating-rate debt are anticipated. • SEEK has incorporated the uncertainty over when the floating-rate debt will move to the IBOR reform rates, the resulting adjustment to the spread, and the other aspects of the reform that have not yet been finalised by adding an additional spread to the discount rate used in the calculation. No other changes were required to any of the amounts recognised in the current or prior period as a result of these amendments. Financial Report146 DIRECTORS’ DECLARATION In the directors’ opinion: a. the financial statements and notes set out on pages 81 to 145 are in accordance with the Corporations Act 2001, including: i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of its performance for the financial year ended on that date; and b. there are reasonable grounds to believe that SEEK Limited will be able to pay its debts as and when they become due and payable. Page 81 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the directors. Graham Goldsmith Chairman Melbourne 24 August 2021 SEEK Limited Annual Report 2021INDEPENDENT AUDITOR’S REPORT 147 Independent auditor’s report To the members of SEEK Limited Report on the audit of the financial report Our opinion In our opinion: The accompanying financial report of SEEK Limited (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year then ended (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. What we have audited The Group financial report comprises: • • • • • • • the consolidated balance sheet as at 30 June 2021 the consolidated statement of comprehensive income for the year then ended the consolidated statement of changes in equity for the year then ended the consolidated statement of cash flows for the year then ended the consolidated income statement for the year then ended the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information the directors’ declaration. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. PricewaterhouseCoopers, ABN 52 780 433 757 2 Riverside Quay, 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. Independent Auditor’s Report 148 Our audit approach An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates. Materiality • For the purpose of our audit we used overall Group materiality of $9 million. This represents approximately 5% of the Group’s continuing operations adjusted profit before tax, adjusted for significant infrequently occurring items such as impairment charges. • We applied this threshold, together with qualitative considerations, to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial report as a whole. • We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly acceptable thresholds. We chose Group continuing operations adjusted profit before tax because, in our view, it is the benchmark against which the performance of the Group is most commonly measured and best reflects the expected size and scale of the Group going forward. Audit Scope • Our audit focused on where the Group made subjective judgements; for example, significant accounting estimates involving assumptions and inherently uncertain future events. • Audits of the most financially significant operations being, SEEK Employment Australia, Zhaopin, SEEK Asia and Online Education Services, were conducted. • • Specified audit procedures over Brasil Online, OCC, Go1 and FutureLearn were conducted. The audit of Zhaopin for the period up to disposal was performed by auditors operating under our instruction (component auditors). • Where audit work was performed by component auditors, we determined the level of involvement we needed to have in their audit work to be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion. This included active dialogue throughout the year through phone calls, discussions and written instructions. We tailored our audit approach accordingly, considering factors SEEK Limited Annual Report 2021 149 such as differing regulations, compliance and tax regimes and sovereign risks in relation to foreign ownership. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. The key audit matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Further, any commentary on the outcomes of a particular audit procedure is made in that context. We communicated the key audit matters to the Audit and Risk Committee. Key audit matter Accounting for the partial disposal of Zhaopin (Refer to note 1 and 2 – segment information and discontinued operations) On 1 May, the Group disposed of 37.6% of its interests in Zhaopin, reducing its previously held controlling stake of 61.1% and retaining an interest of 23.5%. Zhaopin has been presented in the financial report as a discontinued operation up to the point of disposal. The Group has recognised a gain on sale of $628.9m which has been recorded in the Consolidated Income Statement, within discontinued operations. At the time of disposal, the Group’s retained interest in Zhaopin of 23.5% has been recorded at fair value of $521.1m as an equity accounted investment. The partial disposal was a key audit matter because of the transaction being non-routine and having significant impact to the financial statements. How our audit addressed the key audit matter We performed the following procedures amongst others: • Read the terms of the sale and purchase agreements. • Agreed the proceeds on sale to the bank statement and completion documents. • Assessed the carrying value of assets and liabilities sold. • With assistance from PwC tax specialists, considered the Group’s assessment of the taxation impact of the sale by evaluating the appropriateness of tax liabilities on the gain. • Evaluated the adequacy of the disclosures made in the financial statements in accordance with the requirements of Australian Accounting Standards. Classification of Assets held for sale and discontinued operations for SEEK Growth Fund disposal group (Refer to note 2) The investments expected to be subject to disposal into SEEK Growth Fund have been classified as held for sale. At this time the portfolio of assets are treated as a disposal group and measured at their carrying value. The financial results of these investments have We performed the following procedures amongst others: • Read the relevant business plans and board minutes to develop an understanding of the Group’s future intentions and probabilities of a disposal as at the date of assessment. • Evaluated the Group’s assessment criteria of classification as held for sale against the applicable Australian Accounting Standards. Independent Auditor’s Report 150 Key audit matter been presented in the financial report as discontinued operations for the year. This was considered a key audit matter because of the judgement required by the Group in determining the appropriateness of classifying the disposal group as held for sale. This assessment is complex due to the plans and intentions of the Group to deconsolidate the Fund in the future. There is judgement involved in determining the passing of control from SEEK to the Fund given the Fund is expected to run autonomously and hold key decision making rights, despite retaining the majority of financial interest in the Fund. Valuation of goodwill and indefinite lived intangible assets (Refer to note 12 - intangible assets) $1,017.6m Goodwill and $160.3m of indefinite lived intangible assets The year end Consolidated Balance Sheet includes $1,017.6m of goodwill and $160.3m of indefinite lived intangible assets that are subject to an annual impairment assessment by the Group. During the year, the Group recognised total impairment charges of $43.7m in relation to indefinite lived intangible assets. The Group’s annual impairment assessment is performed at the lowest level at which the Group could allocate the goodwill of an asset which generates cash flows that are largely independent of cash flows from other assets, which is referred to as a cash generating unit (CGU). The annual impairment assessment is also carried out on indefinite lived intangible assets. The valuation models used by the Group to perform the impairment assessment are based on cash flow forecasts that use key assumptions including, revenue, operating costs, capital expenditure assumptions, discount rates and terminal growth rates. Future cash flows are discounted using a post-tax discount rate specific to the individual CGU. The cash flow forecast How our audit addressed the key audit matter • Evaluated the adequacy of the disclosures made in the financial statements in accordance with the requirements of Australian Accounting Standards. We evaluated whether the allocation of the Group into CGUs was consistent with our knowledge of the Group’s operations and internal Group reporting. For the significant CGUs of Brasil Online, OCC and SEEK Asia, which are valued by the Group using fair value less costs of disposal models (the models), our audit procedures included, amongst others: • Testing the mathematical accuracy and integrity of the calculations in the models. • Considering the historical accuracy of the Group’s forecasts by comparing the forecasts used in the prior year models to the actual performance. • Assessing the forecasted cash flow growth assumptions including considering historic and current performance and the historic growth performance of similar established businesses within the SEEK portfolio. • Together with PwC valuation experts, comparing the forecast terminal growth rates (used to estimate future cash flows) and the post-tax discount rates used in the models to external market data. • Comparing the Group’s valuations to external data sources including broker reports. SEEK Limited Annual Report 2021 151 Key audit matter How our audit addressed the key audit matter has been derived from approved budgets and the Group’s long term forecasting. We considered the valuation of goodwill and indefinite lived intangible assets to be a key audit matter due to the size of the balances and because subjective changes in key assumptions can have a material impact on the valuation. • Evaluating the reasonableness of disclosures in the financial report in light of the requirements of Australian Accounting Standards. In particular, we considered the adequacy of the disclosures made in note 12 to the financial statements which explain that there is significant estimation uncertainty in relation to the valuation of goodwill and indefinite lived intangible assets. Our audit procedures over the valuation of, and accounting for, investments in unlisted equity instruments and equity accounted investments included: ● Inspecting a sample of signed shareholder agreements to develop an understanding of the underlying terms, arrangements and the appropriate accounting treatment. ● Assessing, for a sample of additions to new or existing equity accounted investments during the year, the Group's determination of whether it has significant influence, joint control or control. ● For equity accounted investments, considering the appropriateness of the Group’s impairment assessment against the requirements of Australian Accounting Standards. ● For investments in equity instruments, considering the appropriateness of the Group's valuation methodology against the requirements of Australian Accounting Standards. ● Evaluating the reasonableness of disclosures in the financial report in light of the requirements of Australian Accounting Standards. Valuation of, and accounting for, equity accounted investments and equity instruments (Refer to note 2 – discontinued operations, note 9 - financial instruments and fair value measurement and note 20 - interests in equity accounted investments) As at 30 June 2021 the Consolidated Balance Sheet includes investments accounted for under the equity method amounting to $562.4m, and investments in equity instruments amounting to $10.3m. Further to this, the Consolidated Balance Sheet includes Assets held for sale for SEEK Growth Fund disposal group. This includes other financial assets of $324.4m which are predominately made up of investment in equity instruments and $295.5m of investments accounted for under the equity method (see note 2(b)iii). The Zhaopin partial disposal (see Key Audit Matter above) has resulted in the recognition of an equity accounted investment of $521.1m (see note 2(b)iv). We considered the valuation of, and accounting for, equity accounted investments and other unlisted equity instruments a key audit matter due to the: ● Large number of investments held by the Group, each with varying terms, which creates complexity in determining the appropriate accounting treatment. ● Subjectivity and judgement required by the Group in determining the carrying value for equity Independent Auditor’s Report 152 Key audit matter How our audit addressed the key audit matter accounted investments and the fair value for equity instruments. Other information The directors are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2021, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors 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 gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: SEEK Limited Annual Report 2021 153 https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our auditor's report. Report on the remuneration report Our opinion on the remuneration report We have audited the remuneration report included in pages 23 to 40 of the directors’ report for the year ended 30 June 2021. In our opinion, the remuneration report of SEEK Limited for the year ended 30 June 2021 complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards. PricewaterhouseCoopers Chris Dodd Partner Melbourne 24 August 2021 Independent Auditor’s Report 154 SHAREHOLDER INFORMATION The shareholder information set out below was applicable as at 10 September 2021. A. Distribution of shareholders Analysis of numbers of ordinary shareholders by size of holding: Range 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 + Rounding Total Total holders Shares % of Issued Capital 19,741 6,922 833 431 60 6,710,162 15,149,567 5,835,738 8,973,560 317,171,163 27,987 353,840,190 1.90 4.28 1.65 2.54 89.64 (0.01) 100.00 There were 412 holders of less than a marketable parcel of ordinary shares. B. Twenty largest quoted equity security holders The names of the twenty largest registered holders of quoted equity securities are listed below: Name HSBC Custody Nominees (Australia) Limited JP Morgan Nominees Australia Pty Limited Citicorp Nominees Pty Limited National Nominees Limited BNP Paribas Nominees Pty Ltd (Agency Lending DRP a/c) Kiteford Pty Ltd (Andrew Bassat Family a/c) BNP Paribas Noms Pty Ltd (DRP) Mr Andrew Reuven Bassat Australian Foundation Investment Company Limited HSBC Custody Nominees (Australia) Limited (NT-Comnwlth Super Corp a/c) BNP Paribas Nominees Pty Ltd Six Sis Ltd (DRP a/c) Netwealth Investments Limited (Wrap Services a/c) Citicorp Nominees Pty Limited (Colonial First State Inv a/c) Mutual Trust Pty Ltd Mr Roger William Allen Netherlane Pty Ltd (Paul Bassat Family a/c) BNP Paribas Noms (NZ) Ltd (DRP) Pacific Custodians Pty Limited (SEK Plans Ctrl a/c) BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd (DRP a/c) Pacific Custodians Pty Limited (Employee Share Tst a/c) Top 20 holders of ordinary fully paid shares (total) Other shareholders Total Unquoted equity securities Options/rights issued to take up ordinary shares under SEEK’s equity plans: Wealth Sharing Plan Rights Wealth Sharing Plan Options Restricted Rights (1) (1) Restricted Rights are issued to Malaysian-based SEEK Equity Plan participants in lieu of Deferred Shares. Ordinary Shares Number Held 117,504,116 74,418,360 39,421,734 22,781,866 14,025,011 11,250,113 6,144,409 3,817,982 3,640,633 2,421,893 1,876,087 1,800,811 1,648,475 1,147,061 1,012,720 1,011,245 991,653 966,208 690,374 636,952 307,207,703 46,632,487 353,840,190 % of Issued Capital 33.21 21.03 11.14 6.44 3.96 3.18 1.74 1.08 1.03 0.68 0.53 0.51 0.47 0.32 0.29 0.29 0.28 0.27 0.20 0.18 86.82 13.18 100.00 Number held 1,377,534 1,217,541 20,797 Number of holders 32 7 6 SEEK Limited Annual Report 2021Shareholder Information 155 C. Substantial Holders Substantial holders in the company are set out below: FIL Limited and FIL Investment Management (Australia) Limited BlackRock Inc and subsidiaries Pinnacle Investment Management Group Limited and subsidiaries Number held(1) 25,709,706 21,321,645 18,104,437 % issued capital 7.27 6.03 5.12 (1) Number of shares held by substantial shareholders is based on the most recent notifications lodged by substantial shareholders with the ASX. D. Voting Rights The voting rights attaching to each class of equity securities are set out below: Ordinary shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. Wealth Sharing Plan Options and Rights No voting rights. Restricted Rights No voting rights. Five Year Financial Summary156 FIVE YEAR FINANCIAL SUMMARY Operating Results Sales revenue from continuing operations ANZ SEEK Asia Brasil Online OCC SEEK Learning AP&A Other Zhaopin Online Education Services Early Stage Ventures Sales revenue from discontinued operations Zhaopin SEEK Growth Fund Total sales revenue Segment EBITDA from continuing operations(2) Segment EBITDA from discontinued operations(2) Total Segment EBITDA(2) Total Segment EBITDA to sales (%) Share of results of equity accounted investments from continuing operations Share of results of equity accounted investments from discontinued operations Net profit after tax from continuing operations Net profit after tax from discontinued operations Total Net profit after tax (NPAT) Non-controlling interests from continuing operations Non-controlling interests from discontinued operations Profit for the year attributable to owners of SEEK Limited from continuing operations Profit for the year attributable to owners of SEEK Limited from discontinued operations Total Profit for the year attributable to owners of SEEK Limited 2021 $m 2020(1) $m 2019 $m 2018 $m 2017 $m 541.0 145.6 30.5 19.2 - 1.2 - - 387.2 162.9 52.4 25.1 - 2.0 - - 22.8 21.0 577.1 253.7 749.6 177.2 440.0 176.6 64.1 26.5 - 2.5 647.9 127.5 52.2 n/a n/a 409.7 151.8 74.9 29.0 - 19.2 468.1 119.4 27.4 n/a n/a 355.9 139.7 87.3 29.4 2.6 14.0 372.9 28.0 5.4 n/a n/a 1,591.1 1,577.4 1,537.3 1,299.5 1,035.2 n/a n/a 455.0 29.6% (16.5) n/a n/a n/a 198.4 n/a n/a 431.2 33.2% (6.2) n/a n/a n/a 90.0 n/a n/a 362.3 35.0% 4.3 n/a n/a n/a 362.0 (18.1) (37.8) (21.8) 332.0 141.6 473.6 29.8% 4.1 (8.7) 104.5 669.4 773.9 0.4 (22.1) 104.9 647.3 752.2 255.1 155.5 410.6 26.0% (8.8) (31.1) (123.3) 31.1 (92.2) 2.1 (23.0) (121.2) 8.1 n/a n/a n/a (113.1) 180.3 Balance Sheet Current assets(3) Non-current assets Total assets Current liabilities(4) Non-current liabilities Total liabilities Net assets Equity Gearing (debt/debt+equity) 2,338.0 2,262.6 4,600.6 1,284.1 1,397.8 2,681.9 1,918.7 1,918.7 36.6% 817.2 3,511.6 4,328.8 961.3 1,991.7 2,953.0 1,375.8 1,375.8 58.5% 693.2 3,557.0 4,250.2 904.6 1,651.2 2,555.8 1,694.4 1,694.4 48.6% n/a n/a n/a 52.2 618.2 3,165.8 3,784.0 774.1 1,384.9 2,159.0 1,625.0 1,625.0 44.4% n/a n/a n/a 340.2 841.9 2,841.1 3,683.0 550.0 1,093.1 1,643.1 2,039.9 2,039.9 32.2% SEEK Limited Annual Report 2021Shareholder Information 157 Per ordinary share Dividends - interim (cents per share) Dividends - other (cents per share) Dividends - final (cents per share) Dividends - total (cents per share) Basic earnings from continuing operations (cents per share) Basic earnings from discontinued operations (cents per share) Total Basic earnings (cents per share) Diluted earnings from continuing operations (cents per share) Diluted earnings from discontinued operations (cents per share) Total Diluted earnings (cents per share) 2021 2020(1) - 20.0 20.0 40.0 29.7 183.3 213.0 29.6 182.0 211.6 13.0 - - 13.0 (34.3) 2.2 (32.1) (34.2) 1.2 (33.0) 2019 24.0 - 22.0 46.0 n/a n/a 51.3 n/a n/a 50.1 2018 24.0 - 22.0 46.0 n/a n/a 14.9 n/a n/a 13.8 2017 23.0 - 21.0 44.0 n/a n/a 97.9 n/a n/a 96.6 (1) Certain amounts reported for FY2020 have been restated for discontinued operations and a change in accounting policy. Refer to Note 2 Discontinued Operations and Note 29 Changes in accounting policies, respectively, for detailed information. (2) Segment EBITDA is earnings before interest, tax, depreciation and amortisation and excludes impairment charges, share-based payment expense, share of results of equity accounted investments, gains/losses on investing activities and other non-operating gains/losses. (3) At 30 June 2021, this amount includes assets deemed to be held for sale of $1,064.5m attributable to the SEEK Growth Fund disposal group. Refer to Note 2 Discontinued Operations for further details of what comprises this amount. (4) At 30 June 2021, this amount includes liabilities directly associated with the assets deemed to be held for sale of $69.1m attributable to the SEEK Growth Fund disposal group. Refer to Note 2 Discontinued Operations for further details of what comprises this amount. Five Year Financial Summary158158 SEEK Limited Annual Report 2021 OUR PURPOSE: We help people live more fulfilling and productive working lives and help organisations succeed. SEEK Limited Annual Report 2021 Directors Graham B Goldsmith Chairman Ian M Narev Managing Director and Chief Executive Officer Andrew R Bassat Julie A Fahey Leigh M Jasper Linda J Kristjanson Michael H Wachtel Vanessa M Wallace Rachel Agnew Secretary Principal registered office in Australia 60 Cremorne Street Cremorne VIC 3121 AUSTRALIA 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 2 Riverside Quay SOUTHBANK VIC 3006 Stock exchange listing SEEK Limited shares are listed on the Australian Securities Exchange (Listing code: SEK) Website www.seek.com.au ABN 46 080 075 314 Pacesetter Laser Recycled is 30% recycled and made from elemental chlorine free bleached pulp sourced from sustainably managed sources. It is manufactured by an ISO certified mill. This Annual Report was printed in Australia by an organisation that is both ISO14001 (Environmental) and ISO9001 (Quality) independently certified. ABN 46 080 075 314 SEEK Limited Annual Report 2018 159 Corporate Directoryseek.com.au seek.co.nz seekbusiness.com.au seek.com.au/learning volunteer.com.au au.gradconnection.com jobsdb.com jobstreet.com jora.com certsy.com sourcr.com jobkorea.co.kr catho.com.br occ.com.mx zhaopin.com jobadder.com oes.edu.au futurelearn.com coursera.org avenulearning.com utel.edu.mx alura.com.br go1.com employmenthero.com hibob.com sidekicker.com jobandtalent.com florence.co.uk workana.com

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