##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 20-F
 o
    
    Registration statement pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934
 or
 þ
    
    Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended June 30, 2008
 or
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 or
 o
    
    Shell company report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of event requiring this shell company report
 Commission file number: 001-33983
 
 SIMS METAL MANAGEMENT LIMITED
  
 Victoria, Australia
 110 Fifth Avenue, Suite 700
New York, NY 10011
 Frank M. Moratti, Company Secretary and Legal Counsel
(61 2) 9956-9100; Frank.Moratti@simsmm.com
 Securities registered or to be registered pursuant to Section 12(b) of the Act.
 Title of each class
    
    Name of each exchange on which registeredOrdinary Shares 
American Depositary Shares, each 
representing one ordinary share
    
    New York Stock Exchange*
New York Stock Exchange
  
  
  
   
  o þ
 
  o þ
 
  þ o
 
  o o þ
  o  þ  o
  o o
  o þ




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##### 



TABLE OF CONTENTS
 PagePART IItem 1.
    
    Identity of Directors, Senior Management and Advisors
    
    
    3Item 2.
    
    Offer Statistics and Expected Timetable
    
    
    3Item 3.
    
    Key Information
    
    
    3Item 4.
    
    Information on the Company
    
    
    15Item 4A.
    
    Unresolved Staff Comments
    
    
    26Item 5.
    
    Operating and Financial Review and Prospects
    
    
    27Item 6.
    
    Directors, Senior Management and Employees
    
    
    38Item 7.
    
    Major Shareholders and Related Party Transactions
    
    
    47Item 8.
    
    Financial Information
    
    
    48Item 9.
    
    The Offer and Listing
    
    
    51Item 10.
    
    Additional Information
    
    
    53Item 11.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    62Item 12.
    
    Description of Securities Other than Equity Securities
    
    
    62PART IIItem 13.
    
    Defaults, Dividend Arrearages and Delinquencies
    
    
    63Item 14.
    
    Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    63Item 15.
    
    Controls and Procedures
    
    
    63Item 16A.
    
    Audit committee financial expert
    
    
    64Item 16B.
    
    Code of Ethics
    
    
    65Item 16C.
    
    Principal Accountant Fees and Services
    
    
    65Item 16D.
    
    Exemptions from the Listing Standards for Audit Committees
    
    
    66Item 16E.
    
    Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    66PART IIIItem 17.
    
    Financial Statements
    
    
    67Item 18.
    
    Financial Statements
    
    
    67Item 19.
    
    Exhibits
    
    
    67EX-4.14EX-4.15EX-4.16EX-4.17EX-8.1EX-12.1EX-12.2EX-13.1




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EXPLANATORY NOTE
      FORWARD LOOKING STATEMENTS
     
    
    current disruption in credit markets;
    
    cyclicality and volatility in the metal recycling industry;
    
    exposure to changes in commodity prices, currency exchange rates and interest rates;
 1




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
    
    loss of export sales and increased competition from containerized recycled metal
exports;
    
    exposure to customer credit risks;
    
    availability of adequate sources of material supply;
    
    failures to comply with or other liabilities incurred pursuant to applicable laws,
including applicable environmental laws;
    
    the loss of senior executive employees or managers;
    
    labor problems;
    
    costs and risks associated with defined benefit pension plans and other employee
benefits;
    
    goodwill impairment and other financial and accounting issues;
    
    compliance costs and other risks relating to internal control over financial
reporting;
    
    existing and future litigation; and
    
    the risks of global operations, including international hostilities.
  2




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PART I
 
 Item 1. Identity of Directors, Senior Management and Advisors
  
 Item 2. Offer Statistics and Expected Timetable
  
 Item 3. Key Information
 A. Selected financial data
  Selected Financial Data
    3




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As of and for the fiscal years ended June 30,2008
    
    
    2007
    
    
    2006
    
    
    2005A$
    
    
    A$
    
    
    A$
    
    
    A$(in thousands, except per share data)Income Statement data in accordance with IFRS:Revenue from continuing operations
    
    
    7,670,536
    
    
    
    5,550,897
    
    
    
    3,754,509
    
    
    
    2,565,603Profit before income tax
    
    
    651,830
    
    
    
    356,165
    
    
    
    270,864
    
    
    
    283,664Profit attributable to members of Sims
    
    
    433,162
    
    
    
    239,352
    
    
    
    186,369
    
    
    
    195,662Basic earnings per share (cents)
    
    
    306.0
    
    
    
    191.6
    
    
    
    165.1
    
    
    
    214.8Diluted earnings per share (cents)
    
    
    303.0
    
    
    
    190.5
    
    
    
    164.6
    
    
    
    214.6Weighted average number of shares outstanding
(in thousands)
    
    
    141,574
    
    
    
    124,916
    
    
    
    112,857
    
    
    
    91,086Weighted average number of diluted shares
outstanding (in thousands)
    
    
    142,949
    
    
    
    125,620
    
    
    
    113,193
    
    
    
    91,180Balance Sheet data in accordance with IFRS:Total current assets
    
    
    2,014,457
    
    
    
    792,820
    
    
    
    711,641
    
    
    
    411,158Total assets
    
    
    4,816,972
    
    
    
    2,199,078
    
    
    
    1,252,540
    
    
    
    899,815Total current liabilities
    
    
    1,125,990
    
    
    
    439,586
    
    
    
    386,239
    
    
    
    229,572Borrowings
    
    
    496,633
    
    
    
    341,326
    
    
    
    301,459
    
    
    
    98,946Total liabilities
    
    
    1,854,884
    
    
    
    919,648
    
    
    
    779,102
    
    
    
    383,658Total equity
    
    
    2,962,088
    
    
    
    1,279,430
    
    
    
    1,196,766
    
    
    
    517,526
 Exchange Rate Data
  Period
    
    
    Average
    
    
    Highest
    
    
    Lowestend Rate
    
    
    Rate
    
    
    Rate
    
    
    RateFor the year ended June 30:2008
    
    
    0.9562
    
    
    
    0.9042
    
    
    
    0.9644
    
    
    
    0.78602007
    
    
    0.8491
    
    
    
    0.7925
    
    
    
    0.8491
    
    
    
    0.74072006
    
    
    0.7423
    
    
    
    0.7472
    
    
    
    0.7781
    
    
    
    0.70562005
    
    
    0.7618
    
    
    
    0.7568
    
    
    
    0.7974
    
    
    
    0.68802004
    
    
    0.6952
    
    
    
    0.7155
    
    
    
    0.7979
    
    
    
    0.6390For the month ended:November 2008
    
    
    0.6546
    
    
    
    0.6591
    
    
    
    0.7005
    
    
    
    0.6191October 2008
    
    
    0.6574
    
    
    
    0.6871
    
    
    
    0.7937
    
    
    
    0.6073September 2008
    
    
    0.7904
    
    
    
    0.8168
    
    
    
    0.8441
    
    
    
    0.7831August 2008
    
    
    0.8563
    
    
    
    0.8815
    
    
    
    0.9317
    
    
    
    0.8553July 2008
    
    
    0.9415
    
    
    
    0.9620
    
    
    
    0.9797
    
    
    
    0.9415June 2008
    
    
    0.9562
    
    
    
    0.9511
    
    
    
    0.9610
    
    
    
    0.9342May 2008
    
    
    0.9551
    
    
    
    0.9492
    
    
    
    0.9644
    
    
    
    0.9338
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Dividends
   Fiscal year ended
    
    Interim
    
    
    Final
    
    
    Special
    
    
    Total(in A$ per share)June 30, 2008
    
    
    0.55
    
    
    
    0.65
    
    
    
    0.10
    
    
    
    1.30June 30, 2007
    
    
    0.60
    
    
    
    0.60
    
    
    
    
    
    
    
    1.20June 30, 2006
    
    
    0.45
    
    
    
    0.60
    
    
    
    
    
    
    
    1.05June 30, 2005
    
    
    0.70
    
    
    
    0.70
    
    
    
    0.20
    
    
    
    1.60June 30, 2004
    
    
    0.26
    
    
    
    0.60
    
    
    
    
    
    
    
    0.86
   B. Capitalization and Indebtedness
  C. Reasons for the Offer and Use of Proceeds
  D. Risk Factors
 Additional risks and uncertainties that are presently unknown or deemed to be immaterial may also
adversely affect our business operations.
 The current unprecedented disruptions in the credit and equity markets worldwide may impede or
prevent our access to the capital markets for additional funding to expand or operate our business
and may affect the availability or cost of borrowing under our existing or future credit
facilities. Additionally, we believe the disruptions in the credit markets  have contributed to
rapidly falling commodity prices, which have had an adverse impact on our revenues and results of
operations.
  5




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Our business may be adversely affected by a general economic slowdown or recession in the U.S., the
United Kingdom and other countries.
  The metal recycling industry has historically been, and is expected to remain, highly cyclical and
demand from individual export markets, which are important to us, is volatile and we believe the
regions in which we operate are currently, or will soon be, in recession and the downturn could be
severe.
  We are subject to significant risks relating to changes in commodity prices, currency exchange
rates and interest rates, and may not be able to effectively protect against these risks.
  6




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The loss of export sales could adversely affect our results of operations and financial condition.
  We are subject to competition from containerized recycled metal exports which negatively affects
our port operations and marketing programs.
  The termination of material customer contracts could have a material adverse effect on our results
of operations and financial condition.
  7




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Potential credit losses from significant customers could adversely affect our results of operations
and financial condition.
  We rely in part on lines of credit from commercial banks to finance our operations, and our results
of operations and financial condition would be materially adversely affected if we are unable to
continue to have access to bank financing on acceptable terms.
   8




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The profitability of our metal recycling operations depends, in part, on the availability of an
adequate source of supply.
  A significant increase in the use of substitute materials by consumers of processed recycled
ferrous metal could reduce demand for our products.
  Our operations are subject to extensive governmental regulation in each of the jurisdictions in
which we operate.
  Our operations are subject to stringent environmental laws and regulations.
  
    
    the acceptance, storage, treatment, handling and disposal of solid, hazardous and toxic
waste;
    
    the discharge of materials into the air;
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
    
    the management and treatment of wastewater and storm water;
    
    the remediation of soil and groundwater contamination; and
    
    the protection of employee health and safety.
     Our operations generate waste that is required to be treated, stored and disposed of in accordance
with applicable environmental laws.
   10




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We may have potential environmental investigation and cleanup liabilities.
  We do not have environmental impairment insurance, except in limited amounts for specific
circumstances.
  Our operations present risk of injury or death.
  The loss of any member of our senior management team or a significant number of our managers could
have a material adverse effect on our results of operations and financial condition.
  11




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We may not be able to negotiate future labor contracts on favorable terms.
  We are obligated to contribute to defined benefit pension plans, some of which are underfunded.
  The mergers with Metal Management and Hugo Neu Corporation and the diversification into e-recycling
and the formation of the SA Recycling joint venture have significantly changed the scope and scale
of our company requiring many organizational changes involving board structure, management
structure, and marketing strategies which are complex and which introduce implementation risks.
  If we were to lose our foreign private issuer status under U.S. federal securities laws, we would
likely incur additional expenses associated with compliance with the U.S. securities laws
applicable to U.S. domestic issuers.
  12




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We are incurring higher expense related to the amortization of intangible assets and may be
required to report losses resulting from the impairment of goodwill or other assets recorded in
connection with completed or future acquisitions which in the aggregate approximate A$1.5 billion
as of June 30, 2008.
  Prior to our merger with Metal Management, Sims was not subject to Securities and Exchange
Commission rules. We will incur significant expenditures and investment of senior management time
with respect to our internal controls to ensure compliance with the requirements of Section 404 of
the Sarbanes Oxley Act of 2002.
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We are exposed to the risk of legal claims and other liabilities that may have a material adverse
effect on our results of operations and financial condition.
  Our tax liabilities may substantially increase if the tax laws and regulations in the countries in
which we operate change or become subject to adverse interpretations or inconsistent enforcement.
  Our operations are subject to risks and uncertainties relating to international conflicts and
terrorism.
  Our largest shareholder has significant influence over transactions requiring shareholder approval.
  14




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Item 4. Information on the Company
 A. History and development of the company
       15




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
    
    October 2005, we merged with entities operating certain of the recycling businesses of
Hugo Neu Corporation, or Hugo Neu, in the United States;
    
    December 2006, we acquired Cymru Metals Recycling in the United Kingdom;
    
    January 2007, we acquired the operating assets of Menzies Metals Recycling in Australia;
    
    August 2007, we acquired the operating assets of McInerney Metals in Australia;
    
    September 2007, we were a party to the creation of a joint venture with Adams Steel LLC
in the United States, named SA Recycling;
    
    October 2007, we acquired the operating assets of ER Coley (Steel) in the United
Kingdom;
    
    May 2008, SA Recycling acquired Pacific Coast Recycling, LLC in the United States;
    
    June 2008, we acquired the operating assets of Evans and Mondon Limited in the United
Kingdom;
    
    September 2008, SA Recycling acquired a 70% interest in Silver Dollar Recycling in the
United States; and
    
    September 2008, we acquired the operating assets of Weinert Recycling in the United
States.
  
    
    October 2004, we acquired the Mirec Group, or Mirec, in The Netherlands;
    
    October 2006, we acquired Metall + Recycling, or M&R, in Germany;
    
    February 2007, we acquired United Recycling Industries, or URI, in the United States;
    
    April 2007, we acquired the e-recycling assets of Noranda Recycling, or Noranda, in the
United States;
    
    November 2007, we acquired Trishyiraya Recycling Private Limited, or Trishyiraya in
India;
    
    January 2008, we acquired the operating assets of RecommIT Limited, or RecommIT, in the
United Kingdom;
    
    January 2008, we acquired Accu-Shred Limited in Canada;
    
    April 2008, we acquired Life Cycle Services, or LCS, in the United Kingdom;
    
    June 2008, we acquired the operating assets of Clearhouse Technology Pty Ltd, or
Clearhouse, in Australia; and
    
    October 2008, we acquired Global Investment Recovery, Inc, or GRI, in the United States.
   16




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B. Business overview
    
    
    North America  comprising the United States of America and Canada.
    
    Australasia  comprising Australia, New Zealand, Papua New Guinea and Asia.
    
    Europe  comprising the United Kingdom, Sweden, Holland and Germany.
  
    
    Ferrous secondary recycling  comprising the collection, processing and trading of iron
and steel secondary raw material.
    
    Non-ferrous secondary recycling  comprising the collection, processing and trading of
other metal alloys and residues, principally aluminum, lead, copper, zinc and nickel
bearing materials.
    
    Secondary processing  comprising value added process involving the melting, refining
and ingoting of certain non-ferrous metals and the reclamation and reprocessing of
plastics.
    
    Recycling solutions  comprising the provision of environmentally responsible solutions
for the disposal of post consumer products. We offer fee for service business
opportunities in the environmentally responsible recycling of negative value materials
including refrigerators, electrical and electronic equipment, and tires.
 17




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Fiscal years ended June 30,2008
    
    
    
    
    
    
    2007
    
    
    
    
    
    
    2006(in thousands)
    
    A$
    
    
    %
    
    
    A$
    
    
    %
    
    
    A$
    
    
    %Net sales by geography:Australasia
    
    
    1,745,109
    
    
    
    23
    %
    
    
    1,465,383
    
    
    
    26
    %
    
    
    1,224,700
    
    
    
    33
    %North America
    
    
    4,607,898
    
    
    
    60
    %
    
    
    2,938,246
    
    
    
    53
    %
    
    
    1,735,204
    
    
    
    46
    %Europe
    
    
    1,312,584
    
    
    
    17
    %
    
    
    1,144,891
    
    
    
    21
    %
    
    
    792,503
    
    
    
    21
    %Net sales
    
    
    7,665,591
    
    
    
    100
    %
    
    
    5,548,520
    
    
    
    100
    %
    
    
    3,752,407
    
    
    
    100
    %Net sales by product group:Ferrous metals
    
    
    5,178,847
    
    
    
    67
    %
    
    
    3,319,031
    
    
    
    60
    %
    
    
    2,259,112
    
    
    
    60
    %Non-ferrous metals
    
    
    1,657,455
    
    
    
    22
    %
    
    
    1,623,139
    
    
    
    29
    %
    
    
    1,082,681
    
    
    
    29
    %Secondary processing
    
    
    252,297
    
    
    
    3
    %
    
    
    155,846
    
    
    
    3
    %
    
    
    159,408
    
    
    
    4
    %Recycling solutions
    
    
    576,992
    
    
    
    8
    %
    
    
    450,504
    
    
    
    8
    %
    
    
    251,206
    
    
    
    7
    %Net sales
    
    
    7,665,591
    
    
    
    100
    %
    
    
    5,548,520
    
    
    
    100
    %
    
    
    3,752,407
    
    
    
    100
    %
 Metal Recycling
 Industry Overview
     Our Metal Recycling Operations
   18




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North America
  Australasia
  Europe
  Marketing
   Sims Recycling Solutions
  19




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North America
     20




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Europe
     Australasia
    Secondary Processing
  21




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Sources and Availability of Raw Materials
 Metal Recycling
  
    
    obsolete metal which is sourced from metal dealers, peddlers (individuals that
constitute Simss retail trade), auto wreckers, demolition firms, railroads and others who
generate steel or non-ferrous metals; and
    
    industrial generated materials which are sourced mainly from manufacturers who generate
off cuts or by-products made from steel, iron or non-ferrous metals, known as prompt or
industrial metal.
  Sims Recycling Solutions
  
    
    manufacturers of post-consumer electronic products who must comply with specific end of
life disposal requirements under legislation such as the WEEE Directive;
    
    the business community for remarketable, reusable or recyclable electronic and
electrical products; and
    
    curbside collections, through contracts such as the New York City recycling contract.
  Government Regulation
  22




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Environmental Matters
   Sustainability
      Seasonality
  23




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Patents and Trademarks
  C. Organizational Structure
  D. Property, Plant and Equipment
    AUSTRALASIAN SITES
 Location
    

Leased or Owned
    

Principal ActivitiesCanberra, Australian Capital Territory,
Australia
    
    Leased
    
    metal recycling yardAlexandria, New South Wales, Australia
    
    Owned (50% interest)
    
    ARA secondary lead smelting operationMilperra, New South Wales, Australia
    
    Owned
    
    metal recycling yardSt. Marys, New South Wales, Australia
    
    Owned
    
    metal recycling yard/ shredder/Villawood, New South Wales, Australia
    
    Leased
    
    e-recycling facilityWetherill Park, New South Wales, Australia
    
    Owned
    
    metal recycling yardDarwin, Northern Territory, Australia
    
    Owned
    
    metal recycling yardGladstone, Queensland, Australia
    
    Owned
    
    metal recycling yardNorthgate, Queensland, Australia
    
    Owned
    
    metal recycling yardRocklea, Queensland, Australia
    
    Owned
    
    metal recycling yard/ shredderTownsville, Queensland, Australia
    
    Leased
    
    metal recycling yardGillman, South Australia, Australia
    
    Owned
    
    metal recycling yard/ shredderBell Bay, Tasmania, Australia
    
    Leased
    
    metal recycling yardBraeside, Victoria, Australia
    
    Leased
    
    e-recycling facilityBroadmeadows, Victoria, Australia
    
    Owned
    
    metal recycling yardBrooklyn, Victoria, Australia
    
    Owned
    
    metal recycling yard/ shredderLaverton North, Victoria, Australia
    
    Owned
    
    Secondary aluminium/ melting & processing operationLaverton North, Victoria, Australia
    
    Owned (50% interest)
    
    ARA secondary lead smelting operation
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Location
    
    Leased or Owned
    
    Principal ActivitiesMoolap, Victoria, Australia
    
    Owned
    
    Aluminium salt slag recovery plantNoble Park, Victoria, Australia
    
    Owned
    
    metal recycling yardSomerton, Victoria, Australia
    
    Owned
    
    Tire recycling facilityKarratha, Western Australia, Australia
    
    Owned
    
    metal recycling yard/ feeder yardSpearwood, Western Australia, Australia
    
    Owned
    
    metal recycling yard/ shredder/ e-recyclingChristchurch, New Zealand
    
    Owned (50% interest)
    
    metal recycling yard/ shredderWellington, New Zealand
    
    Owned (50% interest)
    
    metal recycling yardAuckland, New Zealand
    
    Owned (50% interest)
    
    metal recycling yard/ shredderEUROPEAN SITESLocation
    
    Leased or Owned
    
    Principal ActivitiesEuropark Nord, Sint Niklaas, Belgium
    
    Leased
    
    e-recycling facilityRathenaustrasse, Bergkamen, Germany
    
    Owned
    
    e-recycling facilityDillenburgstraat, Eindhoven,
Netherlands
    
    Owned
    
    e-recycling facilitySint Janskamp, Echt, Netherlands
    
    Leased
    
    e-recycling facilityKarosserigatan, Katrineholm, Sweden
    
    Leased
    
    e-recycling facilityAvonmouth, Bristol, UK
    
    Leased
    
    metal recycling yard/dock/shredderDunkirk, Nottingham, UK
    
    Owned
    
    metal recycling yard/shredderLongside Industrial Estate,
Dumfries, UK
    
    Owned
    
    e-recycling facilityLong Marston, Stratford upon Avon,
UK
    
    Leased
    
    UK head office, metal recycling yard/ dense media plant/ R & D centreSouth Dock, Newport, UK
    
    Leased
    
    metal recycling yard/ dock/ shredder/ fridges processing and
e-recycling facilityWimborne, Dorset, UK
    
    Owned
    
    metal recycling yard/ shredderYateley, Hants, UK
    
    Owned
    
    metal recycling yard/shredderNORTH AMERICAN SITESLocation
    
    Leased or Owned
    
    Principal ActivitiesRichmond, British Columbia, Canada
    
    Leased (50% owned
joint venture)
    
    metal recycling yard/ shredderBrampton, Ontario, Canada
    
    Leased
    
    e-recycling facilityBirmingham, Alabama, USA
    
    Owned
    
    metal recycling yard/shredderPhoenix, Arizona, USA
    
    Owned
    
    metal recycling yard/shredderTucson, Arizona, USA
    
    Owned
    
    metal recycling yard/shredderRichmond, California, USA
    
    Owned
    
    metal recycling yardAnaheim, California, USA
    
    Owned (50% owned
joint venture)
    
    metal recycling yard/ shredderBakersfield, California, USA
    
    Owned (50% owned
joint venture)
    
    metal recycling yard/shredderFontana, California, USA
    
    Owned (50% owned
joint venture)
    
    metal recycling yardHayward, California USA
    
    Leased
    
    e-recycling facilityLong Beach, California, USA
    
    Leased (50% owned
joint venture)
    
    metal recycling yardRedwood City, California, USA
    
    Leased
    
    metal recycling yard/ shredderRoseville, California, USA
    
    Leased
    
    e-recycling facility
 25




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Location
    

Leased or Owned
    

Principal
ActivitiesSacramento, California, USA
    
    Leased
    
    metal recycling yardSan Jose, California, USA
    
    Leased
    
    metal recycling yardSun Valley, California, USA
    
    Leased (50% owned
joint venture)
    
    metal recycling yardTerminal Island, California, USA
    
    Leased (50% owned
joint venture)
    
    metal recycling yard/ shredderDenver, Colorado, USA
    
    Owned
    
    metal recycling yard/ shredderHartford, Connecticut, USA
    
    Leased
    
    metal recycling yardNorth Haven, Connecticut, USA
    
    Owned
    
    metal recycling yard/ shredderBedford Park, Illinois, USA
    
    Owned
    
    metal recycling yardChicago, Illinois, USA
    
    Owned
    
    metal recycling yard/ shredderFranklin Park, Illinois, USA
    
    Owned
    
    precious metal refiningWest Chicago, Illinois, USA
    
    Leased
    
    e-recycling facilityEast Chicago, Indiana, USA
    
    Owned
    
    metal recycling yardDetroit, Michigan
    
    Owned
    
    metal recycling yardGreenville, Mississippi, USA
    
    Leased
    
    metal recycling yard/ shredderSherman, Mississippi
    
    Owned
    
    metal recycling yardPort of Albany, New York, USA
    
    Leased
    
    metal recycling yardLas Vegas, Nevada, USA
    
    Owned (50% owned
joint venture)
    
    metal recycling yard/shredderClaremont Pier, Jersey City, New
Jersey, USA
    
    Owned
    
    metal recycling yard/ shredderNewark, New Jersey, USA
    
    Owned
    
    metal recycling yard/shredderPort of Newark, Newark, New Jersey, USA
    
    Leased
    
    stevedoringDefiance, Ohio, USA
    
    Owned
    
    metal recycling yardElizabeth, Pennsylvania, USA
    
    Owned
    
    metal recycling yardLa Vergne, Tennessee, USA
    
    Leased
    
    e-recycling facilityMemphis, Tennessee, USA
    
    Owned
    
    metal recycling yard/ shredderNashville, Tennessee, USA
    
    Owned (50% owned
joint venture)
    
    metal recycling yard/ shredderHouston, Texas, USA
    
    Owned
    
    metal recycling yardSalt Lake City, Utah, USA
    
    Owned
    
    metal recycling yard/ shredderChesapeake, Virginia, USA
    
    Owned
    
    metal recycling yard/ shredderRichmond, Virginia, USA
    
    Owned
    
    metal recycling yard/ shredderPetersburg, Virginia, USA
    
    Leased
    
    metal recycling yard/ shredder
  
 Item 4A. Unresolved Staff Comments
  26




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Item 5. Operating and Financial Review and Prospects
 A. Operating results
    Principal factors affecting our Results of Operations
      27




---



##### Table of Contents



Recent Developments
   Critical Accounting Policies
  Recently issued accounting pronouncements
  Results of Operations
 Fiscal 2008 compared with fiscal 2007
 28




---



##### Table of Contents



Fiscal years ended June 30,2008
    
    
    % of
    
    
    2007
    
    
    % of
    
    
    %A$
    
    
    Sales
    
    
    A$
    
    
    Sales
    
    
    Change(in thousands, except percentage data)Total revenue
    
    
    7,670,536
    
    
    
    100
    %
    
    
    5,550,897
    
    
    
    100
    %
    
    
    38
    %Cost of materials and freight
    
    
    (6,103,252
    )
    
    
    (80
    )%
    
    
    (4,387,432
    )
    
    
    (79
    )%
    
    
    39
    %Depreciation and amortization
    
    
    (94,557
    )
    
    
    (1
    )%
    
    
    (75,177
    )
    
    
    (1
    )%
    
    
    26
    %Finance costs
    
    
    (34,374
    )
    
    
    (0
    )%
    
    
    (30,405
    )
    
    
    (1
    )%
    
    
    13
    %Income from equity accounted
investments
    
    
    64,573
    
    
    
    1
    %
    
    
    7,030
    
    
    
    0
    %
    
    
    819
    %Other expenses
    
    
    (851,096
    )
    
    
    (11
    )%
    
    
    (708,748
    )
    
    
    (13
    )%
    
    
    20
    %Profit before income tax
    
    
    651,830
    
    
    
    9
    %
    
    
    356,165
    
    
    
    6
    %
    
    
    83
    %Income tax expense
    
    
    (218,668
    )
    
    
    (3
    )%
    
    
    (116,813
    )
    
    
    (2
    )%
    
    
    87
    %Net profit after tax
    
    
    433,162
    
    
    
    6
    %
    
    
    239,352
    
    
    
    4
    %
    
    
    81
    %
         29




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Results by segments
  Fiscal years Ended June 30,2008
    
    
    
    
    
    
    2007(in
thousands)
    
    A$
    
    
    %
    
    
    A$
    
    
    %Sales by geography:Australasia
    
    
    1,745,109
    
    
    
    23
    %
    
    
    1,465,383
    
    
    
    26
    %North America
    
    
    4,607,898
    
    
    
    60
    %
    
    
    2,938,246
    
    
    
    53
    %Europe
    
    
    1,312,584
    
    
    
    17
    %
    
    
    1,144,891
    
    
    
    21
    %Total sales
    
    
    7,665,591
    
    
    
    
    
    
    
    5,548,520Other revenue
    
    
    4,945
    
    
    
    0
    %
    
    
    2,377
    
    
    
    0
    %Total revenue
    
    
    7,670,536
    
    
    
    100
    %
    
    
    5,550,897
    
    
    
    100
    %Sales by product:Ferrous metals
    
    
    5,178,847
    
    
    
    67
    %
    
    
    3,319,031
    
    
    
    60
    %Non-ferrous metals
    
    
    1,657,455
    
    
    
    22
    %
    
    
    1,623,139
    
    
    
    29
    %Secondary processing
    
    
    252,297
    
    
    
    3
    %
    
    
    155,846
    
    
    
    3
    %Recycling solutions
    
    
    576,992
    
    
    
    8
    %
    
    
    450,504
    
    
    
    8
    %Net sales
    
    
    7,665,591
    
    
    
    100
    %
    
    
    5,548,520
    
    
    
    100
    %EBIT by geography:Australasia
    
    
    178,116
    
    
    
    26
    %
    
    
    153,621
    
    
    
    40
    %North America
    
    
    411,580
    
    
    
    60
    %
    
    
    163,650
    
    
    
    43
    %Europe
    
    
    93,632
    
    
    
    14
    %
    
    
    66,935
    
    
    
    17
    %Total EBIT
    
    
    683,328
    
    
    
    100
    %
    
    
    384,206
    
    
    
    100
    %Reconciliation:Total EBIT
    
    
    683,328
    
    
    
    
    
    
    
    384,206Interest income
    
    
    2,876
    
    
    
    
    
    
    
    2,364Finance costs
    
    
    (34,374
    )
    
    
    
    
    
    
    (30,405
    )Profit before income tax
    
    
    651,830
    
    
    
    
    
    
    
    356,165
 Australasia
   30




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North America
   Europe
   Sales
by Product Group
     31




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##### Table of Contents



Fiscal 2007 compared with fiscal 2006
  Years ended June 30,2007
    
    
    % of
    
    
    2006
    
    
    % of
    
    
    %A$
    
    
    Sales
    
    
    A$
    
    
    Sales
    
    
    Change(in thousands, except percentage data)Total revenue
    
    
    5,550,897
    
    
    
    100
    %
    
    
    3,754,509
    
    
    
    100
    %
    
    
    48
    %Cost of materials and freight
    
    
    (4,387,432
    )
    
    
    (79
    )%
    
    
    (2,845,023
    )
    
    
    (76
    )%
    
    
    54
    %Depreciation and amortization
    
    
    (75,177
    )
    
    
    (1
    )%
    
    
    (57,530
    )
    
    
    (2
    )%
    
    
    31
    %Finance costs
    
    
    (30,405
    )
    
    
    (1
    )%
    
    
    (18,360
    )
    
    
    (0
    )%
    
    
    66
    %Income from equity accounted
investments
    
    
    7,030
    
    
    
    0
    %
    
    
    4,164
    
    
    
    0
    %
    
    
    69
    %Other expenses
    
    
    (708,748
    )
    
    
    (13
    )%
    
    
    (566,896
    )
    
    
    (15
    )%
    
    
    25
    %Profit before income tax
    
    
    356,165
    
    
    
    6
    %
    
    
    270,864
    
    
    
    7
    %
    
    
    31
    %Income tax expense
    
    
    (116,813
    )
    
    
    (2
    )%
    
    
    (84,495
    )
    
    
    (2
    )%
    
    
    38
    %Net profit after tax
    
    
    239,352
    
    
    
    4
    %
    
    
    186,369
    
    
    
    5
    %
    
    
    28
    %
        32




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Results by segments
  Fiscal years Ended June 30,2007
    
    
    
    
    
    
    2006(in
thousands)
    
    A$
    
    
    %
    
    
    A$
    
    
    %Sales by geography:Australasia
    
    
    1,465,383
    
    
    
    26
    %
    
    
    1,224,700
    
    
    
    33
    %North America
    
    
    2,938,246
    
    
    
    53
    %
    
    
    1,735,204
    
    
    
    46
    %Europe
    
    
    1,144,891
    
    
    
    21
    %
    
    
    792,503
    
    
    
    21
    %Total sales
    
    
    5,548,520
    
    
    
    
    
    
    
    3,752,407Other revenue
    
    
    2,377
    
    
    
    0
    %
    
    
    2,102
    
    
    
    0
    %Total revenue
    
    
    5,550,897
    
    
    
    100
    %
    
    
    3,754,509
    
    
    
    100
    %Sales by product:Ferrous metals
    
    
    3,319,031
    
    
    
    60
    %
    
    
    2,259,112
    
    
    
    60
    %Non-ferrous metals
    
    
    1,623,139
    
    
    
    29
    %
    
    
    1,082,681
    
    
    
    29
    %Secondary processing
    
    
    155,846
    
    
    
    3
    %
    
    
    159,408
    
    
    
    4
    %Recycling solutions
    
    
    450,504
    
    
    
    8
    %
    
    
    251,206
    
    
    
    7
    %Net sales
    
    
    5,548,520
    
    
    
    100
    %
    
    
    3,752,407
    
    
    
    100
    %EBIT by geography:Australasia
    
    
    153,621
    
    
    
    40
    %
    
    
    125,059
    
    
    
    43
    %North America
    
    
    163,650
    
    
    
    43
    %
    
    
    110,934
    
    
    
    39
    %Europe
    
    
    66,935
    
    
    
    17
    %
    
    
    51,184
    
    
    
    18
    %Total EBIT
    
    
    384,206
    
    
    
    100
    %
    
    
    287,177
    
    
    
    100
    %Reconciliation:Total EBIT
    
    
    384,206
    
    
    
    
    
    
    
    287,177Interest income
    
    
    2,364
    
    
    
    
    
    
    
    2,047Finance costs
    
    
    (30,405
    )
    
    
    
    
    
    
    (18,360
    )Profit before income tax
    
    
    356,165
    
    
    
    
    
    
    
    270,864
 Australasia
   North America
   33




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Europe
   Sales by Product Group
      34




---



##### Table of Contents



B. Liquidity and Capital Resources
 Treasury responsibilities and philosophy
     Sources of liquidity
      35




---



##### Table of Contents



Cash Flows
     36




---



##### Table of Contents



C. Research and Development, Patents and Licenses
  D. Trends information
  E. Off-Balance Sheet Arrangements
  
    
    We occasionally sell a portion of our accounts receivable to a third party under an
uncommitted facility agreement. At the time the receivables are sold, the receivables are
removed from our consolidated balance sheet. All credit risk passes to the third party at
the time of the assignment, such that we have no further exposure to default by the
specific trade debtors. The third party is not obliged to accept offers of receivables and
we are not obligated to make offers or pay commitment fees to the third party.
    
    We have provided letters of credit in respect of the performance of contracts and
workers compensation insurance entered into in the ordinary course of business. At June
30, 2008, the amount of letters of credit was A$22.9 million.
    
    Along with our joint venture partner in SA Recycling, we both equally guarantee SA
Recyclings lines of credit. The amount of the guarantee we
currently provide is US$135
million.
 F. Tabular Disclosure of Contractual Obligations
  Payments due by periodContractual Obligations
    
    
    
    
    
    Less than 1
    
    
    1 to
    
    
    3 to
    
    
    More than 5(in thousands of A$)
    
    Total
    
    
    Year
    
    
    3 Years
    
    
    5 Years
    
    
    YearsLong-term debt (1)
    
    
    530,129
    
    
    
    24,009
    
    
    
    506,120
    
    
    
    
    
    
    
    Capital expenditures
    
    
    25,779
    
    
    
    25,779
    
    
    
    
    
    
    
    
    
    
    
    Derivatives  net settled
    
    
    (1,699
    )
    
    
    (1,699
    )
    
    
    
    
    
    
    
    
    
    
    Derivatives  gross settled:Inflows
    
    
    (139,236
    )
    
    
    (139,236
    )
    
    
    
    
    
    
    
    
    
    
    Outflows
    
    
    139,450
    
    
    
    139,450
    
    
    
    
    
    
    
    
    
    
    
    Pension plan contributions
    
    
    2,430
    
    
    
    2,430
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    252,207
    
    
    
    60,010
    
    
    
    90,661
    
    
    
    39,841
    
    
    
    61,695Total contractual cash
obligations
    
    
    809,060
    
    
    
    110,743
    
    
    
    596,781
    
    
    
    39,841
    
    
    
    61,695
 
 (1)
    
    Long-term debt includes interest based on the June 30, 2008 floating interest rates.(2)
    
    Pension plan contributions represent expected cash contributions to our defined benefit
pension plans for the year ending June 30, 2009. It is not practicable to present expected
cash contributions for subsequent years because they are 37




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determined annually on an actuarial basis to provide for
current and future benefits in
accordance with federal law and other regulations. 
 Item 6. Directors, Senior Management and Employees
 A. Directors and senior management
 Directors
  Name
and Age
    

Title
    

Term
ExpiresExecutive Directors:Daniel W. Dienst, 43
    
    Group Chief Executive Officer
    
    #Jeremy L. Sutcliffe, 51
    
    Chairman European/Australian Metal Recycling and Global SRS Divisions
    
    2008*Ross B. Cunningham, 63
    
    Executive Director, Group Finance & Strategy
    
    2008+Non-Executive Directors:Paul K. Mazoudier, 67
    
    Independent Non-Executive Chairman of the Board
    
    2009Norman R. Bobins, 66
    
    Independent Non-Executive Director
    
    2008*John T. DiLacqua, 56
    
    Independent Non-Executive Director
    
    2008+J. Michael Feeney, 62
    
    Independent Non-Executive Director
    
    2009Masakatsu Iwanaga, 68
    
    Non-Independent, Non-Executive Director
    
    2010Robert Lewon, 66
    
    Independent Non-Executive Director
    
    2008*Gerald E. Morris, 76
    
    Independent Non-Executive Director
    
    2008*Christopher J. Renwick, 66
    
    Independent Non-Executive Director
    
    2010Paul J. Varello, 65
    
    Independent Non-Executive Director and Deputy Chairman
    
    2009
 
 #
    
    - Under our constitution, the Group Chief Executive Officer does not have a term limit.*
    
    - Term renewed to 2011 at our Annual General Meeting on November 21, 2008.+
    
    - Retired from the Board on November 21, 2008. Executive Directors
 Daniel W. Dienst
  Jeremy L. Sutcliffe
  38




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##### Table of Contents



Ross B. Cunningham
  Non-Executive Directors
 Paul K. Mazoudier
  Norman R. Bobins
  John T. DiLacqua
  J. Michael Feeney
  Masakatsu Iwanaga
  Robert Lewon
  39




---



##### Table of Contents



Gerald E. Morris
  Christopher J. Renwick
  Paul J. Varello
  Executive Officers
  Name and Age
    
    TitleRobert C. Larry, 47
    
    Group Chief Financial OfficerTom Bird, 45
    
    Managing Director  Metals Recycling and SRS  United KingdomGraham Davy, 43
    
    Managing Director  Sims Recycling Solutions  Global OperationsRobert Kelman, 45
    
    President  Commercial, North AmericaDarron McGree, 61
    
    Managing Director  Australia and New Zealand, Sims Group AustraliaAlan D. Ratner, 57
    
    President  Operations, North America
 Robert C. Larry
  Tom Bird
  40




---



##### Table of Contents



Graham Davy
  Robert Kelman
  Darron McGree
  Alan D. Ratner
  B. Compensation
  Director Compensation
       41




---



##### Table of Contents



Fees paid in
    
    
    Pension/
    
    
    RetirementName
    

Cash
    
    

Superannuation
    
    

Benefits
    
    

Total(in A$)Paul K. Mazoudier
    
    
    361,284
    
    
    
    32,516
    
    
    
    43,463
    
    
    
    437,263J. Michael Feeney
    
    
    156,523
    
    
    
    14,087
    
    
    
    20,091
    
    
    
    190,701Masakatsu Iwanaga
    
    
    170,610
    
    
    
    
    
    
    
    
    
    
    
    170,610Christopher J. Renwick
    
    
    164,951
    
    
    
    14,846
    
    
    
    
    
    
    
    179,797Paul J. Varello
    
    
    170,610
    
    
    
    
    
    
    
    
    
    
    
    170,610Norman R. Bobins (1)
    
    
    51,435
    
    
    
    
    
    
    
    
    
    
    
    51,435John T. DiLacqua (1)
    
    
    43,744
    
    
    
    
    
    
    
    
    
    
    
    43,744Robert Lewon (1)
    
    
    43,744
    
    
    
    
    
    
    
    
    
    
    
    43,744Gerald E. Morris (1)
    
    
    59,127
    
    
    
    
    
    
    
    
    
    
    
    59,127Geoffrey Brunsdon (2)
    
    
    65,218
    
    
    
    5,870
    
    
    
    6,341
    
    
    
    77,429Bob Every (2)
    
    
    65,218
    
    
    
    5,870
    
    
    
    
    
    
    
    71,088
 
 (1)
    
    appointed  March 14, 2008(2)
    
    resigned  November 21, 2007 Executive Officer Compensation
  SuperannuNon-
    
    
    
    
    
    
    ation/Retir
    
    
    Share-Cash
    
    
    monetary
    
    
    
    
    
    
    ement
    
    
    basedName
    
    Salary
    
    
    Bonus
    
    
    Benefits
    
    
    Other
    
    
    Benefits
    
    
    Payments
    
    
    Total(in A$)Daniel W. Dienst (1)
    
    
    306,711
    
    
    
    
    
    
    
    34,434
    
    
    
    (16,911
    )
    
    
    
    
    
    
    185,622
    
    
    
    509,856Jeremy L. Sutcliffe
    
    
    1,280,943
    
    
    
    3,317,027
    
    
    
    1,000
    
    
    
    144,345
    
    
    
    192,291
    
    
    
    3,439,455
    
    
    
    8,375,060Ross B. Cunningham
    
    
    621,553
    
    
    
    1,316,700
    
    
    
    1,000
    
    
    
    67,228
    
    
    
    108,947
    
    
    
    1,133,336
    
    
    
    3,248,764Robert C. Larry (1)
    
    
    193,713
    
    
    
    
    
    
    
    
    
    
    
    19,036
    
    
    
    
    
    
    
    
    
    
    
    212,749Graham Davy
    
    
    558,597
    
    
    
    1,271,739
    
    
    
    42,601
    
    
    
    
    
    
    
    52,167
    
    
    
    1,031,943
    
    
    
    2,957,047Darron McGree
    
    
    509,650
    
    
    
    843,000
    
    
    
    1,000
    
    
    
    51,778
    
    
    
    89,350
    
    
    
    775,930
    
    
    
    2,270,709Tom Bird
    
    
    439,136
    
    
    
    795,918
    
    
    
    42,601
    
    
    
    169,373
    
    
    
    52,167
    
    
    
    610,735
    
    
    
    2,109,930Robert Kelman
    
    
    664,158
    
    
    
    1,295,107
    
    
    
    17,000
    
    
    
    31,084
    
    
    
    19,344
    
    
    
    318,478
    
    
    
    2,345,170Alan D. Ratner (1)
    
    
    122,684
    
    
    
    
    
    
    
    
    
    
    
    6,067
    
    
    
    
    
    
    
    127,871
    
    
    
    256,622
 
 (1)
    
    appointed March 14, 2008 42




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##### Table of Contents



NumberDate of
    
    ofName
    

Grant
    

RightsJeremy L. Sutcliffe
    
    September 25, 2007
    
    

    224,534Ross B. Cunningham
    
    September 25, 2007
    
    
    66,847Graham Davy
    
    July 1, 2007
    
    
    44,803September 25, 2007
    
    
    49,443Tom Bird
    
    September 25, 2007
    
    
    21,044September 25, 2007
    
    
    33,741Darron McGree
    
    September 25, 2007
    
    
    21,044September 25, 2007
    
    
    45,693Robert Kelman
    
    September 25, 2007
    
    
    24,644
  
    
    Performance rights of 61,092 and 44,440 to Mr. Dienst and Mr. Sutcliffe,
respectively. The performance rights vest upon achievement of a total shareholder
return of Sims relative to an international peer group of companies in our sector. The
measurement period of the total shareholder return is a three year period commencing July 1,
2008 and ending June 30, 2011.
    
    Options to acquire 181,654 ordinary shares(or American Depository Shares) and 135,435 ordinary shares to Mr. Dienst
and Mr. Sutcliffe, respectively, at an exercise price of US$8.39
and A$13.11, respectively. The options will
vest ratably over 3 years.
 C. Board Practices
   Role of the Board
  43




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##### Table of Contents



Responsibilities of the Board
  
    
    Overall corporate governance of Sims including oversight of its control and
accountability systems.
    
    Appointing (following the nomination by the Nomination/Governance Committee),
removing and appraising the performance of the Group Chief Executive Officer and other
executive directors.
    
    On the recommendation of the Group Chief Executive Officer, appointing and, where
appropriate, removing the Group Chief Financial Officer (or equivalent), the Group
Company Secretary and the Head of Group Internal Audit.
    
    Input to, and final approval of, managements development of corporate strategy and
performance objectives.
    
    Monitoring senior managements performance and implementation of strategy, and
ensuring appropriate resources are available.
    
    Enhancing and protecting the reputation of Sims by reviewing and ratifying systems
of risk management and internal compliance and control, codes of conduct, and legal
compliance.
    
    Approving and monitoring the progress of major capital expenditure, capital
management, acquisitions and divestitures, and financial and other reporting.
 Role of the Chairman of the Board
  
    
    chair Board meetings;
    
    establish the agenda for Board meetings, in consultation with the executive directors
and the Group Company Secretary;
    
    be available to liaise with other directors between Board meetings;
    
    chair meetings of shareholders, including the Annual General Meeting;
    
    be the primary spokesperson for the company at the Annual General Meeting;
    
    represent the views of the Board to shareholders of the company, the general public,
governmental authorities, regulators and other stakeholders; and
    
    develop and maintain key strategic relationships.
 Powers delegated to management
  Responsibilities of Individual Directors
  44




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##### Table of Contents




    
    conduct their duties with the highest degree of honesty and integrity;
    
    observe both the rule and spirit of the law, and comply with any relevant ethical and
technical standards;
    
    maintain the confidentiality of all information acquired in the course of conducting
their role and not make improper use of, or disclose to third parties, any confidential
information unless that disclosure has been authorized by the Board, or is required by law
or by the Listing Rules of the ASX or the listing standards of the NYSE;
    
    observe the principles of independence, accuracy and integrity in dealings with the
Board, its committees, internal and external auditors and senior management within the
company; and
    
    disclose to the Board any actual or perceived conflicts of interest, whether of a direct
or indirect nature, of which the director becomes aware and which the director reasonably
believes may compromise the reputation or performance of the company.
 Operations of the Board
 
    
    The Board meets at least four times per year, and otherwise as it considers necessary.
    
    A quorum for Board meetings is two directors, unless determined otherwise by the
directors.
    
    An Agenda for meetings is required, where practicable, be prepared and circulated to
Board members and other relevant individuals at least 48 hours prior to the time of the
meeting.
    
    Board meetings may be held by directors communicating with each other by any
technological means by which they are able to simultaneously hear each other and
participate in discussion. The minutes of the meeting record the method of communication by
which the meeting was conducted.
    
    The Board meetings are minuted and the minutes tabled at the next Board meeting.
    
    The Board, through its Chairperson, may request the attendance of management and/or
staff of Sims on a regular or irregular basis, as it deems necessary, to provide
appropriate information or explanations.
    
    The Board will review and recommend any update to this Charter as deemed necessary.
    
    The Board will perform an evaluation of the Boards performance, utilizing external
consultants where necessary, at least annually to determine whether the Board is
functioning effectively by reference to current best practice.
 Authority of the Board
  Committees of the Board
  Remuneration Committee
  45




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##### Table of Contents



Risk, Audit & Compliance Committee
    Safety, Health, Environment & Community Committee
   
    
    Following receipt of a recommendation from the Sims SHEC Executive Committee,
recommend to the Board for adoption the SHEC standards and policy across Sims global
business.
    
    Monitor and review reports from the Sims SHEC Executive Committee on the
effectiveness of the SHEC standards, policy and management systems across Sims global
business.
    
    Liaise with and receive advice from the Sims SHEC Executive Committee on key SHEC
issues.
    
    Report to the Board on key SHEC issues.
 Nomination/Governance Committee
   46




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##### Table of Contents



Finance & Investment Committee
   Integration Committee
  D. Employees
  As of June 30,2008
    
    
    2007
    
    
    2006Australasia
    
    
    1,099
    
    
    
    985
    
    
    
    959North America
    
    
    3,574
    
    
    
    1,414
    
    
    
    1,235Europe
    
    
    1,312
    
    
    
    1,024
    
    
    
    950Total employees
    
    
    5,985
    
    
    
    3,423
    
    
    
    3,144
   E. Share ownership
  
 Item 7. Major Shareholders and Related Party Transactions
 A. Major shareholders
  47




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##### Table of Contents



Principal
Beneficial Shareholders
    
    Number of Shares
    
    

PercentageMitsui Raw Materials Development Pty Limited
    
    
    34,649,903
    
    
    
    19.05
    %M & G Investment Funds
    
    
    18,220,805
    
    
    
    10.02
    %Legg Mason Asset Management Limited
    
    
    12,085,499
    
    
    
    6.64
    %
  Principal Registered Shareholders
    
    Number of Shares
    
    
    PercentageNational Nominees Limited
    
    
    39,677,869
    
    
    
    21.82
    %Mitsui Raw Materials Development Pty Limited
    
    
    34,649,903
    
    
    
    19.05
    %HSBC Custody Nominees (Australia) Limited
    
    
    21,685,662
    
    
    
    11.93
    %J.P. Morgan Nominees Australia Limited
    
    
    19,400,232
    
    
    
    10.67
    %
   B. Related party transactions
  C. Interests of experts and counsel
  
 Item 8. Financial Information
 A. Consolidated Statements and Other Financial Information
  Adoption of IFRS
  48




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##### Table of Contents



Years ended June 30,2007
    
    
    2006(in thousands)
    

Note
    
    

A$
    
    

A$Income Statement:Net income under US GAAP
    
    
    
    
    
    
    249,874
    
    
    
    191,128IFRS adjustments:Derivatives and hedge accounting
    
    
    (a
    )
    
    
    (14,680
    )
    
    
    (290
    )Inventory adjustment
    
    
    (b
    )
    
    
    7,645
    
    
    
    Pension plan accounting
    
    
    (c
    )
    
    
    (6,406
    )
    
    
    (5,901
    )Depreciation expense
    
    
    (d
    )
    
    
    (2,153
    )
    
    
    (1,169
    )Land revaluations
    
    
    (d
    )
    
    
    
    
    
    
    1,188Capitalized interest
    
    
    (e
    )
    
    
    (442
    )
    
    
    (1,327
    )Income tax on IFRS adjustments
    
    
    
    
    
    
    5,514
    
    
    
    2,740Net IFRS adjustments
    
    
    
    
    
    
    (10,522
    )
    
    
    (4,759
    )Net income under IFRS
    
    
    
    
    
    
    239,352
    
    
    
    186,369
 2007
    
    
    2006A$
    
    

A$Shareholders equityShareholders equity under US GAAP
    
    
    
    
    
    
    1,100,367
    
    
    
    1,031,726IFRS adjustments:Derivatives and hedge accounting
    
    
    (a
    )
    
    
    (5,271
    )
    
    
    288Inventory
    
    
    (b
    )
    
    
    7,645
    
    
    
    Pension plan accounting
    
    
    (c
    )
    
    
    (2,933
    )
    
    
    (1,234
    )Land revaluations
    
    
    (d
    )
    
    
    109,900
    
    
    
    76,497Capitalized interest
    
    
    (e
    )
    
    
    (1,769
    )
    
    
    (1,327
    )Goodwill
    
    
    (f
    )
    
    
    65,287
    
    
    
    76,558Income tax on IFRS adjustments
    
    
    
    
    
    
    6,204
    
    
    
    690Shareholders equity under IFRS
    
    
    
    
    
    
    1,279,430
    
    
    
    1,183,198
 (a) Derivatives and hedge accounting
   49




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##### Table of Contents



(b) Inventory adjustments
   (c) Pension plan accounting
  (d) Revaluation of land and buildings
   (e) Capitalized interest
  (f) Goodwill
  50




---



##### Table of Contents



Dividend Policy
      B. Significant Changes
  
 Item 9. The Offer and Listing
 A. Offer and Listing Details
  51




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##### Table of Contents



ASX Price
    
    
    NYSE Priceper share A$
    
    
    per share US$High
    
    
    Low
    
    
    High
    
    

LowYear ended June 30, 2008:First Quarter
    
    
    34.28
    
    
    
    23.59
    
    
    
    n/a
    
    
    
    n/aSecond Quarter
    
    
    32.40
    
    
    
    25.05
    
    
    
    n/a
    
    
    
    n/aThird Quarter
    
    
    34.67
    
    
    
    24.00
    
    
    
    31.12
    
    
    
    23.70Fourth Quarter
    
    
    42.41
    
    
    
    29.62
    
    
    
    40.99
    
    
    
    27.25Year ended June 30, 2007:First Quarter
    
    
    21.59
    
    
    
    17.79
    
    
    
    n/a
    
    
    
    n/aSecond Quarter
    
    
    23.59
    
    
    
    19.20
    
    
    
    n/a
    
    
    
    n/aThird Quarter
    
    
    24.79
    
    
    
    19.06
    
    
    
    n/a
    
    
    
    n/aFourth Quarter
    
    
    28.65
    
    
    
    22.62
    
    
    
    n/a
    
    
    
    n/aYear ended June 30, 2006
    
    
    20.60
    
    
    
    14.03
    
    
    
    n/a
    
    
    
    n/aYear ended June 30, 2005
    
    
    19.25
    
    
    
    11.36
    
    
    
    n/a
    
    
    
    n/aYear ended June 30, 2004
    
    
    12.22
    
    
    
    8.60
    
    
    
    n/a
    
    
    
    n/aMost recent six months:November 2008
    
    
    17.08
    
    
    
    10.68
    
    
    
    12.05
    
    
    
    7.02October 2008
    
    
    29.99
    
    
    
    13.15
    
    
    
    23.37
    
    
    
    8.50September 2008
    
    
    35.41
    
    
    
    27.22
    
    
    
    29.25
    
    
    
    20.00August 2008
    
    
    35.79
    
    
    
    28.81
    
    
    
    30.42
    
    
    
    25.25July 2008
    
    
    43.20
    
    
    
    29.83
    
    
    
    41.49
    
    
    
    28.78June 2008
    
    
    42.41
    
    
    
    35.38
    
    
    
    40.99
    
    
    
    33.29May 2008
    
    
    38.79
    
    
    
    33.50
    
    
    
    37.09
    
    
    
    31.60
 B. Plan of Distribution
  C. Markets
  D. Selling Shareholders
  E. Dilution
  F. Expenses of the Issue
  52




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##### Table of Contents



Item 10. Additional Information
 A. Share Capital
  B. Memorandum and articles of association
 General
   Directors
     53




---



##### Table of Contents



Rights and Restrictions on Classes of Shares
   Dividend Rights
   54




---



##### Table of Contents



Voting Rights
    Preemptive Rights
  Liability to Further Calls
     Liquidation Rights
  55




---



##### Table of Contents



Annual General Meetings and General Meetings of Shareholders
    Foreign Ownership Regulation
  Restrictions on Takeovers
   Ownership Threshold
  56




---



##### Table of Contents



C. Material contracts.
 Acquisition of Metal Management, Inc.
  Operating Agreement with SA Recycling joint venture
  Top-Up Deed with Mitsui Raw Materials Development Pty Limited, or Mitsui (formerly known as
Votraint No. 1652 Pty Limited)
  D. Exchange controls
  
    
    withholding for Australian tax due in respect of dividends (to the extent they are
unfranked) and interest and royalties paid to non-residents of Australia; and
    
    a requirement for approval from the Reserve Bank of Australia or in some cases the
Minister for Foreign Affairs for certain payments or dealings in or out of Australia to or
on behalf of:
 
    
    members of the previous government of Iraq, its senior officials and their
immediate families;
    
    certain supporters of the former government of the Federal Republic of Yugoslavia;
    
    the Taliban or any undertaking owned or controlled directly or indirectly by the
Taliban and certain other named terrorist organizations and individuals; or
    
    certain ministers and senior officials of the Government of Zimbabwe.
    E. Taxation
 Australian taxation
  57




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##### Table of Contents



Taxation of dividends
         58




---



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Gain or loss on disposition of shares
  Capital Account
  (a)
    
    shares held as part of a trade or business conducted through a permanent
establishment in Australia; or(b)
    
    shares held in companies where the shareholder and its associates holds (or has
held for a 12 month period during the last 24 months) an interest of 10% or more in the
issued capital of the company and more than 50% of the companys assets relate to
Australian real property.
  Individual Investor
  
    
    taxed on any capital gain after allowing for indexation up to September 30, 1999
(essentially when indexation ceased) of the cost base where the shares have been held for
more than 12 months (i.e. the difference between the disposal price and the original cost
indexed for inflation over the period to September 30, 1999); and
    
    taxed on 50% of the actual capital gain (without adjustment for inflation indexation)
where the shares have been held for at least 12 months.
  Corporate Investor
   59




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##### Table of Contents



Revenue Account
  (a)
    
    If the United States investor holds the shares as part of a trade or business conducted
through a permanent establishment in Australia, any profit on disposal would be assessable
and subject to ordinary income tax. Losses may constitute an allowable deduction.(b)
    
    If the United States investor does not hold the shares as part of a trade or business
conducted through a permanent establishment in Australia, then the Tax Treaty should
operate to ensure that the taxing of any profits arising on the sale of shares should only
occur in the United States even if the source of that profit is Australia unless the profit
is in respect of the disposal of shares which consist wholly or principally of real
property situated in Australia (in which case Australia will have taxing rights under the
Tax Treaty).
    United States taxation
   
    
    a citizen or resident of the United States;
    
    a domestic corporation;
    
    an estate whose income is subject to United States federal income tax regardless of its
source; or
    
    a trust if a United States court can exercise primary supervision over the trusts
administration and one or more United States persons are authorized to control all
substantial decision of the trust.
 Taxation of dividends
  60




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##### Table of Contents



Taxation of capital gains
  F. Dividends and Paying Agents
  G. Statements by Experts
  H. Documents on Display
  61




---



##### Table of Contents



I. Subsidiary Information
  
 Item 11. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 12. Description of Securities Other than Equity Securities
  62




---



##### Table of Contents



PART II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15. Controls and Procedures
 Disclosure Controls and Procedures
    Material Weakness
   63




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##### Table of Contents



Managements Plan for Remediation of Material Weakness
  
    
    We plan to commence a review and revise, as necessary, our internal accounting policies
and procedures, increasing the training of our accounting personnel in the application of
IFRS, and expanding the resources allocated to our accounting and tax departments.
    
    We plan to implement and monitor financial reporting controls to ensure that all complex
routine and non-routine transactions, such as business combinations and accounting for
deferred income taxes, are identified, and accurately accounted for in accordance with
IFRS.
   Managements Annual Report and Attestation Report
  Changes in Internal Control over Financial Reporting
  
 Item 16A. Audit committee financial expert
  64




---



##### Table of Contents



Item 16B. Code of Ethics
   
 Item 16C. Principal Accountant Fees and Services
    Limitation on Independent Registered Public Accounting Firms Liability
    65




---



##### Table of Contents



Item 16D. Exemptions from the Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  66




---



##### Table of Contents



PART III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
  Consolidated Financial Statements
 Report of Independent Registered Public Accounting Firm
    
    
    F-1Income Statements
    
    
    F-2Balance Sheets
    
    
    F-3Statements of Recognized Income and Expense
    
    
    F-4Cash Flow Statements
    
    
    F-5Notes to the Financial Statements
    
    
    F-7
 
 Item 19. Exhibits
 
 Exhibit Index
 ExhibitNumber
    

Description1.1
    
    Constitution of the Registrant (incorporated by reference to Exhibit 3.1 on Form F-4
filed on November 28, 2007).2.1
    
    Form of Deposit Agreement among the Registrant, The Bank of New York, as the
depositary, and all owners and holders from time to time of American Depositary Shares
issued thereunder (incorporated by reference to Exhibit 4.1 on Form F-4/A filed on
February 8, 2008).2.2
    
    Top-Up Deed, dated April 2, 2007, by and between the Registrant and Votraint No. 1652
Pty Limited Mitsui) (incorporated by reference to Exhibit 4.2 on Form F-4 filed on
November 28, 2007).2.3
    
    Amendment Deed, dated November 27, 2007, by and between the Registrant and Mitsui Raw
Materials Development Pty Limited (incorporated by reference to Exhibit 4.3 on Form F-4
filed on November 28, 2007).4.1
    
    Agreement and Plan of Merger dated as of September 24, 2007, between and among the
Registrant, MMI Acquisition Corporation and Metal Management, Inc. (incorporated by
reference to Appendix A on Form F-4 filed on November 28, 2007).4.2
    
    Rules of the Dividend Reinvestment Plan (incorporated by reference to Exhibit 10.1 on
Form F-4 filed on November 28, 2007).4.3
    
    Executive Long Term Incentive Plan Rules (incorporated by reference to Exhibit 10.2 on
Form F-4 filed on November 28, 2007).4.4
    
    Long Term Incentive Plan Rules (incorporated by reference to Exhibit 10.3 on Form F-4
filed on November 28, 2007).4.5
    
    Sims Group Limited Transition Incentive Stock Plan (incorporated by reference to
Exhibit 10.1 on Form S-8 filed on March 14, 2008).
 67




---



##### Table of Contents



ExhibitNumber
    

Description4.6
    
    Employment Agreement, dated September 5, 2005, by and between Sims Co Limited and
Jeremy Sutcliffe (incorporated by reference to Exhibit 10.5 on Form F-4 filed on
November 28, 2007).4.7
    
    Employment Agreement, dated September 24, 2007, by and between the Registrant and
Jeremy Sutcliffe (incorporated by reference to Exhibit 10.6 on Form F-4 filed on
November 28, 2007).4.8
    
    Employment Agreement, dated January 8, 2007, by and between the Registrant and Graham
Davy (incorporated by reference to Exhibit 10.9 on Form F-4 filed on November 28,
2007).4.9
    
    Employment Agreement, effective as of February 1, 2007, by and between the Registrant
and Bob Kelman (incorporated by reference to Exhibit 10.10 on Form F-4 filed on
November 28, 2007).4.10
    
    Employment Agreement, dated January 8, 2007, by and between the Registrant and Darron
McGree (incorporated by reference to Exhibit 10.11 on Form F-4 filed on November 28,
2007).4.11
    
    Letter Agreement, dated September 24, 2007, by and between the Registrant and Robert C.
Larry (incorporated by reference to Exhibit 10.12 on Form F-4 filed on November 28,
2007.4.12
    
    Letter Agreement, dated September 24, 2007, by and between the Registrant and Daniel W.
Dienst (incorporated by reference to Exhibit 10.13 on Form F-4 filed on November 28,
2007).4.13
    
    Operating Agreement of SA Recycling LLC, dated as of September 1, 2007, by and between
Adams Steel, LLC and Simsmetal West LLC (f/k/a Sims Hugo Neu West LLC) (incorporated by
reference to Exhibit 10.14 on Form F-4/A filed on January 17, 2008).4.14
    
    Employment Agreement, dated January 8, 2007, by and between the Registrant and Tom Bird.4.15
    
    Facility Agreement, dated October 29, 1991, between Simsmetal Finance Limited and
Simsmetal USA Corporation and Commonwealth Bank of Australia; Negative Pledge
Agreement, dated October 29, 1991, between Commonwealth Bank of Australia and Simsmetal
Limited and certain other subsidiaries of the Registrant; and the amending agreements
and amending deeds to such agreements.4.16
    
    Multicurrency Revolving Floating Rate Cash Advance Facility, dated November 1, 2000,
among Westpac Banking Corporation and Simsmetal Limited, Simsmetal Finance Limited,
Simsmetal USA Corporation, Simsmetal UK Holdings Limited and Simsmetal UK Limited
(collectively, the Parties); the Standard Terms, dated November 1, 2000, among the
Parties; and the variations to such agreements.4.17
    
    Credit Agreement, dated as of September 12, 2006, among Sims Group USA Holdings
Corporation and certain of its subsidiaries party thereto and Bank of America, N.A.
(collectively, the Parties); First Amendment to Credit Agreement, dated as of
October 4, 2006; Second Amendment to Credit Agreement, dated as of December 31, 2007;
and Third Amendment to Credit Agreement, dated as of March 14, 2008.8.1
    
    List of subsidiaries.12.1
    
    Certification of Group Chief Executive Officer pursuant to Rule 13 (a)  14(a) of the
Securities Exchange Act of 1934.12.2
    
    Certification of Group Chief Financial Officer pursuant to Rule 13 (a)  14(a) of the
Securities Exchange Act of 1934.13.1
    
    Certification of Group Chief Executive Officer and Group Chief Financial Officer
pursuant to Rule 13(a)  14 (b) of the Securities Exchange Act of 1934 and 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
    
    Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Commission under Rule 24b-2
under the Securities Exchange Act of 1934, as amended. The omitted
confidential material has been filed separately with the Commission.
The location of the omitted confidential information is indicated in
the exhibit with brackets and a bullet point ([]). 68




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##### Table of Contents



SIGNATURES
  SIMS METAL MANAGEMENT LIMITEDBy:
    

/s/
Frank MorattiFrank
Moratti
Company Secretary and Legal Counsel
  69




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Report of Independent Registered Public Accounting Firm
     
 F-1




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Income Statements
For the year ended 30 June 2008
 Consolidated
    
    Parent entity2008
    
    2007
    
    2006
    
    2008
    
    2007Notes
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000Revenue from continuing operations
    
    
    3
    
    
    
    7,670,536
    
    
    
    5,550,897
    
    
    
    3,754,509
    
    
    
    171,678
    
    
    
    158,006Other income
    
    
    4
    
    
    
    51,448
    
    
    
    8,978
    
    
    
    2,105
    
    
    
    
    
    
    
    Raw materials and changes in inventories of finished goods
    
    
    
    
    
    
    (5,324,584
    )
    
    
    (3,847,254
    )
    
    
    (2,471,870
    )
    
    
    
    
    
    
    Freight expense
    
    
    
    
    
    
    (778,668
    )
    
    
    (540,178
    )
    
    
    (373,153
    )
    
    
    
    
    
    
    Employee benefits expense
    
    
    
    
    
    
    (404,873
    )
    
    
    (296,421
    )
    
    
    (238,386
    )
    
    
    (2,777
    )
    
    
    (2,369
    )Depreciation and amortisation expense
    
    
    5
    
    
    
    (94,557
    )
    
    
    (75,177
    )
    
    
    (57,530
    )
    
    
    
    
    
    
    Repairs and maintenance expense
    
    
    
    
    
    
    (126,192
    )
    
    
    (117,993
    )
    
    
    (92,415
    )
    
    
    
    
    
    
    Other expenses from ordinary activities
    
    
    
    
    
    
    (371,479
    )
    
    
    (303,312
    )
    
    
    (238,200
    )
    
    
    
    
    
    
    Finance costs
    
    
    5
    
    
    
    (34,374
    )
    
    
    (30,405
    )
    
    
    (18,360
    )
    
    
    
    
    
    
    Share of pre-tax profit of investments accounted for using
the equity method
    
    
    30
    
    
    
    64,573
    
    
    
    7,030
    
    
    
    4,164
    
    
    
    
    
    
    
    Profit before income tax
    
    
    
    
    
    
    651,830
    
    
    
    356,165
    
    
    
    270,864
    
    
    
    168,901
    
    
    
    155,637Income tax (expense) / benefit
    
    
    7
    
    
    
    (218,668
    )
    
    
    (116,813
    )
    
    
    (84,495
    )
    
    
    391
    
    
    
    287Profit attributable to members of Sims Group Limited
    
    
    
    
    
    
    433,162
    
    
    
    239,352
    
    
    
    186,369
    
    
    
    169,292
    
    
    
    155,924Cents
        
    Cents
        
    CentsBasic earnings per share
    
    
    34
    
    
    
    306.0
    
    
    
    191.6
    
    
    
    165.1Diluted earnings per share
    
    
    34
    
    
    
    303.0
    
    
    
    190.5
    
    
    
    164.6
 The above income statements should be read in conjunction with the accompanying notes.
 F-2




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Balance Sheets
As at 30 June 2008
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007Notes
    
    $000
    
    $000
    
    $000
    
    $000ASSETSCurrent assetsCash and cash equivalents
    
    
    35
    
    
    
    133,487
    
    
    
    38,560
    
    
    
    
    
    
    
    Trade and other receivables
    
    
    8
    
    
    
    866,101
    
    
    
    365,173
    
    
    
    41,147
    
    
    
    20,679Inventories
    
    
    9
    
    
    
    1,010,921
    
    
    
    374,289
    
    
    
    
    
    
    
    Derivative financial instruments
    
    
    2
    (e)
    
    
    3,948
    
    
    
    14,798
    
    
    
    
    
    
    
    Total current assets
    
    
    
    
    
    
    2,014,457
    
    
    
    792,820
    
    
    
    41,147
    
    
    
    20,679Non-current assetsReceivables
    
    
    8
    
    
    
    2,963
    
    
    
    
    
    
    
    
    
    
    
    Investments accounted for using the equity method
    
    
    10
    
    
    
    335,826
    
    
    
    25,945
    
    
    
    
    
    
    
    Other financial assets
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    4,026,736
    
    
    
    2,506,652Property, plant and equipment
    
    
    12
    
    
    
    950,210
    
    
    
    681,846
    
    
    
    
    
    
    
    Retirement benefit surplus
    
    
    19
    
    
    
    
    
    
    
    7,454
    
    
    
    
    
    
    
    Deferred tax assets
    
    
    13
    
    
    
    111,360
    
    
    
    64,599
    
    
    
    
    
    
    
    Intangible assets
    
    
    14
    
    
    
    1,402,156
    
    
    
    626,414
    
    
    
    
    
    
    
    Total non-current assets
    
    
    
    
    
    
    2,802,515
    
    
    
    1,406,258
    
    
    
    4,026,736
    
    
    
    2,506,652Total assets
    
    
    
    
    
    
    4,816,972
    
    
    
    2,199,078
    
    
    
    4,067,883
    
    
    
    2,527,331LIABILITIESCurrent liabilitiesTrade and other payables
    
    
    15
    
    
    
    964,034
    
    
    
    379,911
    
    
    
    343,483
    
    
    
    362,685Derivative financial instruments
    
    
    2
    (e)
    
    
    2,463
    
    
    
    492
    
    
    
    
    
    
    
    Current tax liabilities
    
    
    17
    
    
    
    131,429
    
    
    
    41,374
    
    
    
    40,756
    
    
    
    20,316Provisions
    
    
    18
    
    
    
    28,064
    
    
    
    17,809
    
    
    
    
    
    
    
    Total current liabilities
    
    
    
    
    
    
    1,125,990
    
    
    
    439,586
    
    
    
    384,239
    
    
    
    383,001Non-current liabilitiesPayables
    
    
    15
    
    
    
    2,270
    
    
    
    
    
    
    
    
    
    
    
    Borrowings
    
    
    16
    
    
    
    496,633
    
    
    
    341,326
    
    
    
    
    
    
    
    Deferred tax liabilities
    
    
    17
    
    
    
    190,434
    
    
    
    119,617
    
    
    
    
    
    
    
    Provisions
    
    
    18
    
    
    
    34,729
    
    
    
    19,119
    
    
    
    
    
    
    
    Retirement benefit obligations
    
    
    19
    
    
    
    4,828
    
    
    
    
    
    
    
    
    
    
    
    Total non-current liabilities
    
    
    
    
    
    
    728,894
    
    
    
    480,062
    
    
    
    
    
    
    
    Total liabilities
    
    
    
    
    
    
    1,854,884
    
    
    
    919,648
    
    
    
    384,239
    
    
    
    383,001Net assets
    
    
    
    
    
    
    2,962,088
    
    
    
    1,279,430
    
    
    
    3,683,644
    
    
    
    2,144,330EQUITYContributed equity
    
    
    20
    
    
    
    2,325,924
    
    
    
    811,976
    
    
    
    3,646,580
    
    
    
    2,132,632Reserves
    
    
    22
    
    
    
    (39,014
    )
    
    
    46,720
    
    
    
    36,141
    
    
    
    5,355Retained profits
    
    
    22
    
    
    
    675,178
    
    
    
    420,734
    
    
    
    923
    
    
    
    6,343Total equity
    
    
    
    
    
    
    2,962,088
    
    
    
    1,279,430
    
    
    
    3,683,644
    
    
    
    2,144,330
 The above balance sheets should be read in conjunction with the accompanying notes.
 F-3




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Statements of Recognised Income and Expense
For the year ended 30 June 2008
 Consolidated
    
    
    
    
    
    Parent entity2008
    
    2007
    
    2006
    
    2008
    
    2007Notes
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000Defined benefit plan actuarial (loss)/gain (net of tax)
    
    
    19
    (f)
    
    
    (7,827
    )
    
    
    5,211
    
    
    
    3,869
    
    
    
    
    
    
    
    Gain on revaluation of land and buildings (net of tax)
    
    
    22
    
    
    
    34,145
    
    
    
    40,040
    
    
    
    25,544
    
    
    
    
    
    
    
    Changes in fair value of cash flow hedges (net of tax)
    
    
    22
    
    
    
    (9,656
    )
    
    
    9,121
    
    
    
    383
    
    
    
    
    
    
    
    Exchange differences on translation of foreign operations
    
    
    22
    
    
    
    (137,188
    )
    
    
    (82,169
    )
    
    
    17,853
    
    
    
    
    
    
    
    Net (expense)/income recognised directly in equity
    
    
    
    
    
    
    (120,526
    )
    
    
    (27,797
    )
    
    
    47,649
    
    
    
    
    
    
    
    Profit for the year
    
    
    
    
    
    
    433,162
    
    
    
    239,352
    
    
    
    186,369
    
    
    
    169,292
    
    
    
    155,924Total recognised income for the year
    
    
    
    
    
    
    312,636
    
    
    
    211,555
    
    
    
    234,018
    
    
    
    169,292
    
    
    
    155,924Effect of correction of errorTotal equity at the beginning of the financial year
    
    
    
    
    
    
    1,324,652
    
    
    
    1,196,785
    
    
    
    517,001Recognition of deferred tax on US subsidiaries land
revaluations
    
    
    17
    
    
    
    (20,723
    )
    
    
    (1,921
    )
    
    
    Recognition of intangible asset amortisation *
    
    
    14
    
    
    
    (24,499
    )
    
    
    (11,666
    )
    
    
    Restated total equity at the beginning of the financial year
    
    
    
    
    
    
    1,279,430
    
    
    
    1,183,198
    
    
    
    517,001Profit as reported in the 2007 financial report
    
    
    
    
    
    
    
    
    
    
    254,375
    
    
    
    196,646Recognition of deferred tax on US subsidiaries land
revaluations
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    Recognition of intangible asset amortisation *
    
    
    14
    
    
    
    
    
    
    
    (15,023
    )
    
    
    (10,277
    )Restated profit
    
    
    
    
    
    
    
    
    
    
    239,352
    
    
    
    186,369Effect of correction on earnings per share
  
 *
    
    This item is consistent with that previously reported by the Group in its 31 December 2007 Half Year Report. The above statements of recognised income and expense should be read in conjunction with the accompanying notes.
 F-4




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Cash Flow Statements
for the year ended 30 June 2008
 Consolidated
    
    
    
    
    
    Parent entity2008
    
    2007
    
    2006
    
    2008
    
    2007Notes
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000Cash flows from operating activitiesReceipts from customers (inclusive of goods and services tax)
    
    
    
    
    
    
    7,361,526
    
    
    
    5,683,089
    
    
    
    3,732,075
    
    
    
    
    
    
    
    Payments to suppliers and employees (inclusive of goods and
services tax)
    
    
    
    
    
    
    (7,009,047
    )
    
    
    (5,205,939
    )
    
    
    (3,412,100
    )
    
    
    
    
    
    
    352,479
    
    
    
    477,150
    
    
    
    319,975
    
    
    
    
    
    
    
    Interest received
    
    
    
    
    
    
    2,876
    
    
    
    2,364
    
    
    
    2,047
    
    
    
    
    
    
    
    Interest paid
    
    
    
    
    
    
    (34,374
    )
    
    
    (30,405
    )
    
    
    (18,360
    )
    
    
    
    
    
    
    Dividends received from associates and jointly controlled entities
    
    
    
    
    
    
    5,153
    
    
    
    
    
    
    
    
    
    
    
    156,589
    
    
    
    120,026Income taxes paid
    
    
    
    
    
    
    (144,477
    )
    
    
    (135,612
    )
    
    
    (95,091
    )
    
    
    40,056
    
    
    
    30,567Net loans to subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (40,056
    )
    
    
    (30,567
    )Net cash inflow from operating activities
    
    
    35
    
    
    
    181,657
    
    
    
    313,497
    
    
    
    208,571
    
    
    
    156,589
    
    
    
    120,026Cash flows from investing activitiesPayments for property, plant and equipment
    
    
    12
    
    
    
    (129,691
    )
    
    
    (90,503
    )
    
    
    (76,481
    )
    
    
    
    
    
    
    Proceeds from sale of property, plant and equipment
    
    
    
    
    
    
    2,022
    
    
    
    8,203
    
    
    
    2,021
    
    
    
    
    
    
    
    Payments for subsidiaries and businesses, net of cash
acquired
    
    
    29
    
    
    
    (58,517
    )
    
    
    (158,914
    )
    
    
    (28,515
    )
    
    
    
    
    
    
    Return of capital from jointly controlled entities
    
    
    30
    (b)
    
    
    48,496
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net cash outflow from investing activities
    
    
    
    
    
    
    (137,690
    )
    
    
    (241,214
    )
    
    
    (102,975
    )
    
    
    
    
    
    
    Cash flows from financing activitiesProceeds from borrowings
    
    
    
    
    
    
    936,670
    
    
    
    940,339
    
    
    
    337,801
    
    
    
    
    
    
    
    Repayment of borrowings
    
    
    
    
    
    
    (733,458
    )
    
    
    (871,690
    )
    
    
    (363,988
    )
    
    
    
    
    
    
    Proceeds from issue of shares
    
    
    20
    
    
    
    5,735
    
    
    
    1,872
    
    
    
    1,309
    
    
    
    
    
    
    
    Dividends paid
    
    
    23
    
    
    
    (156,589
    )
    
    
    (120,026
    )
    
    
    (113,292
    )
    
    
    (156,589
    )
    
    
    (120,026
    )Net cash inflow/(outflow) from financing activities
    
    
    
    
    
    
    52,358
    
    
    
    (49,505
    )
    
    
    (138,170
    )
    
    
    (156,589
    )
    
    
    (120,026
    )Net increase/(decrease) in cash held
    
    
    
    
    
    
    96,325
    
    
    
    22,778
    
    
    
    (32,574
    )
    
    
    
    
    
    
    Cash and cash equivalents at the beginning of the financial year
    
    
    
    
    
    
    38,560
    
    
    
    15,800
    
    
    
    46,008
    
    
    
    
    
    
    
    Effects of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    (1,398
    )
    
    
    (18
    )
    
    
    2,366
    
    
    
    
    
    
    
    Cash and cash equivalents at the end of the financial year
    
    
    35
    
    
    
    133,487
    
    
    
    38,560
    
    
    
    15,800
    
    
    
    
    
    
    
    Financing arrangements
    
    
    2Non-cash financing and investing activities
    
    
    36
 The above cash flow statements should be read in conjunction with the accompanying notes.
 F-5




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Contents of the notes to the financial statements
 1
    
    Summary of significant accounting policies
F-72
    
    Financial and capital risk management
F-203
    
    Revenue
F-274
    
    Other income
F-275
    
    Expenses
F-276
    
    Remuneration of auditors
F-287
    
    Income tax
F-298
    
    Trade and other receivables
F-309
    
    Inventory
F-3110
    
    Investments accounted for using the equity method
F-3111
    
    Other financial assets
F-3112
    
    Property, plant and equipment
F-3213
    
    Deferred tax assets
F-3314
    
    Intangibles
F-3415
    
    Trade and other payables
F-3616
    
    Borrowings
F-3617
    
    Tax liabilities
F-3618
    
    Provisions
F-3719
    
    Retirement benefit obligations
F-3820
    
    Contributed equity
F-4221
    
    Statements of changes in equity
F-4322
    
    Reserves and retained profits
F-4323
    
    Dividends
F-4424
    
    Contingent liabilities
F-4525
    
    Capital expenditure commitments
F-4526
    
    Lease commitments
F-4527
    
    Share ownership plans
F-4628
    
    Key management personnel disclosures
F-5029
    
    Subsidiaries
F-5330
    
    Investments in associates and jointly controlled entities
F-5831
    
    Interests in joint ventures
F-6032
    
    Related party transactions
F-6133
    
    Segment reporting
F-6334
    
    Earnings per share
F-6635
    
    Cash flow information
F-6736
    
    Non-cash investing and financing activities
F-68
 F-6




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##### Table of Contents



Sims Metal Management Limited
(formerly Sims Group Limited)
 Notes to the financial
statements 30 June 2008
 1 Summary of significant accounting policies
  (a) Basis of preparation
  Compliance with IFRS
    Early adoption of standards
  Historical cost convention
  Critical Accounting Estimates
  (b) Principles of consolidation
 (i) Subsidiaries
       F-7




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 1 Summary of significant accounting policies (continued)
 (b) Principles of consolidation  continued
 (ii) Associates
     (iii) Joint ventures
      (c) Segment reporting
  (d) Foreign currency translation
 (i) Functional and presentation currency
  (ii) Transactions and balances
   (iii) Group companies
  
    
    assets and liabilities for each balance sheet presented are translated at the closing rate
at the date of that balance sheet;
    
    income and expenses for each income statement are
translated at average exchange rates (unless this is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which case income and
expenses are translated at the dates of the transactions); and
    
    all resulting exchange
differences are recognised as a separate component of equity.
  F-8




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 1 Summary of significant accounting policies (continued)
 (d) Foreign currency translation  continued
 (iii) Group companies  continued
  (e) Revenue recognition
    (i) Sales of goods
  (ii) Service revenue
  (iii) Interest income
  (iv) Dividend income
  (f) Government grants
    (g) Income tax
       F-9




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 1 Summary of significant accounting policies (continued)
 (g) Income tax (continued)
 Tax consolidation legislation
      (h) Leases
   (i) Business combinations
    (j) Impairment of assets
  (k) Cash and cash equivalents
  F-10




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 1 Summary of significant accounting policies (continued)
 (l) Trade receivables
    (m) Inventories
  (n) Maintenance and repairs
  (o) Investments and other financial assets
 Classification
  (i) Financial assets at fair value through profit or loss
  (ii) Loans and receivables
  Recognition and derecognition
  Fair value
  F-11




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 1 Summary of significant accounting policies (continued)
 (p) Derivatives and hedging activities
     (i) Fair value hedge
   (ii) Cash flow hedge
    (iii) Derivatives that do not qualify for hedge accounting
  F-12




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 1 Summary of significant accounting policies (continued)
 (q) Fair value estimation
    (r) Property, plant and equipment
     - Buildings
    
    25-40 years- Plant and equipment
    
    3-14 years
    F-13




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 1 Summary of significant accounting policies (continued)
 (s) Intangible assets
 (i) Goodwill
   (ii) Trade Name
  (iii) Supplier relationships and contracts
  (iv) Permits
  (t) Trade and other payables
  (u) Borrowings
   (v) Borrowing costs
  F-14




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 1 Summary of significant accounting policies (continued)
 (w) Provisions
   (x) Employee benefits
 (i) Wages and salaries, annual leave and sick leave
  (ii) Long service leave
  (iii) Retirement benefit obligations
        (iv) Share-based payments
   F-15




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 1 Summary of significant accounting policies (continued)
 (x) Employee benefits  continued
 (v) Profit-sharing and bonus plans
  (y) Contributed equity
   (z) Dividends
  (aa) Earnings per share
 (i) Basic earnings per share
  (ii) Diluted earnings per share
  (ab) Held for sale assets
      F-16




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 1 Summary of significant accounting policies (continued)
 (ac) Goods and services tax (GST)
    (ad) New accounting standards and interpretations
  AASB 2007-4 Amendments to Australian Accounting Standards arising from ED 151 and Other Amendments
and AASB 2007-7, Amendments to Australian Accounting Standards [AASB 1, AASB 2, AASB 4, AASB 5, AASB 107 & AASB 128]
AASB 2007-4 and AASB 2007-7
  
    
    the ability to use the proportionate consolidation method for interests in
joint venture entities;
    
    the ability to use the indirect method for presenting cash flow
statements;
    
    the ability to recognise government grants of non-monetary assets at nominal amounts
and present assets and expenses net of related government grants;
    
    a possible exemption from the
requirement to prepare consolidated financial reports for intermediate parent entities, provided
they are wholly-owned or all shareholders agree and they are not the ultimate Australian parent
entity in the group; and
    
    discount rates for employee benefits obligations to be based on
corporate bonds if there is a deep market in Australia (previous guidance mandated the use of
government bond rates).
  Revised AASB 123 Borrowing Costs and AASB 2007-6 Amendments to Australian Accounting Standards
arising from AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111, AASB 116 & AASB 138 and
Interpretations 1 & 12]
  AASB-I 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
 Revised AASB 101 Presentation of Financial Statements and AASB 2007-8 Amendments to Australian
Accounting Standards arising from AASB 101.
 F-17




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 1 Summary of significant accounting policies (continued)
 (ad) New accounting standards and interpretations  continued
 AASB 2008-1 Amendments to Australian Accounting Standard  Share-based Payments: Vesting Conditions
and Cancellations.
 Revised AASB 3 Business Combinations, AASB 127 Consolidated and Separate Financial Statements and
AASB 2008-3 Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127.
 
    
    all payments (including contingent consideration) to purchase a business are to be recorded at
fair value at the acquisition date, with contingent payments subsequently remeasured at fair value
through income;
    
    all transaction costs will be expensed;
    
    the Group will need to decide whether
to continue calculating goodwill based only on the parents share of net assets or whether to
recognise goodwill also in relation to the non-controlling (minority) interest, and when control is
lost, any continuing ownership interest in the entity will be remeasured to fair value and a gain
or loss recognised in profit or loss.
  AASB 2008-7 Amendments to Australian Accounting Standards  Cost of an investment in a Subsidiary,
Jointly Controlled Entity or Associate.
 Improvements to Australian Accounting Standards: AASB 2008-5 and AASB 2008-6.
 (ae) Critical accounting estimates and judgements
   Inventories
  F-18




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 1 Summary of significant accounting policies (continued)
 (ae) Critical accounting estimates and judgements  continued
 Financial instruments
 Financial
Instruments: Recognition and Measurement
 Impairment of non-current assets
   Defined benefit superannuation schemes
    Taxation
  (af) Rounding of amounts
  F-19




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements 
30 June 2008
(continued)
 2 Financial and capital risk management
 Financial risk management
    Capital risk management
       Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Borrowings
    
    
    496,633
    
    
    
    341,326
    
    
    
    
    
    
    
    Less: Cash and cash equivalents
    
    
    (133,487
    )
    
    
    (38,560
    )
    
    
    
    
    
    
    Net debt
    
    
    363,146
    
    
    
    302,766
    
    
    
    
    
    
    
    Total equity
    
    
    2,962,088
    
    
    
    1,279,430
    
    
    
    3,683,644
    
    
    
    2,144,330Total capital
    
    
    3,325,234
    
    
    
    1,582,196
    
    
    
    3,683,644
    
    
    
    2,144,330Gearing ratio
    
    
    11
    %
    
    
    19
    %
    
    
    0
    %
    
    
    0
    %
  (a) Fair value of financial assets and financial liabilities
  
    
    Cash and cash equivalents  approximates to the carrying amount.
    
    Receivables and payables  approximates to the carrying amount due to their short-term nature.
    
    Derivative financial instruments  based on market prices and exchange rates at the balance date.
    
    Borrowings  approximates to the carrying amount as all borrowings have floating interest rates.
  F-20




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 2 Financial and capital risk management  continued
 (b) Market risks
       
    
    providing access to
diverse sources of funding;
    
    reducing risks of refinancing by establishing and managing in accordance with target maturity
profiles; and
    
    negotiating interest rates with the Groups banks based on a variable pricing matrix which
includes a LIBOR rate plus a margin.
  Floating
    
    Fixed interest maturing in:
    
    Non-interest30 June 2008
    
    
    
    
    
    interest rate
    
    1 year or
    
    Over 1 to 5
    
    More than 5
    
    bearingConsolidated
    
    Note
    
    $000
    
    less $000
    
    years $000
    
    years $000
    
    $000
    
    Total $000Financial assetsCash and cash equivalents
    
    
    35
    
    
    
    20,543
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    112,944
    
    
    
    133,487Trade and other receivables  current
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    866,101
    
    
    
    866,101Receivables  non-current
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    2,963
    
    
    
    
    
    
    
    
    
    
    
    2,96320,543
    
    
    
    
    
    
    
    2,963
    
    
    
    
    
    
    
    979,045
    
    
    
    1,002,551Financial liabilitiesTrade and other payables  current
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    964,034
    
    
    
    964,034Payables  non-current
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,270
    
    
    
    2,270Borrowings
    
    
    16
    
    
    
    496,633
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    496,633496,633
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    966,304
    
    
    
    1,462,937
 Floating
    
    Fixed interest maturing in:
    
    Non-interest30 June 2007
    
    
    
    
    
    interest rate
    
    1 year or
    
    Over 1 to 5
    
    More than 5
    
    bearingConsolidated
    
    Note
    
    $000
    
    less $000
    
    years $000
    
    years $000
    
    $000
    
    Total $000Financial assetsCash and cash equivalents
    
    
    35
    
    
    
    7,156
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,404
    
    
    
    38,560Trade and other receivables  current
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    365,173
    
    
    
    365,1737,156
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    396,577
    
    
    
    403,733Financial liabilitiesTrade and other payables  current
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    379,911
    
    
    
    379,911Borrowings
    
    
    16
    
    
    
    341,326
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    341,326341,326
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    379,911
    
    
    
    721,237
 F-21




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 2 Financial and capital risk management  continued
 (b) Market risks  continued
 Floating
    
    Fixed interest maturing in:
    
    Non-interest30 June 2008
    
    
    
    
    
    interest rate
    
    1 year or
    
    Over 1 to 5
    
    More than 5
    
    bearingParent Entity
    
    Note
    
    $000
    
    less $000
    
    years $000
    
    years $000
    
    $000
    
    Total $000Financial assetsTrade and other receivables  current
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,147
    
    
    
    41,147
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,147
    
    
    
    41,147Financial liabilitiesTrade and other payables  current
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    343,483
    
    
    
    343,483
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    343,483
    
    
    
    343,483
 Floating
    
    Fixed interest maturing in:
    
    Non-interest30 June 2007
    
    
    
    
    
    interest rate
    
    1 year or
    
    Over 1 to 5
    
    More than 5
    
    bearingParent Entity
    
    Note
    
    $000
    
    less $000
    
    years $000
    
    years $000
    
    $000
    
    Total $000Financial assetsTrade and other receivables  current
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,679
    
    
    
    20,679
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,679
    
    
    
    20,679Financial liabilitiesTrade and other payables  current
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    362,685
    
    
    
    362,685
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    362,685
    
    
    
    362,685
  Consolidated
    
    Parent Entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Impact on net profit:Interest rates +1%
    
    
    (2,429
    )
    
    
    (2,035
    )
    
    
    
    
    
    
    Interest rates - 1%
    
    
    2,429
    
    
    
    2,035
    
    
    
    
    
    
    
    
     F-22




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 2 Financial and capital risk management  continued
 (b) Market risks  continued
 Financial assets and liabilities
  Net foreign currency recognised assets/(liabilities)New
    
    
    
    
    
    BritishUS
    
    Zealand
    
    Euro
    
    pounds
    
    Other30 June 2008
    
    dollar $000
    
    dollar $000
    
    $000
    
    $000
    
    $000
    
    Total $000Functional currency of the entityAustralian dollars
    
    
    64,290
    
    
    
    (3,474
    )
    
    
    330
    
    
    
    4,305
    
    
    
    
    
    
    
    65,451British pounds
    
    
    10,185
    
    
    
    
    
    
    
    22,142
    
    
    
    
    
    
    
    207
    
    
    
    32,534New Zealand dollars
    
    
    291
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35
    
    
    
    32674,766
    
    
    
    (3,474
    )
    
    
    22,472
    
    
    
    4,305
    
    
    
    242
    
    
    
    98,311Net foreign currency recognised assets/(liabilities)NewUS
    
    Zealand
    
    
    
    
    
    Britishdollar
    
    dollar
    
    Euro
    
    pounds
    
    Other30 June 2007
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    Total $000Functional currency of the entityAustralian dollars
    
    
    29,248
    
    
    
    (16,373
    )
    
    
    (103
    )
    
    
    7,306
    
    
    
    
    
    
    
    20,078British pounds
    
    
    4,042
    
    
    
    
    
    
    
    5,766
    
    
    
    
    
    
    
    
    
    
    
    9,808New Zealand dollars
    
    
    450
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45033,740
    
    
    
    (16,373
    )
    
    
    5,663
    
    
    
    7,306
    
    
    
    
    
    
    
    30,336
  Consolidated
    
    Parent Entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Impact on net profits:10% appreciation of
the US dollar
    
    
    5,002
    
    
    
    2,267
    
    
    
    
    
    
    
    10% appreciation of
the Euro
    
    
    1,503
    
    
    
    380
    
    
    
    
    
    
    
    10% appreciation of
the British pound
    
    
    288
    
    
    
    491
    
    
    
    
    
    
    
    
  Foreign currency derivatives
  Consolidated
    
    Parent Entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Impact on equity:10% appreciation of the US dollar
    
    
    606
    
    
    
    50
    
    
    
    
    
    
    
    10% appreciation of the Euro
    
    
    116
    
    
    
    31
    
    
    
    
    
    
    
    10% appreciation of the British pound
    
    
    8,803
    
    
    
    6,678
    
    
    
    
    
    
    
    
 
 F-23




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 (b) Market risks  continued
       Consolidated
    
    Parent Entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Impact on equity based on a 10% increase in:Copper prices
    
    
    (2,796
    )
    
    
    
    
    
    
    
    
    
    
    Nickel prices
    
    
    
    
    
    
    (3,454
    )
    
    
    
    
    
    
    Impact on net profit based on a 10% increase in nickel prices
    
    
    (2,210
    )
    
    
    
    
    
    
    
    
    
    
    
  (c) Credit risk
     F-24




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 2 Financial and capital risk management  continued
 (d) Liquidity risk
   
    
    the Group will not have sufficient funds to settle a transaction
on the due date;
    
    the Group will be forced to sell financial assets at a value
which is less than what they are worth;
    
    the Group may be unable to settle or recover a financial asset
at all; or
    
    the Group may be required to refinance the Groups borrowing
facilities.
    Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Unsecured global multi-currency/multi-option loan facilities
    
    
    1,065,781
    
    
    
    717,393
    
    
    
    
    
    
    
    Amount of credit unused
    
    
    569,148
    
    
    
    376,067
    
    
    
    
    
    
    
    
  2008
    
    2007Between
    
    Between
    
    
    
    
    
    Between 1
    
    Between 2Less than 1
    
    1 and 2
    
    2 and 5
    
    Less than
    
    and 2 years
    
    and 5 yearsConsolidated
    
    year $000
    
    years $000
    
    years $000
    
    1 year $000
    
    $000
    
    $000Non-derivative financial liabilities:Trade and other payables
    
    
    964,034
    
    
    
    
    
    
    
    
    
    
    
    379,911
    
    
    
    
    
    
    
    Payables  non-current
    
    
    
    
    
    
    2,270
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Borrowings (including interest payments)
    
    
    24,009
    
    
    
    506,120
    
    
    
    
    
    
    
    19,348
    
    
    
    346,639
    
    
    
    988,043
    
    
    
    508,390
    
    
    
    
    
    
    
    399,259
    
    
    
    346,639
    
    
    
    DerivativesNet settled (commodity contracts)
    
    
    (1,699
    )
    
    
    
    
    
    
    
    
    
    
    (13,715
    )
    
    
    
    
    
    
    Gross settled: (inflow)
    
    
    (139,236
    )
    
    
    
    
    
    
    
    
    
    
    (114,621
    )
    
    
    
    
    
    
     outflow
    
    
    139,450
    
    
    
    
    
    
    
    
    
    
    
    114,030
    
    
    
    
    
    
    
    (1,485
    )
    
    
    
    
    
    
    
    
    
    
    (14,306
    )
    
    
    
    
    
    
    
 2008
    
    2007Between
    
    Between
    
    
    
    
    
    Between 1
    
    Between 2Less than 1
    
    1 and 2
    
    2 and 5
    
    Less than 1
    
    and 2 years
    
    and 5 yearsParent Entity
    
    year $000
    
    years $000
    
    years $000
    
    year $000
    
    $000
    
    $000Non-derivative financial liabilities:Trade and other payables
    
    
    343,483
    
    
    
    
    
    
    
    
    
    
    
    362,685
    
    
    
    
    
    
    
    343,483
    
    
    
    
    
    
    
    
    
    
    
    362,685
    
    
    
    
    
    
    
    
  F-25




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 2 Financial and capital risk management  continued
 (e) Derivative hedging instruments
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Current assetsForward foreign exchange contracts  cash flow hedges
    
    
    33
    
    
    
    1,079
    
    
    
    
    
    
    
    Forward commodity contracts  held for trading
    
    
    3,901
    
    
    
    
    
    
    
    
    
    
    
    Forward commodity contracts  cash flow hedges
    
    
    14
    
    
    
    13,719
    
    
    
    
    
    
    
    3,948
    
    
    
    14,798
    
    
    
    
    
    
    
    Current liabilitiesForward foreign exchange contracts  cash flow hedges
    
    
    247
    
    
    
    488
    
    
    
    
    
    
    
    Forward commodity contracts  cash flow hedges
    
    
    2,216
    
    
    
    4
    
    
    
    
    
    
    
    2,463
    
    
    
    492
    
    
    
    
    
    
    
    
   F-26




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 Consolidated
    
    Parent entity2008
    
    2007
    
    2006
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000
    
    $0003 RevenueSales
revenueSale of goods
    
    
    7,517,277
    
    
    
    5,420,590
    
    
    
    3,605,135
    
    
    
    
    
    
    
    Services
    
    
    148,314
    
    
    
    127,930
    
    
    
    147,272
    
    
    
    
    
    
    
    7,665,591
    
    
    
    5,548,520
    
    
    
    3,752,407
    
    
    
    
    
    
    
    Other revenueInterest
    
    
    2,876
    
    
    
    2,364
    
    
    
    2,047
    
    
    
    
    
    
    
    Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    170,205
    
    
    
    156,595Management fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,473
    
    
    
    1,411Rents
    
    
    2,069
    
    
    
    13
    
    
    
    55
    
    
    
    
    
    
    
    4,945
    
    
    
    2,377
    
    
    
    2,102
    
    
    
    171,678
    
    
    
    158,0067,670,536
    
    
    
    5,550,897
    
    
    
    3,754,509
    
    
    
    171,678
    
    
    
    158,0064 Other incomeNet gain on contribution of assets to SA Recycling LLC (note 30)
    
    
    34,623
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealised gain on held for trading commodity contracts ( note 2(e))
    
    
    3,901
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net gain on disposal of property, plant and equipment
    
    
    
    
    
    
    401
    
    
    
    
    
    
    
    
    
    
    
    Insurance recovery
    
    
    11,815
    
    
    
    7,632
    
    
    
    107
    
    
    
    
    
    
    
    Net revaluation losses reversed in the profit and loss (note 12)
    
    
    
    
    
    
    
    
    
    
    1,188
    
    
    
    
    
    
    
    Net foreign exchange gains
    
    
    243
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Government grants
    
    
    866
    
    
    
    945
    
    
    
    810
    
    
    
    
    
    
    
    51,448
    
    
    
    8,978
    
    
    
    2,105
    
    
    
    
    
    
    
    5 ExpensesProfit before income tax includes the following specific expenses:DepreciationBuildings
    
    
    7,868
    
    
    
    4,584
    
    
    
    2,815
    
    
    
    
    
    
    
    Plant and equipment
    
    
    55,728
    
    
    
    43,084
    
    
    
    35,615
    
    
    
    
    
    
    
    Total depreciation
    
    
    63,596
    
    
    
    47,668
    
    
    
    38,430
    
    
    
    
    
    
    
    AmortisationLeasehold improvements
    
    
    2,765
    
    
    
    3,724
    
    
    
    2,706
    
    
    
    
    
    
    
    Identified intangible assets
    
    
    28,196
    
    
    
    23,785
    
    
    
    16,394
    
    
    
    
    
    
    
    Total amortisation
    
    
    30,961
    
    
    
    27,509
    
    
    
    19,100
    
    
    
    
    
    
    
    Total depreciation and amortisation
    
    
    94,557
    
    
    
    75,177
    
    
    
    57,530
    
    
    
    
    
    
    
    Finance costs
    
    
    34,374
    
    
    
    30,405
    
    
    
    18,360
    
    
    
    
    
    
    
    Net loss on disposal of property, plant and equipment
    
    
    5,883
    
    
    
    
    
    
    
    705
    
    
    
    
    
    
    
    Impairment loss on fire destroyed assets
    
    
    71
    
    
    
    6,784
    
    
    
    
    
    
    
    
    
    
    
    Rental expenses relating to operating leases
    
    
    43,883
    
    
    
    33,489
    
    
    
    20,395
    
    
    
    
    
    
    
    Net foreign exchange losses
    
    
    
    
    
    
    59
    
    
    
    34
    
    
    
    
    
    
    
    Defined contribution superannuation expense
    
    
    6,275
    
    
    
    5,949
    
    
    
    4,448
    
    
    
    
    
    
    
    Research and development
    
    
    2,082
    
    
    
    2,515
    
    
    
    2,395
    
    
    
    
    
    
    
    Restructuring costs *
    
    
    4,553
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Merger costs **
    
    
    6,992
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 *
    
    As part of the Groups strategic review post merger with Metal Management, Inc., the Group is
considering offers to dispose of certain minor non-core businesses. As a result, the Group has
written the net book value of assets in these businesses down to fair value less costs to sell.**
    
    Merger costs include retention incentives, synergy achievement bonuses and redundancy costs
associated with the post merger rationalisation of the Sims Group Limited and Metal Management,
Inc. businesses. F-27




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $0006 Remuneration of auditorsAssurance Services1. Audit servicesFees paid and payable to PricewaterhouseCoopers Australian FirmAudit and review of financial reports and other
work under the Corporations Act 2001
    
    
    2,166
    
    
    
    456
    
    
    
    
    
    
    
    Fees paid and payable to related practices of PricewaterhouseCoopers Australian FirmAudit and review of financial reports
    
    
    2,194
    
    
    
    880
    
    
    
    
    
    
    
    Total remuneration for audit services
    
    
    4,360
    
    
    
    1,336
    
    
    
    
    
    
    
    2. Other Assurance servicesFees paid and payable to PricewaterhouseCoopers Australian FirmOther audit related services
    
    
    354
    
    
    
    3
    
    
    
    
    
    
    
    Due diligence services
    
    
    778
    
    
    
    131
    
    
    
    
    
    
    
    Fees paid and payable to related practices of PricewaterhouseCoopers Australian FirmOther audit related services
    
    
    79
    
    
    
    9
    
    
    
    
    
    
    
    Due diligence services
    
    
    
    
    
    
    167
    
    
    
    
    
    
    
    Total remuneration for other assurance services
    
    
    1,211
    
    
    
    310
    
    
    
    
    
    
    
    Total remuneration for assurance services
    
    
    5,571
    
    
    
    1,646
    
    
    
    
    
    
    
    Taxation servicesFees paid and payable to PricewaterhouseCoopers Australian FirmTax compliance services including review of company
income tax returns
    
    
    405
    
    
    
    331
    
    
    
    
    
    
    
    Tax consulting and advice
    
    
    22
    
    
    
    9
    
    
    
    
    
    
    
    Fees paid and payable to related practices of PricewaterhouseCoopers Australian FirmTax compliance services including review of company
income tax returns
    
    
    31
    
    
    
    30
    
    
    
    
    
    
    
    Tax consulting and advice
    
    
    107
    
    
    
    Total remuneration for taxation services
    
    
    565
    
    
    
    370
    
    
    
    
    
    
    
    Fees paid to auditors other than PricewaterhouseCoopers or
its related practicesAudit and review of the financial reports of joint ventures
and other entities in the consolidated entity and other
work under the Corporations Act 2001
    
    
    44
    
    
    
    24
    
    
    
    
    
    
    
    
  F-28




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 Consolidated
    
    Parent entity2008
    
    2007
    
    2006
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000
    
    $0007 Income tax(a) Income tax expenseThe parent entity and its subsidiariesCurrent tax
    
    
    217,122
    
    
    
    120,105
    
    
    
    74,523
    
    
    
    (391
    )
    
    
    (287
    )Deferred tax
    
    
    (8,100
    )
    
    
    (5,749
    )
    
    
    9,821
    
    
    
    
    
    
    
    Adjustments for current tax of prior periods
    
    
    5,485
    
    
    
    176
    
    
    
    (1,139
    )
    
    
    
    
    
    
    214,507
    
    
    
    114,532
    
    
    
    83,205
    
    
    
    (391
    )
    
    
    (287
    )Income tax expense on equity accounted profits (note 30)
    
    
    4,161
    
    
    
    2,281
    
    
    
    1,290
    
    
    
    
    
    
    
    218,668
    
    
    
    116,813
    
    
    
    84,495
    
    
    
    (391
    )
    
    
    (287
    )Deferred income tax expense/(benefit) included in income tax expense
comprises:Decrease (increase) in deferred tax assets (note 13)
    
    
    9,991
    
    
    
    (25,268
    )
    
    
    (3,295
    )
    
    
    
    
    
    
    (Decrease) increase in deferred tax liabilities (note 17)
    
    
    (18,091
    )
    
    
    19,519
    
    
    
    13,116
    
    
    
    
    
    
    
    (8,100
    )
    
    
    (5,749
    )
    
    
    9,821
    
    
    
    
    
    
    
    (b) Numerical reconciliation of income tax expense to prima facie tax
payableTax at the Australian tax rate of 30% (2007: 30%, 2006: 30%)
    
    
    195,549
    
    
    
    106,850
    
    
    
    81,259
    
    
    
    50,671
    
    
    
    46,691Tax effect of amounts which are not deductible (taxable) in calculating
taxable income:Non-deductible amortisation and depreciation
    
    
    29
    
    
    
    137
    
    
    
    (134
    )
    
    
    
    
    
    
    Expenses not allowable
    
    
    3,769
    
    
    
    723
    
    
    
    903
    
    
    
    
    
    
    
    Research and development
    
    
    (210
    )
    
    
    
    
    
    
    (90
    )
    
    
    
    
    
    
    Non assessable income
    
    
    (5,672
    )
    
    
    (10
    )
    
    
    (373
    )
    
    
    
    
    
    
    Non assessable gain on formation of jointly controlled entity
    
    
    (12,983
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dividend received from subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (51,062
    )
    
    
    (46,978
    )Other
    
    
    (1,640
    )
    
    
    (3,513
    )
    
    
    (3,069
    )
    
    
    
    
    
    
    178,842
    
    
    
    104,187
    
    
    
    78,496
    
    
    
    (391
    )
    
    
    (287
    )Difference in overseas tax rates
    
    
    34,407
    
    
    
    13,004
    
    
    
    7,840
    
    
    
    
    
    
    
    Utilisation of group losses not previously recognised
    
    
    (66
    )
    
    
    (554
    )
    
    
    (702
    )
    
    
    
    
    
    
    Adjustments for current tax of prior periods
    
    
    5,485
    
    
    
    176
    
    
    
    (1,139
    )
    
    
    
    
    
    
    Income tax expense / (benefit)
    
    
    218,668
    
    
    
    116,813
    
    
    
    84,495
    
    
    
    (391
    )
    
    
    (287
    )(c) Amounts recognised directly in equityAggregate current and deferred tax arising in the reporting period and not
recognised in net profit or loss but directly debited or credited to equity.Net deferred taxArising on equity movements in the current period
    
    
    (3,243
    )
    
    
    27,978
    
    
    
    5,010
    
    
    
    
    
    
    
    Adjustments arising on formation of the new Australian tax consolidated
group
    
    
    
    
    
    
    
    
    
    
    (9,552
    )(3,243
    )
    
    
    27,978
    
    
    
    (4,542
    )
    
    
    
    
    
    
    (d) Tax lossesUnused tax losses for which no deferred tax asset has been recognised
    
    
    5,676
    
    
    
    6,794
    
    
    
    6,539
    
    
    
    
    
    
    
    Potential tax benefit @ 30%
    
    
    1,703
    
    
    
    2,038
    
    
    
    1,962
    
    
    
    
    
    
    
    
 Tax consolidation legislation
   F-29




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $0008 Trade and other receivablesCurrentTrade receivables
    
    
    743,006
    
    
    
    291,942
    
    
    
    
    
    
    
    Provision for impairment of receivables
    
    
    (949
    )
    
    
    (1,760
    )
    
    
    
    
    
    
    742,057
    
    
    
    290,182
    
    
    
    
    
    
    
    Other receivables and deferred expenses
    
    
    84,171
    
    
    
    34,980
    
    
    
    
    
    
    
    Prepayments
    
    
    13,290
    
    
    
    13,748
    
    
    
    
    
    
    
    Income tax receivable
    
    
    26,583
    
    
    
    26,263
    
    
    
    
    
    
    
    Net tax-related amounts receivable from subsidiaries
    
    
    
    
    
    
    
    
    
    
    41,147
    
    
    
    20,679866,101
    
    
    
    365,173
    
    
    
    41,147
    
    
    
    20,679Non-currentOther receivables
    
    
    2,963
    
    
    
    
    
    
    
    
    
    
    
    2,963
    
    
    
    
    
    
    
    
    
    
    
    
   (a) Impaired trade receivables
    Consolidated
    
    Parent entity2008
    
    2007
    
    2006
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000
    
    $000Movements in the provision for impairment of receivables are as follows:At 1 July
    
    
    1,760
    
    
    
    3,015
    
    
    
    2,055
    
    
    
    
    
    
    
    Acquisitions
    
    
    145
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impairment/(write back) recognised during the year
    
    
    590
    
    
    
    (436
    )
    
    
    1,943
    
    
    
    
    
    
    
    Receivables written off during the year as uncollectible
    
    
    (1,528
    )
    
    
    (785
    )
    
    
    (986
    )
    
    
    
    
    
    
    Foreign currency exchange differences
    
    
    (18
    )
    
    
    (34
    )
    
    
    3
    
    
    
    
    
    
    
    949
    
    
    
    1,760
    
    
    
    3,015
    
    
    
    
    
    
    
    
 (b) Past due but not impaired
   Consolidated2008
    
    
    
    
    
    
    
    
    
    20071 - 30 days
    
    31+ days
    
    
    
    
    
    1 - 30 days
    
    31+ days pastTotal
    
    past due
    
    past due
    
    Total
    
    past due
    
    due$000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000By GeographyNorth America
    
    
    410,984
    
    
    
    37,252
    
    
    
    12,620
    
    
    
    92,933
    
    
    
    1,421
    
    
    
    466Europe
    
    
    178,944
    
    
    
    12,262
    
    
    
    4,316
    
    
    
    115,896
    
    
    
    5,097
    
    
    
    1,845Australasia
    
    
    152,129
    
    
    
    6,000
    
    
    
    3,828
    
    
    
    81,353
    
    
    
    3,098
    
    
    
    3,195742,057
    
    
    
    55,514
    
    
    
    20,764
    
    
    
    290,182
    
    
    
    9,616
    
    
    
    5,506
 (c) Other receivables
  (d) Net tax-related amounts receivable from subsidiaries
  F-30




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $0009 InventoryRaw materials at net realisable value
    
    
    230,934
    
    
    
    132,442
    
    
    
    
    
    
    
    Stores and spare parts at net realisable value
    
    
    29,179
    
    
    
    27,269
    
    
    
    
    
    
    
    Finished goods at net realisable value
    
    
    750,808
    
    
    
    214,578
    
    
    
    
    
    
    
    1,010,921
    
    
    
    374,289
    
    
    
    
    
    
    
    
 Inventory expense
  10 Investments accounted for using the equity method
 Shares in associates (note 30)
    
    
    335,826
    
    
    
    25,945
    
    
    
    
    
    
    
    
 11 Other financial assets
 Other (non-traded) investments
 Shares in subsidiaries (note 29)
    
    
    
    
    
    
    
    
    
    
    4,026,736
    
    
    
    2,506,652
 F-31




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 12 Property, plant and equipment
 Freehold
    
    
    
    
    
    Leasehold
    
    Plant &
    
    Capital WorkLand
    
    Buildings
    
    Improvements
    
    Equipment
    
    In Progress
    
    TotalConsolidated
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000At 1 July 2006Cost or fair value
    
    
    228,803
    
    
    
    65,923
    
    
    
    27,438
    
    
    
    509,034
    
    
    
    78,210
    
    
    
    909,408Accumulated depreciation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (308,161
    )
    
    
    
    
    
    
    (308,161
    )Net book amount
    
    
    228,803
    
    
    
    65,923
    
    
    
    27,438
    
    
    
    200,873
    
    
    
    78,210
    
    
    
    601,247Year ended 30 June 2007Opening net book amount
    
    
    228,803
    
    
    
    65,923
    
    
    
    27,438
    
    
    
    200,873
    
    
    
    78,210
    
    
    
    601,247Additions
    
    
    1,740
    
    
    
    3,084
    
    
    
    1,014
    
    
    
    22,489
    
    
    
    62,176
    
    
    
    90,503Disposals
    
    
    
    
    
    
    (78
    )
    
    
    (803
    )
    
    
    (2,131
    )
    
    
    
    
    
    
    (3,012
    )Impairment loss on fire destroyed assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,784
    )
    
    
    
    
    
    
    (6,784
    )Transfer from capital work in progress to
other property, plant
and equipment categories
    
    
    2,680
    
    
    
    27,505
    
    
    
    5,306
    
    
    
    62,909
    
    
    
    (98,400
    )
    
    
    Depreciation/amortisation expense (note 5)
    
    
    
    
    
    
    (4,584
    )
    
    
    (3,724
    )
    
    
    (43,084
    )
    
    
    
    
    
    
    (51,392
    )Acquisition due to purchase of
subsidiaries and businesses
    
    
    6,276
    
    
    
    14,713
    
    
    
    51
    
    
    
    19,047
    
    
    
    
    
    
    
    40,087Revaluation increments recognised in
asset revaluation
reserve (note 22)
    
    
    60,947
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,947Foreign currency exchange differences
    
    
    (20,530
    )
    
    
    (6,384
    )
    
    
    (2,509
    )
    
    
    (13,855
    )
    
    
    (6,472
    )
    
    
    (49,750
    )Closing net book amount
    
    
    279,916
    
    
    
    100,179
    
    
    
    26,773
    
    
    
    239,464
    
    
    
    35,514
    
    
    
    681,846At 30 June 2007Cost or fair value
    
    
    279,916
    
    
    
    100,179
    
    
    
    26,773
    
    
    
    555,263
    
    
    
    35,514
    
    
    
    997,645Accumulated depreciation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (315,799
    )
    
    
    
    
    
    
    (315,799
    )Net book amount
    
    
    279,916
    
    
    
    100,179
    
    
    
    26,773
    
    
    
    239,464
    
    
    
    35,514
    
    
    
    681,846Year ended 30 June 2008Opening net book amount
    
    
    279,916
    
    
    
    100,179
    
    
    
    26,773
    
    
    
    239,464
    
    
    
    35,514
    
    
    
    681,846Additions
    
    
    8,081
    
    
    
    2,933
    
    
    
    10,747
    
    
    
    49,116
    
    
    
    58,814
    
    
    
    129,691Disposals
    
    
    (7,153
    )
    
    
    (264
    )
    
    
    (51
    )
    
    
    (234
    )
    
    
    
    
    
    
    (7,702
    )Impairment loss on fire destroyed assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (71
    )
    
    
    
    
    
    
    (71
    )Transfer from capital work in progress to
other property, plant
and equipment categories
    
    
    9,716
    
    
    
    17,142
    
    
    
    1,224
    
    
    
    13,854
    
    
    
    (41,936
    )
    
    
    Transfer to SA Recycling LLC (equity
accounted) (note 30)
    
    
    (39,787
    )
    
    
    (1,378
    )
    
    
    (10,219
    )
    
    
    (25,614
    )
    
    
    (2,874
    )
    
    
    (79,872
    )Depreciation/amortisation expense (note 5)
    
    
    
    
    
    
    (7,868
    )
    
    
    (2,765
    )
    
    
    (55,728
    )
    
    
    
    
    
    
    (66,361
    )Acquisition due to purchase of
subsidiaries and business es
(note 29)
    
    
    98,695
    
    
    
    29,320
    
    
    
    1,114
    
    
    
    165,304
    
    
    
    9,320
    
    
    
    303,753Revaluation increments recognised in
asset revaluation
reserve (note 22)
    
    
    43,337
    
    
    
    2,501
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,838Foreign currency exchange differences
    
    
    (26,185
    )
    
    
    (7,927
    )
    
    
    (2,344
    )
    
    
    (16,833
    )
    
    
    (3,623
    )
    
    
    (56,912
    )Closing net book amount
    
    
    366,620
    
    
    
    134,638
    
    
    
    24,479
    
    
    
    369,258
    
    
    
    55,215
    
    
    
    950,210At 30 June 2008Cost or fair value
    
    
    366,620
    
    
    
    134,638
    
    
    
    24,479
    
    
    
    688,689
    
    
    
    55,215
    
    
    
    1,269,641Accumulated depreciation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (319,431
    )
    
    
    
    
    
    
    (319,431
    )Net book amount
    
    
    366,620
    
    
    
    134,638
    
    
    
    24,479
    
    
    
    369,258
    
    
    
    55,215
    
    
    
    950,210
 Valuations of freehold land, buildings and leasehold improvements
  F-32




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 12 Property, plant and equipment (continued)
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Carrying amounts that would have been recognised if land and buildings were stated at costFreehold landCost
    
    
    206,516
    
    
    
    165,666
    
    
    
    
    
    
    
    Buildings including leasehold improvementsCost
    
    
    145,278
    
    
    
    128,425
    
    
    
    
    
    
    
    Accumulated depreciation
    
    
    (24,959
    )
    
    
    (34,566
    )
    
    
    
    
    
    
    120,319
    
    
    
    93,859
    
    
    
    
    
    
    
    
 13 Deferred tax assets
 Non-currentThe balance comprises temporary differences attributed to:Property, plant and equipment
    
    
    8,481
    
    
    
    27,437
    
    
    
    
    
    
    
    Provisions
    
    
    25,296
    
    
    
    13,937
    
    
    
    
    
    
    
    Jointly controlled entities and associates
    
    
    8,850
    
    
    
    
    
    
    
    
    
    
    
    Stock based compensation
    
    
    27,000
    
    
    
    
    
    
    
    
    
    
    
    Foreign exchange losses on US receivable
    
    
    23,789
    
    
    
    9,338
    
    
    
    
    
    
    
    Other
    
    
    17,944
    
    
    
    13,887
    
    
    
    
    
    
    
    Total deferred tax assets
    
    
    111,360
    
    
    
    64,599
    
    
    
    
    
    
    
    
 Jointly
    
    
    
    
    
    ForeignProperty,
    
    
    
    
    
    controlled
    
    
    
    
    
    exchangeplant and
    
    
    
    
    
    entities and
    
    Stock Based
    
    losses on USequipment
    
    Provisions
    
    associates
    
    Compensation
    
    receivable
    
    Other
    
    TotalMovements
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000ConsolidatedAt 1 July 2006
    
    
    13,151
    
    
    
    12,007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,152
    
    
    
    35,310Credited to the income
statement
    
    
    14,230
    
    
    
    2,753
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,285
    
    
    
    25,268(Charged)/credited directly
to equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,338
    
    
    
    (226
    )
    
    
    9,112Acquisition of subsidiary
    
    
    
    
    
    
    65
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    65Foreign currency exchange
differences
    
    
    56
    
    
    
    (888
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,324
    )
    
    
    (5,156
    )At 30 June 2007
    
    
    27,437
    
    
    
    13,937
    
    
    
    
    
    
    
    
    
    
    
    9,338
    
    
    
    13,887
    
    
    
    64,599(Charged)/credited to the
income statement
    
    
    (18,758
    )
    
    
    6,344
    
    
    
    10,430
    
    
    
    (489
    )
    
    
    
    
    
    
    (7,518
    )
    
    
    (9,991
    )Credited directly to equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,875
    
    
    
    14,451
    
    
    
    2,869
    
    
    
    24,195Acquisition of subsidiary
    
    
    7
    
    
    
    6,305
    
    
    
    
    
    
    
    23,861
    
    
    
    
    
    
    
    8,359
    
    
    
    38,532Foreign currency exchange
differences
    
    
    (205
    )
    
    
    (1,290
    )
    
    
    (1,580
    )
    
    
    (3,247
    )
    
    
    
    
    
    
    347
    
    
    
    (5,975
    )At 30 June 2008
    
    
    8,481
    
    
    
    25,296
    
    
    
    8,850
    
    
    
    27,000
    
    
    
    23,789
    
    
    
    17,944
    
    
    
    111,360
 F-33




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 14 Intangibles
 Correction of error  Recognition of intangible assets acquired in previous business combinations
  Business Combinations Intangible Assets
  1 July 2006
    
    30 June 2007Book Value
    
    Book Value$000
    
    $000Increase in other intangible assets
    
    
    101,385
    
    
    
    94,174Increase in plant and equipment
    
    
    10,578
    
    
    
    10,907Decrease in goodwill
    
    
    (85,581
    )
    
    
    (92,958
    )Increase in deferred tax liabilities
    
    
    (38,048
    )
    
    
    (36,620
    )Decrease/(increase) in foreign currency translation reserve
    
    
    19
    
    
    
    (2,173
    )Decrease in retained earnings
    
    
    11,647
    
    
    
    26,670
    
    
    
    
  Goodwill and Intangible assets
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Goodwill
    
    
    1,166,534
    
    
    
    532,240
    
    
    
    
    
    
    
    Intangible Assets
    
    
    235,622
    
    
    
    94,174
    
    
    
    
    
    
    
    1,402,156
    
    
    
    626,414
    
    
    
    
    
    
    
    Goodwill
    
    
    1,166,534
    
    
    
    532,240
    
    
    
    
    
    
    
    (a) Reconciliation of consolidated movementsOpening net book amount at 1 July
    
    
    532,240
    
    
    
    493,494
    
    
    
    
    
    
    
    Transfer to SA Recycling LLC (equity accounted) (note 30)
    
    
    (173,652
    )
    
    
    
    
    
    
    
    
    
    
    Acquisition of subsidiaries and businesses (note 29)
    
    
    826,463
    
    
    
    70,462
    
    
    
    
    
    
    
    Write down business to fair value less costs to sell *
    
    
    (3,349
    )
    
    
    
    
    
    
    
    
    
    
    Foreign currency exchange differences
    
    
    (15,168
    )
    
    
    (31,716
    )
    
    
    
    
    
    
    Closing net book amount at 30 June
    
    
    1,166,534
    
    
    
    532,240
    
    
    
    
    
    
    
    
 
 *
    
    As part of the Groups strategic review post merger with Metal Management, Inc., the Group is considering offers to dispose of certain minor non-core businesses. As a result, the Group has written the net book value of goodwill in these
businesses down to fair value less costs to sell. F-34




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 14 Intangibles  continued
 (b) Impairment test for goodwill
   Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Australasia
    
    
    26,870
    
    
    
    13,788
    
    
    
    
    
    
    
    North America
    
    
    1,025,617
    
    
    
    411,674
    
    
    
    
    
    
    
    Europe
    
    
    114,047
    
    
    
    106,778
    
    
    
    
    
    
    
    1,166,534
    
    
    
    532,240
    
    
    
    
    
    
    
    
  Intangibles
    
    
    235,622
    
    
    
    94,174
    
    
    
    
    
    
    
    (a) Reconciliation of consolidated movementsOpening net book amount at 1 July
    
    
    94,174
    
    
    
    101,507
    
    
    
    
    
    
    
    Transfer to SA Recycling LLC (equity accounted) (note 30)
    
    
    (22,773
    )
    
    
    
    
    
    
    
    
    
    
    Acceleration of amortisation
    
    
    (1,094
    )
    
    
    
    
    
    
    
    
    
    
    Amortisation charge (note 5)
    
    
    (28,196
    )
    
    
    (23,785
    )
    
    
    
    
    
    
    Acquisition of subsidiaries and businesses (note 29)
    
    
    211,478
    
    
    
    28,778
    
    
    
    
    
    
    
    Foreign currency exchange differences
    
    
    (17,967
    )
    
    
    (12,326
    )
    
    
    
    
    
    
    Closing net book amount at 30 June
    
    
    235,622
    
    
    
    94,174
    
    
    
    
    
    
    
    
 SupplierConsolidated
    
    Relationships
    
    Trade name
    
    Permits
    
    Contracts
    
    Other
    
    TotalAt 1 July 2006Cost
    
    
    76,653
    
    
    
    
    
    
    
    8,412
    
    
    
    32,326
    
    
    
    2,234
    
    
    
    119,625Accumulated amortisation and impairment
    
    
    (10,791
    )
    
    
    
    
    
    
    
    
    
    
    (6,857
    )
    
    
    (470
    )
    
    
    (18,118
    )Net book amount
    
    
    65,862
    
    
    
    
    
    
    
    8,412
    
    
    
    25,469
    
    
    
    1,764
    
    
    
    101,507Year ended 30 June 2007Opening net book amount
    
    
    65,862
    
    
    
    
    
    
    
    8,412
    
    
    
    25,469
    
    
    
    1,764
    
    
    
    101,507Additions  acquisition
    
    
    28,516
    
    
    
    
    
    
    
    262
    
    
    
    
    
    
    
    
    
    
    
    28,778Amortisation charge
    
    
    (13,591
    )
    
    
    
    
    
    
    
    
    
    
    (9,655
    )
    
    
    (539
    )
    
    
    (23,785
    )Foreign currency exchange differences
    
    
    (8,500
    )
    
    
    
    
    
    
    (1,065
    )
    
    
    (2,574
    )
    
    
    (187
    )
    
    
    (12,326
    )Closing net book amount
    
    
    72,287
    
    
    
    
    
    
    
    7,609
    
    
    
    13,240
    
    
    
    1,038
    
    
    
    94,174At 30 June 2007Cost
    
    
    94,005
    
    
    
    
    
    
    
    7,609
    
    
    
    28,218
    
    
    
    1,952
    
    
    
    131,784Accumulated amortisation and impairment
    
    
    (21,718
    )
    
    
    
    
    
    
    
    
    
    
    (14,978
    )
    
    
    (914
    )
    
    
    (37,610
    )Net book amount
    
    
    72,287
    
    
    
    
    
    
    
    7,609
    
    
    
    13,240
    
    
    
    1,038
    
    
    
    94,174Year ended 30 June 2008Opening net book amount
    
    
    72,287
    
    
    
    
    
    
    
    7,609
    
    
    
    13,240
    
    
    
    1,038
    
    
    
    94,174Additions  acquisitions
    
    
    169,110
    
    
    
    34,468
    
    
    
    1,682
    
    
    
    5,823
    
    
    
    395
    
    
    
    211,478Transfer to SA Recycling LLC (equity accounted) (note 30)
    
    
    (17,804
    )
    
    
    
    
    
    
    (3,957
    )
    
    
    
    
    
    
    (1,012
    )
    
    
    (22,773
    )Amortisation charge
    
    
    (20,626
    )
    
    
    (487
    )
    
    
    
    
    
    
    (6,907
    )
    
    
    (176
    )
    
    
    (28,196
    )Acceleration of amortisation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,094
    )
    
    
    
    
    
    
    (1,094
    )Foreign currency exchange differences
    
    
    (13,071
    )
    
    
    (2,151
    )
    
    
    (1,039
    )
    
    
    (1,584
    )
    
    
    (122
    )
    
    
    (17,967
    )Closing net book amount
    
    
    189,896
    
    
    
    31,830
    
    
    
    4,295
    
    
    
    9,478
    
    
    
    123
    
    
    
    235,622At 30 June 2008Cost
    
    
    219,799
    
    
    
    32,308
    
    
    
    4,295
    
    
    
    25,499
    
    
    
    195
    
    
    
    282,096Accumulated amortisation and impairment
    
    
    (29,903
    )
    
    
    (478
    )
    
    
    
    
    
    
    (16,021
    )
    
    
    (72
    )
    
    
    (46,474
    )Net book amount
    
    
    189,896
    
    
    
    31,830
    
    
    
    4,295
    
    
    
    9,478
    
    
    
    123
    
    
    
    235,622Remaining weighted average amortisation period
    
    10 years
    
    
    19 years
    
    
    Indefinite
    
    
    2 years
    
    
    4 years
 F-35




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $00015 Trade and other payablesCurrentTrade payables
    
    
    805,367
    
    
    
    298,001
    
    
    
    
    
    
    
    Other payables
    
    
    154,853
    
    
    
    76,523
    
    
    
    72
    
    
    
    47Deferred income
    
    
    3,814
    
    
    
    5,387
    
    
    
    
    
    
    
    Amounts payable to subsidiaries
    
    
    
    
    
    
    
    
    
    
    343,411
    
    
    
    362,638964,034
    
    
    
    379,911
    
    
    
    343,483
    
    
    
    362,685Non-currentOther
    
    
    2,270
    
    
    
    
    
    
    
    
    
    
    
    16 BorrowingsNon-current (unsecured)Bank loans
    
    
    496,633
    
    
    
    341,326
    
    
    
    
    
    
    
    
  17 Tax liabilities
 CurrentIncome tax
    
    
    131,429
    
    
    
    41,374
    
    
    
    40,756
    
    
    
    20,316Non-currentDeferred income taxThe balance comprises temporary differences attributed to:Property, plant and equipment
    
    
    109,464
    
    
    
    74,312
    
    
    
    
    
    
    
    Intangibles
    
    
    68,485
    
    
    
    37,161
    
    
    
    
    
    
    
    Other
    
    
    12,485
    
    
    
    8,144
    
    
    
    
    
    
    
    Total deferred tax liability
    
    
    190,434
    
    
    
    119,617
    
    
    
    
    
    
    
    
 Property,plant andequipment
    
    Intangibles
    
    Other
    
    TotalMovements
    
    $000
    
    $000
    
    $000
    
    $000ConsolidatedAt 1 July 2006
    
    
    26,292
    
    
    
    38,620
    
    
    
    3,801
    
    
    
    68,713(Charged)/credited to the
income statement
    
    
    29,653
    
    
    
    (8,619
    )
    
    
    (1,515
    )
    
    
    19,519(Charged)/credited directly
to equity
    
    
    20,907
    
    
    
    
    
    
    
    6,783
    
    
    
    27,690Acquisition of subsidiary
    
    
    1,648
    
    
    
    12,826
    
    
    
    
    
    
    
    14,474Foreign currency exchange
differences
    
    
    (4,188
    )
    
    
    (5,666
    )
    
    
    (925
    )
    
    
    (10,779
    )At 30 June 2007
    
    
    74,312
    
    
    
    37,161
    
    
    
    8,144
    
    
    
    119,617Charged/(credited) to the
income statement
    
    
    (3,472
    )
    
    
    (15,054
    )
    
    
    435
    
    
    
    (18,091
    )(Charged)/credited directly
to equity
    
    
    11,693
    
    
    
    
    
    
    
    (5,271
    )
    
    
    6,422Acquisition of subsidiary
    
    
    36,587
    
    
    
    49,460
    
    
    
    9,686
    
    
    
    95,733Foreign currency exchange
differences
    
    
    (9,656
    )
    
    
    (3,082
    )
    
    
    (509
    )
    
    
    (13,247
    )At 30 June 2008
    
    
    109,464
    
    
    
    68,485
    
    
    
    12,485
    
    
    
    190,434
 F-36




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 17 Tax liabilities continued
 Non-current  Correction of error  Deferred income tax
      18 Provisions
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000CurrentEmployee entitlements
    
    
    21,004
    
    
    
    16,095
    
    
    
    
    
    
    
    Other
    
    
    7,060
    
    
    
    1,714
    
    
    
    
    
    
    
    28,064
    
    
    
    17,809
    
    
    
    
    
    
    
    Non-currentEmployee entitlements
    
    
    10,307
    
    
    
    9,905
    
    
    
    
    
    
    
    Environmental compliance
    
    
    6,875
    
    
    
    9,214
    
    
    
    
    
    
    
    Contingent consideration  business combinations
    
    
    17,547
    
    
    
    
    
    
    
    
    
    
    
    34,729
    
    
    
    19,119
    
    
    
    
    
    
    
    
 Movements in provisions
  Current
    
    Non-current
    
    Non-currentEnvironmental
    
    ContingentOther
    
    Compliance
    
    Consideration$000
    
    $000
    
    $000Consolidated  2008Carrying amount at start of year
    
    
    1,714
    
    
    
    9,214
    
    
    
    Reclassifications (to)/from creditors
    
    
    (26
    )
    
    
    (1,260
    )
    
    
    13,212Additional provisions recognised
    
    
    6,550
    
    
    
    
    
    
    
    Payments
    
    
    (1,161
    )
    
    
    (5
    )
    
    
    Transferred to SA Recycling LLC jointly controlled entity (note 30)
    
    
    
    
    
    
    (3,206
    )
    
    
    Acquisition of subsidiaries
    
    
    
    
    
    
    3,696
    
    
    
    4,596Foreign currency exchange differences
    
    
    (17
    )
    
    
    (1,564
    )
    
    
    (261
    )Carrying amount at end of year
    
    
    7,060
    
    
    
    6,875
    
    
    
    17,547
    F-37




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 19 Retirement benefit obligations
 (a) Superannuation plans
   (b) Balance sheet amounts
  Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Present value of the defined benefit obligation
    
    
    81,559
    
    
    
    69,976
    
    
    
    
    
    
    
    Fair value of defined benefit plan assets
    
    
    (76,731
    )
    
    
    (77,430
    )
    
    
    
    
    
    
    Net (asset)/liability in the balance sheet
    
    
    4,828
    
    
    
    (7,454
    )
    
    
    
    
    
    
    
  (c) Categories of plan assets
  Cash
    
    
    18,816
    
    
    
    3,839
    
    
    
    
    
    
    
    Equity instruments
    
    
    41,498
    
    
    
    43,093
    
    
    
    
    
    
    
    Debt instruments
    
    
    9,675
    
    
    
    19,597
    
    
    
    
    
    
    
    Property
    
    
    6,005
    
    
    
    10,454
    
    
    
    
    
    
    
    Other assets
    
    
    737
    
    
    
    447
    
    
    
    
    
    
    
    76,731
    
    
    
    77,430
    
    
    
    
    
    
    
    
 (d) Reconciliations
 Reconciliation of the present value of the defined benefit obligation, which is partly funded
(2007: fully funded):
 Balance at the beginning of the year
    
    
    69,976
    
    
    
    87,062
    
    
    
    
    
    
    
    Current service cost
    
    
    2,012
    
    
    
    2,663
    
    
    
    
    
    
    
    Interest cost
    
    
    3,933
    
    
    
    3,921
    
    
    
    
    
    
    
    Actuarial gains
    
    
    (535
    )
    
    
    (2,769
    )
    
    
    
    
    
    
    Benefits paid
    
    
    (3,333
    )
    
    
    (4,637
    )
    
    
    
    
    
    
    Contributions paid by members
    
    
    496
    
    
    
    567
    
    
    
    
    
    
    
    Acquired in business combinations
    
    
    14,002
    
    
    
    
    
    
    
    
    
    
    
    Curtailment / settlement adjustment
    
    
    
    
    
    
    (14,554
    )
    
    
    
    
    
    
    Foreign currency exchange differences
    
    
    (4,992
    )
    
    
    (2,277
    )
    
    
    
    
    
    
    Balance at the end of the year
    
    
    81,559
    
    
    
    69,976
    
    
    
    
    
    
    
    
 Reconciliation of the fair value of plan assets:
 Balance at the beginning of the year
    
    
    77,430
    
    
    
    82,232
    
    
    
    
    
    
    
    Expected return on plan assets
    
    
    5,466
    
    
    
    4,968
    
    
    
    
    
    
    
    Actuarial (losses) / gains
    
    
    (11,825
    )
    
    
    3,954
    
    
    
    
    
    
    
    Contributions by Group companies
    
    
    2,147
    
    
    
    5,524
    
    
    
    
    
    
    
    Contributions paid by members
    
    
    496
    
    
    
    567
    
    
    
    
    
    
    
    Benefits paid
    
    
    (3,333
    )
    
    
    (4,637
    )
    
    
    
    
    
    
    Acquired in business combinations
    
    
    12,468
    
    
    
    
    
    
    
    
    
    
    
    Curtailment / settlement adjustment
    
    
    
    
    
    
    (12,828
    )
    
    
    
    
    
    
    Foreign currency exchange differences
    
    
    (6,118
    )
    
    
    (2,350
    )
    
    
    
    
    
    
    Balance at the end of the year
    
    
    76,731
    
    
    
    77,430
    
    
    
    
    
    
    
    
 F-38




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 19 Retirement benefit obligations (continued)
 Consolidated
    
    Parent entity2008
    
    2007
    
    2006
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000
    
    $000(e) Amounts recognised in income statementCurrent service cost
    
    
    2,012
    
    
    
    2,663
    
    
    
    3,009
    
    
    
    
    
    
    
    Interest cost
    
    
    3,933
    
    
    
    3,921
    
    
    
    3,866
    
    
    
    
    
    
    
    Expected return on plan assets
    
    
    (5,466
    )
    
    
    (4,968
    )
    
    
    (4,472
    )
    
    
    
    
    
    
    Curtailment / settlement gain
    
    
    
    
    
    
    (1,726
    )
    
    
    
    
    
    
    
    
    
    
    Total included in employee benefits expense
    
    
    479
    
    
    
    (110
    )
    
    
    2,403
    
    
    
    
    
    
    
    Actual return on plan assets
    
    
    (6,359
    )
    
    
    8,922
    
    
    
    7,791
    
    
    
    
    
    
    
    (f) Amounts recognised in statement of recognised income and expenseActuarial (loss) / gain recognised in the year
    
    
    (11,290
    )
    
    
    6,723
    
    
    
    5,921
    
    
    
    
    
    
    
    Deferred tax
    
    
    3,463
    
    
    
    (1,512
    )
    
    
    (2,052
    )
    
    
    
    
    
    
    Defined benefit plan actuarial (loss)/gain (net of tax)
    
    
    (7,827
    )
    
    
    5,211
    
    
    
    3,869
    
    
    
    
    
    
    
    Cumulative actuarial (losses) / gains (gross of tax) recognised in the
statement of recognised income and expense
    
    
    (5,753
    )
    
    
    5,537
    
    
    
    (1,186
    )
    
    
    
    
    
    
    (g) Principal actuarial assumptionsThe principal actuarial assumptions used were as follows:AustraliaDiscount rate
    
    
    5.5
    %
    
    
    5.3
    %
    
    
    4.8
    %
    
    
    
    
    
    
    Expected return on plan assets
    
    
    8.0
    %
    
    
    8.0
    %
    
    
    8.0
    %
    
    
    
    
    
    
    Future salary increases
    
    
    5.0
    %
    
    
    5.0
    %
    
    
    5.0
    %
    
    
    
    
    
    
    United KingdomDiscount rate
    
    
    6.2
    %
    
    
    5.8
    %
    
    
    5.3
    %
    
    
    
    
    
    
    Expected return on plan assets
    
    
    6.4
    %
    
    
    5.8
    %
    
    
    5.7
    %
    
    
    
    
    
    
    Future salary increases
    
    
    5.0
    %
    
    
    4.8
    %
    
    
    4.5
    %
    
    
    
    
    
    
    USADiscount rate
    
    
    6.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expected return on plan assets
    
    
    8.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Future salary increases
    
    
    3.5
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    EuropeDiscount rate
    
    
    
    
    
    
    
    
    
    
    4.5
    %
    
    
    
    
    
    
    Expected return on plan assets
    
    
    
    
    
    
    
    
    
    
    4.5
    %
    
    
    
    
    
    
    Future salary increases
    
    
    
    
    
    
    
    
    
    
    3.0
    %
    
    
    
    
    
    
    
  F-39




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 19 Retirement benefit obligations (continued)
 (h) Employer Contributions
  Australia
    United Kingdom
    F-40




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 19 Retirement benefit obligations (continued)
 (h) Employer Contributions (continued)
 USA
    Europe
    Consolidated2008
    
    2007
    
    2006
    
    2005$000
    
    $000
    
    $000
    
    $000(i) Historic summaryDefined benefit plan obligation
    
    
    81,559
    
    
    
    69,976
    
    
    
    87,062
    
    
    
    82,913Plan assets
    
    
    (76,731
    )
    
    
    (77,430
    )
    
    
    (82,232
    )
    
    
    (60,720
    )Deficit/(surplus)
    
    
    4,828
    
    
    
    (7,454
    )
    
    
    4,830
    
    
    
    22,193Experience adjustments arising on plan liabilities
    
    
    (535
    )
    
    
    (2,769
    )
    
    
    (2,602
    )
    
    
    9,687Experience adjustments arising on plan assets
    
    
    11,825
    
    
    
    (3,954
    )
    
    
    (3,319
    )
    
    
    (2,580
    )
 F-41




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 20 Contributed equity
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000(i) Share capitalOrdinary shares  fully paid
    
    
    2,325,924
    
    
    
    811,976
    
    
    
    3,646,580
    
    
    
    2,132,632Movement in ordinary share capital  fully paid
 Number of shares issued
    
    
    
    
    
    Equity carrying amountby :
    
    
    
    
    
    $000SimsGroup
    
    Issue price
    
    
    
    
    
    Parent EntityDetails
    
    Date
    
    Limited
    
    $
    
    Consolidated
    
    **Opening Balance
    
    1 July 2006
    
    
    124,317,284
    
    
    
    
    
    
    
    780,108
    
    
    
    2,100,764Issued under the dividend reinvestment plan
    
    20 October 2006
    
    
    742,970
    
    
    
    20.91
    
    
    
    15,536
    
    
    
    15,536Exercise of performance rights under the Former LTI Plan
    
    31 October 2006
    
    
    20,000
    
    
    
    
    
    
    
    
    
    
    
    Shares issued under the employee share plan recognised
as issued following repayment of associated employee
loans.
    
    1 July 2006 - 
30 June 2007
    
    
    127,361
    
    
    
    14.99
    
    
    
    1,872
    
    
    
    1,872Issued under the dividend reinvestment plan
    
    10 April 2007
    
    
    640,065
    
    
    
    22.59
    
    
    
    14,460
    
    
    
    14,460Exercise of performance rights under the Former LTI Plan
    
    4 May 2007
    
    
    3,983
    
    
    
    
    
    
    
    
    
    
    
    Balance
    
    30 June 2007
    
    
    125,851,663
    
    
    
    
    
    
    
    811,976
    
    
    
    2,132,632Issued under the dividend reinvestment plan
    
    19 October 2007
    
    
    330,581
    
    
    
    29.97
    
    
    
    9,908
    
    
    
    9,908Exercise of performance rights under the Former LTI Plan
    
    Various
    
    
    52,711
    
    
    
    
    
    
    
    
    
    
    
    Vesting of restricted stock units under the Former LTI
Plan
    
    Various
    
    
    123,431
    
    
    
    
    
    
    
    
    
    
    
    Shares issued under the employee share plan recognised
as issued following repayment of associated employee
loans.
    
    1 July 2007 - 
30 June 2008
    
    
    15,517
    
    
    
    14.99
    
    
    
    233
    
    
    
    233Shares issued under the employee share plan recognised
as issued following repayment of associated employee
loans.
    
    1 July 2007 - 
30 June 2008
    
    
    67,142
    
    
    
    18.73
    
    
    
    1,258
    
    
    
    1,258Issued on acquisition of Metal Management Inc
    
    18 March 2008
    
    
    53,217,567
    
    
    
    28.00
    
    
    
    1,490,090
    
    
    
    1,490,090Issued on acquisition of Metal Management Inc
    
    18 March 2008
    
    
    256,250
    
    
    
    
    
    
    
    
    
    
    
    Issued under the dividend reinvestment plan
    
    9 April 2008
    
    
    286,836
    
    
    
    28.64
    
    
    
    8,215
    
    
    
    8,215Exercise of options issued under the Sims Group Limited
Transition Incentive Stock Plan (SGLTISP)
    
    13 May 2008
    
    
    123,000
    
    
    
    23.59
    
    
    
    2,902
    
    
    
    2,902Exercise of options issued under the SGLTISP
    
    13 May 2008
    
    
    61,500
    
    
    
    16.00
    
    
    
    984
    
    
    
    984Exercise of options issued under the SGLTISP
    
    3 June 2008
    
    
    30,750
    
    
    
    11.66
    
    
    
    358
    
    
    
    358Balance at the end of the financial year for
accounting purposes
    
    30 June 2008
    
    
    180,416,948
    
    
    
    
    
    
    
    2,325,924
    
    
    
    3,646,580Issue of ordinary shares under the employee share plan
deemed to be options for accounting purposes (note
27(ii)(a))
    
    22 July 2005
    
    
    44,286
    
    
    
    
    
    
    
    
    
    
    
    Issue of ordinary shares under the employee share plan
deemed to be options for accounting purposes (note
27(ii)(a))
    
    28 July 2006
    
    
    64,403
    
    
    
    
    
    
    
    
    
    
    
    Balance at the end of the financial year per share
register
    
    30 June 2008
    
    
    180,525,637
    
    
    
    
    
    
    
    2,325,924
    
    
    
    3,646,580
 
 **
    
    Refer to the accounting policy in respect of the basis of preparation and accounting for reverse acquisition (note 1(a)) Ordinary shares
  (ii) Options including ordinary shares deemed to be options noted above
  F-42    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 21 Statements of changes in equity
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007Notes
    
    $000
    
    $000
    
    $000
    
    $000Total equity at the beginning of the financial year
    
    
    
    
    
    
    1,279,430
    
    
    
    1,196,785
    
    
    
    2,144,330
    
    
    
    2,103,729Effect of correction of errorRecognition of intangible asset amortisation
    
    
    14
    
    
    
    
    
    
    
    (11,666
    )
    
    
    
    
    
    
    Recognition of deferred tax on US subsidiaries land revaluations
    
    
    17
    
    
    
    
    
    
    
    (1,921
    )
    
    
    
    
    
    
    Restated total equity at the beginning of the financial year
    
    
    
    
    
    
    1,279,430
    
    
    
    1,183,198
    
    
    
    2,144,330
    
    
    
    2,103,729Total recognised income and expense for the year
    
    
    
    
    
    
    312,636
    
    
    
    211,555
    
    
    
    169,292
    
    
    
    155,924Transactions with equity holders in their capacity as equity holders:Dividends provided for or paid
    
    
    23
    
    
    
    (174,712
    )
    
    
    (150,022
    )
    
    
    (174,712
    )
    
    
    (150,022
    )Share ownership and option plan expense (net of tax)
    
    
    22
    
    
    
    20,263
    
    
    
    2,831
    
    
    
    20,263
    
    
    
    2,831Share option assumed from acquisition of Metal Management Inc
    
    
    29
    
    
    
    10,523
    
    
    
    
    
    
    
    10,523
    
    
    
    Issue of ordinary shares, net of transaction costs
    
    
    20
    
    
    
    1,513,948
    
    
    
    31,868
    
    
    
    1,513,948
    
    
    
    31,868Total equity at the end of the financial year
    
    
    
    
    
    
    2,962,088
    
    
    
    1,279,430
    
    
    
    3,683,644
    
    
    
    2,144,33022 Reserves and retained profitsReservesAsset revaluation reserve
    
    
    
    
    
    
    146,078
    
    
    
    115,754
    
    
    
    
    
    
    
    Share-based payments reserve
    
    
    
    
    
    
    36,141
    
    
    
    5,355
    
    
    
    36,141
    
    
    
    5,355Cash flow hedging reserve
    
    
    
    
    
    
    (607
    )
    
    
    9,049
    
    
    
    
    
    
    
    Foreign currency translation reserve
    
    
    
    
    
    
    (220,626
    )
    
    
    (83,438
    )
    
    
    
    
    
    
    (39,014
    )
    
    
    46,720
    
    
    
    36,141
    
    
    
    5,355Movements in reserves were:Asset revaluation reserveBalance 1 July
    
    
    
    
    
    
    115,754
    
    
    
    75,714
    
    
    
    
    
    
    
    Increment on revaluation of land, buildings and leasehold improvements
    
    
    
    
    
    
    45,838
    
    
    
    60,947
    
    
    
    
    
    
    
    Deferred tax on current year movements
    
    
    
    
    
    
    (11,693
    )
    
    
    (20,907
    )
    
    
    
    
    
    
    Transfer to retained profits
    
    
    
    
    
    
    (3,821
    )
    
    
    
    
    
    
    
    
    
    
    Balance 30 June
    
    
    
    
    
    
    146,078
    
    
    
    115,754
    
    
    
    
    
    
    
    Share-based payments reserveBalance 1 July
    
    
    
    
    
    
    5,355
    
    
    
    2,524
    
    
    
    5,355
    
    
    
    2,524Share ownership and option plan
expense                       27(iv)
    
    
    
    
    
    
    13,388
    
    
    
    2,831
    
    
    
    13,388
    
    
    
    2,831Share option assumed from acquisition of Metal ManagementInc                    
                                                           
    29
    
    
    
    
    
    
    10,523
    
    
    
    
    
    
    
    10,523
    
    
    
    Deferred tax on current year movements
    
    
    
    
    
    
    6,875
    
    
    
    
    
    
    
    6,875
    
    
    
    Balance 30 June
    
    
    
    
    
    
    36,141
    
    
    
    5,355
    
    
    
    36,141
    
    
    
    5,355Cash flow hedging reserveBalance 1 July
    
    
    
    
    
    
    9,049
    
    
    
    (72
    )
    
    
    
    
    
    
    Revaluation
    
    
    
    
    
    
    (13
    )
    
    
    14,320
    
    
    
    
    
    
    
    Deferred tax on revaluation
    
    
    
    
    
    
    (594
    )
    
    
    (5,271
    )
    
    
    
    
    
    
    Transfer to net profit  gross
    
    
    
    
    
    
    (14,320
    )
    
    
    360
    
    
    
    
    
    
    
    Deferred tax on transfer to net profit
    
    
    
    
    
    
    5,271
    
    
    
    (288
    )
    
    
    
    
    
    
    Balance 30 June
    
    
    
    
    
    
    (607
    )
    
    
    9,049
    
    
    
    
    
    
    
    Foreign currency translation reserveBalance 1 July
    
    
    
    
    
    
    (83,438
    )
    
    
    (1,269
    )
    
    
    
    
    
    
    Currency exchange differences arising during the year
    
    
    
    
    
    
    (137,188
    )
    
    
    (82,169
    )
    
    
    
    
    
    
    Balance 30 June
    
    
    
    
    
    
    (220,626
    )
    
    
    (83,438
    )
    
    
    
    
    
    
    
 Asset revaluation reserve
  Share-based payments reserve
  Cash flow hedging reserve
  F-43
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 22 Reserves and retained profits (continued)
 Foreign currency translation reserve
  Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Retained profitsRetained profits at the beginning of the financial year
    
    
    420,734
    
    
    
    337,840
    
    
    
    6,343
    
    
    
    441Effect of correction of errorRecognition of intangible asset amortisation (note 14)
    
    
    
    
    
    
    (11,647
    )
    
    
    
    
    
    
    Restated retained profits at the beginning of the financial year
    
    
    420,734
    
    
    
    326,193
    
    
    
    6,343
    
    
    
    441Net profit attributable to members of Sims Group Limited
    
    
    433,162
    
    
    
    239,352
    
    
    
    169,292
    
    
    
    155,924Dividends paid (note 23)
    
    
    (174,712
    )
    
    
    (150,022
    )
    
    
    (174,712
    )
    
    
    (150,022
    )Actuarial gain/(loss) on retirement benefit obligations (net of tax)
    
    
    (7,827
    )
    
    
    5,211
    
    
    
    
    
    
    
    Transfers from reserves
    
    
    3,821
    
    
    
    
    
    
    
    
    
    
    
    Retained profits at the end of the financial year
    
    
    675,178
    
    
    
    420,734
    
    
    
    923
    
    
    
    6,343
 23 Dividends
 Consolidated
    
    Parent entity2008
    
    2007
    
    2006
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000
    
    $000Ordinary sharesFinal dividend for the year ended 30 June 2007 paid at 60c per share
franked at 51% based on tax paid at 30% (2006: Final dividend for the year
ended 30 June 2006 paid at 60c per share franked at 51% based on tax
paid at 30%) (2005: Final dividend for the year ended 30 June 2005 paid at
70c per share plus an additional special dividend of 20c per share both
franked at 60% based on tax paid at 30%)
    
    
    75,699
    
    
    
    74,782
    
    
    
    82,329
    
    
    
    75,699
    
    
    
    74,782Interim dividend for the year ended 30 June 2008 paid at 55c per share,
franked at 47% based on tax paid at 30% (2007: Interim dividend for the
year ended 30 June 2007 paid at 60c per share, franked at 57% based on
tax paid at 30%) (2006: Interim dividend for the year ended 30 June 2006
paid at 45c per share, franked at 47% based on tax paid at 30%)
    
    
    99,013
    
    
    
    75,240
    
    
    
    45,981
    
    
    
    99,013
    
    
    
    75,240Total dividends paid
    
    
    174,712
    
    
    
    150,022
    
    
    
    128,310
    
    
    
    174,712
    
    
    
    150,022Shares issued under the dividend reinvestment plan
    
    
    (18,123
    )
    
    
    (29,996
    )
    
    
    (15,018
    )
    
    
    (18,123
    )
    
    
    (29,996
    )Total cash dividends paid
    
    
    156,589
    
    
    
    120,026
    
    
    
    113,292
    
    
    
    156,589
    
    
    
    120,026Dividends not recognised at year endSince year end the directors have determined the payment of a final
dividend of 65c per share plus an additional special dividend of 10c per
share, both franked at 23% based on tax paid at 30%. The aggregate
amount of the proposed dividend expected to be paid on 27 October 2008
out of consolidated retained profits at 30 June 2008, but not recognised as
a liability at year end
    
    
    135,395
    
    
    
    75,660
    
    
    
    74,702
    
    
    
    135,395
    
    
    
    75,660Franked dividendsThe franked portion of dividends determined after 30 June 2008 will be franked out of existing franking credits or out of franking credits arising from
the payment of income tax in the year ending 30 June 2009.Franking credits available for the subsequent financial year based
on tax rate of 30% (2007: 30%, 2006: 30%)
    
    
    47,786
    
    
    
    30,706
    
    
    
    22,777
    
    
    
    47,786
    
    
    
    30,706
  (a)
    
    franking credits that will arise from the payment of income tax payable as at the end of the financial year(b)
    
    franking debits that will arise from the payment of dividends recognised as a liability as at the reporting date, and(c)
    
    franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
  F-44
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 24 Contingent liabilities
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000
  Guarantees
  Bank Guarantees  subsidiaries
    
    
    22,869
    
    
    
    7,917
    
    
    
    
    
    
    
    Borrowing guarantee  SA Recycling LLC jointly controlled entity
    
    
    129,857
    
    
    
    
    
    
    
    
    
    
    
    152,726
    
    
    
    7,917
    
    
    
    
    
    
    
    
 Subsidiaries
  25 Capital expenditure commitments
 Total capital expenditure contracted for at the balance date but not recognised in the
financial statements and payable not later than one year for the acquisition of plant and equipment
    
    
    24,624
    
    
    
    9,482
    
    
    
    
    
    
    
     for the acquisition of land and buildings
    
    
    935
    
    
    
    4,473
    
    
    
    
    
    
    
    25,559
    
    
    
    13,955
    
    
    
    
    
    
    
    Commitments included above relating to joint venture operations, jointly controlled entities
and associates. for the acquisition of plant and equipment
    
    
    220
    
    
    
    
    
    
    
    
    
    
    
    220
    
    
    
    
    
    
    
    
    
    
    
    
 26 Lease commitments
 Commitments in relation to leases contracted for at balance date but not
recognised as liabilities, payable:Not later than one year
    
    
    60,010
    
    
    
    35,834
    
    
    
    
    
    
    
    Later than one, but not later than three years
    
    
    90,661
    
    
    
    62,500
    
    
    
    
    
    
    
    Later than three, but not later than five years
    
    
    39,841
    
    
    
    24,125Later than five years
    
    
    61,695
    
    
    
    54,542
    
    
    
    
    
    
    
    252,207
    
    
    
    177,001
    
    
    
    
    
    
    
    Representing:Cancellable operating leases
    
    
    3,624
    
    
    
    3,510
    
    
    
    
    
    
    
    Non-cancellable operating leases
    
    
    248,583
    
    
    
    173,491
    
    
    
    
    
    
    
    252,207
    
    
    
    177,001
    
    
    
    
    
    
    
    Commitments for minimum lease payments in relation to non-cancellable
operating leases are payable as follows:Not later than one year
    
    
    58,187
    
    
    
    34,229
    
    
    
    
    
    
    
    Later than one, but not later than three years
    
    
    88,860
    
    
    
    72,570Later than three, but not later than five years
    
    
    39,841
    
    
    
    12,150
    
    
    
    
    
    
    
    Later than five years
    
    
    61,695
    
    
    
    54,542
    
    
    
    
    
    
    
    248,583
    
    
    
    173,491
    
    
    
    
    
    
    
    
  F-45
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 27 Share ownership plans
  (i) Long Term Incentive Plan
       (ii) Former Long Term Incentive Plan
  (a) Employee share plan
    F-46
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 27 Share ownership plans  continued
  2008
    
    2007Weighted
    
    
    
    
    
    WeightedNumber
    
    Average
    
    Number
    
    Averageof
    
    Exercise
    
    of
    
    ExerciseShares
    
    Price
    
    Shares
    
    PriceBalance at beginning of financial year
    
    
    191,348
    
    
    $
    17.56
    
    
    
    196,784
    
    
    $
    14.99Granted in the financial year
    
    
    
    
    
    $
    0.00
    
    
    
    131,545
    
    
    $
    18.73Redemptions in the financial year
    
    
    (82,659
    )
    
    $
    18.03
    
    
    
    (127,361
    )
    
    $
    14.99Forfeited in the financial year
    
    
    
    
    
    $
    0.00
    
    
    
    (9,620
    )
    
    $
    14.99Balance at end of financial year
    
    
    108,689
    
    
    $
    17.21
    
    
    
    191,348
    
    
    $
    17.56Exercisable at end of financial year
    
    
    46,818
    
    
    $
    17.42
    
    
    
    31,952
    
    
    $
    14.99
  (b) Restricted stock units
  2008
    
    2007Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    AverageNumber
    
    Grant
    
    Number
    
    Grantof
    
    Date
    
    of
    
    DateRSUs
    
    Fair Value
    
    RSUs
    
    Fair ValueBalance at beginning of financial year
    
    
    232,011
    
    
    $
    14.38
    
    
    
    280,708
    
    
    $
    14.72Granted in the financial year
    
    
    53,552
    
    
    $
    18.59
    
    
    
    11,028
    
    
    $
    7.66Vested in the financial year
    
    
    (123,431
    )
    
    $
    14.72
    
    
    
    
    
    
    $
    0.00Forfeited in the financial year
    
    
    (29,863
    )
    
    $
    14.72
    
    
    
    (59,725
    )
    
    $
    14.72Unvested balance at end of financial year
    
    
    132,269
    
    
    $
    15.70
    
    
    
    232,011
    
    
    $
    14.38
    (c) Performance rights
  Balance at
    
    Granted
    
    Exercised
    
    Forfeited
    
    Balance atExercise
    
    start of the
    
    during the
    
    during the
    
    during the
    
    end of the2008
    
    Grant date
    
    Expiry date
    
    price
    
    year
    
    year
    
    year
    
    year
    
    year31 Oct 2005
    
    30 Oct 2010
    
    Nil
    
    
    95,930
    
    
    
    
    
    
    
    (23,983
    )
    
    
    
    
    
    
    71,94718 Nov 2005
    
    30 Oct 2008
    
    Nil
    
    
    29,978
    
    
    
    
    
    
    
    (14,989
    )
    
    
    
    
    
    
    14,98910 Jul 2006
    
    30 Jun 2009
    
    Nil
    
    
    10,444
    
    
    
    
    
    
    
    (2,611
    )
    
    
    
    
    
    
    7,83328 Jul 2006
    
    1 Sep 2009
    
    Nil
    
    
    16,359
    
    
    
    
    
    
    
    (11,128
    )
    
    
    (1,652
    )
    
    
    3,5791 Jul 2007
    
    30 Apr 2010
    
    Nil
    
    
    
    
    
    
    44,803
    
    
    
    
    
    
    
    
    
    
    
    44,80317 Sep 2007
    
    30 Apr 2010
    
    Nil
    
    
    
    
    
    
    42,088
    
    
    
    
    
    
    
    
    
    
    
    42,088152,711
    
    
    
    86,891
    
    
    
    (52,711
    )
    
    
    (1,652
    )
    
    
    185,239
 F-47
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 27 Share ownership plans  continued
 Granted
    
    Exercised
    
    
    
    
    
    Balance atExercise
    
    Balance at
    
    during the
    
    during the
    
    Forfeited
    
    end of the2007
    
    Grant date
    
    Expiry date
    
    price
    
    start of the year
    
    year
    
    year
    
    during the year
    
    year31 Oct 2005
    
    30 Oct 2010
    
    Nil
    
    
    119,913
    
    
    
    
    
    
    
    (23,983
    )
    
    
    
    
    
    
    95,93018 Nov 2005
    
    30 Oct 2008
    
    Nil
    
    
    29,978
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,97810 Jul 2006
    
    30 Jun 2009
    
    Nil
    
    
    
    
    
    
    10,444
    
    
    
    
    
    
    
    
    
    
    
    10,44428 Jul 2006
    
    1 Sep 2009
    
    Nil
    
    
    
    
    
    
    16,359
    
    
    
    
    
    
    
    
    
    
    
    16,359149,891
    
    
    
    26,803
    
    
    
    (23,983
    )
    
    
    
    
    
    
    152,711
   (iii) Transition Incentive Stock Plan related to the Metal Management Inc merger
  (a) Stock options
    2008WeightedNumber
    
    
    Averageof
    
    
    ExerciseOptions
    
    
    PriceBalance at beginning of financial year
    
    
    
    
    
    $
    0.00Assumed in the financial year
    
    
    953,250
    
    
    $
    18.07Exercised in the financial year
    
    
    (215,250
    )
    
    $
    20.89Forfeited in the financial year
    
    
    
    
    
    $
    0.00Balance at end of financial year
    
    
    738,000
    
    
    $
    17.24Exercisable at end of financial year
    
    
    738,000
    
    
    $
    17.24
  F-48
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 27 Share ownership plans  continued
  ExerciseGrant date
    
    Expiry date

    
    price
    
    
    Number14 Mar 2008
    
    16 Jan 2014
    
    
    $
    9.49
    
    
    
    61,50014 Mar 2008
    
    16 Apr 2014
    
    
    $
    9.71
    
    
    
    20,50014 Mar 2008
    
    16 Jan 2014
    
    
    $
    14.19
    
    
    
    205,00014 Mar 2008
    
    7 Apr 2011
    
    
    $
    16.94
    
    
    
    123,00014 Mar 2008
    
    16 Jan 2014
    
    
    $
    18.92
    
    
    
    205,00014 Mar 2008
    
    2 Apr 2012
    
    
    $
    24.98
    
    
    
    123,000738,000
 (b) Restricted stock
   2008WeightedAverageNumber
    
    Grantof
    
    DateShares
    
    Fair ValueBalance at beginning of financial year
    
    
    
    
    
    $
    Assumed in the financial year
    
    
    256,250
    
    
    $
    28.00Vested in the financial year
    
    
    
    
    
    $
    Forfeited in the financial year
    
    
    (6,765
    )
    
    $
    28.00Unvested balance at end of financial year
    
    
    249,485
    
    
    $
    28.00
 (iv) Effect of share based payments on profit and loss
  Consolidated
    
    Parent entity2008
    
    2007
    
    2006
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000
    
    $000Employee Share Plan
    
    
    
    
    
    
    922
    
    
    
    886
    
    
    
    
    
    
    
    LTI Plan
    
    
    10,633
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Former LTI Plan  Restricted stock units
    
    
    943
    
    
    
    1,237
    
    
    
    1,350
    
    
    
    
    
    
    
    Former LTI Plan  Performance rights
    
    
    866
    
    
    
    672
    
    
    
    288
    
    
    
    
    
    
    
    Transition incentive stock plan
    
    
    1,228
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total (note 22)
    
    
    13,670
    
    
    
    2,831
    
    
    
    2,524
    
    
    
    
    
    
    
    
  F-49
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 28 Key management personnel disclosures
 (a) Other key management personnel
  Name
    
    PositionA Ratner
    
    President  North America  Operations (commenced 14 March 2008)R Larry
    
    Chief Financial Officer (commenced 14 March 2008)R Kelman
    
    President  North America  Commercial (commenced 14 March 2008)DR McGree
    
    Managing Director  Simsmetal Australia & New ZealandWT Bird
    
    Managing Director  Metals Recycling  UKG Davy
    
    Managing Director  Sims Recycling Solutions  Europe & North America
 (b) Key management personnel compensation
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$
    
    $
    
    $
    
    $Short-term benefits
    
    
    15,238,590
    
    
    
    8,787,184
    
    
    
    2,777,023
    
    
    
    2,369,430Long-term benefits
    
    
    262,147
    
    
    
    1,182,608
    
    
    
    
    
    
    
    Post-employment benefits
    
    
    657,347
    
    
    
    690,771
    
    
    
    
    
    
    
    Termination benefits
    
    
    
    
    
    
    1,456,170
    
    
    
    
    
    
    
    Share based payments
    
    
    7,437,748
    
    
    
    1,184,890
    
    
    
    
    
    
    
    23,595,832
    
    
    
    13,301,623
    
    
    
    2,777,023
    
    
    
    2,369,430
  (c) Equity instrument disclosures relating to key management personnel
 (i) Options provided as remuneration and shares issued on exercise of such options
  (ii) Option holdings
  Balance at2008
    
    start of the
    
    Granted as
    
    
    
    
    
    
    
    
    
    Balance at end
    
    Vested andName
    
    year
    
    compensation
    
    Exercised
    
    Other changes
    
    of the year
    
    exercisable
    
    UnvestedDirectors of Sims Group LimitedPK Mazoudier
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    JL SutcliffeEmployee share plan
    
    
    36,738
    
    
    
    
    
    
    
    (36,738
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Performance rights
    
    
    95,930
    
    
    
    224,534
    
    
    
    (23,983
    )
    
    
    
    
    
    
    296,481
    
    
    
    
    
    
    
    296,481RB CunninghamEmployee share plan
    
    
    10,417
    
    
    
    
    
    
    
    (10,417
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Performance rights
    
    
    29,978
    
    
    
    66,847
    
    
    
    (14,991
    )
    
    
    
    
    
    
    81,834
    
    
    
    
    
    
    
    81,834JM Feeney
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    M Iwanaga
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    C Renwick, AM
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    P Varello
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    D Dienst (appointed 14 March 2008)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    410,000
    
    
    
    410,000
    
    
    
    410,000
    
    
    
    NR Bobins (appointed 14 March 2008)
    
    
    
    
    
    
    
    
    
    
    (123,000
    )
    
    
    123,000
    
    
    
    
    
    
    
    
    
    
    
    JT DiLacqua (appointed 14 March 2008)
    
    
    
    
    
    
    
    
    
    
    (61,500
    )
    
    
    61,500
    
    
    
    
    
    
    
    
    
    
    
    R Lewon (appointed 14 March 2008)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    123,000
    
    
    
    123,000
    
    
    
    123,000
    
    
    
    GE Morris (appointed 14 March 2008)
    
    
    
    
    
    
    
    
    
    
    (30,750
    )
    
    
    235,750
    
    
    
    205,000
    
    
    
    205,000
    
    
    
    GN Brunsdon (resigned 21 November 2007)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    B Every (resigned 21 November 2007)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    173,063
    
    
    
    291,381
    
    
    
    (301,379
    )
    
    
    953,250
    
    
    
    1,116,315
    
    
    
    738,000
    
    
    
    378,315Other key management personnel of the GroupA RatnerRestricted stock award
    
    
    
    
    
    
    29,629
    
    
    
    
    
    
    
    
    
    
    
    29,629
    
    
    
    
    
    
    
    29,629R LarryRestricted stock award
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    R KelmanRestricted stock units
    
    
    59,725
    
    
    
    
    
    
    
    (29,863
    )
    
    
    
    
    
    
    29,862
    
    
    
    14,931
    
    
    
    14,931Performance rights
    
    
    
    
    
    
    24,644
    
    
    
    
    
    
    
    
    
    
    
    24,644
    
    
    
    
    
    
    
    24,644DR McGree
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Employee share plan
    
    
    8,185
    
    
    
    45,693
    
    
    
    
    
    
    
    
    
    
    
    53,878
    
    
    
    
    
    
    
    53,878Performance rights
    
    
    
    
    
    
    21,044
    
    
    
    
    
    
    
    
    
    
    
    21,044
    
    
    
    
    
    
    
    21,044WT BirdPerformance rights
    
    
    2,788
    
    
    
    54,785
    
    
    
    
    
    
    
    
    
    
    
    57,573
    
    
    
    
    
    
    
    57,573G DavyPerformance rights
    
    
    3,003
    
    
    
    70,487
    
    
    
    
    
    
    
    
    
    
    
    73,490
    
    
    
    
    
    
    
    73,49073,701
    
    
    
    246,282
    
    
    
    (29,863
    )
    
    
    
    
    
    
    290,120
    
    
    
    14,931
    
    
    
    275,189
 F-50
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 28 Key management personnel disclosures (continued)
 (c) Equity instrument disclosures relating to key management personnel (continued)
 Balance at2007
    
    start of the
    
    Granted as
    
    
    
    
    
    
    
    
    
    Balance at end
    
    Vested andName
    
    year
    
    compensation
    
    Exercised
    
    Other changes
    
    of the year
    
    exercisable
    
    UnvestedDirectors of Sims Group LimitedPK Mazoudier
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    J Neu (resigned 6 June 2007)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    JL SutcliffeEmployee share plan
    
    
    90,517
    
    
    
    36,738
    
    
    
    
    
    
    
    (90,517
    )
    
    
    36,738
    
    
    
    
    
    
    
    36,738Performance rights
    
    
    119,913
    
    
    
    
    
    
    
    (23,983
    )
    
    
    
    
    
    
    95,930
    
    
    
    
    
    
    
    95,930RB CunninghamEmployee share plan
    
    
    11,879
    
    
    
    10,417
    
    
    
    (11,879
    )
    
    
    
    
    
    
    10,417
    
    
    
    
    
    
    
    10,417Performance rights
    
    
    29,978
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,978
    
    
    
    
    
    
    
    29,978GN Brunsdon
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    B Every
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    JM Feeney
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    M Iwanaga (appointed 12 June 2007)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    C Renwick, AM (appointed 12 June 2007)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    P Varello
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    252,287
    
    
    
    47,155
    
    
    
    (35,862
    )
    
    
    (90,517
    )
    
    
    173,063
    
    
    
    
    
    
    
    173,063Other key management personnel of the GroupR KelmanRestricted stock units
    
    
    59,725
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59,725
    
    
    
    14,931
    
    
    
    44,794CR Jansen (resigned 31 December 2006)Restricted stock units
    
    
    59,725
    
    
    
    
    
    
    
    
    
    
    
    (59,725
    )
    
    
    
    
    
    
    
    
    
    
    DR McGree
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Employee share plan
    
    
    9,427
    
    
    
    8,185
    
    
    
    (9,427
    )
    
    
    
    
    
    
    8,185
    
    
    
    
    
    
    
    8,185WT BirdPerformance rights
    
    
    
    
    
    
    2,788
    
    
    
    
    
    
    
    
    
    
    
    2,788
    
    
    
    
    
    
    
    2,788G DavyPerformance rights
    
    
    
    
    
    
    3,003
    
    
    
    
    
    
    
    
    
    
    
    3,003
    
    
    
    
    
    
    
    3,003128,877
    
    
    
    13,976
    
    
    
    (9,427
    )
    
    
    (59,725
    )
    
    
    73,701
    
    
    
    14,931
    
    
    
    58,770
 F-51
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 28 Key management personnel disclosures (continued)
 (iii) Share holdings
  Receivedduring theBalance at
    
    year on the
    
    
    
    
    
    Balance at2008
    
    start of the
    
    exercise of
    
    Other changes
    
    end of theName
    
    year
    
    options
    
    during the year
    
    yearDirectors of Sims Group LimitedPK Mazoudier
    
    
    14,082
    
    
    
    
    
    
    
    557
    
    
    
    14,639JL Sutcliffe
    
    
    15,517
    
    
    
    60,721
    
    
    
    (23,983
    )
    
    
    52,255RB Cunningham
    
    
    
    
    
    
    25,408
    
    
    
    (25,408
    )
    
    
    GN Brunsdon (resigned 21 November
2007)
    
    
    3,497
    
    
    
    
    
    
    
    (3,497
    )
    
    
    B Every (resigned 21 November 2007)
    
    
    4,000
    
    
    
    
    
    
    
    (4,000
    )
    
    
    JM Feeney
    
    
    25,504
    
    
    
    
    
    
    
    230
    
    
    
    25,734P Varello
    
    
    4,600
    
    
    
    
    
    
    
    1,625
    
    
    
    6,225M Iwanaga
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    C Renwick, AM
    
    
    
    
    
    
    
    
    
    
    1,444
    
    
    
    1,444D Dienst (appointed 14 March 2008)
    
    
    
    
    
    
    
    
    
    
    1,156,872
    
    
    
    1,156,872NR Bobins (appointed 14 March 2008)
    
    
    
    
    
    
    123,000
    
    
    
    (68,400
    )
    
    
    54,600JT DiLacqua
(appointed 14 March 2008)
    
    
    
    
    
    
    61,500
    
    
    
    (61,500
    )
    
    
    R Lewon (appointed 14 March 2008)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    GE Morris (appointed 14 March 2008)
    
    
    
    
    
    
    30,750
    
    
    
    (10,750
    )
    
    
    20,00067,200
    
    
    
    301,379
    
    
    
    963,190
    
    
    
    1,331,769Other key management personnel of
the GroupA Ratner
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    R Larry
    
    
    
    
    
    
    
    
    
    
    90,972
    
    
    
    90,972R Kelman
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    DR McGree
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    WT Bird
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    G Davy
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,972
    
    
    
    90,972Receivedduring theBalance at
    
    year on the
    
    
    
    
    
    Balance at2007
    
    start of the
    
    exercise of
    
    Other changes
    
    end of theName
    
    year
    
    options
    
    during the year
    
    yearDirectors of Sims Group LimitedPK Mazoudier
    
    
    14,082
    
    
    
    
    
    
    
    
    
    
    
    14,082J Neu, Vice Chairman (resigned 6
June 2007)
    
    
    32,263,924
    
    
    
    
    
    
    
    (32,263,924
    )
    
    
    JL Sutcliffe
    
    
    100,517
    
    
    
    23,983
    
    
    
    (108,983
    )
    
    
    15,517RB Cunningham
    
    
    11,879
    
    
    
    
    
    
    
    (11,879
    )
    
    
    GN Brunsdon
    
    
    3,312
    
    
    
    
    
    
    
    185
    
    
    
    3,497B Every
    
    
    4,000
    
    
    
    
    
    
    
    
    
    
    
    4,000JM Feeney
    
    
    25,504
    
    
    
    
    
    
    
    
    
    
    
    25,504P Varello
    
    
    
    
    
    
    
    
    
    
    4,600
    
    
    
    4,600M Iwanaga (appointed 12 June 2007)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    C Renwick, AM (appointed 12 June
2007)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,423,218
    
    
    
    23,983
    
    
    
    (32,380,001
    )
    
    
    67,200The shares issued to J Neu formed part of the consideration paid for the purchase by Sims Group
Limited of the recycling operations in North America from Hugo Neu Corporation.Other key management personnel of
the GroupR Kelman
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    CR Jansen (resigned 31 December
2006)
    
    
    19,909
    
    
    
    
    
    
    
    (19,909
    )
    
    
    DR McGree
    
    
    9,427
    
    
    
    
    
    
    
    (9,427
    )
    
    
    WT Bird
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    G Davy
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,336
    
    
    
    
    
    
    
    (29,336
    )
    
    
    
 (d) Other transactions with key management personnel
  F-52
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
Notes to the financial statements  30 June 2008
(continued)
 29 Subsidiaries
  Country of
    
    EquityName of entity
    
    Note
    
    incorporation
    
    holding(indentation indicates ownership relationship)
    
    
    
    
    
    
    
    2008
    
    2007%
    
    %Sims Group LimitedSims Group Australia Holdings Limited
    
    (i)
    
    Australia
    
    100
    
    100PNG Recycling Limited
    
    
    
    PNG
    
    100
    
    100Sims Aluminium Pty Limited
    
    (i)
    
    Australia
    
    100
    
    100Sims E-Recycling Pty Limited
    
    
    
    Australia
    
    90
    
    90Sims Group Canada Holdings Limited
    
    
    
    Canada
    
    100
    
    100Sims Group Mauritius Limited
    
    (ii)
    
    Mauritius
    
    100
    
    Trishyiraya Recycling India Pvt Ltd
    
    (ii)
    
    India
    
    100
    
    Sims Tyrecycle Properties Pty Limited
    
    
    
    Australia
    
    100
    
    100Sims Tyrecycle Pty Limited
    
    (i)
    
    Australia
    
    100
    
    100Simsmetal Holdings Pty Limited
    
    
    
    Australia
    
    100
    
    100Sims Asia Holdings Limited
    
    
    
    Hong Kong
    
    100
    
    100Sims Energy Pty Limited
    
    
    
    Australia
    
    100
    
    100Sims Industrial Pty Limited
    
    
    
    Australia
    
    100
    
    100Simsmetal Industries Limited
    
    
    
    New Zealand
    
    100
    
    100Simsmetal Services Pty Limited
    
    (i)
    
    Australia
    
    100
    
    100Sims Manufacturing Pty Limited
    
    
    
    Australia
    
    100
    
    100Simsmetal Executive Staff Superannuation Pty Limited
    
    
    
    Australia
    
    100
    
    100Universal Inspection and Testing Company Pty Limited
    
    
    
    Australia
    
    100
    
    100Sims Recycling Solutions Pte Limited
    
    (ii)
    
    Singapore
    
    100
    
    Simsmetal Staff Equity Pty Limited
    
    
    
    Australia
    
    100
    
    100Sims Group UK Holdings Limited
    
    
    
    UK
    
    100
    
    100Sims Group UK Intermediate Holdings Limited
    
    
    
    UK
    
    100
    
    100Sims Group UK Limited
    
    
    
    UK
    
    100
    
    100ER Coley (Steel) Limited
    
    (ii)
    
    UK
    
    100
    
    ER Coley (Cast) Limited
    
    (ii)
    
    UK
    
    100
    
    Evans & Mondon Limited
    
    (ii)
    
    UK
    
    100
    
    Mirec BV
    
    
    
    The Netherlands
    
    100
    
    100Sims Recycling Solutions NV
    
    
    
    Belgium
    
    100
    
    100Recommit Limited
    
    
    
    UK
    
    100
    
    Sims Cymru Limited
    
    
    
    UK
    
    100
    
    100Sims Group German Holdings GmbH
    
    
    
    Germany
    
    100
    
    100Sims M+R GmbH
    
    
    
    Germany
    
    100
    
    100Sims Recycling Solutions AB (formerly Mirec AB)
    
    
    
    Sweden
    
    100
    
    100Sims Group Recycling Solutions Canada Limited
    
    
    
    Canada
    
    100
    
    100Accu-Shred Limited
    
    (ii)
    
    Canada
    
    100
    
    Sims Recycling Solutions Inc (formerly United Recycling Industries Inc)
    
    
    
    USA
    
    100
    
    100Sims Group Recycling Solutions USA Corporation
    
    
    
    USA
    
    100
    
    100United Refining & Smelting Co
    
    
    
    USA
    
    100
    
    100United Recycling International Corporation
    
    (iii)
    
    USA
    
    
    
    100United Technology Services Inc
    
    (iii)
    
    USA
    
    
    
    100Universal Integration Circuits Corporation
    
    (iii)
    
    USA
    
    
    
    100Sims Recycling Solutions UK Holding Limited
    
    
    
    UK
    
    100
    
    100Sims Recycling Solutions UK Group Limited
    
    
    
    UK
    
    100
    
    100Sims Recycling Solutions UK Limited
    
    
    
    Scotland
    
    100
    
    100United Castings Limited
    
    
    
    UK
    
    100
    
    100Simsmetal UK Pension Trustees Limited
    
    
    
    UK
    
    100
    
    100Sims Group Holdings 1 Pty Limited
    
    (ii)
    
    Australia
    
    100
    
    Sims Group Holdings 2 Pty Limited
    
    (ii)
    
    Australia
    
    100
    
    Sims Metal Management USA GP
    
    (ii)
    
    USA
    
    100
    
    Sims Group USA Holdings Corporation
    
    
    
    USA
    
    100
    
    100SHN Co LLC
    
    
    
    USA
    
    100
    
    100HNW Recycling LLC
    
    
    
    USA
    
    100
    
    100HNE Recycling LLC
    
    
    
    USA
    
    100
    
    100Dover Barge Company
    
    (iv)
    
    USA
    
    100
    
    100North Carolina Resource Conservation LLC
    
    (iv)
    
    USA
    
    100
    
    100Simsmetal East LLC
    
    (iv)
    
    USA
    
    100
    
    100Sims Municipal Recycling of New York LLC
    
    (ii)
    
    USA
    
    100
    
    Schiabo Larovo Corporation
    
    
    
    USA
    
    100
    
    100Simsmetal West LLC
    
    (iv)
    
    USA
    
    100
    
    100Sims Group Global Trade Corporation
    
    
    
    USA
    
    100
    
    100Sims Group USA Corporation
    
    
    
    USA
    
    100
    
    100
 F-53
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 29
Subsidiaries (continued)
 Country of
    
    EquityName of entity
    
    Note
    
    incorporation
    
    holding(indentation indicates ownership relationship)
    
    
    
    
    
    
    
    2008
    
    2007%
    
    %Sims Group Limited (parent company)Metal Management Inc
    
    (ii)
    
    USA
    
    100
    
    MM Metal Dynamics Holdings Inc
    
    (ii)
    
    USA
    
    100
    
    Metal Dynamics LLC
    
    (ii)
    
    USA
    
    100
    
    Metal Dynamics Detroit LLC
    
    (ii)
    
    USA
    
    100
    
    Metal Dynamics Indianapolis LLC
    
    (ii)
    
    USA
    
    100
    
    Metal Management Midwest Inc
    
    (ii)
    
    USA
    
    100
    
    CIM Trucking Inc
    
    (ii)
    
    USA
    
    100
    
    Metal Management Indiana Inc
    
    (ii)
    
    USA
    
    100
    
    Metal Management Memphis LLC
    
    (ii)
    
    USA
    
    100
    
    Metal Management Ohio Inc
    
    (ii)
    
    USA
    
    100
    
    Metal Management S&A Holdings Inc
    
    (ii)
    
    USA
    
    100
    
    Metal Management Pittsburgh Inc
    
    (ii)
    
    USA
    
    100
    
    Metal Management Aerospace Inc
    
    (ii)
    
    USA
    
    100
    
    Metal Management West Coast Holdings Inc
    
    (ii)
    
    USA
    
    100
    
    Metal Management West Inc
    
    (ii)
    
    USA
    
    100
    
    Metal Management Arizona LLC
    
    (ii)
    
    USA
    
    100
    
    Proler Southwest GP Inc
    
    (ii)
    
    USA
    
    100
    
    Metal Management Proler Southwest Inc
    
    (ii)
    
    USA
    
    100
    
    Proler Southwest LP
    
    (ii)
    
    USA
    
    100
    
    Metal Management Alabama Inc
    
    (ii)
    
    USA
    
    100
    
    Metal Management Mississippi Inc
    
    (ii)
    
    USA
    
    100
    
    Naporano Iron & Metal Inc
    
    (ii)
    
    USA
    
    100
    
    Metal Management Northeast Inc
    
    (ii)
    
    USA
    
    100
    
    Metal Management Connecticut Inc
    
    (ii)
    
    USA
    
    100
    
    New York Recycling Ventures Inc
    
    (ii)
    
    USA
    
    100
    
    Metal Management New Haven Inc
    
    (ii)
    
    USA
    
    100
    
    Reserve Iron & Metal Limited Partnership
    
    (ii) (v)
    
    USA
    
    100
    
    
 (i)
    
    These subsidiaries and the company are parties to a Deed of Cross Guarantee under which
each entity guarantees the debts of the others. The above entities represent a Closed Group and an
Extended Closed Group for the purposes of the relevant Australian Securities & Investments
Commission Class Order.(ii)
    
    These subsidiaries were acquired or incorporated during the year.(iii)
    
    These subsidiaries were de-registered or liquidated during the year.(iv)
    
    These subsidiaries are 50% owned by HNW Recycling LLC and 50% owned by HNE Recycling LLC.(v)
    
    This subsidiary is 75% owned by Metal Management Inc and 25% owned by Metal Management Ohio Inc.
  F-54
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 29 Subsidiaries (continued)
 Subsidiaries and businesses acquired during the year ended 30 June 2008:
 Acquisition of Metal Management Inc
   Other Acquisitions
  
    
    On 1 August 2007  McInerney Metals. The business is a specialist recycler of ferrous and
non-ferrous scrap metal via its significant investment in balers and associated equipment, in
servicing the regional remote areas of Victoria and border regions of New South Wales and South
Australia. The business is located in Victoria, Australia.
    
    On 26 October 2007  ER Coley (Steel) Limited. The business is a ferrous metal recycling merchant
and is based in Halesowen, United Kingdom.
    
    On 28 November 2007  Trishyiraya Recycling India Pvt Ltd. The business is a small
established recycler of electrical and electronic equipment. The business is located in the
southern Indian city of Chennai  a major industrial hub in India and in close proximity to major
information technology companies.
    
    On 3 January 2008  RecommIT Limited. The business is a leading IT disposal agency undertaking
the collection, secure data purging, recycling and redistribution of redundant IT equipment. The
business is based in Salisbury, United Kingdom.
    
    On 31 January 2008  Accu-Shred Limited. Accu-Shred is located in Ontario, Canada and is one
of Ontarios leading environmentally sound end of life electronics recyclers.
    
    On 2 April 2008  Life Cycle Services Limited. The business is a leading specialist in the
asset refurbishment, redeployment and secure disposal of information, communication and
telecommunication equipment. The business is based in Ashford, Middlesex, United Kingdom.
    
    On 5 June 2008  Clearhouse Technology. The business is located in Melbourne, Australia and
is a leading service provider in the region covering the collection, data protection, redeployment
and remarketing of obsolete IT equipment for a variety of government and business customers.
    
    On 5 June 2008  Evans and Mondon Limited. The business is a ferrous and non-ferrous metal
recycling merchant and is based in Halesowen, United Kingdom.
  F-55
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 29 Subsidiaries (continued)
 Fair value of assets and liabilities as at acquisition dates
  Consolidated2008
    
    
    2008
    
    
    2008
    
    
    2008$000
    
    
    $000
    
    
    $000
    
    
    $000Metal
    
    
    MetalManagement
    
    
    Management
    
    
    OtherInc
    
    
    Inc
    
    
    Acquisitions
    
    
    TotalAcquireescarryingamount
    
    
    Fair ValueCash
    
    
    32,720
    
    
    
    32,720
    
    
    
    1,825
    
    
    
    34,545Trade and other receivables
    
    
    305,548
    
    
    
    305,649
    
    
    
    9,166
    
    
    
    314,815Prepayments
    
    
    15,340
    
    
    
    18,295
    
    
    
    639
    
    
    
    18,934Inventories
    
    
    204,289
    
    
    
    227,786
    
    
    
    1,242
    
    
    
    229,028Equity accounted investments
    
    
    27,440
    
    
    
    27,440
    
    
    
    
    
    
    
    27,440Property, plant & equipment
    
    
    244,430
    
    
    
    295,398
    
    
    
    8,355
    
    
    
    303,753Identified intangibles
    
    
    28,518
    
    
    
    206,800
    
    
    
    4,678
    
    
    
    211,478Deferred tax asset
    
    
    58,581
    
    
    
    38,525
    
    
    
    7
    
    
    
    38,532Trade and other creditors
    
    
    (280,978
    )
    
    
    (282,689
    )
    
    
    (8,917
    )
    
    
    (291,606
    )Bank loans
    
    
    (24,656
    )
    
    
    (24,656
    )
    
    
    (7
    )
    
    
    (24,663
    )Deferred tax liability
    
    
    (17,085
    )
    
    
    (95,554
    )
    
    
    (179
    )
    
    
    (95,733
    )Employee entitlement provisions
    
    
    (4,101
    )
    
    
    (4,101
    )
    
    
    
    
    
    
    (4,101
    )Environmental provision
    
    
    (3,696
    )
    
    
    (3,696
    )
    
    
    
    
    
    
    (3,696
    )Defined benefit obligations
    
    
    (465
    )
    
    
    (1,534
    )
    
    
    
    
    
    
    (1,534
    )Current tax liabilities
    
    
    (9,495
    )
    
    
    (9,495
    )
    
    
    (552
    )
    
    
    (10,047
    )Net assets of entity
    
    
    576,390
    
    
    
    730,888
    
    
    
    16,257
    
    
    
    747,145Goodwill on acquisition
    
    
    
    
    
    
    789,196
    
    
    
    37,267
    
    
    
    826,463Consideration
    
    
    
    
    
    
    1,520,084
    
    
    
    53,524
    
    
    
    1,573,608ConsiderationCash
    
    
    
    
    
    
    
    
    
    
    47,512
    
    
    
    47,512Non-cash consideration  provision for
contingent consideration
    
    
    
    
    
    
    
    
    
    
    4,596
    
    
    
    4,596Shares issued (note 20)
    
    
    
    
    
    
    1,490,090
    
    
    
    
    
    
    
    1,490,090Fully vested options acquired as part of a business
combination
    
    
    
    
    
    
    10,523
    
    
    
    
    
    
    
    10,523Total consideration payable / paid
to vendor
    
    
    
    
    
    
    1,500,613
    
    
    
    52,108
    
    
    
    1,552,721Direct costs relating to acquisitions
    
    
    
    
    
    
    19,471
    
    
    
    1,416
    
    
    
    20,8871,520,084
    
    
    
    53,524
    
    
    
    1,573,608Outflow of cash to acquire subsidiaries and
businesses, net of cash acquiredConsideration
    
    
    
    
    
    
    1,520,084
    
    
    
    53,524
    
    
    
    1,573,608Non-cash consideration  shares issued
    
    
    
    
    
    
    (1,490,090
    )
    
    
    
    
    
    
    (1,490,090
    )Non-cash consideration  options acquired
    
    
    
    
    
    
    (10,523
    )
    
    
    
    
    
    
    (10,523
    )Non-cash consideration  provision for contingent
consideration
    
    
    
    
    
    
    
    
    
    
    (4,596
    )
    
    
    (4,596
    )Cash acquired net of bank loans
    
    
    
    
    
    
    (8,064
    )
    
    
    (1,818
    )
    
    
    (9,882
    )Net cash outflow in respect of acquistions made during
the year
    
    
    
    
    
    
    11,407
    
    
    
    47,110
    
    
    
    58,517
  F-56
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 29 Subsidiaries (continued)
  (a) Condensed consolidated income statement and summary of movements in consolidated retained
profits
   2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Condensed income statementProfit before income tax
    
    
    253,376
    
    
    
    202,236
    
    
    
    186,923Income tax expense
    
    
    (51,374
    )
    
    
    (40,778
    )
    
    
    (30,473
    )Profit for the year
    
    
    202,002
    
    
    
    161,458
    
    
    
    156,450Summary of movements in consolidated retained profitsRetained profits at the beginning of the financial year
    
    
    84,708
    
    
    
    71,607
    
    
    
    42,157Profit for the year
    
    
    202,002
    
    
    
    161,458
    
    
    
    156,450Actuarial gain on defined benefit fund (net of tax)
    
    
    (4,830
    )
    
    
    1,665
    
    
    
    1,310Dividends provided for or paid
    
    
    (174,712
    )
    
    
    (150,022
    )
    
    
    (128,310
    )Retained profits at the end of the financial year
    
    
    107,168
    
    
    
    84,708
    
    
    
    71,607(b) Condensed balance sheetSet out below is a consolidated balance sheet as at 30
June 2008 of the Closed Group.Current assetsCash and cash equivalents
    
    
    1,546
    
    
    
    1,053Trade and other receivables
    
    
    332,179
    
    
    
    97,081Inventories
    
    
    112,012
    
    
    
    118,223Derivative financial instruments
    
    
    47
    
    
    
    1,13013,389
    
    
    
    7,575Total current assets
    
    
    459,173
    
    
    
    225,062Non-current assetsReceivables
    
    
    150
    
    
    
    170Investments accounted for using the equity method
    
    
    7,439
    
    
    
    8,139Other financial assets
    
    
    2,302,999
    
    
    
    780,331Property, plant and equipment
    
    
    136,668
    
    
    
    102,284Deferred tax assets
    
    
    7,091
    
    
    
    5,449Intangible assets
    
    
    18,874
    
    
    
    13,116Retirement benefit surplus
    
    
    
    
    
    
    2,518Total non-current assets
    
    
    2,473,221
    
    
    
    912,007Total assets
    
    
    2,932,394
    
    
    
    1,137,069Current liabilitiesTrade and other payables
    
    
    304,376
    
    
    
    144,108Derivative financial instruments
    
    
    1,897
    
    
    
    65Current tax liabilities
    
    
    37,132
    
    
    
    21,051Provisions
    
    
    16,098
    
    
    
    10,147Total current liabilities
    
    
    359,503
    
    
    
    175,371Non-current liabilitiesBorrowings
    
    
    60,138
    
    
    
    37,147Deferred tax liabilities
    
    
    9,379
    
    
    
    2,059Provisions
    
    
    9,045
    
    
    
    9,419Retirement benefit obligations
    
    
    3,317
    
    
    
    Total non-current liabilities
    
    
    81,879
    
    
    
    48,625Total liabilities
    
    
    441,382
    
    
    
    223,996Net assets
    
    
    2,491,012
    
    
    
    913,073EquityContributed equity
    
    
    2,325,924
    
    
    
    811,976Reserves
    
    
    57,920
    
    
    
    16,389Retained profits
    
    
    107,168
    
    
    
    84,708Total equity
    
    
    2,491,012
    
    
    
    913,073
 F-57
    Table of Contents  Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 30 Investments in associates and jointly controlled entities
 SA Recycling LLC  jointly controlled entity
  Investments in Associates Interests in Joint Ventures
  Book Value
    
    Fair Value
    
    Non-cash gain$000
    
    $000
    
    $000Property, plant and equipment (note 12)
    
    
    79,872
    
    
    
    79,872
    
    
    
    Goodwill and intangible assets (note 14)
    
    
    196,425
    
    
    
    265,670
    
    
    
    (69,245
    )Non-current provisions (note 18)
    
    
    (3,206
    )
    
    
    (3,206
    )
    
    
    Investment at formation
    
    
    273,091
    
    
    
    342,336
    
    
    
    (69,245
    )
 Jointly Controlled Entities  Non-Monetary Contributions by Venturers,
 (a) Carrying amounts
 Name of associate and jointly
    
    Principal
    
    Country of
    
    
    
    
    
    
    
    
    
    Consolidated carrying
    
    Parent entity carryingcontrolled entities
    
    Activity
    
    Incorporation
    
    Ownership Interest
    
    amount $000
    
    amount $0002008
    
    2007
    
    2008
    
    2007
    
    2008
    
    2007SA Recycling LLC
    
    Metal Recycling
    
    USA
    
    
    50.0
    %
    
    
    
    %
    
    
    274,930
    
    
    
    
    
    
    
    
    
    
    
    Metal
Management 
Nashville LLC (i)
    
    Metal Recycling
    
    USA
    
    
    50.0
    %
    
    
    
    %
    
    
    20,368
    
    
    
    
    
    
    
    
    
    
    
    Rondout Iron & Metal LLC (i)
    
    Metal Recycling
    
    USA
    
    
    50.0
    %
    
    
    
    %
    
    
    1,082
    
    
    
    
    
    
    
    
    
    
    
    Port Albany Ventures LLC (i)
    
    Stevedoring and Marine Services
    
    USA
    
    
    50.0
    %
    
    
    
    %
    
    
    5,791
    
    
    
    
    
    
    
    
    
    
    
    Richmond Steel Recycling
Limited
    
    Metal Recycling
    
    Canada
    
    
    50.0
    %
    
    
    50.0
    %
    
    
    19,485
    
    
    
    14,030
    
    
    
    
    
    
    
    LMS Generation Pty Ltd
    
    Landfill Gas Management
    
    Australia
    
    
    50.0
    %
    
    
    50.0
    %
    
    
    13,624
    
    
    
    11,359
    
    
    
    
    
    
    
    Australian Refined Alloys
Pty Limited
    
    Metal Recycling
    
    Australia
    
    
    50.0
    %
    
    
    50.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Australian Refined Alloys
Sales Pty Limited
    
    Metal Recycling
    
    Australia
    
    
    50.0
    %
    
    
    50.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Extruded Metals (New
Zealand) Limited
    
    Metal Recycling
    
    NZ
    
    
    33.0
    %
    
    
    33.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sims Pacific Metals Limited
    
    Metal Recycling
    
    NZ
    
    
    50.0
    %
    
    
    50.0
    %
    
    
    546
    
    
    
    556
    
    
    
    
    
    
    
    Consolidated Extrusions Pty
Limited
    
    Metal Recycling
    
    Australia
    
    
    33.3
    %
    
    
    33.3
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consolidated Extrusions
(Management) Pty Limited
    
    Metal Recycling
    
    Australia
    
    
    33.3
    %
    
    
    33.3
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    335,826
    
    
    
    25,945
    
    
    
    
    
    
    
    
 
 (i)
    
    These associates were acquired as part of the Metal Management Inc acquisition.
 F-58




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 30 Investments in associates and jointly controlled entities  (continued)
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000(b) Movements in carrying amountsCarrying amount at the beginning of the financial year
    
    
    25,945
    
    
    
    21,761
    
    
    
    
    
    
    
    Additions from acquisition of businesses during the year
    
    
    27,440
    
    
    
    
    
    
    
    
    
    
    
    Additions from formation of SA Recycling LLC
    
    
    342,336
    
    
    
    
    
    
    
    
    
    
    
    Share of profits before tax
    
    
    62,334
    
    
    
    4,749
    
    
    
    
    
    
    
    Accretion of deferred gain to equity accounted profits
    
    
    2,239
    
    
    
    
    
    
    
    
    
    
    
    Deferral of gain on formation of SA Recycling LLC
    
    
    (34,623
    )
    
    
    
    
    
    
    
    
    
    
    Associates share of income tax expense
    
    
    (4,161
    )
    
    
    
    
    
    
    
    
    
    
    Dividends received
    
    
    (5,153
    )
    
    
    
    
    
    
    
    
    
    
    Return of capital from SA Recycling LLC
    
    
    (46,083
    )
    
    
    
    
    
    
    
    
    
    
    Return of capital from Port Albany Ventures LLC
    
    
    (2,413
    )
    
    
    
    
    
    
    
    
    
    
    Foreign currency translation reserve
    
    
    (32,035
    )
    
    
    (565
    )
    
    
    
    
    
    
    Carrying amount at the end of the financial year
    
    
    335,826
    
    
    
    25,945
    
    
    
    
    
    
    
    (c) Share of associates and jointly controlled entities profitsProfit before income tax
    
    
    64,573
    
    
    
    7,030
    
    
    
    
    
    
    
    Associates share of income tax expense
    
    
    (4,161
    )
    
    
    (2,281
    )
    
    
    
    
    
    
    Profit after income tax recognised in equity accounted investment
    
    
    60,412
    
    
    
    4,749
    
    
    
    
    
    
    
    Jointly controlled entities income tax expense *
    
    
    (19,331
    )
    
    
    Associates and jointly controlled entities profit after tax
    
    
    41,081
    
    
    
    4,749
    
    
    
    
    
    
    
    
 
 *
    
    The jointly controlled entities to which this relates are deemed to be pass through
entities for taxation purposes. As such, the Group incurs the income tax expense and associated
current tax liability on its share of the profits and includes this amount as part of the current
tax charge in note 7(a). (d) Summarised financial information of associates and jointly controlled entities
 Groups share of:Current
    
    
    
    
    
    Current
    
    
    
    
    
    
    
    
    
    Profit afterAcquisition
    
    assets
    
    Non-Current
    
    liabilities
    
    Non-current
    
    Revenues
    
    taxDate
    
    $000
    
    Assets
    
    $000
    
    liabilities
    
    $000
    
    $0002008SA Recycling LLC
    
    1 September 2007
    
    
    147,822
    
    
    
    325,168
    
    
    
    182,775
    
    
    
    
    
    
    
    499,964
    
    
    
    29,833Metal Management Nashville LLC
    
    14 March 2008
    
    
    16,332
    
    
    
    11,304
    
    
    
    6,732
    
    
    
    578
    
    
    
    19,780
    
    
    
    2,197Rondout Iron & Metal LLC
    
    14 March 2008
    
    
    935
    
    
    
    165
    
    
    
    13
    
    
    
    
    
    
    
    2,842
    
    
    
    188Port Albany Ventures LLC
    
    14 March 2008
    
    
    977
    
    
    
    4,863
    
    
    
    49
    
    
    
    
    
    
    
    1,653
    
    
    
    39Richmond Steel Recycling Limited
    
    
    
    
    
    
    17,368
    
    
    
    6,233
    
    
    
    4,693
    
    
    
    
    
    
    
    53,955
    
    
    
    5,823LMS Generation Pty Limited
    
    
    
    
    
    
    1,378
    
    
    
    23,222
    
    
    
    3,274
    
    
    
    11,180
    
    
    
    10,864
    
    
    
    2,965Australian Refined Alloys Pty Limited
    
    
    
    
    
    
    5,089
    
    
    
    11
    
    
    
    5,957
    
    
    
    870
    
    
    
    44,433
    
    
    
    Australian Refined Alloys Sales Pty Limited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66,374
    
    
    
    Extruded Metals (New Zealand) Limited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sims Pacific Metals Limited
    
    
    
    
    
    
    228
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36Consolidated Extrusions Pty Limited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consolidated Extrusions (Management) Pty Limited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    190,129
    
    
    
    370,966
    
    
    
    203,493
    
    
    
    12,628
    
    
    
    699,865
    
    
    
    41,081
 Groups share of:Current
    
    Non-Current
    
    Current
    
    Non-current
    
    
    
    
    
    Profit afterassets
    
    Assets
    
    liabilities
    
    liabilities
    
    Revenues
    
    tax$000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $0002007Richmond Steel Recycling Limited
    
    
    16,214
    
    
    
    4,764
    
    
    
    1,931
    
    
    
    139
    
    
    
    35,973
    
    
    
    2,939LMS Generation Pty Limited
    
    
    1,736
    
    
    
    18,575
    
    
    
    2,355
    
    
    
    9,718
    
    
    
    8,140
    
    
    
    1,810Australian Refined Alloys Pty Limited
    
    
    1,298
    
    
    
    10
    
    
    
    1,085
    
    
    
    210
    
    
    
    21,504
    
    
    
    Australian Refined Alloys Sales Pty Limited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,607
    
    
    
    Extruded Metals (New Zealand) Limited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sims Pacific Metals Limited
    
    
    210
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consolidated Extrusions Pty Limited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consolidated Extrusions (Management) Pty Limited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,458
    
    
    
    23,349
    
    
    
    5,371
    
    
    
    10,067
    
    
    
    101,224
    
    
    
    4,749
  F-59




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 31 Interests in joint ventures
  
    
    50% interest in the Australian Refined Alloys unincorporated joint venture, the principal
activity of which is the production of lead, lead alloys and related products.
    
    50% interest in the New Zealand based Sims Pacific Metals unincorporated joint venture, the
principal activity of which is the processing and sale of ferrous and non-ferrous secondary
raw materials.
    
    33.3% interest in the Consolidated Extrusions unincorporated joint venture, a non-operating
entity.
  Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Current assetsCash and cash equivalents
    
    
    1,997
    
    
    
    1,765
    
    
    
    
    
    
    
    Trade and other receivables
    
    
    11,525
    
    
    
    14,649
    
    
    
    
    
    
    
    Inventories
    
    
    11,624
    
    
    
    7,326
    
    
    
    
    
    
    
    Non-current assetsDeferred tax assets
    
    
    1,170
    
    
    
    2,193
    
    
    
    
    
    
    
    Property, plant and equipment
    
    
    10,429
    
    
    
    8,270
    
    
    
    
    
    
    
    Goodwill
    
    
    285
    
    
    
    327
    
    
    
    
    
    
    
    Total assets
    
    
    37,030
    
    
    
    34,530
    
    
    
    
    
    
    
    Current liabilitiesTrade and other payables
    
    
    15,521
    
    
    
    13,833
    
    
    
    
    
    
    
    Current tax liabilities
    
    
    5,646
    
    
    
    5,971
    
    
    
    
    
    
    
    Provisions
    
    
    514
    
    
    
    1,055
    
    
    
    
    
    
    
    Non-current liabilitiesProvisions
    
    
    241
    
    
    
    227
    
    
    
    
    
    
    
    Total liabilities
    
    
    21,922
    
    
    
    21,086
    
    
    
    
    
    
    
    Share of net assets employed in joint ventures
    
    
    15,108
    
    
    
    13,444
    
    
    
    
    
    
    
    
  F-60




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 32 Related party transactions
 (a) Parent entity
  (b) Subsidiaries
  (c) Key management personnel
  (d) Transactions with related parties
  Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Tax consolidation legislationCurrent tax payable assumed from wholly-owned tax consolidation entities
    
    
    
    
    
    
    
    
    
    
    41,147
    
    
    
    20,679Dividend revenueReceived from subsidiaries
    
    
    
    
    
    
    
    
    
    
    170,205
    
    
    
    156,595Management feeReceived from subsidiaries
    
    
    
    
    
    
    
    
    
    
    1,473
    
    
    
    1,411Operating expensesPaid by subsidiaries
    
    
    
    
    
    
    
    
    
    
    2,777
    
    
    
    2,369Superannuation contributionsContributions to superannuation funds on behalf of employees
    
    
    8,386
    
    
    
    11,956
    
    
    
    
    
    
    
    (e) Outstanding balances arising from transactions with related entitiesThe following balances are outstanding at the reporting date in relation to transaction with related parties:Current receivables (tax funding agreement)
Subsidiaries
    
    
    
    
    
    
    
    
    
    
    41,147
    
    
    
    20,679No provision for doubtful debts has been raised in relation to any outstanding balances, and no expense has been recognised in respect of bad or
doubtful debts due from related parties.(f) Transactions with associates and jointly controlled entitiesSales
    
    
    854
    
    
    
    
    
    
    
    
    
    
    
    Purchases
    
    
    689,634
    
    
    
    294
    
    
    
    
    
    
    
    Management fees received
    
    
    2,084
    
    
    
    946
    
    
    
    
    
    
    
    Other costs
    
    
    276
    
    
    
    
    
    
    
    
    
    
    
    (g) Outstanding balances arising from transactions with associates and jointly controlled entitiesCurrent receivables
    
    
    4,603
    
    
    
    592
    
    
    
    
    
    
    
    Current payables
    
    
    169,074
    
    
    
    1,270
    
    
    
    
    
    
    
    
 F-61




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 32 Related party transactions  continued
 (h) Loans from related parties
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Loans from subsidiariesBeginning of the year
    
    
    
    
    
    
    
    
    
    
    362,638
    
    
    
    390,963Net reduction in loan *
    
    
    
    
    
    
    
    
    
    
    (19,227
    )
    
    
    (28,325
    )End of year
    
    
    
    
    
    
    
    
    
    
    343,411
    
    
    
    362,638
 
 *
    
    Other than for cash transactions to fund and pay dividends, all other cash
receipts and payments of the parent company are conducted through a
subsidiary. The net reduction reflects the aggregate impact of these
transactions during the year.  (i) Terms and conditions
    F-62




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 33 Segment reporting
  North America  comprising the United States of America and Canada
  Australasia  comprising Australia, New Zealand, Papua New Guinea and Asia
  Europe  comprising United Kingdom, Sweden, Holland and Germany
  Lines of business
      Operating segments
 2008Inter-segmentNorth
    
    Austral-
    
    
    
    
    
    eliminations/America
    
    asia
    
    Europe
    
    unallocated
    
    Consolidated$000
    
    $000
    
    $000
    
    $000
    
    $000Sales to external customers (note (a))
    
    
    4,607,898
    
    
    
    1,745,109
    
    
    
    1,312,584
    
    
    
    
    
    
    
    7,665,591Inter-segment sales (note (b))
    
    
    
    
    
    
    400
    
    
    
    
    
    
    
    (400
    )
    
    
    Total sales revenue
    
    
    4,607,898
    
    
    
    1,745,509
    
    
    
    1,312,584
    
    
    
    (400
    )
    
    
    7,665,591Other revenue / income
    
    
    2,293
    
    
    
    1,182
    
    
    
    1,470
    
    
    
    
    
    
    
    4,945Total segment revenue / income
    
    
    4,610,191
    
    
    
    1,746,691
    
    
    
    1,314,054
    
    
    
    (400
    )
    
    
    7,670,536Share of pre-tax profits of associates
    
    
    60,271
    
    
    
    4,302
    
    
    
    
    
    
    
    
    
    
    
    64,573Segment EBITDA
    
    
    466,096
    
    
    
    195,232
    
    
    
    116,557
    
    
    
    
    
    
    
    777,885Depreciation and amortisation expense
    
    
    54,516
    
    
    
    17,116
    
    
    
    22,925
    
    
    
    
    
    
    
    94,557Segment EBIT
    
    
    411,580
    
    
    
    178,116
    
    
    
    93,632
    
    
    
    
    
    
    
    683,328Interest income (note 3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,876Finance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (34,374
    )Profit before income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    651,830Segment and Total Assets
    
    
    3,455,149
    
    
    
    666,309
    
    
    
    695,514
    
    
    
    
    
    
    
    4,816,972Segment and Total Liabilities
    
    
    1,056,584
    
    
    
    266,382
    
    
    
    531,918
    
    
    
    
    
    
    
    1,854,884Net Assets
    
    
    2,398,565
    
    
    
    399,927
    
    
    
    163,596
    
    
    
    
    
    
    
    2,962,088Acquisitions of property, plant and equipment
    
    
    59,988
    
    
    
    32,588
    
    
    
    37,115
    
    
    
    
    
    
    
    129,691Acquisition of goodwill and intangibles
    
    
    995,996
    
    
    
    17,630
    
    
    
    24,315
    
    
    
    
    
    
    
    1,037,941Other non-cash expenses
    
    
    11,843
    
    
    
    23,765
    
    
    
    2,132
    
    
    
    
    
    
    
    37,740
 F-63




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 33 Segment reporting (continued)
 Operating segments (continued)
 2007Inter-segmentNorth
    
    Austral-
    
    
    
    
    
    eliminations/America
    
    asia
    
    Europe
    
    unallocated
    
    Consolidated$000
    
    $000
    
    $000
    
    $000
    
    $000Sales to external customers (note (a))
    
    
    2,938,246
    
    
    
    1,465,383
    
    
    
    1,144,891
    
    
    
    
    
    
    
    5,548,520Intersegment sales (note (b))
    
    
    
    
    
    
    894
    
    
    
    
    
    
    
    (894
    )
    
    
    Total sales revenue
    
    
    2,938,246
    
    
    
    1,466,277
    
    
    
    1,144,891
    
    
    
    (894
    )
    
    
    5,548,520Other revenue/income
    
    
    512
    
    
    
    435
    
    
    
    1,430
    
    
    
    
    
    
    
    2,377Total segment revenue
    
    
    2,938,758
    
    
    
    1,466,712
    
    
    
    1,146,321
    
    
    
    (894
    )
    
    
    5,550,897Share of pre-tax profits of associates
    
    
    4,446
    
    
    
    2,584
    
    
    
    
    
    
    
    
    
    
    
    7,030Segment EBITDA
    
    
    204,326
    
    
    
    167,721
    
    
    
    87,336
    
    
    
    
    
    
    
    459,383Depreciation and amortisation expense
    
    
    40,676
    
    
    
    14,100
    
    
    
    20,401
    
    
    
    
    
    
    
    75,177Segment EBIT
    
    
    163,650
    
    
    
    153,621
    
    
    
    66,935
    
    
    
    
    
    
    
    384,206Interest income (note 3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,364Finance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,405
    )Profit before income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    356,165Segment and Total Assets
    
    
    1,167,673
    
    
    
    514,759
    
    
    
    516,646
    
    
    
    
    
    
    
    2,199,078Segment and Total Liabilities
    
    
    363,976
    
    
    
    177,416
    
    
    
    378,256
    
    
    
    
    
    
    
    919,648Net Assets
    
    
    803,697
    
    
    
    337,343
    
    
    
    138,390
    
    
    
    
    
    
    
    1,279,430Acquisitions of property, plant and equipment
    
    
    42,684
    
    
    
    25,019
    
    
    
    22,800
    
    
    
    
    
    
    
    90,503Acquisition of goodwill and intangibles
    
    
    52,698
    
    
    
    4,744
    
    
    
    41,798
    
    
    
    
    
    
    
    99,240Other non-cash expenses
    
    
    (216
    )
    
    
    5,436
    
    
    
    7,169
    
    
    
    
    
    
    
    12,389
 2006Inter-segmentNorth
    
    Austral-
    
    
    
    
    
    eliminations/America
    
    asia
    
    Europe
    
    unallocated
    
    Consolidated$000
    
    $000
    
    $000
    
    $000
    
    $000Sales to external customers (note (a))
    
    
    1,735,204
    
    
    
    1,224,700
    
    
    
    792,503
    
    
    
    
    
    
    
    3,752,407Intersegment sales (note (b))
    
    
    
    
    
    
    1,273
    
    
    
    
    
    
    
    (1,273
    )
    
    
    Total sales revenue
    
    
    1,735,204
    
    
    
    1,225,973
    
    
    
    792,503
    
    
    
    (1,273
    )
    
    
    3,752,407Other revenue/income
    
    
    1,106
    
    
    
    996
    
    
    
    
    
    
    
    
    
    
    
    2,102Total segment revenue
    
    
    1,736,310
    
    
    
    1,226,969
    
    
    
    792,503
    
    
    
    (1,273
    )
    
    
    3,754,509Share of net profits of associates
    
    
    2,411
    
    
    
    1,753
    
    
    
    
    
    
    
    
    
    
    
    4,164Segment EBITDA
    
    
    139,060
    
    
    
    138,892
    
    
    
    66,755
    
    
    
    
    
    
    
    344,707Depreciation and amortisation expense
    
    
    28,126
    
    
    
    13,833
    
    
    
    15,571
    
    
    
    
    
    
    
    57,530Segment EBIT
    
    
    110,934
    
    
    
    125,059
    
    
    
    51,184
    
    
    
    
    
    
    
    287,177Interest income (note 3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,047Finance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,360
    )Profit before income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    270,864Segment and Total Assets
    
    
    1,126,863
    
    
    
    402,500
    
    
    
    408,476
    
    
    
    
    
    
    
    1,937,839Segment and Total Liabilities
    
    
    366,795
    
    
    
    175,683
    
    
    
    198,576
    
    
    
    
    
    
    
    741,054Net Assets
    
    
    760,068
    
    
    
    226,817
    
    
    
    209,900
    
    
    
    
    
    
    
    1,196,785Acquisitions of property, plant and equipment
    
    
    43,780
    
    
    
    19,416
    
    
    
    13,285
    
    
    
    
    
    
    
    76,481Acquisition of goodwill and intangibles
    
    
    476,456
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    476,456Other non-cash expenses
    
    
    10,476
    
    
    
    10,510
    
    
    
    1,823
    
    
    
    
    
    
    
    22,809
 F-64




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 33 Segment reporting (continued)
 Operating segments (continued)
   2008
    
    2007$000
    
    $000Australia
    
    
    773,050
    
    
    
    576,722China
    
    
    600,101
    
    
    
    638,674Malaysia
    
    
    663,990
    
    
    
    599,228USA
    
    
    1,175,386
    
    
    
    529,534Turkey
    
    
    1,072,729
    
    
    
    400,731United Kingdom
    
    
    402,287
    
    
    
    365,288South Korea
    
    
    412,093
    
    
    
    354,939Other
    
    
    2,565,955
    
    
    
    2,083,4047,665,591
    
    
    
    5,548,520
  Note (b)
  F-65




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
 (continued)
 33 Segment reporting (continued)
 Note (c)
 2008
    
    2007
    
    2006$000
    
    $000
    
    $000Australia
    
    
    286,745
    
    
    
    218,682
    
    
    
    206,803USA
    
    
    2,098,396
    
    
    
    837,771
    
    
    
    806,261United Kingdom
    
    
    158,188
    
    
    
    142,476
    
    
    
    132,435Benelux
    
    
    46,506
    
    
    
    50,659
    
    
    
    63,234Germany
    
    
    50,901
    
    
    
    53,052
    
    
    
    Canada
    
    
    21,131
    
    
    
    15,555
    
    
    
    13,103New Zealand
    
    
    11,446
    
    
    
    9,365
    
    
    
    9,796Other
    
    
    14,879
    
    
    
    6,645
    
    
    
    1,1952,688,192
    
    
    
    1,334,205
    
    
    
    1,232,827
 Revenue by product
 2008
    
    2007
    
    2006$000
    
    $000
    
    $000Segment revenues from sales to external customersFerrous metal recycling
    
    
    5,178,847
    
    
    
    3,319,031
    
    
    
    2,259,112Non-ferrous metal recycling
    
    
    1,657,455
    
    
    
    1,623,139
    
    
    
    1,082,681Secondary processing
    
    
    252,297
    
    
    
    155,846
    
    
    
    159,408Recycling solutions
    
    
    576,992
    
    
    
    450,504
    
    
    
    251,2067,665,591
    
    
    
    5,548,520
    
    
    
    3,752,407
 34 Earnings per share
 Consolidated2008
    
    2007
    
    2006Cents Per ShareBasic earnings per share
    
    
    306.0
    
    
    
    191.6
    
    
    
    165.1Diluted earnings per share
    
    
    303.0
    
    
    
    190.5
    
    
    
    164.6$000
    
    $000
    
    $000Earnings used in calculating basic
and diluted earnings per share
    
    
    433,162
    
    
    
    239,352
    
    
    
    186,369Number of SharesWeighted average number of ordinary
shares used as the denominator in
calculating basic earnings per share
    
    
    141,574,196
    
    
    
    124,916,157
    
    
    
    112,856,555Adjustments for calculation of
diluted earnings per share:Options, including ordinary shares
issued under the Sims Group
Employee
Share Scheme deemed to be options
for accounting purposes, deemed to
be potential ordinary shares
    
    
    1,374,355
    
    
    
    704,319
    
    
    
    336,281Weighted average number of ordinary
shares and potential ordinary
shares
used as the denominator in
calculating diluted earnings per
share
    
    
    142,948,551
    
    
    
    125,620,476
    
    
    
    113,192,836
    F-66




---



##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 35 Cash flow information
 Consolidated
    
    
    
    
    
    Parent entity2008
    
    2007
    
    2006
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000
    
    $000(i
    )
    
    Reconciliation of cashCash at the end of the financial year as shown in the
statements of cash flows is reconciled to the related items in
the statements of financial position as follows:Cash at bank and on hand
    
    
    112,944
    
    
    
    31,404
    
    
    
    10,637
    
    
    
    
    
    
    
    Short term deposits
    
    
    20,543
    
    
    
    7,156
    
    
    
    5,163
    
    
    
    
    
    
    
    Cash and cash equivalents
    
    
    133,487
    
    
    
    38,560
    
    
    
    15,800
    
    
    
    
    
    
    
    Details of interest rates and fair values are set out in note 2.(ii)
    
    Reconciliation of profit after income tax expense to net
cash inflow from operating activitiesProfit for the year
    
    
    433,162
    
    
    
    239,352
    
    
    
    186,369
    
    
    
    169,292
    
    
    
    155,924Depreciation and amortisation
    
    
    94,557
    
    
    
    75,177
    
    
    
    57,530
    
    
    
    
    
    
    
    Net gain on contribution of assets to SA Recycling LLC joint
venture (note 30)
    
    
    (34,623
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealised gain on held for trading commodity contracts (note
2e)
    
    
    (3,901
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impairment loss on fire destroyed assets
    
    
    71
    
    
    
    6,784
    
    
    
    
    
    
    
    
    
    
    
    Net loss/(profit) on disposal of non-current assets
    
    
    5,883
    
    
    
    (401
    )
    
    
    705
    
    
    
    
    
    
    
    Revaluation losses reversed in the profit and loss
    
    
    
    
    
    
    
    
    
    
    (1,188
    )
    
    
    
    
    
    
    Non-cash employee benefits expense
    
    
    13,670
    
    
    
    2,831
    
    
    
    2,524
    
    
    
    
    
    
    
    Equity accounted profits net of dividends received
    
    
    (55,259
    )
    
    
    (4,749
    )
    
    
    (2,874
    )
    
    
    
    
    
    
    Change in operating assets and liabilities, excluding the
effects of acquisitions and disposals of entities:(Increase) / decrease in trade and other receivables
    
    
    (176,650
    )
    
    
    42,275
    
    
    
    4,186
    
    
    
    1,490
    
    
    
    (554
    )(Increase) in inventories
    
    
    (407,604
    )
    
    
    (16,650
    )
    
    
    (104,137
    )
    
    
    
    
    
    
    Decrease in prepayments
    
    
    18,562
    
    
    
    3,758
    
    
    
    8,538
    
    
    
    
    
    
    
    Increase/(decrease) in provisions
    
    
    24,220
    
    
    
    (16,391
    )
    
    
    (10,593
    )
    
    
    
    
    
    
    Increase/(decrease) in current tax liability
    
    
    80,298
    
    
    
    3,928
    
    
    
    (9,284
    )
    
    
    (28
    )
    
    
    (287
    )Increase/(decrease) in deferred taxes
    
    
    (13,032
    )
    
    
    (21,027
    )
    
    
    5,102
    
    
    
    
    
    
    
    Increase/(decrease) in trade and other payables
    
    
    202,303
    
    
    
    (1,390
    )
    
    
    71,693
    
    
    
    (14,165
    )
    
    
    (35,057
    )Net cash inflow from operating activities
    
    
    181,657
    
    
    
    313,497
    
    
    
    208,571
    
    
    
    156,589
    
    
    
    120,026
 F-67




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##### Table of Contents



Sims Metal Management Limited(formerly Sims Group Limited)
 Notes to the financial statements  30 June 2008
(continued)
 36 Non-cash investing and financing activities
 Consolidated
    
    Parent entity2008
    
    2007
    
    2008
    
    2007$000
    
    $000
    
    $000
    
    $000Acquisition of subsidiariesIssue of shares (notes 20 and 29)
    
    
    1,490,090
    
    
    
    
    
    
    
    1,490,090
    
    
    
    (532
    )Fully vested options acquired (note 29)
    
    
    10,523
    
    
    
    
    
    
    
    10,523
    
    
    
    1,500,613
    
    
    
    
    
    
    
    1,500,613
    
    
    
    (532
    )
  Dividend paymentDividends settled by issue of
shares under the dividend
reinvestment plan
    
    
    18,123
    
    
    
    29,996
    
    
    
    18,123
    
    
    
    29,996
 Formation of SA Recycling LLC Joint Controlled Entity
  F-68