##### 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, 2010
 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







N/A


Victoria, Australia




110 Fifth Avenue, Suite 700
New York, NY 10011


Frank M. Moratti, Company Secretary and General Counsel
(61 2) 9956-9101; Frank.Moratti@simsmm.com
Suite 1202, Level 12, 65 Berry Street
North Sydney, NSW 2060, Australia


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
    
    New York Stock Exchange*American Depositary Shares, each 
representing one ordinary share
    
    New York Stock Exchange





|  |  |                                                                                                                                                           
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|* |  | Not for trading, but only in connection with the listing of American Depositary Shares pursuant
to requirements of the Securities and Exchange Commission.

þ o
 
  o þ
 
  þ o
 
  o o
 
  þ o o
  o  þ  o
  o o
  o þ




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TABLE OF CONTENTS
 PagePART IItem 1.
    
    Identity of Directors, Senior Management and Advisers
    
    
    2Item 2.
    
    Offer Statistics and Expected Timetable
    
    
    2Item 3.
    
    Key Information
    
    
    2Item 4.
    
    Information on the Company
    
    
    15Item 4A.
    
    Unresolved Staff Comments
    
    
    28Item 5.
    
    Operating and Financial Review and Prospects
    
    
    28Item 6.
    
    Directors, Senior Management and Employees
    
    
    41Item 7.
    
    Major Shareholders and Related Party Transactions
    
    
    50Item 8.
    
    Financial Information
    
    
    51Item 9.
    
    The Offer and Listing
    
    
    53Item 10.
    
    Additional Information
    
    
    54Item 11.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    66Item 12.
    
    Description of Securities Other than Equity Securities
    
    
    66PART IIItem 13.
    
    Defaults, Dividend Arrearages and Delinquencies
    
    
    67Item 14.
    
    Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    67Item 15.
    
    Controls and Procedures
    
    
    67Item 16A.
    
    Audit Committee Financial Expert
    
    
    68Item 16B.
    
    Code of Ethics
    
    
    68Item 16C.
    
    Principal Accountant Fees and Services
    
    
    69Item 16D.
    
    Exemptions from the Listing Standards for Audit Committees
    
    
    69Item 16E.
    
    Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    69Item 16F.
    
    Change in Registrants Certifying Accountant
    
    
    69Item 16G.
    
    Corporate Governance
    
    
    69PART IIIItem 17.
    
    Financial Statements
    
    
    71Item 18.
    
    Financial Statements
    
    
    71Item 19.
    
    Exhibits
    
    
    72EX-1.1EX-4.12EX-4.13EX-4.14EX-4.18EX-4.21EX-4.22EX-4.25EX-4.26EX-4.27EX-4.28EX-4.29EX-8.1EX-12.1EX-12.2EX-13.1EX-15.1EX-15.2




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EXPLANATORY NOTE
      FORWARD LOOKING STATEMENTS
     
    
    a failure of the economy to recover from the global financial crisis and recession, or a
prolonged period of weak economic growth, either globally or in our key markets;
    
    cyclicality and volatility in the metal recycling and steel industries;
    
    exposure to changes in commodity prices, currency exchange rates and interest rates;
 1




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
    
    increases in steel imports into the United States or other significant market regions;
    
    ability to access the capital markets and/or obtain capital on favorable terms;
    
    the loss of export sales to markets outside of Australia, the United States and the
United Kingdom due to changes in trade regulations or otherwise;
    
    competition from containerized recycled metal exports;
    
    exposure to customer credit risks with counterparties;
    
    availability of bank financing on acceptable terms to us or our customers;
    
    availability of adequate sources of material supply;
    
    reduction in demand due to a significant increase in the use of scrap substitute
materials by consumers of processed recycled ferrous metal;
    
    legislative or regulatory changes, including those relating to protection of the
environment and health and safety;
    
    the loss of senior executive employees or managers;
    
    the risk of labor disputes and risk of serious injury or death to our employees;
    
    costs and risks associated with defined benefit pension plans and other employee
benefits;
    
    potential for goodwill and other identified intangible or other long-lived asset
impairments and other financial and accounting issues;
    
    loss of foreign private issuer status;
    
    existing and future litigation;
    
    the risks of global operations, including international hostilities and terrorism;
    
    significant influence of our largest shareholder over transactions requiring shareholder
approval; and
    
    risks associated with implementing technology into our business
  
 PART I
 
 Item 1. Identity of Directors, Senior Management and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
  
 Item 3. Key Information
 A. Selected Financial Data
  2




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As of and for the fiscal years ended June 30,2010
    
    2009
    
    2008
    
    2007
    
    2006A$
    
    A$
    
    A$
    
    A$
    
    A$(in millions, except per share data)Income statement data:Revenue
    
    
    7,458.5
    
    
    
    8,641.0
    
    
    
    7,670.5
    
    
    
    5,550.9
    
    
    
    3,754.5Goodwill impairment charge
    
    
    
    
    
    
    (191.1
    )
    
    
    (3.3
    )
    
    
    
    
    
    
    Share of pre-tax profit of
investments accounted for using
the equity method
    
    
    14.5
    
    
    
    60.8
    
    
    
    64.6
    
    
    
    7.0
    
    
    
    4.2Profit/(loss) before income tax
    
    
    194.5
    
    
    
    (122.2
    )
    
    
    660.6
    
    
    
    356.9
    
    
    
    269.8Profit/(loss) after tax
    
    
    126.7
    
    
    
    (150.3
    )
    
    
    440.1
    
    
    
    239.9
    
    
    
    184.9Basic earnings/(loss) per share
(cents)1
    
    
    64.9
    
    
    
    (82.5
    )
    
    
    309.3
    
    
    
    191.1
    
    
    
    163.0Diluted earnings/(loss) per share
(cents)1
    
    
    64.5
    
    
    
    (82.5
    )
    
    
    306.3
    
    
    
    190.0
    
    
    
    162.5Dividends
declared per share (cents)
    
    
    20.0
    
    
    
    103.0
    
    
    
    115.0
    
    
    
    120.0
    
    
    
    135.0Dividends declared per share
(US cents)2
    
    
    16.3
    
    
    
    63.1
    
    
    
    102.6
    
    
    
    94.4
    
    
    
    92.9Weighted average number of shares
outstanding1
    
    
    195.3
    
    
    
    182.2
    
    
    
    142.3
    
    
    
    125.6
    
    
    
    113.4Weighted average number of diluted
shares outstanding1
    
    
    196.5
    
    
    
    182.2
    
    
    
    143.7
    
    
    
    126.3
    
    
    
    113.8Statement of financial position
data:Total assets
    
    
    4,239.7
    
    
    
    3,808.6
    
    
    
    4,646.5
    
    
    
    2,057.4
    
    
    
    1,836.6Borrowings
    
    
    117.2
    
    
    
    175.1
    
    
    
    398.4
    
    
    
    307.6
    
    
    
    301.5Total liabilities
    
    
    960.9
    
    
    
    949.6
    
    
    
    1,812.6
    
    
    
    885.3
    
    
    
    728.7Total equity
    
    
    3,278.8
    
    
    
    2,859.0
    
    
    
    2,833.9
    
    
    
    1,172.1
    
    
    
    1,107.9
 
 1
    
    Diluted earnings per share for the prior periods have been adjusted to reflect the
shares issued in fiscal 2010 from our institutional placement and share purchase program. In
accordance with IAS 33 Earnings Per Share, an adjustment to shares issued is required in the
calculation of earnings per share when shares are offered to existing shareholders at a discount to
the market price. This gives rise to a retrospective restatement of the weighted average number of
shares.2
    
    The US dividend amount represents the net dividend paid to ADS holders by the
depositary, Bank of New York Mellon, after converting the Australian dividend amount based on
exchange rates at the dividend payment date and after withholding a fee of US$0.01 per share. See
Item 12.D.  American Depositary Shares. Exchange Rate Data
  3




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Period
    
    Average
    
    Highest
    
    LowestEnd Rate
    
    Rate
    
    Rate
    
    RateFor the fiscal year ended June 30:2010
    
    
    0.8480
    
    
    
    0.8820
    
    
    
    0.9369
    
    
    
    0.77512009
    
    
    0.8055
    
    
    
    0.7483
    
    
    
    0.9797
    
    
    
    0.60732008
    
    
    0.9562
    
    
    
    0.9042
    
    
    
    0.9644
    
    
    
    0.78602007
    
    
    0.8491
    
    
    
    0.7925
    
    
    
    0.8491
    
    
    
    0.74072006
    
    
    0.7423
    
    
    
    0.7472
    
    
    
    0.7781
    
    
    
    0.7056For the month ended:November 2010 (through November 26)
    
    
    0.9640
    
    
    
    0.9919
    
    
    
    1.0162
    
    
    
    0.9640October 2010
    
    
    0.9796
    
    
    
    0.9811
    
    
    
    0.9943
    
    
    
    0.9666September 2010
    
    
    0.9640
    
    
    
    0.9398
    
    
    
    0.9714
    
    
    
    0.9093August 2010
    
    
    0.8910
    
    
    
    0.8997
    
    
    
    0.9170
    
    
    
    0.8807July 2010
    
    
    0.9051
    
    
    
    0.8786
    
    
    
    0.9051
    
    
    
    0.8380June 2010
    
    
    0.8480
    
    
    
    0.8539
    
    
    
    0.8818
    
    
    
    0.8192
 B. Capitalization and Indebtedness
  C. Reasons for the Offer and Use of Proceeds
  D. Risk Factors
  Global economic conditions and recession in many parts of the world have adversely affected our
results of operations and financial condition and are expected to continue to do so, until global
economic conditions and scrap intake improves.
  4




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The metal recycling industry has historically been, and is expected to remain, highly cyclical and
has been subject in the past to significant fluctuations in scrap metal prices as well as changes in supply and rapid demand, which could have a
material adverse effect on our results of operations and financial condition.
   Fluctuations in commodity prices could have a material adverse effect on our results of operations
and financial condition.
  Developments in the steel industry could have a material adverse effect on our results of
operations and financial condition.
  5




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Exchange rate fluctuations could have a material adverse effect on our results of operations and
financial condition.
   Changes in interest rates could have a material adverse effect on our results of operations and
financial condition.
  The recent volatility and disruption of credit and equity markets may impede or prevent our ability
to access the capital markets in the future and/or obtain capital on favorable terms.
  The loss of export sales could adversely affect our results of operations and financial condition.
  6




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We are subject to competition from containerized recycled metal exports which can negatively affect
our port operations and marketing programs.
  The commercial counterparties we transact with may not meet their obligations which could have a
material adverse effect on our results of operations and financial condition.
  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. Our results of
operations and financial condition would be materially adversely affected if we were unable to
continue to have access to bank financing on acceptable terms.
  7




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The profitability of our metal recycling operations depends, in part, on the availability of an
adequate source of supply and scrap flows have been adversely impacted by the global financial
crisis and its lingering effects in the US, the UK and elsewhere.
  A significant increase in the use of substitute materials by consumers of processed recycled
ferrous metal could reduce demand for our products.
  8




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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, regulations and permit and license
requirements.
  
    
    the storage, treatment, handling and disposal of solid and hazardous waste and other
hazardous materials;
    
    the discharge of materials and emissions into the air;
    
    the discharge of materials into water or the ground;
    
    the management, treatment and discharge of wastewater and storm water;
    
    the prevention and remediation of impacts to soil, surface water and groundwater; and
    
    the protection of employee health and safety.
   9




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Regulation of greenhouse gas emissions and climate change issues may adversely affect our
operations and markets.
   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 serious injury or death.
  11




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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.
  We may not be able to negotiate future labor contracts on favorable terms.
  Declines in the market value of equity and/or debt securities held by our pension plans may
decrease the value of our pension plan assets, which in turn may increase the cost of satisfying
our pension obligations and may negatively affect our results of operations and financial
condition.
  Changes in assumptions underlying the carrying value of goodwill or other identifiable intangible
assets, as a result of adverse market conditions, could result in an impairment of such assets and
adversely affect our results of operations, the price of our securities and our ability to pay
dividends.
    12




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If we fail to maintain adequate internal controls over financial reporting in accordance with
the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, we may be unable to produce
timely financial statements which could result in a loss of investor confidence and cause the price
of our ordinary shares and ADS to decline.
   If we were to lose our foreign private issuer status under US federal securities laws, we would
likely incur additional expenses associated with compliance with the US securities laws applicable
to US domestic issuers.
  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.
  13




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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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We are dependent on technology in our business and face risks associated with implementing
technology into our business.
  
 Item 4. Information on the Company
 A. History and Development of the Company
 Corporate Information
  History of the Company
      15




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Acquisitions
    
    
    August 2007, we acquired the operating assets of McInerney Metals in Australia;
    
    October 2007, we acquired the operating assets of ER Coley (Steel) in the UK;
    
    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
UK;
    
    January 2008, we acquired Accu-Shred Limited in Canada;
    
    April 2008, we acquired Life Cycle Services, or LCS, in the UK;
    
    June 2008, we acquired the operating assets of Evans and Mondon Limited in the UK;
    
    June 2008, we acquired the operating assets of Clearhouse Technology Pty Ltd, in Australia;
    
    September 2008, we acquired the operating assets of Weinert Recycling in the US;
    
    October 2008, we acquired Global Investment Recovery, Inc., or GIR, in the US;
    
    February 2009, we acquired the operating assets of All Metal Recovery Limited in the UK;
    
    May 2009, we acquired the operating assets of Global Environment Recycling Co. Limited
in the UK;
    
    July 2009, we acquired the operating assets of Fairless Iron & Metal, LLC in the US;
    
    September 2009, we acquired the operating assets of Technorecycle Buromaschinen
Vertwertung GmbH in Germany;
    
    November 2009, we obtained control of Port Albany Ventures by acquiring 50% of the joint
venture that we previously did not own; and
    
    April 2010, we acquired the operating assets of Border Metals Pty Ltd in Australia.In August 2010, we acquired the e-recycling assets of Wincanton PLC, or Wincanton, in the
UK.
 16




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Capital Expenditures
  Fiscal years ended June 30,2010
    
    2009
    
    2008(in millions)
    
    A$
    
    A$
    
    A$North America
    
    
    67.6
    
    
    
    106.4
    
    
    
    59.9Australasia
    
    
    21.7
    
    
    
    39.8
    
    
    
    32.7Europe
    
    
    31.6
    
    
    
    41.3
    
    
    
    37.1Total
    
    
    120.9
    
    
    
    187.5
    
    
    
    129.7
  
    
    In North America, we installed new non-ferrous separation and recovery systems in Jersey
City, New Jersey and North Haven, Connecticut. In addition, investments were made to
further improve our operational efficiency, environmental compliance and safety procedures.
At our Canadian SRS operation, investment commenced on a facility to process Ontarios
materials from that Provinces newly legislated e-recycling program.
    
    In Australasia, we completed several major production and technology projects during the
year. In Queensland, we significantly upgraded our Brisbane shredder which is delivering
substantial capacity improvements while reducing energy consumption. We installed a
state-of-the-art non-ferrous shredder residue plant at St. Marys, New South Wales.
    
    In Europe, the UK metals division has begun investment into technology for further separation
to recover plastics and metals. We anticipate that these units will be commissioned in fiscal 2011.
SRS has invested globally in value adding technologies to automate previously manual processes. By
way of example, in fiscal 2010, SRS commissioned new TV and monitor glass recycling processes to
automate processing and improve safety performance.
 Divestures
  B. Business Overview
   17




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
    
    North America  comprising the US and Canada.
    
    Australasia  comprising Australia, New Zealand, Papua New Guinea, India, Singapore,
Hong Kong and South Africa.
    
    Europe  comprising UK, Germany, Sweden, Belgium and the Netherlands.We also report revenues by the following product groups:
    
    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, copper and nickel bearing materials.
    
    Recycling solutions  comprising the provision of environmentally responsible solutions
for the disposal of post-consumer electronic products, including IT assets recycled for
commercial customers. We offer fee for service business opportunities in the
environmentally responsible recycling of negative value materials including refrigerators,
electrical and electronic equipment.
    
    Secondary processing  comprising value added processes involving the melting, refining
and ingoting of certain non-ferrous metals and the reclamation and reprocessing of
plastics.
  Metal Recycling
 Industry Overview
   18




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Our Metal Recycling Operations
    North America
  Australasia
  Europe
  19




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Marketing
   Sims Recycling Solutions
     North America
  20




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Europe
    21




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Australasia
    Secondary Processing
   Sources and Availability of Raw Materials
 Metal Recycling
  
    
    obsolete metal which is sourced from metal dealers, peddlers, 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
offcuts 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; and
 22




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
    
    the business community for remarketable, reusable or recyclable electronic and
electrical products.
  Government Regulation
  Environmental Law and Regulations
   Obligated External Reporting
  Energy Efficiencies and Opportunities Act 2006 www.simsmm.com
 23




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Voluntary External Reporting
    Health and Safety
   Seasonality and Cyclicality
  24




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Patents and Trademarks
  C. Organizational Structure
  D. Property, Plant and Equipment
    25




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AUSTRALASIAN SITES
 Leased orLocation
    
    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/shredderVillawood, 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 yardBroadmeadows, 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
operationNoble Park, Victoria, Australia
    
    Owned
    
    metal recycling yardKarratha, 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/shredder
 EUROPEAN SITES
 Leased orLocation
    
    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 facility
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Leased orLocation
    
    Owned
    
    Principal ActivitiesLong Marston,
Stratford upon Avon,
UK
    
    Leased
    
    UK head office, metal recycling
yard/dense media plant/ R & D centerSouth 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/shredder
 NORTH AMERICAN SITES
 Leased orLocation
    
    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 facilitySacramento, 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 yard
 27




---



##### Table of Contents



Leased orLocation
    
    Owned
    
    Principal ActivitiesDetroit, Michigan, USA
    
    Owned
    
    metal recycling yardGreenville, Mississippi, USA
    
    Leased
    
    metal recycling yard/shredderSherman, Mississippi, USA
    
    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, New Jersey, USA
    
    Leased
    
    stevedoringDefiance, Ohio, USA
    
    Owned
    
    metal recycling yardElizabeth, Pennsylvania, USA
    
    Owned
    
    metal recycling yardMemphis, 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
  
 Item 5. Operating and Financial Review and Prospects
 A. Operating Results
   28




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##### Table of Contents



Principal Factors Affecting our Results of Operations
      Critical Accounting Policies
  29




---



##### Table of Contents



Recently issued accounting pronouncements
  Results of Operations
  Fiscal years ended June 30,2010
    
    
    % of
    
    
    2009
    
    
    % of
    
    
    2008
    
    
    % of(in millions, except %)
    
    A$
    
    
    Revenue
    
    
    A$
    
    
    Revenue
    
    
    A$
    
    
    RevenueRevenue
    
    
    7,458.5
    
    
    
    100
    
    
    
    8,641.0
    
    
    
    100
    
    
    
    7,670.5
    
    
    
    100Cost of materials
    
    
    (6,060.3
    )
    
    
    (81
    )
    
    
    (7,191.9
    )
    
    
    (84
    )
    
    
    (6,103.3
    )
    
    
    (80
    )Depreciation and
amortization
    
    
    (143.9
    )
    
    
    (2
    )
    
    
    (170.8
    )
    
    
    (2
    )
    
    
    (95.1
    )
    
    
    (1
    )Finance costs
    
    
    (16.4
    )
    
    
    (0
    )
    
    
    (21.5
    )
    
    
    (0
    )
    
    
    (34.4
    )
    
    
    (0
    )Income from equity
accounted investments
    
    
    14.5
    
    
    
    0
    
    
    
    60.8
    
    
    
    1
    
    
    
    64.6
    
    
    
    1Goodwill impairment charge
    
    
    
    
    
    
    
    
    
    
    (191.1
    )
    
    
    (2
    )
    
    
    (3.3
    )
    
    
    (0
    )Other, net
    
    
    (1,057.9
    )
    
    
    (14
    )
    
    
    (1,248.7
    )
    
    
    (15
    )
    
    
    (838.4
    )
    
    
    (11
    )Profit/(loss) before tax
    
    
    194.5
    
    
    
    3
    
    
    
    (122.2
    )
    
    
    (2
    )
    
    
    660.6
    
    
    
    9Income tax expense
    
    
    (67.8
    )
    
    
    (1
    )
    
    
    (28.1
    )
    
    
    (0
    )
    
    
    (220.5
    )
    
    
    (3
    )Profit/(loss) after tax
    
    
    126.7
    
    
    
    2
    
    
    
    (150.3
    )
    
    
    (2
    )
    
    
    440.1
    
    
    
    6
 Fiscal 2010 compared with fiscal 2009
    30




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##### Table of Contents



31




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##### Table of Contents



Fiscal 2009 compared with fiscal 2008
 Comparability and restatement
 Property, Plant and Equipment Accounting Policies, Changes in Accounting
Estimates and Errors.
   32




---



##### Table of Contents



2009(in millions)
    
    A$Goodwill impairment charge
    
    
    191.1Write-down of inventory to net realizable value
    
    
    119.4First time
Sarbanes-Oxley related professional fees1, 8
    
    
    9.7Withdrawal
liability related to a multi-employer pension plan2, 8
    
    
    3.4Impairment
provisions for trade receivables3, 8
    
    
    23.7Professional fees and other costs incurred in connection with Fairless Iron &
Metal
acquisition4, 8
    
    
    2.5Redundancies8
    
    
    5.5Loss on sale
of subsidiaries5, 8
    
    
    2.6Impairment
of property, plant and equipment and yard closure costs6, 8
    
    
    13.7Merger
costs7, 8
    
    
    4.0
 
 1
    
    In fiscal 2009, we were required to implement and comply with Section 404 of the
Sarbanes-Oxley Act of 2002 (US). Professional fees incurred in the first year of Sarbanes-Oxley
implementation are much higher and thus listed above.2
    
    Represents a termination liability associated with the withdrawal from a
multi-employer pension plan in the US.3
    
    Represents provisions recorded for trade debtors for which we believe collectability
is in doubt.4
    
    In fiscal 2009, we incurred transaction costs associated with the acquisition of
Fairless Iron & Metal which was completed in 2010 (July 3, 2009). We applied the transitional
principles consistent with the revised IFRS 3 Business Combinationswhereby transaction costs are
expensed for all acquisitions prospectively from July 1, 2009.5
    
    Represents the loss on sale of Tyrecycle.6
    
    Represents the impact of the global financial crisis which resulted in impairment
charges for asset rationalization, asset retirement and idling of certain yards.7
    
    Merger costs include integration bonuses, retention incentives and other costs
associated with the post-merger rationalization of the Sims Metal Management Limited and Metal
Management businesses.8
    
    These amounts are reflected in other, net.       33




---



##### Table of Contents



Results by segments
  Fiscal years ended June 30,2010
    
    
    
    
    
    2009
    
    
    
    
    
    2008(in millions, except %)
    
    A$
    
    %
    
    A$
    
    %
    
    A$
    
    %Sales by geography:Australasia
    
    
    1,221.3
    
    
    
    16
    
    
    
    1,158.6
    
    
    
    13
    
    
    
    1,745.1
    
    
    
    23North America
    
    
    5,040.0
    
    
    
    68
    
    
    
    6,368.5
    
    
    
    74
    
    
    
    4,607.9
    
    
    
    60Europe
    
    
    1,191.3
    
    
    
    16
    
    
    
    1,109.1
    
    
    
    13
    
    
    
    1,312.5
    
    
    
    17Total sales
    
    
    7,452.6
    
    
    
    100
    
    
    
    8,636.2
    
    
    
    100
    
    
    
    7,665.5
    
    
    
    100Other revenue
    
    
    5.9
    
    
    
    0
    
    
    
    4.8
    
    
    
    0
    
    
    
    5.0
    
    
    
    0Total revenue
    
    
    7,458.5
    
    
    
    100
    
    
    
    8,641.0
    
    
    
    100
    
    
    
    7,670.5
    
    
    
    100Sales by product:Ferrous metals
    
    
    5,071.2
    
    
    
    68
    
    
    
    6,642.7
    
    
    
    77
    
    
    
    5,421.1
    
    
    
    71Non-ferrous metals
    
    
    1,525.5
    
    
    
    20
    
    
    
    1,193.4
    
    
    
    14
    
    
    
    1,324.1
    
    
    
    17Recycling solutions
    
    
    657.4
    
    
    
    9
    
    
    
    578.5
    
    
    
    7
    
    
    
    559.2
    
    
    
    7Secondary processing
    
    
    198.5
    
    
    
    3
    
    
    
    221.6
    
    
    
    2
    
    
    
    361.1
    
    
    
    5Net sales
    
    
    7,452.6
    
    
    
    100
    
    
    
    8,636.2
    
    
    
    100
    
    
    
    7,665.5
    
    
    
    100
 34




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##### Table of Contents



Fiscal years ended June 30,2010
    
    
    
    
    
    2009
    
    
    
    
    
    2008(in millions, except %)
    
    A$
    
    %
    
    A$
    
    %
    
    A$
    
    %EBIT by geography:Australasia
    
    
    61.2
    
    
    
    29
    
    
    
    18.7
    
    
    
    (18
    )
    
    
    182.4
    
    
    
    26North America
    
    
    80.3
    
    
    
    39
    
    
    
    (88.6
    )
    
    
    86
    
    
    
    415.7
    
    
    
    60Europe
    
    
    66.6
    
    
    
    32
    
    
    
    (33.1
    )
    
    
    32
    
    
    
    94.0
    
    
    
    14Total EBIT
    
    
    208.1
    
    
    
    100
    
    
    
    (103.0
    )
    
    
    100
    
    
    
    692.1
    
    
    
    100Reconciliation:Total EBIT
    
    
    208.1
    
    
    
    
    
    
    
    (103.0
    )
    
    
    
    
    
    
    692.1Interest income
    
    
    2.8
    
    
    
    
    
    
    
    2.3
    
    
    
    
    
    
    
    2.9Finance costs
    
    
    (16.4
    )
    
    
    
    
    
    
    (21.5
    )
    
    
    
    
    
    
    (34.4
    )Profit/(loss) before tax
    
    
    194.5
    
    
    
    
    
    
    
    (122.2
    )
    
    
    
    
    
    
    660.6
 Fiscal 2010 compared with fiscal 2009
 Australasia
    North America
   Europe
  35




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##### Table of Contents



Sales by Product Group
     Fiscal 2009 compared with fiscal 2008
 Australasia
   North America
   36




---



##### Table of Contents



Europe
  Sales by Product Group
     B. Liquidity and Capital Resources
 Treasury responsibilities and philosophy
     37




---



##### Table of Contents



Sources of liquidity
    MaximumLender
    
    Commitment
    
    Maturity DateCBA
    
    A$450.0 million
    
    December 31, 2011WBC
    
    A$400.0 million
    
    August 1, 2011HSBC
    
    A$300.0 million
    
    19 month notice from the lenderBOA
    
    US$200.0 million
    
    14 month notice from the lenderNAB
    
    A$150.0 million
    
    March 13, 2012
    38




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##### Table of Contents



Cash Flows
 Fiscal 2010 compared with fiscal 2009
     Fiscal 2009 compared with fiscal 2008
  39




---



##### Table of Contents



C. Research and Development, Patents and Licenses, etc.
  D. Trends Information
  E. Off-Balance Sheet Arrangements
  F. Tabular Disclosure of Contractual Obligations
  40




---



##### Table of Contents



Payments due by PeriodMoreLess than
    
    1 to 3
    
    3 to 5
    
    than 5(in millions of A$)
    
    Total
    
    1 Year
    
    Years
    
    Years
    
    YearsContractual ObligationsLong-term debt 1
    
    
    143.2
    
    
    
    15.4
    
    
    
    127.8
    
    
    
    
    
    
    
    Capital expenditures
    
    
    27.0
    
    
    
    26.3
    
    
    
    0.7
    
    
    
    
    
    
    
    Derivatives  net settled
    
    
    (4.4
    )
    
    
    (4.4
    )
    
    
    
    
    
    
    
    
    
    
    Derivatives  gross settled:Inflows
    
    
    (274.4
    )
    
    
    (274.4
    )
    
    
    
    
    
    
    
    
    
    
    Outflows
    
    
    278.7
    
    
    
    278.7
    
    
    
    
    
    
    
    
    
    
    
    Pension plan contributions 2
    
    
    4.7
    
    
    
    4.7
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    316.7
    
    
    
    59.0
    
    
    
    95.6
    
    
    
    41.1
    
    
    
    121.0Total contractual cash obligations
    
    
    491.5
    
    
    
    105.3
    
    
    
    224.1
    
    
    
    41.1
    
    
    
    121.0
 
 1
    
    Long-term debt includes interest based on the June 30, 2010 floating interest rates.2
    
    Pension plan contributions represent expected cash contributions to our defined
benefit pension plans for the year ended June 30, 2010. It is not practicable to present expected
cash contributions for subsequent years because they are 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
  TermName and Age
    
    Title
    
    ExpiresExecutive Directors:Daniel W. Dienst, 45
    
    Group Chief Executive Officer
    
    #Non-Executive Directors:Paul J. Varello, 66
    
    Chairman and Independent Non-Executive Director
    
    2012Norman R. Bobins, 67
    
    Independent Non-Executive Director
    
    2011Geoffrey Brunsdon, 52
    
    Independent Non-Executive Director
    
    2012J. Michael Feeney, 64
    
    Independent Non-Executive Director
    
    2012Robert Lewon, 67
    
    Independent Non-Executive Director
    
    2011Gerald E. Morris, 78
    
    Independent Non-Executive Director
    
    2011Christopher J. Renwick, 67
    
    Independent Non-Executive Director
    
    2013*M. Paul Sukagawa, 59
    
    Non-independent Non-Executive Director
    
    2012James T. Thompson, 60
    
    Independent Non-Executive Director
    
    2012
 
 #
    
    Under our constitution, the Group Chief Executive Officer does not have a term limit.*
    
    Mr. Renwick was re-elected as an Independent Non-Executive Director at our annual
general meeting on November 19, 2010. 41




---



##### Table of Contents



Daniel W. Dienst
  Paul J. Varello
  Norman R. Bobins
  Geoffrey Brunsdon
  J. Michael Feeney
  42




---



##### Table of Contents



Robert Lewon
  Gerald E. Morris
  Christopher J. Renwick
  M. Paul Sukagawa
  James T. Thompson
  43




---



##### Table of Contents



Executive Officers
  Name and Age
    
    TitleRobert Larry, 49
    
    Group Chief Financial OfficerGraham Davy, 45
    
    CEO  European Metals and Sims Recycling Solutions  Global OperationsRobert Kelman, 46
    
    President  Commercial, North AmericaDarron McGree, 62
    
    Managing Director  Australia and New ZealandAlan Ratner, 58
    
    President  Operations, North America
 Robert Larry
  Graham Davy
  Robert Kelman
  Darron McGree
  Alan Ratner
  B. Compensation
  Director Compensation
  44




---



##### Table of Contents



NED Fees
    
    A$Base fee (Chairman)
    
    
    433,200Base fee (Non-executive Director)
    
    
    195,600Chairman Risk, Audit & Compliance Committee
    
    
    60,000Chairman Safety, Health, Environment & Community Committee
    
    
    30,000Chairman Remuneration Committee
    
    
    30,000Chairman Finance & Investment Committee
    
    
    30,000Chairman Nomination/Governance Committee
    
    
    30,000
       45




---



##### Table of Contents



Short-Term
    
    Post-Employment(in A$)
    
    Benefits
    
    BenefitsRetire-Super-
    
    mentName
    
    Cash Fees6
    
    anuation
    
    Benefits
    
    TotalPaul J. Varello1
    
    
    511,861
    
    
    
    
    
    
    
    
    
    
    
    511,861Norman R. Bobins1
    
    
    279,017
    
    
    
    
    
    
    
    
    
    
    
    279,017Geoffrey Brunsdon
    
    
    109,993
    
    
    
    10,878
    
    
    
    
    
    
    
    120,871J. Michael Feeney
    
    
    205,296
    
    
    
    20,304
    
    
    
    22,150
    
    
    
    247,750Masakatsu
Iwanaga2, 3
    
    
    97,101
    
    
    
    
    
    
    
    
    
    
    
    97,101Robert Lewon1
    
    
    262,853
    
    
    
    
    
    
    
    
    
    
    
    262,853Paul K. Mazoudier2
    
    
    87,239
    
    
    
    8,628
    
    
    
    18,773
    
    
    
    114,640Gerald E. Morris1
    
    
    316,120
    
    
    
    
    
    
    
    
    
    
    
    316,120Christopher J. Renwick
    
    
    205,296
    
    
    
    20,304
    
    
    
    
    
    
    
    225,600M. Paul Sukagawa5
    
    
    119,533
    
    
    
    
    
    
    
    
    
    
    
    119,533James T.
Thompson1, 4
    
    
    125,325
    
    
    
    
    
    
    
    
    
    
    
    125,325
 
 1
    
    Messrs. Bobins, Lewon, Morris, Thompson and Varello are residents of the US and
receive their payments in US dollars.2
    
    Messrs. Iwanaga and Mazoudier retired from the Board on November 20, 2009.3
    
    Mr. Iwanaga is a resident of Japan and receives his payments in Japanese yen.4
    
    Mr. Thompson was appointed to the Board on November 20, 2009.5
    
    Mr. Sukagawa was appointed to the Board on November 20, 2009 as a representative
director of Mitsui. He is currently employed by a subsidiary of Mitsui and as a result his
director fees are paid to a Mitsui affiliate.6
    
    Figure shown is after fee sacrifice to superannuation. Executive Officer Compensation
  Pension
    
    Other
    
    
    
    
    
    Share-and
    
    Long-
    
    Termin-
    
    basedCash
    
    Other
    
    Super-
    
    Term
    
    ation
    
    Pay-Name
    
    Salary1
    
    Bonus2
    
    Benefits3
    
    annuation
    
    Benefits4
    
    Benefits
    
    ments5
    
    Total(in A$)D. Dienst6
    
    
    1,417,073
    
    
    
    368,439
    
    
    
    394,689
    
    
    
    7,507
    
    
    
    13,657
    
    
    
    
    
    
    
    2,574,459
    
    
    
    4,775,824J. Sutcliffe7
    
    
    449,095
    
    
    
    387,000
    
    
    
    35,209
    
    
    
    484,290
    
    
    
    1,981,054
    
    
    
    1,551,200
    
    
    
    1,328,297
    
    
    
    6,216,145T.
Bird6, 8
    
    
    56,192
    
    
    
    
    
    
    
    5,714
    
    
    
    5,878
    
    
    
    
    
    
    
    
    
    
    
    (664,803
    )
    
    
    (597,019
    )G. Davy6
    
    
    483,361
    
    
    
    943,588
    
    
    
    34,288
    
    
    
    35,273
    
    
    
    
    
    
    
    
    
    
    
    899,728
    
    
    
    2,396,238R. Kelman6
    
    
    708,536
    
    
    
    141,707
    
    
    
    204,684
    
    
    
    22,257
    
    
    
    
    
    
    
    
    
    
    
    724,993
    
    
    
    1,802,177R. Larry6
    
    
    708,536
    
    
    
    708,536
    
    
    
    113,461
    
    
    
    20,006
    
    
    
    14,001
    
    
    
    
    
    
    
    867,373
    
    
    
    2,431,913D. McGree
    
    
    573,743
    
    
    
    1,029,977
    
    
    
    21,449
    
    
    
    100,580
    
    
    
    27,328
    
    
    
    
    
    
    
    712,110
    
    
    
    2,465,187A. Ratner6
    
    
    708,536
    
    
    
    141,707
    
    
    
    34,091
    
    
    
    7,507
    
    
    
    14,001
    
    
    
    
    
    
    
    807,306
    
    
    
    1,713,148
 46




---



##### Table of Contents



1
    
    Cash salary includes amounts sacrificed in lieu of other benefits at the discretion of the
individual.2
    
    Cash bonus amount reflects the amount accrued for the fiscal 2010 short-term incentive
plan for all executives, except Mr. Sutcliffe, as well as a special bonus for Mr. Larry.3
    
    Other short-term benefits include auto allowances, health and life insurance benefits,
and accrued annual leave during the period. The amount for Messrs. Dienst, Larry and Kelman
includes a one-time payment to buy out accrued annual leave from a discontinued plan for all US
employees. The amount for Mr. Dienst also includes payments for personal security and a A$172,236
reimbursement for a redundant state tax payment (including gross-up) made due to a state
jurisdiction dispute.4
    
    Other long-term benefits include amounts accrued for cash-based long-term incentive
plans, long-service leave and deferred compensation plans.5
    
    Share-based payments represent the accounting expense (as computed pursuant to IFRS
2 Share-based Payment) recognized for share-based awards.6
    
    Messrs. Dienst, Larry, Ratner and Kelman are residents of the US and receive their cash
payments in US dollars. Messrs. Bird and Davy are residents of the UK and receive their cash
payments in pounds sterling.7
    
    Mr. Sutcliffes agreement was terminated by way of redundancy on August 26, 2009.8
    
    We accepted the resignation of Mr. Bird on August 17, 2009. Under the terms of his
resignation, Mr. Bird forfeited any entitlement to a bonus payment and unvested share-based awards.
Share-based payment amount for Mr. Bird reflects the reversal of previously recognized share-based
expense. Share-based Plan Awards
  Name
    
    Grant Date
    

NumberGranted
    

ExercisePrice
    
    Expiration DateOrdinary shares (A$)G. Davy
    
    November 23, 2009
    
    
    37,231
    
    
    $
    21.95
    
    
    November 23, 2016D. McGree
    
    November 23, 2009
    
    
    46,908
    
    
    $
    21.95
    
    
    November 23, 2016ADS (US$)D. Dienst
    
    November 23, 2009
    
    
    178,037
    
    
    $
    20.57
    
    
    November 23, 2016R. Kelman
    
    November 23, 2009
    
    
    44,914
    
    
    $
    20.57
    
    
    November 23, 2016R. Larry
    
    November 23, 2009
    
    
    56,142
    
    
    $
    20.57
    
    
    November 23, 2016A. Ratner
    
    November 23, 2009
    
    
    44,914
    
    
    $
    20.57
    
    
    November 23, 2016
  Name
    
    Grant Date
    
    Number GrantedD. Dienst
    
    November 23, 2009
    
    
    197,006G. Davy
    
    November 23, 2009
    
    
    16,928R. Kelman
    
    November 23, 2009
    
    
    25,531R. Larry
    
    November 23, 2009
    
    
    31,914D. McGree
    
    November 23, 2009
    
    
    20,728A. Ratner
    
    November 23, 2009
    
    
    25,531
   47




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##### Table of Contents



C. Board Practices
    Committees of the Board
  Remuneration Committee
   
    
    remuneration and incentive performance packages of the CEO and direct reports to the
CEO;
    
    recruitment, retention and termination policies and procedures;
    
    introduction and application of equity-based schemes, including allocations; and
    
    level of annual fees paid to the non-executive directors.
 Risk, Audit & Compliance Committee
  48




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##### Table of Contents




    
    reviewing and assessing the internal and external reporting of financial information;
    
    assessing management processes supporting the integrity and reliability of our
financial and management reporting systems and our external reporting;
    
    overseeing the relationship with and performance of the external auditor and assessing
the independence of the external auditor; and
    
    overseeing the performance of the internal audit function.
  Safety, Health, Environment & Community Committee
   Nomination/Governance Committee
   Finance & Investment Committee
  49




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##### Table of Contents



D. Employees
  As of June 30,2010
    
    2009
    
    2008Australasia
    
    
    895
    
    
    
    945
    
    
    
    1,099North America
    
    
    3,370
    
    
    
    3,248
    
    
    
    3,574Europe
    
    
    1,307
    
    
    
    1,340
    
    
    
    1,312Total employees
    
    
    5,572
    
    
    
    5,533
    
    
    
    5,985
     E. Share Ownership
  
 Item 7. Major Shareholders and Related Party Transactions
 A. Major shareholders
  50




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##### Table of Contents



Principal Beneficial Shareholders
    
    Number of Shares
    
    PercentageMitsui Raw Materials Development Pty Limited
    
    
    36,151,787
    
    
    
    17.72
    %M & G Investment Funds
    
    
    20,094,157
    
    
    
    9.85
    %Legg Mason Asset Management Limited
    
    
    12,374,033
    
    
    
    6.06
    %IOOF Holdings Limited
    
    
    10,267,704
    
    
    
    5.03
    %
  Principal Registered Shareholders
    
    Number of Shares
    
    PercentageNational Nominees Limited
    
    
    47,674,996
    
    
    
    23.37
    %Mitsui Raw Materials Development Pty Limited
    
    
    33,486,787
    
    
    
    16.42
    %HSBC Custody Nominees (Australia) Limited
    
    
    31,776,010
    
    
    
    15.58
    %J.P. Morgan Nominees Australia Limited
    
    
    26,955,367
    
    
    
    13.21
    %
   B. Related Party Transactions
  C. Interests of Experts and Counsel
  
 Item 8. Financial Information
 A. Consolidated Statements and Other Financial Information
  51




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##### Table of Contents



Export Sales
  Legal Proceedings
  Dividend Policy
   
    
    assets to exceed its liabilities immediately before the dividend is declared and the
excess to be sufficient for the payment of the dividend; and
    
    the payment of the dividend to be fair and reasonable to shareholders as a whole; and
    
    the payment of the dividend to not materially prejudice the ability to pay its
creditors.
    B. Significant Changes
  52




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##### Table of Contents



Item 9. The Offer and Listing
 A. Offer and Listing Details
   ASX Price
    
    NYSE Price Per SharePer Share A$
    
    US$High
    
    Low
    
    High
    
    LowYear ended June 30, 2010:First Quarter
    
    
    29.15
    
    
    
    22.10
    
    
    
    23.74
    
    
    
    18.21Second Quarter
    
    
    24.00
    
    
    
    19.38
    
    
    
    22.11
    
    
    
    17.11Third Quarter
    
    
    25.50
    
    
    
    18.86
    
    
    
    23.60
    
    
    
    16.30Fourth Quarter
    
    
    23.43
    
    
    
    16.34
    
    
    
    21.47
    
    
    
    14.10Year ended June 30, 2009:First Quarter
    
    
    43.20
    
    
    
    27.22
    
    
    
    41.49
    
    
    
    20.00Second Quarter
    
    
    29.99
    
    
    
    10.68
    
    
    
    23.37
    
    
    
    6.97Third Quarter
    
    
    20.61
    
    
    
    14.44
    
    
    
    14.87
    
    
    
    9.39Fourth Quarter
    
    
    27.19
    
    
    
    16.90
    
    
    
    22.78
    
    
    
    11.90Year ended June 30, 2008
    
    
    42.41
    
    
    
    29.62
    
    
    
    40.99
    
    
    
    27.25Year ended June 30, 2007
    
    
    28.65
    
    
    
    22.62
    
    
    
    n/a
    
    
    
    n/aYear ended June 30, 2006
    
    
    20.60
    
    
    
    14.03
    
    
    
    n/a
    
    
    
    n/aMost recent six months:November 2010
    
    
    18.32
    
    
    
    16.21
    
    
    
    17.36
    
    
    
    16.00October 2010
    
    
    17.95
    
    
    
    15.23
    
    
    
    17.60
    
    
    
    15.45September 2010
    
    
    19.00
    
    
    
    16.51
    
    
    
    17.79
    
    
    
    15.27August 2010
    
    
    18.48
    
    
    
    15.38
    
    
    
    16.74
    
    
    
    13.00July 2010
    
    
    18.74
    
    
    
    15.72
    
    
    
    16.90
    
    
    
    16.47June 2010
    
    
    19.00
    
    
    
    16.34
    
    
    
    17.18
    
    
    
    14.10
 B. Plan of Distribution
  C. Markets
  53




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##### Table of Contents



D. Selling Shareholders
  E. Dilution
  F. Expenses of the Issue
  
 Item 10. Additional Information
 A. Share Capital
  B. Memorandum and Articles of Association
 General
   Directors
   54




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Rights and Restrictions on Classes of Shares
   55




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Dividend Rights
  Voting Rights
    Preemptive Rights
  Liability to Further Calls
    56




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Liquidation Rights
    Annual General Meetings and General Meetings of Shareholders
    Foreign Ownership Regulation
  57




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Restrictions on Takeovers
    Ownership Threshold
  C. Material Contracts
  Primary
Credit Facilities Provided by CBA, WBC, HSBC, BOA and NAB
  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;
    
    a requirement for approval from the Reserve Bank of Australia or in some cases the
Minister for Foreign Affairs and the Department of Foreign Affairs and Trade, or DFAT, 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;
 58




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##### Table of Contents




    
    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 such as
Al-Qaida;
    
    certain ministers and senior officials of the Government of Zimbabwe;
    
    certain Burmese regime figures and supporters;
    
    certain entities associated with North Korea; or
    
    certain entities and persons associated with Iran; and
 
    
    sanctions with respect to financial transactions also exist in relation to certain
individuals and entities in the Democratic Republic of Congo, Eritrea, Liberia, Sudan, Cote
dIvoire, Sierra Leone, Lebanon and Somalia. These sanctions are administered by DFAT,
based on the Charter of the United Nations (Dealing with Assets) Regulations 2008 (Cth).
   E. Taxation
 Australian taxation
   Taxation of dividends
    59




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##### Table of Contents



Gain or loss on disposition of shares
  Capital Account
  (a)
    
    the shares are held as part of a trade or business conducted through a
permanent establishment in Australia; or(b)
    
    the shareholder and its associates hold (or have held the shares 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 market value of the companys assets relate to
Australian real
 60




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##### Table of Contents



property.
    
    
    taxed on any capital gain after allowing for cost base indexation up to September 30,
1999 (essentially when indexation ceased) where the shares have been held for at least 12
months (i.e. the difference between the disposal price and the original cost indexed for
inflation over the period to September 30, 1999); or
    
    taxed on 50% of the actual capital gain (without adjustment for inflation indexation)
where the shares have been held for at least 12 months.
      Revenue Account
  (a)
    
    If the US 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. (Any losses on disposal may constitute an allowable
deduction.)(b)
    
    If the US 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 US even if the source of that profit is Australian. The only exception is if the
profits are in respect of the
 61




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##### Table of Contents



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.
    US Federal taxation
   
    
    a citizen or resident of the US;
    
    a domestic corporation;
    
    an estate whose income is subject to US federal income tax regardless of its source; or
    
    a trust if a US court can exercise primary supervision over the trusts administration
and one or more US persons are authorized to control all substantial decision of the trust.
 Taxation of dividends
   62




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Taxation of capital gains
  Passive foreign investment company
  63




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64




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Information reporting and backup withholding
    F. Dividends and Paying Agents
  G. Statements by Experts
  H. Documents on Display
  65




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##### Table of Contents



I. Subsidiary Information
  
 Item 11. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 12. Description of Securities Other than Equity Securities
 A. Debt Securities
  B. Warrants and Rights
  C. Other Securities
  D. American Depositary Shares
   
    
    a fee not in excess of US $5 per 100 ADSs for the execution and delivery of receipts and
the surrender of receipts;
    
    a fee not in excess of US $0.01 per ADS for each cash distribution pursuant to the
deposit agreement; and
 66




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##### Table of Contents




    
    a fee for the distribution of the deposited securities pursuant to the deposit
agreement, such fee being an amount equal to the fee for the execution and delivery of ADSs
which would have been charged as a result of the deposit of such securities, but which
securities were instead distributed by the depositary to ADR holders.
  
    
    taxes and other governmental charges incurred by the depositary or the custodian on any
ADS or an equity share underlying any ADS;
    
    transfer or registration fees for the registration or transfer of deposited securities
on any applicable register in connection with the deposit or withdrawal of deposited
securities, including those of a central depository for securities (where applicable);
    
    any cable, telex, facsimile transmission and delivery expenses incurred by the
depositary; and
    
    customary expenses incurred by the depositary in the conversion of foreign currency,
including, without limitation, expenses incurred on behalf of registered holders in
connection with compliance with foreign exchange control restrictions and other applicable
regulatory requirements.
 
 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
  Managements Report on Internal Control over Financial Reporting
  67




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##### Table of Contents



Changes in Internal Control over Financial Reporting
  
 Item 16A. Audit Committee Financial Expert
  
 Item 16B. Code of Ethics
 Code of Conduct
  www.simsmm.com
 Anti-corruption Code
  68




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www.simsmm.com
 Dealing in Sims Metal Management Limited Securities
 www.simsmm.com
 
 Item 16C. Principal Accountant Fees and Services
  Pre-Approval Policies and Procedures
  
 Item 16D. Exemptions from the Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  
 Item 16F. Change in Registrants Certifying Accountant
  
 Item 16G. Corporate Governance
  69




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##### Table of Contents




    
    the Nomination/Governance Committee is not composed entirely of independent directors.
    
    the Nomination/Governance Committee Charter does not include a mandate to:
 
    
    develop and recommend to the Board a set of corporate governance principles
applicable to the corporation (which is largely a Board function), though it does
mandate the Nomination/Governance Committee to review our corporate governance
procedures and any statement on corporate governance and recommend changes to the Board
as appropriate;
    
    select, or to recommend that the Board select, the director nominees for the next
annual meeting of shareholders (this is governed by our constitution); or
    
    oversee the evaluation of management (the Board undertakes an evaluation of the
Group Chief Executive Officer, and the Group Chief Executive Officer evaluates other
management).
 
    
    the Remuneration Committee charter does not:
 
    
    include a mandate to review and approve the corporate goals and objectives relevant
to Group Chief Executive Officer compensation, evaluate the Group Chief Executive
Officer s performance in light of those goals and objectives and, either as a
Committee or together with the other independent directors (as directed by the Board),
determine and approve the Group Chief Executive Officer s compensation level based on
this evaluation (these responsibilities rest with the Board, although the Committees
charter does include a mandate to review and make recommendations to the Board
on remuneration policies and practices for the Group Chief Executive Officer, and the
remuneration and incentive performance package of the Group Chief Executive Officer,
as well as overseeing the annual performance appraisal of the Group Chief Executive
Officer);
    
    specify the qualifications of its members or its reporting obligations to the Board;
    
    include a mandate to report on executive officer compensation (such disclosure is
made in the remuneration report in our annual report); or
    
    give the Remuneration Committee sole authority to retain and terminate a search firm
or to approve a consultants fees and other retention terms (although the Remuneration
Committee is authorized to obtain professional advice on any matters within its
charter).
 
    
    Shareholders are not provided the opportunity to vote on certain new equity compensation
plans or material revisions to existing equity compensation plans, such as our Long Term
Incentive Plan (as this is not obligatory under the Australian Securities Exchange Listing
Rules).
    
    We have not published a set of corporate governance guidelines as set forth in Section
303A.09. However, we do provide information on corporate governance policies and practices
as required by Australian Securities Exchange Listing Rules, which are available in our
annual report and on our website. Specifically, we do not have corporate governance
guidelines with respect to the procedure for how a director may access management, or
director compensation information (however, such disclosure is made in the remuneration
report in our annual report).
 70




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##### Table of Contents



PART III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
  Consolidated Financial Statements  Sims Metal Management LimitedReport of Independent Registered Public Accounting Firm
    
    
    F-1Consolidated Income Statements
    
    
    F-2Consolidated Statements of Comprehensive Income
    
    
    F-3Consolidated Statements of Financial Position
    
    
    F-4Consolidated Statements of Changes in Equity
    
    
    F-5Consolidated Statements of Cash Flows
    
    
    F-6Notes to the Financial Statements
    
    
    F-7Consolidated Financial Statements  SA Recycling, LLC and SubsidiariesReport of Independent Registered Public Accounting Firm
    
    
    F-63Consolidated Balance Sheets
    
    
    F-64Consolidated Statements of Operations
    
    
    F-65Consolidated Statements of Changes in Equity
    
    
    F-66Consolidated Statements of Cash Flows
    
    
    F-67Notes to Consolidated Financial Statements
    
    
    F-68
 71




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##### Table of Contents



Item 19. Exhibits
 Exhibit Index
 ExhibitNumber
    
    Description1.1
    
    Constitution of the Registrant.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, as amended October 23, 2008 (incorporated by reference
to Exhibit 4.5 on Form S-8 filed on January 23, 2009).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).4.6
    
    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).4.7
    
    Deed of Release, dated August 26, 2009, by and between the Registrant and Jeremy Sutcliffe
(incorporated by reference to Exhibit 4.8 on Form 20-F filed on November 12, 2009).4.8
    
    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).4.9
    
    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).4.10
    
    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).4.11
    
    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).4.12
    
    Amendment and Restatement Deed, dated October 7, 2010, among Sims Metal
Management Limited and certain of its affiliates and certain of HSBC Holdings plcs
affiliates.4.13
    
    Amended and Restated Multi Option Facility Agreement, dated December 3, 2003
(as amended and restated on December 6, 2005, June 26,
2008, November 2, 2009, May
12, 2010 and October 7, 2010), among Sims Metal Management Limited and certain of its
affiliates and certain of HSBC Holdings plcs affiliates.4.14
    
    Amended and Restated Multi Option Facility
Agreement  Fee Letter from certain HSBC Holdings plcs affiliates to Sims Metal
Management Limited, dated December 13, 2009.4.15
    
    Multi-Option Facility Agreement dated November 2, 2009 among Commonwealth
Bank of Australia, Sims Metal Management Limited, and its affiliates listed on Schedule 1
thereto as Original Borrowers (incorporated by reference to Exhibit 4.13 on Form 20-F/A
filed on April 14, 2010).
 72




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##### Table of Contents



ExhibitNumber
    
    Description4.16
    
    Common Terms Deed dated November 2, 2009 among Commonwealth Bank of Australia, Sims Metal
Management Limited, and its affiliates listed on Parts 1 and 2 of Schedule 1 thereto as
Original Borrowers and Original Guarantors, respectively (incorporated by reference to
Exhibit 4.14 on Form 20-F filed on November 12, 2009).4.17
    
    Group Limit Facility dated November 2, 2009 between, amongst others, Commonwealth Bank of
Australia and Sims Metal Management Limited (incorporated by reference to Exhibit 4.15 on
20-F/A filed on April 14, 2010).4.18
    
    Renewal Notice, dated November 27, 2009, from Commonwealth Bank of Australia to Sims Metal
Management Limited.4.19
    
    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 (incorporated by reference to Exhibit 4.16 on Form
20-F/A filed on April 14, 2010).4.20
    
    Variation to Standard Terms dated as of November 2, 2009 by and among Westpac Banking
Corporation, Sims Metal Management Limited and certain of its subsidiaries (including the
Standard Terms in the Annexure thereto) (incorporated by reference to Exhibit 4.17 on Form
20-F/A filed on April 14, 2010).4.21
    
    Variation to Multicurrency Cash Advance Facility, dated December 23, 2009, between Westpac
Banking Corporation and Sims Metal Management Limited.4.22
    
    Variation to Cash Advance Facility for Sims Group,
dated July 20, 2010, between Westpac Banking Corporation and Sims Group Metal Management Limited.4.23
    
    Amended and Restated Credit Agreement dated as of November 2, 2009 among Sims
Group USA Holdings Corporation, certain of its affiliates identified therein as Borrowers,
and Bank of America, N.A. incorporated by reference to Exhibit 4.18 on Form 20-F/A filed on
April 14, 2010).4.24
    
    Amended and Restated Deed Poll of Continuing Guaranty dated as of November 2, 2009 by Sims
Metal Management Limited in favor of Bank of America, N.A. (incorporated by reference to
Exhibit 4.19 on Form 20-F filed on November 12, 2009).4.25
    
    First Amendment to Amended and Restated Credit Agreement, dated as of June 25, 2010, among
Sims Group USA Holdings Corporation, certain of its affiliates identified therein as
Borrowers, and Bank of America, N.A.4.26
    
    Multicurrency Revolving Floating Rate Cash Advance Facility  Letter of Offer, dated March
13, 2009, from National Australia Bank Limited to Sims Metal Management Limited.4.27
    
    Standard Terms, dated November 2, 2009, among National Australia Bank Limited, Sims Metal
Management Limited and certain of its subsidiaries listed in Schedule 1.4.28
    
    Letter from National Australia Bank Limited to Sims Metal Management Limited, dated May 3,
2010.4.29
    
    Letter Agreement, dated October 20, 2009, by and between the Registrant and Daniel W. Dienst.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 2002.15.1
    
    Consent of Independent Registered Public Accounting Firm to the incorporation of the audit
report relating to Sims Metal Management Limited and effectiveness of internal control over
financial reporting of Sims Metal Management Limited by reference in registration statements
on Form S-8.15.2
    
    Consent of Independent Registered Public Accounting Firm to the incorporation of the audit
report relating to SA Recycling LLC by reference in registration statements on Form S-8.
 
 
    
    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 confidential information is indicated in the exhibit with brackets and a bullet
point ([]). 73




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SIGNATURES
  Sims Metal Management LimitedBy:
    /s/ Frank M. MorattiFrank M. MorattiCompany Secretary and General Counsel  74




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PricewaterhouseCoopers
ABN 52 780 433 757
 
 Report of Independent Registered Public Accounting Firm
  Internal Control  Integrated Framework
   
 F-1




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CONSOLIDATED INCOME STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 2010
    
    
    2009
    
    
    2008NOTE
    
    
    A$M
    
    
    A$M
    
    
    A$MRevenue
    
    
    5
    
    
    
    7,458.5
    
    
    
    8,641.0
    
    
    
    7,670.5Other income
    
    
    6
    
    
    
    25.2
    
    
    
    33.7
    
    
    
    55.7Raw materials used and changes in inventories
    
    
    10
    
    
    
    (5,344.3
    )
    
    
    (6,272.6
    )
    
    
    (5,324.6
    )Freight expense
    
    
    
    
    
    
    (716.0
    )
    
    
    (919.3
    )
    
    
    (778.7
    )Employee benefits expense
    
    
    
    
    
    
    (433.0
    )
    
    
    (592.4
    )
    
    
    (404.9
    )Depreciation and amortisation expense
    
    
    7
    
    
    
    (143.9
    )
    
    
    (170.8
    )
    
    
    (95.1
    )Repairs and maintenance expense
    
    
    
    
    
    
    (111.7
    )
    
    
    (147.8
    )
    
    
    (126.2
    )Other expenses
    
    
    
    
    
    
    (538.4
    )
    
    
    (542.2
    )
    
    
    (363.0
    )Finance costs
    
    
    7
    
    
    
    (16.4
    )
    
    
    (21.5
    )
    
    
    (34.4
    )Goodwill impairment charge
    
    
    13
    
    
    
    
    
    
    
    (191.1
    )
    
    
    (3.3
    )Share of pre-tax profit of investments accounted for using the
equity method
    
    
    29
    
    
    
    14.5
    
    
    
    60.8
    
    
    
    64.6Profit/(loss) before income tax
    
    
    
    
    
    
    194.5
    
    
    
    (122.2
    )
    
    
    660.6Income tax expense
    
    
    8
    
    
    
    (67.8
    )
    
    
    (28.1
    )
    
    
    (220.5
    )Profit/(loss) for the year
    
    
    
    
    
    
    126.7
    
    
    
    (150.3
    )
    
    
    440.1A¢
    
    
    A¢
    
    
    A¢Earnings/(loss) per share:Basic
    
    
    32
    
    
    
    64.9
    
    
    
    (82.5
    )
    
    
    309.3Diluted
    
    
    32
    
    
    
    64.5
    
    
    
    (82.5
    )
    
    
    306.3
  F-2




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##### Table of Contents



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2010
 2010
    
    
    2009
    
    
    2008NOTE
    
    
    A$M
    
    
    A$M
    
    
    A$MProfit/(loss) for the year
    
    
    
    
    
    
    126.7
    
    
    
    (150.3
    )
    
    
    440.1Other comprehensive (loss)/incomeOther financial assets
    
    
    20
    
    
    
    (1.4
    )
    
    
    
    
    
    
    Cash flow hedge instruments
    
    
    20
    
    
    
    (1.5
    )
    
    
    0.6
    
    
    
    (14.3
    )Exchange differences on translation of foreign operations
    
    
    20
    
    
    
    (121.3
    )
    
    
    337.1
    
    
    
    (130.8
    )Actuarial losses on defined benefit plans
    
    
    18
    (c)
    
    
    (3.8
    )
    
    
    (8.2
    )
    
    
    (11.2
    )Income tax on other comprehensive income
    
    
    8
    
    
    
    2.1
    
    
    
    3.1
    
    
    
    8.0Other comprehensive (loss)/income for the year, net of tax
    
    
    
    
    
    
    (125.9
    )
    
    
    332.6
    
    
    
    (148.3
    )Total comprehensive income for the year
    
    
    
    
    
    
    0.8
    
    
    
    182.3
    
    
    
    291.8
  F-3




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##### Table of Contents



CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT 30 JUNE 2010
 2010
    
    2009NOTE
    
    A$M
    
    A$MAssetsCurrent assetsCash and cash equivalents
    
    
    33
    
    
    132.3

    
    
    69.5Trade and other receivables
    
    
    9

    
    
    576.2

    
    
    350.3Current tax receivable
    
    
    
    
    
    
    

    
    
    96.2Inventory
    
    
    10

    
    
    776.9

    
    
    469.2Other financial assets
    
    
    
    
    
    
    8.7

    
    
    0.7Total current assets
    
    
    
    
    
    
    1,494.1

    
    
    985.9Non-current assetsReceivables
    
    
    9

    
    
    7.9

    
    
    17.6Investments accounted for using the equity method
    
    
    29

    
    
    369.5

    
    
    400.2Other financial assets
    
    
    
    
    
    
    21.4

    
    
    Property, plant and equipment
    
    
    12

    
    
    925.8

    
    
    947.7Deferred tax assets
    
    
    8

    
    
    74.1

    
    
    71.6Goodwill
    
    
    13

    
    
    1,151.7

    
    
    1,146.8Other intangible assets
    
    
    14

    
    
    195.2

    
    
    238.8Total non-current assets
    
    
    
    
    
    
    2,745.6

    
    
    2,822.7Total assets
    
    
    
    
    
    
    4,239.7

    
    
    3,808.6LiabilitiesCurrent liabilitiesTrade and other payables
    
    
    15

    
    
    614.2

    
    
    521.8Borrowings
    
    
    16

    
    
    0.6

    
    
    0.8Other financial liabilities
    
    
    
    
    
    
    5.0

    
    
    10.5Current tax liabilities
    
    
    
    
    
    
    23.2

    
    
    5.9Provisions
    
    
    17

    
    
    31.1

    
    
    38.0Total current liabilities
    
    
    
    
    
    
    674.1

    
    
    577.0Non-current liabilitiesPayables
    
    
    
    
    
    
    3.3

    
    
    4.3Borrowings
    
    
    16

    
    
    116.6

    
    
    174.3Deferred tax liabilities
    
    
    8

    
    
    133.7

    
    
    148.8Provisions
    
    
    17

    
    
    22.2

    
    
    34.0Retirement benefit obligations
    
    
    18

    
    
    11.0

    
    
    11.2Total non-current liabilities
    
    
    
    
    
    
    286.8

    
    
    372.6Total liabilities
    
    
    
    
    
    
    960.9

    
    
    949.6Net assets
    
    
    
    
    
    
    3,278.8

    
    
    2,859.0EquityContributed equity
    
    
    19

    
    
    2,795.2

    
    
    2,352.9Reserves
    
    
    20

    
    
    58.1

    
    
    166.0Retained earnings
    
    
    20

    
    
    425.5

    
    
    340.1Total equity
    
    
    
    
    
    
    3,278.8

    
    
    2,859.0
  F-4




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2010
 CONTRIBUTED
    
    
    
    
    
    
    RETAINED
    
    
    TOTALEQUITY
    
    
    RESERVES
    
    
    EARNINGS
    
    
    EQUITYNOTE
    
    
    A$M
    
    
    A$M
    
    
    A$M
    
    
    A$MBalance at 1 July 2007
    
    
    
    
    
    
    812.0
    
    
    
    (64.6
    )
    
    
    424.7
    
    
    
    1,172.1Total comprehensive income for the year
    
    
    
    
    
    
    
    
    
    
    (140.5
    )
    
    
    432.3
    
    
    
    291.8Transactions with owners in their capacity as owners:Dividends provided for or paid
    
    
    21
    
    
    
    
    
    
    
    
    
    
    
    (174.7
    )
    
    
    (174.7
    )Share-based payments
    
    
    
    
    
    
    5.7
    
    
    
    30.8
    
    
    
    
    
    
    
    36.5Acquisition of Metal Management Inc
    
    
    
    
    
    
    1,490.1
    
    
    
    
    
    
    
    
    
    
    
    1,490.1Dividend Reinvestment Plan
    
    
    21
    
    
    
    18.1
    
    
    
    
    
    
    
    
    
    
    
    18.11,513.9
    
    
    
    30.8
    
    
    
    (174.7
    )
    
    
    1,370.0Balance at 30 June 2008
    
    
    
    
    
    
    2,325.9
    
    
    
    (174.3
    )
    
    
    682.3
    
    
    
    2,833.9Total comprehensive income for the year
    
    
    
    
    
    
    
    
    
    
    338.0
    
    
    
    (155.7
    )
    
    
    182.3Transactions with owners in their capacity as owners:Dividends provided for or paid
    
    
    21
    
    
    
    
    
    
    
    
    
    
    
    (186.5
    )
    
    
    (186.5
    )Share-based payments
    
    
    
    
    
    
    0.4
    
    
    
    2.3
    
    
    
    
    
    
    
    2.7Dividend Reinvestment Plan
    
    
    21
    
    
    
    26.6
    
    
    
    
    
    
    
    
    
    
    
    26.627.0
    
    
    
    2.3
    
    
    
    (186.5
    )
    
    
    (157.2
    )Balance at 30 June 2009
    
    
    
    
    
    
    2,352.9
    
    
    
    166.0
    
    
    
    340.1
    
    
    
    2,859.0Total comprehensive income for the year
    
    
    
    
    
    
    
    
    
    
    (123.2
    )
    
    
    124.0
    
    
    
    0.8Transactions with owners in their capacity as owners:Dividends provided for or paid
    
    
    21
    
    
    
    
    
    
    
    
    
    
    
    (38.6
    )
    
    
    (38.6
    )Share-based payments
    
    
    
    
    
    
    0.5
    
    
    
    15.3
    
    
    
    
    
    
    
    15.8Issue of shares under Institutional Placement
    
    
    19
    
    
    
    391.4
    
    
    
    
    
    
    
    
    
    
    
    391.4Issue of shares under Share Purchase Plan
    
    
    19
    
    
    
    41.2
    
    
    
    
    
    
    
    
    
    
    
    41.2Dividend Reinvestment Plan
    
    
    21
    
    
    
    9.2
    
    
    
    
    
    
    
    
    
    
    
    9.2442.3
    
    
    
    15.3
    
    
    
    (38.6
    )
    
    
    419.0Balance at 30 June 2010
    
    
    
    
    
    
    2,795.2
    
    
    
    58.1
    
    
    
    425.5
    
    
    
    3,278.8
  F-5




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2010
 2010
    
    
    2009
    
    
    2008NOTE
    
    
    A$M
    
    
    A$M
    
    
    A$MCash flows from operating activitiesReceipts from customers (inclusive of goods and services tax)
    
    
    
    
    
    
    7,230.3
    
    
    
    9,232.8
    
    
    
    7,353.9Payments to suppliers and employees (inclusive of goods and services tax)
    
    
    
    
    
    
    (7,305.1
    )
    
    
    (8,475.6
    )
    
    
    (6,943.1
    )Interest received
    
    
    
    
    
    
    2.8
    
    
    
    2.3
    
    
    
    2.9Interest paid
    
    
    
    
    
    
    (16.2
    )
    
    
    (20.9
    )
    
    
    (34.4
    )Dividends from associates and jointly controlled entities
    
    
    29
    
    
    
    19.6
    
    
    
    41.5
    
    
    
    5.1Insurance recoveries
    
    
    
    
    
    
    1.0
    
    
    
    12.3
    
    
    
    7.6Income taxes refunded (paid)
    
    
    
    
    
    
    20.1
    
    
    
    (238.0
    )
    
    
    (144.5
    )Net cash (outflow)/inflow from operating activities
    
    
    33
    
    
    
    (47.5
    )
    
    
    554.4
    
    
    
    247.5Cash flows from investing activitiesPayments for property, plant and equipment
    
    
    12
    
    
    
    (120.9
    )
    
    
    (187.5
    )
    
    
    (129.7
    )Payments for acquisition of subsidiaries, net of cash acquired
    
    
    27
    
    
    
    (113.4
    )
    
    
    (76.0
    )
    
    
    (58.5
    )Payments for other financial assets
    
    
    
    
    
    
    (22.8
    )
    
    
    
    
    
    
    Proceeds from sale of property, plant and equipment
    
    
    
    
    
    
    8.1
    
    
    
    5.5
    
    
    
    2.0Proceeds from sale of subsidiaries
    
    
    
    
    
    
    
    
    
    
    39.7
    
    
    
    Return of capital from jointly controlled entities
    
    
    29
    
    
    
    0.4
    
    
    
    3.6
    
    
    
    48.5Net cash outflow from investing activities
    
    
    
    
    
    
    (248.6
    )
    
    
    (214.7
    )
    
    
    (137.7
    )Cash flows from financing activitiesProceeds from borrowings
    
    
    
    
    
    
    3,009.9
    
    
    
    1,847.3
    
    
    
    815.7Repayment of borrowings
    
    
    
    
    
    
    (3,051.1
    )
    
    
    (2,112.6
    )
    
    
    (678.3
    )Fees paid for loan facilities
    
    
    
    
    
    
    (3.2
    )
    
    
    (2.0
    )
    
    
    Proceeds from issue of shares
    
    
    
    
    
    
    441.9
    
    
    
    0.4
    
    
    
    5.7Transaction costs associated with issue of shares
    
    
    
    
    
    
    (8.8
    )
    
    
    
    
    
    
    Dividends paid
    
    
    21
    
    
    
    (29.4
    )
    
    
    (159.9
    )
    
    
    (156.6
    )Net cash inflow/(outflow) from financing activities
    
    
    
    
    
    
    359.3
    
    
    
    (426.8
    )
    
    
    (13.5
    )Net increase/(decrease) in cash and cash equivalents
    
    
    
    
    
    
    63.2
    
    
    
    (87.1
    )
    
    
    96.3Cash and cash equivalents at the beginning of the financial year
    
    
    
    
    
    
    69.5
    
    
    
    133.5
    
    
    
    38.6Effects of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    (0.4
    )
    
    
    23.1
    
    
    
    (1.4
    )Cash and cash equivalents at the end of the financial year
    
    
    33
    
    
    
    132.3
    
    
    
    69.5
    
    
    
    133.5
  F-6




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   Corporations Act 2001,
          Presentation of
Financial Statements
   FURTHER AMENDMENTS TO AUSTRALIAN ACCOUNTING STANDARDS ARISING FROM THE
ANNUAL IMPROVEMENTS PROJECT (IMPROVEMENTS TO IFRS ISSUED IN
APRIL 2009)
  AMENDMENTS TO AUSTRALIAN ACCOUNTING
STANDARDS  GROUP CASH-SETTLED
SHARE-BASED PAYMENT TRANSACTIONS
    AMENDMENTS TO
AUSTRALIAN INTERPRETATIONS  PREPAYMENTS
OF A MINIMUM FUNDING REQUIREMENT
  F-7




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  FINANCIAL INSTRUMENTS
 Financial Instruments: Recognition and Measurement.
 
    
    The replacement of the multiple classification and
measurement models in AASB 139 (IAS 39) with a single
model that has only two classification categories:
amortised cost and fair value.
    
    The replacement of the requirement to separate
embedded derivatives from financial assets with a
requirement to classify a hybrid contract in its entity
at either amortised cost or fair value.
    
    The replacement of the cost exemption for unquoted
equities and derivatives on unquoted equities with
guidance on when cost may be an appropriate
estimate of fair value.
  AMENDMENTS TO AUSTRALIAN
ACCOUNTING STANDARDS ARISING FROM THE ANNUAL
IMPROVEMENTS PROJECT FURTHER
AMENDMENTS TO AUSTRALIAN ACCOUNTING STANDARDS
ARISING FROM THE ANNUAL IMPROVEMENTS PROJECT
(IASB IMPROVEMENTS TO IFRS ISSUED IN MAY 2010)
          Jointly controlled entities
  Joint venture operations
  F-8




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
      Consolidated and Separate Financial Statements Investments
in Associates Interests in Joint Ventures.
         Business Combinations
  F-9




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 1
 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         
    
    statement of financial position items are translated
at the closing rate at the date of that statement of
financial position;
    
    income statement items and statement of
comprehensive income items 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 they are translated at the date of the
transaction); and
    
    all resulting exchange differences are recognised in
other comprehensive income.
              F-10




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
                   F-11




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 1
 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                  F-12




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
    (i) Financial assets at fair value through profit or loss
  (ii) Loans and receivables
  (iii) Available-for-sale financial assets
             F-13




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
        
    
    Buildings  25 to 40 years
    
    Plant and equipment  3 to 20 years
    
    Leasehold improvements  lesser of life of asset
or life of the lease
            F-14




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
                        F-15




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                F-16




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
                           F-17




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 2  FINANCIAL RISK MANAGEMENT
  
    
    market risk (including interest rate risk, foreign
exchange risk and commodity price risk);
    
    credit risk; and
    
    liquidity risk.
           
    
    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 generally
involves a LIBOR rate plus a margin.
      F-18




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 Financial
assets and liabilities
  NET FINANCIALASSETS/(LIABILITIES)2010
    
    
    2009CURRENCY:
    
    A$M
    
    
    A$MUS dollar
    
    
    69.5
    
    
    
    (58.3)Euro
    
    
    16.4
    
    
    
    (57.5)British pound
    
    
    0.8
    
    
    
    49.9
  US DOLLAR
    
    
    EURO
    
    
    BRITISH POUND2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009A$M
    
    
    A$M
    
    
    A$M
    
    
    A$M
    
    
    A$M
    
    
    A$MImpact on
post-tax profit  higher/(lower)
    
    
    4.5
    
    
    
    (3.8)
    
    
    
    1.1
    
    
    
    (3.7)
    
    
    
    0.1
    
    
    
    3.2Impact on equity
    
    
    36.1
    
    
    
    28.2
    
    
    
    
    
    
    
    
    
    
    
    9.9
    
    
    
    
    US DOLLAR
    
    
    EURO
    
    
    BRITISH POUND2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009A$M
    
    
    A$M
    
    
    A$M
    
    
    A$M
    
    
    A$M
    
    
    A$M+/-
    
    
    +/-
    
    
    +/-
    
    
    +/-
    
    
    +/-
    
    
    +/-Impact on post-tax profit
    
    
    1.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.3Impact on equity
    
    
    5.4
    
    
    
    1.7
    
    
    
    0.3
    
    
    
    0.4
    
    
    
    1.4
    
    
    
    4.8
 F-19




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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 2  FINANCIAL RISK MANAGEMENT (CONTINUED)
          NET FINANCIAL ASSETS/(LIABILITIES)2010
    
    2009A$M
    
    A$MCopper
    
    
    0.7
    
    (4.6)Nickel
    
    
    4.4
    
    (4.8)
 F-20




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
  COPPER PRICES
    
    
    NICKEL PRICE2010
    
    
    2009
    
    
    2010
    
    
    2009A$M
    
    
    A$M
    
    
    A$M
    
    
    A$MImpact on post-tax profit  higher/(lower)
    
    
    (2.7)
    
    
    
    (4.5)
    
    
    
    (2.4
    )
    
    
    (0.4)
  Equity securities price 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;
    
    the Group may be required to refinance the Groups borrowing facilities; or
    
    the Group may have insufficient access to capital to fund growth projects or in extreme instances, its
operations.
   F-21




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 2  FINANCIAL RISK MANAGEMENT (CONTINUED)
   2010
    
    
    2009A$M
    
    
    A$MUnsecured global
multi-currency/multi-option
loan facilities
    
    
    1,422.9
    
    
    
    1,063.0Amount of credit unused
    
    
    1,276.0
    
    
    
    856.5
  2010
    
    
    2009BETWEEN
    
    
    BETWEEN
    
    
    
    
    
    
    BETWEEN
    
    
    BETWEENLESS THAN
    
    
    1 AND
    
    
    2 AND
    
    
    LESS THAN
    
    
    1 AND
    
    
    2 AND1YEAR
    
    
    2 YEARS
    
    
    5YEARS
    
    
    1YEAR
    
    
    2 YEARS
    
    
    5YEARSA$M
    
    
    A$M
    
    
    A$M
    
    
    A$M
    
    
    A$M
    
    
    A$MNon-derivatives:Trade and other payables
    
    
    (614.2
    )
    
    
    
    
    
    
    
    
    
    
    (521.8
    )
    
    
    
    
    
    
    Payables  non-current
    
    
    
    
    
    
    (0.9
    )
    
    
    (2.4
    )
    
    
    
    
    
    
    (2.0
    )
    
    
    (2.3
    )Borrowings (including interest payments)
    
    
    (15.4
    )
    
    
    (111.3
    )
    
    
    (16.5
    )
    
    
    (9.6
    )
    
    
    (177.9
    )
    
    
    (629.6
    )
    
    
    (112.2
    )
    
    
    (18.9
    )
    
    
    (531.4
    )
    
    
    (179.9
    )
    
    
    (2.3
    )Derivatives:Net settled (commodity contracts)
    
    
    (4.4
    )
    
    
    
    
    
    
    
    
    
    
    9.7
    
    
    
    
    
    
    
    Gross settled: (inflow)
    
    
    (274.4
    )
    
    
    
    
    
    
    
    
    
    
    (174.7
    )
    
    
    
    
    
    
     outflow
    
    
    278.7
    
    
    
    
    
    
    
    
    
    
    
    174.8
    
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    
    
    
    
    9.8
    
    
    
    
    
    
    
    
    Financial Instruments:
Disclosures
 
    
    Level 1  quoted prices (unadjusted) in active markets for identical assets or liabilities.
 
    
    Level 2  inputs other than quoted prices included within level 1 that are observable for the
asset or liability, either directly [as prices] or indirectly (derived from prices).
 
    
    Level 3  inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
  LEVEL 1
    
    
    LEVEL 2
    
    
    LEVEL 3
    
    
    TOTALA$M
    
    
    A$M
    
    
    A$M
    
    
    A$MAssetsOther current financial assets
    
    
    8.3
    
    
    
    0.4
    
    
    
    
    
    
    
    8.7Other non-current financial assets
    
    
    21.4
    
    
    
    
    
    
    
    
    
    
    
    21.4Total Assets
    
    
    29.7
    
    
    
    0.4
    
    
    
    
    
    
    
    30.1LiabilitiesOther current financial liabilities
    
    
    0.3
    
    
    
    4.7
    
    
    
    
    
    
    
    5.0Total Liabilities
    
    
    0.3
    
    
    
    4.7
    
    
    
    
    
    
    
    5.0
  F-22




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 3  CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
                F-23




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 4  SEGMENT INFORMATION
   
    
    North America  comprising the United States of America and Canada.
    
    Australasia  comprising Australia, New Zealand, Papua New Guinea, India, Singapore, Hong Kong
and South Africa.
    
    Europe  comprising the United Kingdom, Sweden, the Netherlands 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 aluminium, lead, copper, zinc and nickel bearing
materials.
    
    Secondary processing  comprising value-added processes 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 electronic products, including IT assets recycled for commercial
customers. The Group offers fee-for-service business opportunities in the environmentally
responsible recycling of negative value materials including refrigerators, electrical and
electronic equipment.
  F-24




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
  NORTHAMERICA
    
    
    AUSTRALASIA
    
    
    EUROPEA$M
    
    
    A$M
    
    
    A$M
    
    
    A$M2010Total sales revenue
    
    
    5,040.0
    
    
    
    1,221.3
    
    
    
    1,191.3
    
    
    
    7,452.6Other revenue/income
    
    
    1.8
    
    
    
    3.8
    
    
    
    0.3
    
    
    
    5.9Total segment revenue
    
    
    5,041.8
    
    
    
    1,225.1
    
    
    
    1,191.6
    
    
    
    7,458.5Segment EBIT
    
    
    80.3
    
    
    
    61.2
    
    
    
    66.6
    
    
    
    208.1Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.8Finance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16.4
    )Profit before income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    194.5Segment total assets
    
    
    3,032.3
    
    
    
    562.8
    
    
    
    644.6
    
    
    
    4,239.7Segment total liabilities
    
    
    532.0
    
    
    
    222.9
    
    
    
    206.0
    
    
    
    960.9Net assets
    
    
    2,500.3
    
    
    
    339.9
    
    
    
    438.6
    
    
    
    3,278.8Other items:Depreciation and amortisation expense
    
    
    97.4
    
    
    
    21.2
    
    
    
    25.3
    
    
    
    143.9Share of pre-tax profit of investments accounted for using the
equity method
    
    
    10.1
    
    
    
    4.4
    
    
    
    
    
    
    
    14.5Investments in associates and jointly controlled entities
    
    
    348.9
    
    
    
    20.6
    
    
    
    
    
    
    
    369.5Acquisitions of property, plant and equipment
    
    
    67.6
    
    
    
    21.7
    
    
    
    31.6
    
    
    
    120.9Impairment charge/(reversal):Property, plant and equipment
    
    
    15.8
    
    
    
    (1.3
    )
    
    
    
    
    
    
    14.5Intangible assets
    
    
    0.9
    
    
    
    
    
    
    
    
    
    
    
    0.916.7
    
    
    
    (1.3
    )
    
    
    
    
    
    
    15.4
 NORTHAMERICA
    
    
    AUSTRALASIA
    
    
    EUROPEA$M
    
    
    A$M
    
    
    A$M
    
    
    A$M2009Total sales revenue
    
    
    6,368.5
    
    
    
    1,158.6
    
    
    
    1,109.1
    
    
    
    8,636.2Other revenue/income
    
    
    2.8
    
    
    
    1.5
    
    
    
    0.5
    
    
    
    4.8Total segment revenue
    
    
    6,371.3
    
    
    
    1,160.1
    
    
    
    1,109.6
    
    
    
    8,641.0Segment EBIT
    
    
    (88.6
    )
    
    
    18.7
    
    
    
    (33.1
    )
    
    
    (103.0
    )Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.3Finance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21.5
    )Loss before income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (122.2
    )Segment total assets
    
    
    2,770.0
    
    
    
    485.5
    
    
    
    553.1
    
    
    
    3,808.6Segment total liabilities
    
    
    465.9
    
    
    
    175.5
    
    
    
    308.2
    
    
    
    949.6Net assets
    
    
    2,304.1
    
    
    
    310.0
    
    
    
    244.9
    
    
    
    2,859.0Other items:Depreciation and amortisation expense
    
    
    122.7
    
    
    
    21.4
    
    
    
    26.7
    
    
    
    170.8Share of pre-tax profit of investments accounted for using the
equity method
    
    
    55.2
    
    
    
    5.6
    
    
    
    
    
    
    
    60.8Investments in associates and jointly controlled entities
    
    
    381.1
    
    
    
    19.1
    
    
    
    
    
    
    
    400.2Acquisitions of property, plant and equipment
    
    
    106.4
    
    
    
    39.8
    
    
    
    41.3
    
    
    
    187.5Impairment charge:Property, plant and equipment
    
    
    7.6
    
    
    
    2.4
    
    
    
    
    
    
    
    10.0Goodwill
    
    
    190.2
    
    
    
    0.9
    
    
    
    
    
    
    
    191.1197.8
    
    
    
    3.3
    
    
    
    
    
    
    
    201.1
 F-25




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 4  SEGMENT INFORMATION (CONTINUED)
  NORTHAMERICA
    
    
    AUSTRALASIA
    
    
    EUROPEA$M
    
    
    A$M
    
    
    A$M
    
    
    A$M2008Total sales revenue
    
    
    4,607.9
    
    
    
    1,745.1
    
    
    
    1,312.5
    
    
    
    7,665.5Other revenue/income
    
    
    2.3
    
    
    
    1.2
    
    
    
    1.5
    
    
    
    5.0Total segment revenue
    
    
    4,610.2
    
    
    
    1,746.3
    
    
    
    1,314.0
    
    
    
    7,670.5Segment EBIT
    
    
    415.7
    
    
    
    182.4
    
    
    
    94.0
    
    
    
    692.1Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.9Finance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (34.4
    )Profit before income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    660.6Segment total assets
    
    
    3,372.1
    
    
    
    597.2
    
    
    
    677.2
    
    
    
    4,646.5Segment total liabilities
    
    
    767.4
    
    
    
    526.9
    
    
    
    518.3
    
    
    
    1,812.6Net assets
    
    
    2,604.7
    
    
    
    70.3
    
    
    
    158.9
    
    
    
    2,833.9Other items:Depreciation and amortisation expense
    
    
    55.7
    
    
    
    16.6
    
    
    
    22.8
    
    
    
    95.1Share of pre-tax profit of investments accounted for using the
equity method
    
    
    60.3
    
    
    
    4.3
    
    
    
    
    
    
    
    64.6Investments in associates and jointly controlled entities
    
    
    318.1
    
    
    
    14.1
    
    
    
    
    
    
    
    332.2Acquisitions of property, plant and equipment
    
    
    59.9
    
    
    
    32.7
    
    
    
    37.1
    
    
    
    129.7Impairment charge:Property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    0.1Goodwill
    
    
    
    
    
    
    3.3
    
    
    
    
    
    
    
    3.3
    
    
    
    3.3
    
    
    
    0.1
    
    
    
    3.4
  2010
    
    
    2009
    
    
    2008A$M
    
    
    A$M
    
    
    A$MAustralia
    
    
    505.3
    
    
    
    475.8
    
    
    
    773.0China
    
    
    1,189.1
    
    
    
    1,320.6
    
    
    
    600.1Malaysia
    
    
    362.4
    
    
    
    449.1
    
    
    
    664.0USA
    
    
    1,966.4
    
    
    
    2,045.9
    
    
    
    1,175.4Turkey
    
    
    843.3
    
    
    
    1,352.9
    
    
    
    1,072.7South Korea
    
    
    660.5
    
    
    
    643.5
    
    
    
    412.1Other
    
    
    1,925.6
    
    
    
    2,348.4
    
    
    
    2,968.27,452.6
    
    
    
    8,636.2
    
    
    
    7,665.5
    2010
    
    
    2009
    
    
    2008A$M
    
    
    A$M
    
    
    A$MFerrous metal recycling
    
    
    5,071.2
    
    
    
    6,642.7
    
    
    
    5,421.1Non-ferrous metal recycling
    
    
    1,525.5
    
    
    
    1,193.4
    
    
    
    1,324.1Secondary processing
    
    
    198.5
    
    
    
    221.6
    
    
    
    361.1Recycling solutions
    
    
    657.4
    
    
    
    578.5
    
    
    
    559.27,452.6
    
    
    
    8,636.2
    
    
    
    7,665.5
 F-26




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
   2010
    
    
    2009A$M
    
    
    A$MAustralia
    
    
    193.3
    
    
    
    189.1USA
    
    
    2,153.5
    
    
    
    2,238.4United Kingdom
    
    
    160.8
    
    
    
    170.6Benelux
    
    
    50.8
    
    
    
    65.2Germany
    
    
    42.1
    
    
    
    44.7Canada
    
    
    32.5
    
    
    
    23.2New Zealand
    
    
    7.1
    
    
    
    7.8Other
    
    
    10.0
    
    
    
    12.12,650.1
    
    
    
    2,751.1
 NOTE 5  REVENUE
 2010
    
    
    2009
    
    
    2008A$M
    
    
    A$M
    
    
    A$MSales of goods
    
    
    7,391.9
    
    
    
    8,417.4
    
    
    
    7,517.2Service revenue
    
    
    60.7
    
    
    
    218.8
    
    
    
    148.3Total sales revenue
    
    
    7,452.6
    
    
    
    8,636.2
    
    
    
    7,665.5Interest income
    
    
    2.8
    
    
    
    2.3
    
    
    
    2.9Rental income
    
    
    3.1
    
    
    
    2.5
    
    
    
    2.1Total other revenue
    
    
    5.9
    
    
    
    4.8
    
    
    
    5.07,458.5
    
    
    
    8,641.0
    
    
    
    7,670.5
 NOTE 6  OTHER INCOME
 2010
    
    
    2009
    
    
    2008A$M
    
    
    A$M
    
    
    A$MRemeasurement at fair value of existing interest in Port Albany Ventures LLC
(Port Albany) (Note 29c)
    
    
    8.7
    
    
    
    
    
    
    
    Net gain on held for trading derivatives
    
    
    7.0
    
    
    
    29.8
    
    
    
    3.9Net gain on revaluation of financial assets at fair value through profit or loss
    
    
    0.4
    
    
    
    
    
    
    
    Government grants
    
    
    0.7
    
    
    
    0.8
    
    
    
    0.9Net foreign exchange gain
    
    
    
    
    
    
    
    
    
    
    0.3Insurance recovery
    
    
    1.0
    
    
    
    1.8
    
    
    
    11.8Net gain on disposal of property, plant and equipment
    
    
    3.0
    
    
    
    0.9
    
    
    
    Negative goodwill on acquisition
    
    
    
    
    
    
    0.4
    
    
    
    Net gain on
contribution of assets to SA Recycling LLC (Note 29d)
    
    
    
    
    
    
    
    
    
    
    38.8Other
    
    
    4.4
    
    
    
    
    
    
    
    25.2
    
    
    
    33.7
    
    
    
    55.7
 F-27




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 7  EXPENSES
 2010
    
    
    2009
    
    
    2008A$M
    
    
    A$M
    
    
    A$M(A) PROFIT/(LOSS) BEFORE INCOME TAX INCLUDES THE FOLLOWING
SPECIFIC EXPENSES:Depreciation and amortisation:Depreciation expense
    
    
    109.1
    
    
    
    120.7
    
    
    
    65.8Amortisation expense
    
    
    34.8
    
    
    
    50.1
    
    
    
    29.3143.9
    
    
    
    170.8
    
    
    
    95.1Finance costs
    
    
    16.4
    
    
    
    21.5
    
    
    
    34.4Net loss on disposal of property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    1.9Net loss on held for trading derivatives
    
    
    15.4
    
    
    
    10.3
    
    
    
    Rental expenses relating to operating leases
    
    
    60.1
    
    
    
    71.7
    
    
    
    43.9Net foreign exchange loss
    
    
    15.6
    
    
    
    
    
    
    
    Defined contribution superannuation expense
    
    
    4.1
    
    
    
    8.0
    
    
    
    6.3Share-based payments expense
    
    
    17.0
    
    
    
    9.3
    
    
    
    13.4(B) PROFIT/(LOSS) BEFORE INCOME TAX INCLUDES THE FOLLOWING
EXPENSES WHICH ARE INCLUDED DUE TO THEIR SIZE OR NATURE:Write-down of inventory to net realisable value
    
    
    18.5
    
    
    
    119.4
    
    
    
    Sarbanes-Oxley related professional fees1
    
    
    
    
    
    
    9.7
    
    
    
    Withdrawal liability related to a multi-employer pension plan2
    
    
    
    
    
    
    3.4
    
    
    
    Impairment provisions for trade receivables3
    
    
    1.2
    
    
    
    23.7
    
    
    
    0.6Professional fees and other costs incurred in connection
with Fairless Iron 8 Metal acquisition4
    
    
    (0.8
    )
    
    
    2.5
    
    
    
    Loss on sale of subsidiaries
    
    
    
    
    
    
    2.6
    
    
    
    Impairment loss on fire destroyed assets
    
    
    
    
    
    
    
    
    
    
    0.1Impairment of property, plant and equipment and yard closure costs5
    
    
    14.5
    
    
    
    13.7
    
    
    
    4.6Intangible asset impairments6
    
    
    0.9
    
    
    
    
    
    
    
    Impairment
of jointly controlled entity (Note 29)7
    
    
    5.7
    
    
    
    
    
    
    
    Merger costs8
    
    
    
    
    
    
    4.0
    
    
    
    1.4Redundancies
    
    
    5.7
    
    
    
    5.5
    
    
    
    5.6
 1
    
    In 2009, the Group was required to implement and comply with Section 404 of the
Sarbanes-Oxley Act of 2002 (United States). Professional
fees incurred in the first year of Sarbanes-Oxley implementation are much higher and thus listed
above. No amount is provided for 2010 as the
primary professional fees are inseparable and included in the overall statutory audit fee disclosed in Note 26.2
    
    Represents a termination liability associated with the withdrawal from a multi-employer pension plan in the United States.3
    
    Represents provisions recorded for trade debtors for which
the Group believes collectability is in doubt. Refer to Note 1(m).4
    
    In 2009, the Group incurred transaction costs associated with
the acquisition of Fairless Iron & Metal which was completed in 2010 (3 July 2009).In 2009, the Group applied the transitional principles consistent with the revised AASB 3 (IFRS 3)
whereby transaction costs are expensed for
all acquisitions prospectively from 1 July 2009. The amount in 2010 represents the reversal of
accrued costs which were settled for a lower
amount.5
    
    In 2010, impairments on property, plant and equipment were recognised for the write-down of processing equipment located in idled yards
(A$15.8 million) offset by the reversal of previously recognised processing equipment impairments
(A$1.3 million). In 2009, the impact of the
global financial crisis on the Group resulted in impairment charges for asset rationalisation,
asset retirement and idling of certain yards. In 2008,
impairments on property, plant and equipment were recognised for assets held by non-core
businesses which were being considered for disposal.6
    
    Represents the write-off of permits which the Group determined had no value.7
    
    Represents an impairment of the Groups investment in Metal Management Nashville LLC.
The jointly controlled entity operates in a very
competitive market which has impacted its financial performance resulting in the impairment charge.8
    
    Merger costs include integration bonuses, retention incentives and other costs associated with the post-merger rationalisation of the
Sims Metal Management Limited and Metal Management businesses.
 F-28




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 8  INCOME TAX AND DEFERRED TAX
 2010
    
    
    2009
    
    
    2008A$M
    
    
    A$M
    
    
    A$M(A) INCOME TAX EXPENSECurrent income tax charge
    
    
    69.7
    
    
    
    27.5
    
    
    
    217.1Adjustments for prior years
    
    
    5.6
    
    
    
    (10.3
    )
    
    
    5.4Deferred income tax
    
    
    (9.9
    )
    
    
    8.3
    
    
    
    (6.2
    )65.4
    
    
    
    25.5
    
    
    
    216.3Income tax expense on equity accounted profit (Note 29)
    
    
    2.4
    
    
    
    2.6
    
    
    
    4.2Income tax expense
    
    
    67.8
    
    
    
    28.1
    
    
    
    220.5Deferred income tax expense included in income tax expense comprises:(Increase)/decrease in deferred tax assets
    
    
    (4.9
    )
    
    
    15.5
    
    
    
    10.0(Decrease)/increase in deferred tax liabilities
    
    
    (5.0
    )
    
    
    (7.2
    )
    
    
    (16.2
    )(9.9
    )
    
    
    8.3
    
    
    
    (6.2
    )(B) RECONCILIATION OF INCOME TAX EXPENSE TO PRIMA FACIE TAX PAYABLEProfit/(loss) before income tax
    
    
    194.5
    
    
    
    (122.2
    )
    
    
    660.6Tax at the standard Australian rate of 30%
    
    
    58.4
    
    
    
    (36.7
    )
    
    
    198.2Adjustments for prior years
    
    
    5.6
    
    
    
    (10.3
    )
    
    
    5.4Effect of tax rates in other jurisdictions
    
    
    2.4
    
    
    
    12.0
    
    
    
    34.4Non-deductible expenses
    
    
    6.1
    
    
    
    3.5
    
    
    
    3.6Non-assessable gain on formation of jointly controlled entity
    
    
    
    
    
    
    
    
    
    
    (13.0
    )Non-assessable gain on acquisition of a remaining interest
in a jointly
controlled entity
    
    
    (2.6
    )
    
    
    
    
    
    
    Non-assessable income
    
    
    (2.5
    )
    
    
    (1.1
    )
    
    
    (6.5
    )Non-deductible goodwill impairment
    
    
    
    
    
    
    57.2
    
    
    
    Prior year tax loss not previously recognised
    
    
    (1.7
    )
    
    
    
    
    
    
    (0.1
    )Other
    
    
    2.1
    
    
    
    3.5
    
    
    
    (1.5
    )Income tax expense
    
    
    67.8
    
    
    
    28.1
    
    
    
    220.5(C)AMOUNTS RECOGNISED DIRECTLY TO EQUITYShare placement costs
    
    
    (1.3
    )
    
    
    
    
    
    
    Share-based payments
    
    
    1.6
    
    
    
    7.7
    
    
    
    (6.9
    )Exchange gain/(loss) on foreign denominated intercompany loans
    
    
    (4.6
    )
    
    
    20.4
    
    
    
    (14.4
    )Total deferred tax debited/(credited) to equity
    
    
    (4.3
    )
    
    
    28.1
    
    
    
    (21.3
    )(D) TAX BENEFIT RELATING TO OTHER COMPREHENSIVE INCOMECash flow hedges
    
    
    (0.4
    )
    
    
    (0.4
    )
    
    
    (4.6
    )Other financial assets
    
    
    (0.6
    )
    
    
    
    
    
    
    Defined benefit plans
    
    
    (1.1
    )
    
    
    (2.7
    )
    
    
    (3.4
    )(2.1
    )
    
    
    (3.1
    )
    
    
    (8.0
    )
 F-29




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 8  INCOME TAX AND DEFERRED TAX (CONTINUED)
 2010A$M
    
    
    2009A$M(E) DEFERRED TAX ASSETS AND LIABILITIESDeferred tax assetsThe balance comprises temporary difference attributable to:(amounts recognised in profit or loss)Provisions and other accruals
    
    
    19.2
    
    
    
    22.2Employee benefits
    
    
    11.0
    
    
    
    9.3Stores and consumables
    
    
    7.0
    
    
    
    5.2Property, plant and equipment
    
    
    5.6
    
    
    
    4.4Jointly controlled entities and associates
    
    
    
    
    
    
    1.1Foreign exchange loss
    
    
    
    
    
    
    2.0Share-based payments
    
    
    3.4
    
    
    
    4.7Other
    
    
    10.0
    
    
    
    11.156.2
    
    
    
    60.0(amounts recognised directly in equity)Share-based payments
    
    
    1.0
    
    
    
    2.6Defined benefit plans
    
    
    5.8
    
    
    
    4.7Share placement costs
    
    
    1.3
    
    
    
    Exchange loss on foreign denominated intercompany loans
    
    
    8.9
    
    
    
    4.3Cash flow hedges
    
    
    0.3
    
    
    
    Other financial assets
    
    
    0.6
    
    
    
    17.9
    
    
    
    11.6MovementsBalance at 1 July
    
    
    71.6
    
    
    
    110.0Charged to income statement
    
    
    4.9
    
    
    
    (15.5
    )Adjustments for prior years
    
    
    (3.3
    )
    
    
    8.6Transfers to deferred tax liabilities
    
    
    (2.8
    )
    
    
    (17.2
    )Acquisitions
    
    
    0.5
    
    
    
    Charged directly to equity and other comprehensive income
    
    
    5.4
    
    
    
    (26.1
    )Foreign exchange differences
    
    
    (2.2
    )
    
    
    11.8Balance at 30 June
    
    
    74.1
    
    
    
    71.6Deferred tax assets expected to be recovered within 12 months
    
    
    44.0
    
    
    
    41.4Deferred tax assets expected to be recovered after 12 months
    
    
    30.1
    
    
    
    30.274.1
    
    
    
    71.6Deferred tax liabilitiesThe balance comprises temporary differences attributable to:(amounts recognised in profit or loss)Intangibles
    
    
    52.9
    
    
    
    65.7Property, plant and equipment
    
    
    66.9
    
    
    
    76.2Stores and consumables
    
    
    3.1
    
    
    
    Jointly controlled entities and associates
    
    
    3.4
    
    
    
    Other
    
    
    7.4
    
    
    
    6.8133.7
    
    
    
    148.7(amounts recognised directly in equity)Cash flow hedges
    
    
    
    
    
    
    0.1
    
    
    
    0.1MovementsBalance at 1 July
    
    
    148.8
    
    
    
    148.2Charged to income statement
    
    
    (5.0
    )
    
    
    (7.2
    )Adjustments for prior years
    
    
    1.6
    
    
    
    (3.2
    )Transfers from deferred tax assets
    
    
    (2.8
    )
    
    
    (17.2
    )Charged directly to equity and other comprehensive income
    
    
    (1.0
    )
    
    
    (1.1
    )Acquisitions/disposals
    
    
    
    
    
    
    0.9Foreign exchange differences
    
    
    (7.9
    )
    
    
    28.4Balance at 30 June
    
    
    133.7
    
    
    
    148.8Deferred tax liabilities expected to be settled within 12 months
    
    
    17.8
    
    
    
    6.0Deferred tax liabilities expected to be settled after 12 months
    
    
    115.9
    
    
    
    142.8133.7
    
    
    
    148.8
 F-30




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
             F-31




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 9  TRADE AND OTHER RECEIVABLES
 2010
    
    
    2009A$M
    
    
    A$MCurrent:Trade receivables
    
    
    485.4
    
    
    
    286.1Provision for impairment of receivables
    
    
    (3.6
    )
    
    
    (9.0
    )481.8
    
    
    
    277.1Other receivables and deferred expenses
    
    
    76.6
    
    
    
    60.7Prepayments
    
    
    17.8
    
    
    
    12.594.4
    
    
    
    73.2576.2
    
    
    
    350.3Non-current:Trade receivables
    
    
    3.8
    
    
    
    7.8Other
    
    
    4.1
    
    
    
    9.87.9
    
    
    
    17.6
   2010
    
    
    2009
    
    
    2008A$M
    
    
    A$M
    
    
    A$MBalance at 1 July
    
    
    9.0
    
    
    
    0.9
    
    
    
    1.8Acquisitions
    
    
    
    
    
    
    
    
    
    
    0.1Provision for impairment recognised during the year
    
    
    1.2
    
    
    
    23.7
    
    
    
    0.6Receivables written-off during the year as uncollectible
    
    
    (5.9
    )
    
    
    (15.0
    )
    
    
    (1.6
    )Foreign exchange differences
    
    
    (0.7
    )
    
    
    (0.6
    )
    
    
    Balance at 30 June
    
    
    3.6
    
    
    
    9.0
    
    
    
    0.9
  (B)
    
    PAST DUE BUT NOT IMPAIRED
  2010
    
    
    2009A$M
    
    
    A$MDays
overdue:1-30 days
    
    
    68.0
    
    
    
    51.431-60 days
    
    
    16.1
    
    
    
    13.7Over 60 days
    
    
    12.2
    
    
    
    18.496.3
    
    
    
    83.5
       F-32




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
  NOTE 10-INVENTORY
 2010
    
    
    2009A$M
    
    
    A$MRaw materials
    
    
    171.7
    
    
    
    101.9Stores and spare parts
    
    
    37.3
    
    
    
    36.5Finished goods
    
    
    567.9
    
    
    
    330.8776.9
    
    
    
    469.2
   NOTE 11  OTHER FINANCIAL ASSETS AND LIABILITIES
 2010
    
    
    2009A$M
    
    
    A$MCurrent assets:Financial assets designated at fair value through profit or loss
    
    
    3.6
    
    
    
    Forward foreign exchange contracts  cash flow hedges
    
    
    0.4
    
    
    
    0.7Forward commodity contracts  held for trading
    
    
    4.7
    
    
    
    8.7
    
    
    
    0.7Non-current assets:Available-for-sale investments
    
    
    21.4
    
    
    
    Current liabilities:Forward foreign exchange contracts  cash flow hedges
    
    
    4.0
    
    
    
    0.2Forward commodity contracts  held for trading
    
    
    0.3
    
    
    
    9.7Forward foreign exchange contracts  held for trading
    
    
    0.7
    
    
    
    0.65.0
    
    
    
    10.5
            F-33




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 12  PROPERTY, PLANT AND EQUIPMENT
 LEASEHOLD
    
    
    
    
    
    
    CAPITALIMPROVE-
    
    
    PLANT &
    
    
    WORK INLAND
    
    
    BUILDINGS
    
    
    MENTS
    
    
    EQUIPMENT
    
    
    PROGRESS
    
    
    TOTALA$M
    
    
    A$M
    
    
    A$M
    
    
    A$M
    
    
    A$M
    
    
    A$MAt 30 June 2010Cost
    
    
    254.1
    
    
    
    186.4
    
    
    
    53.8
    
    
    
    863.6
    
    
    
    90.0
    
    
    
    1,447.9Accumulated depreciation
    
    
    
    
    
    
    (42.7
    )
    
    
    (21.3
    )
    
    
    (458.1
    )
    
    
    
    
    
    
    (522.1
    )Net book amount
    
    
    254.1
    
    
    
    143.7
    
    
    
    32.5
    
    
    
    405.5
    
    
    
    90.0
    
    
    
    925.8Year ended 30 June 2010Balance at 1 July
    
    
    254.5
    
    
    
    153.2
    
    
    
    35.9
    
    
    
    404.6
    
    
    
    99.5
    
    
    
    947.7Additions
    
    
    1.0
    
    
    
    2.4
    
    
    
    4.4
    
    
    
    81.3
    
    
    
    31.8
    
    
    
    120.9Disposals
    
    
    (0.6
    )
    
    
    (1.0
    )
    
    
    (0.1
    )
    
    
    (3.4
    )
    
    
    
    
    
    
    (5.1
    )Transfers
    
    
    1.6
    
    
    
    6.2
    
    
    
    0.8
    
    
    
    28.5
    
    
    
    (37.1
    )
    
    
    Impairment loss (Note 7)
    
    
    (1.8
    )
    
    
    (0.2
    )
    
    
    
    
    
    
    (12.5
    )
    
    
    
    
    
    
    (14.5
    )Depreciation expense
    
    
    
    
    
    
    (11.3
    )
    
    
    (4.8
    )
    
    
    (93.0
    )
    
    
    
    
    
    
    (109.1
    )Acquisition of subsidiaries (Note 27)
    
    
    12.5
    
    
    
    3.0
    
    
    
    
    
    
    
    26.4
    
    
    
    
    
    
    
    41.9Foreign exchange differences
    
    
    (13.1
    )
    
    
    (8.6
    )
    
    
    (3.7
    )
    
    
    (26.4
    )
    
    
    (4.2
    )
    
    
    (56.0
    )Balance at 30 June
    
    
    254.1
    
    
    
    143.7
    
    
    
    32.5
    
    
    
    405.5
    
    
    
    90.0
    
    
    
    925.8At 30
June 2009Cost
    
    
    254.5
    
    
    
    187.0
    
    
    
    53.8
    
    
    
    817.7
    
    
    
    99.5
    
    
    
    1,412.5Accumulated depreciation
    
    
    
    
    
    
    (33.8
    )
    
    
    (17.9
    )
    
    
    (413.1
    )
    
    
    
    
    
    
    (464.8
    )Net book amount
    
    
    254.5
    
    
    
    153.2
    
    
    
    35.9
    
    
    
    404.6
    
    
    
    99.5
    
    
    
    947.7Year
ended 30 June 2009Balance at 1 July
    
    
    212.3
    
    
    
    123.9
    
    
    
    24.5
    
    
    
    368.8
    
    
    
    55.2
    
    
    
    784.7Additions
    
    
    6.9
    
    
    
    20.3
    
    
    
    13.6
    
    
    
    63.5
    
    
    
    83.2
    
    
    
    187.5Disposals
    
    
    (0.2
    )
    
    
    (3.2
    )
    
    
    
    
    
    
    (1.2
    )
    
    
    
    
    
    
    (4.6
    )Transfers
    
    
    1.0
    
    
    
    5.7
    
    
    
    1.1
    
    
    
    33.5
    
    
    
    (42.7
    )
    
    
    (1.4
    )Impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10.0
    )
    
    
    
    
    
    
    (10.0
    )Depreciation expense
    
    
    
    
    
    
    (11.4
    )
    
    
    (4.6
    )
    
    
    (104.7
    )
    
    
    
    
    
    
    (120.7
    )Acquisition of subsidiaries
    
    
    3.7
    
    
    
    4.4
    
    
    
    
    
    
    
    19.0
    
    
    
    
    
    
    
    27.1Disposal of subsidiaries
    
    
    (1.0
    )
    
    
    (0.6
    )
    
    
    
    
    
    
    (5.5
    )
    
    
    
    
    
    
    (7.1
    )Foreign exchange differences
    
    
    31.8
    
    
    
    14.1
    
    
    
    1.3
    
    
    
    41.2
    
    
    
    3.8
    
    
    
    92.2Balance at 30 June
    
    
    254.5
    
    
    
    153.2
    
    
    
    35.9
    
    
    
    404.6
    
    
    
    99.5
    
    
    
    947.7
 F-34




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 13  GOODWILL
  2010
    
    
    2009A$M
    
    
    A$MCost
    
    
    1,308.7
    
    
    
    1,312.6Accumulated impairment
    
    
    (157.0
    )
    
    
    (165.8
    )Net book amount
    
    
    1,151.7
    
    
    
    1,146.8Balance at 1 July
    
    
    1,146.8
    
    
    
    1,166.5Impairment charge
    
    
    
    
    
    
    (191.1
    )Acquisition of subsidiaries (Note 27)
    
    
    64.3
    
    
    
    44.0Contingent consideration on prior year acquisitions
    
    
    4.8
    
    
    
    Other
    
    
    
    
    
    
    (2.3
    )Foreign exchange differences
    
    
    (64.2
    )
    
    
    129.7Balance at 30 June
    
    
    1,151.7
    
    
    
    1,146.8
  2010
    
    
    2009A$M
    
    
    A$MAustralasia
    
    
    21.8
    
    
    
    20.9North America
    
    
    1,017.0
    
    
    
    1,005.6Europe
    
    
    112.9
    
    
    
    120.31,151.7
    
    
    
    1,146.8
  2010
    
    
    2009A$M
    
    
    A$MEast
    
    
    554.7
    
    
    
    593.4Houston
    
    
    118.5
    
    
    
    148.3Rest of North America
    
    
    343.8
    
    
    
    263.91,017.0
    
    
    
    1,005.6
       F-35




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 13  GOODWILL (CONTINUED)
   DISCOUNT RATE (PRE-TAX)
    
    
    GROWTH RATE2010
    
    
    2009
    
    
    2010
    
    
    2009Australasia
    
    
    13.520.9
    
    
    
    12.517.0
    
    
    
    2.5
    
    
    
    2.5East
    
    
    14.8
    
    
    
    15.1
    
    
    
    3.0
    
    
    
    3.0Houston
    
    
    14.1
    
    
    
    15.2
    
    
    
    3.0
    
    
    
    3.0Rest of North America
    
    
    12.515.7
    
    
    
    13.816.2
    
    
    
    3.0
    
    
    
    3.0Europe
    
    
    11.313.2
    
    
    
    12.514.5
    
    
    
    1.52.5
    
    
    
    1.52.5
         NOTE 14  INTANGIBLE ASSETS
 SUPPLIERRELATIONSHIPS
    
    
    PERMITS
    
    
    CONTRACTS
    
    
    TRADE NAMES
    
    
    OTHER
    
    
    TOTALA$M
    
    
    A$M
    
    
    A$M
    
    
    A$M
    
    
    A$M
    
    
    A$MAt 30
June 2010Cost
    
    
    252.8
    
    
    
    9.7
    
    
    
    31.8
    
    
    
    36.5
    
    
    
    
    
    
    
    330.8Accumulated impairment
    
    
    
    
    
    
    (0.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.9
    )Accumulated amortisation
    
    
    (101.6
    )
    
    
    
    
    
    
    (28.5
    )
    
    
    (4.6
    )
    
    
    
    
    
    
    (134.7
    )Net book amount
    
    
    151.2
    
    
    
    8.8
    
    
    
    3.3
    
    
    
    31.9
    
    
    
    
    
    
    
    195.2Year
ended 30 June 2010Balance at 1 July
    
    
    187.6
    
    
    
    9.8
    
    
    
    5.6
    
    
    
    35.8
    
    
    
    
    
    
    
    238.8Acquisitions
    
    
    5.4
    
    
    
    0.5
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    6.0Impairment charge
    
    
    
    
    
    
    (0.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.9
    )Amortisation charge
    
    
    (30.5
    )
    
    
    
    
    
    
    (2.1
    )
    
    
    (2.2
    )
    
    
    
    
    
    
    (34.8
    )Foreign exchange differences
    
    
    (11.3
    )
    
    
    (0.6
    )
    
    
    (0.3
    )
    
    
    (1.7
    )
    
    
    
    
    
    
    (13.9
    )Balance at 30 June
    
    
    151.2
    
    
    
    8.8
    
    
    
    3.3
    
    
    
    31.9
    
    
    
    
    
    
    
    195.2At 30
June 2009Cost
    
    
    262.9
    
    
    
    9.8
    
    
    
    33.4
    
    
    
    38.3
    
    
    
    
    
    
    
    344.4Accumulated amortisation
    
    
    (75.3
    )
    
    
    
    
    
    
    (27.8
    )
    
    
    (2.5
    )
    
    
    
    
    
    
    (105.6
    )Net book amount
    
    
    187.6
    
    
    
    9.8
    
    
    
    5.6
    
    
    
    35.8
    
    
    
    
    
    
    
    238.8Year
ended 30 June 2009Balance at 1 July
    
    
    189.9
    
    
    
    4.3
    
    
    
    9.5
    
    
    
    31.8
    
    
    
    0.1
    
    
    
    235.6Acquisitions
    
    
    7.0
    
    
    
    
    
    
    
    0.7
    
    
    
    
    
    
    
    
    
    
    
    7.7Transfers
    
    
    (3.4
    )
    
    
    3.5
    
    
    
    
    
    
    
    
    
    
    
    (0.1
    )
    
    
    Amortisation charge
    
    
    (40.0
    )
    
    
    
    
    
    
    (8.0
    )
    
    
    (2.1
    )
    
    
    
    
    
    
    (50.1
    )Foreign exchange differences
    
    
    34.1
    
    
    
    2.0
    
    
    
    3.4
    
    
    
    6.1
    
    
    
    
    
    
    
    45.6Balance at 30 June
    
    
    187.6
    
    
    
    9.8
    
    
    
    5.6
    
    
    
    35.8
    
    
    
    
    
    
    
    238.8
 F-36




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
 FOR THE YEAR ENDED 30 JUNE 2010
  2010
    
    
    2009A$M
    
    
    A$MNorth America
    
    
    188.7
    
    
    
    228.3Australasia
    
    
    0.4
    
    
    
    0.5Europe
    
    
    6.1
    
    
    
    10.0195.2
    
    
    
    238.8
 NOTE 15  TRADE AND OTHER PAYABLES
 2010
    
    
    2009A$M
    
    
    A$MTrade payables
    
    
    430.4
    
    
    
    293.4Other payables
    
    
    160.2
    
    
    
    220.0Deferred income
    
    
    23.6
    
    
    
    8.4614.2
    
    
    
    521.8
  NOTE 16  BORROWINGS
 2010
    
    
    2009A$M
    
    
    A$MCurrent borrowings:Other borrowings
    
    
    0.6
    
    
    
    0.80.6
    
    
    
    0.8Non-current borrowings:Bank loans
    
    
    116.2
    
    
    
    173.4Other borrowings
    
    
    0.4
    
    
    
    0.9116.6
    
    
    
    174.3
      NOTE 17  PROVISIONS
 2010
    
    
    2009A$M
    
    
    A$MCurrent:Employee
benefits
    
    
    10.8
    
    
    
    14.6Legal provisions
    
    
    13.3
    
    
    
    16.2Other
    
    
    7.0
    
    
    
    7.231.1
    
    
    
    38.0Non-current:Employee
benefits
    
    
    10.2
    
    
    
    12.1Environmental compliance
    
    
    4.9
    
    
    
    5.3Contingent consideration  business combinations
    
    
    4.8
    
    
    
    14.2Other
    
    
    2.3
    
    
    
    2.422.2
    
    
    
    34.0
 F-37




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
 FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 17  PROVISIONS (CONTINUED)
    CURRENT
    
    NON-CURRENTCONTINGENT
    
    
    ENVIRONMENTALLEGAL
    
    
    OTHER
    
    
    CONSIDERATION
    
    
    COMPLIANCE
    
    
    OTHERA$M
    
    
    A$M
    
    
    A$M
    
    
    A$M
    
    
    A$MBalance at 1 July
    
    
    16.2
    
    
    
    7.2
    
    
    
    14.2
    
    
    
    5.3
    
    
    
    2.4Reclassifications/transfers
    
    
    
    
    
    
    2.2
    
    
    
    (1.2
    )
    
    
    
    
    
    
    0.5Provisions
recognised/(written-back) in profit or
loss
    
    
    (1.0
    )
    
    
    (0.3
    )
    
    
    
    
    
    
    0.2
    
    
    
    0.5Payments
    
    
    (1.1
    )
    
    
    (1.7
    )
    
    
    (11.4
    )
    
    
    (0.4
    )
    
    
    (1.2
    )Purchase accounting adjustments
    
    
    
    
    
    
    
    
    
    
    4.8
    
    
    
    
    
    
    
    Foreign exchange differences
    
    
    (0.8
    )
    
    
    (0.4
    )
    
    
    (1.6
    )
    
    
    (0.2
    )
    
    
    0.1Balance at 30 June
    
    
    13.3
    
    
    
    7.0
    
    
    
    4.8
    
    
    
    4.9
    
    
    
    2.3
 NOTE 18  RETIREMENT BENEFIT OBLIGATIONS
     2010
    
    
    2009A$M
    
    
    A$MPresent
value of the defined benefit obligation
    
    
    72.9
    
    
    
    73.4Fair value
of defined benefit plan assets
    
    
    (61.9
    )
    
    
    (62.2
    )Net
liability in the statement of financial position
    
    
    11.0
    
    
    
    11.2
    2010
    
    
    2009A$M
    
    
    A$MCash
    
    
    8.4
    
    
    
    15.5Equity instruments
    
    
    34.6
    
    
    
    36.4Debt instruments
    
    
    12.9
    
    
    
    7.0Property
    
    
    6.0
    
    
    
    3.3Total plan assets
    
    
    61.9
    
    
    
    62.2
 F-38




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
 FOR THE YEAR ENDED 30 JUNE 2010
  2010
    
    
    2009A$M
    
    
    A$MReconciliation
of the present value of the defined benefit obligation, which is partly funded:Balance at 1 July
    
    
    73.4
    
    
    
    81.6Current service cost
    
    
    1.4
    
    
    
    2.1Interest cost
    
    
    3.7
    
    
    
    5.0Actuarial loss (gain)
    
    
    8.4
    
    
    
    (8.7
    )Benefits paid
    
    
    (5.0
    )
    
    
    (9.7
    )Contributions paid by members
    
    
    0.4
    
    
    
    0.5Plan changes
    
    
    
    
    
    
    0.2Settlements
    
    
    (4.0
    )
    
    
    Foreign exchange differences
    
    
    (5.4
    )
    
    
    2.4Balance at 30 June
    
    
    72.9
    
    
    
    73.4Reconciliation of the fair value of plan assets:Balance at 1 July
    
    
    62.2
    
    
    
    76.7Expected return on plan assets
    
    
    3.6
    
    
    
    5.5Actuarial gain (loss)
    
    
    4.6
    
    
    
    (16.9
    )Contributions by Group
    
    
    5.1
    
    
    
    3.8Contributions paid by members
    
    
    0.4
    
    
    
    0.5Benefits paid
    
    
    (5.0
    )
    
    
    (9.7
    )Settlements
    
    
    (3.9
    )
    
    
    Foreign exchange differences
    
    
    (5.1
    )
    
    
    2.3Balance at 30 June
    
    
    61.9
    
    
    
    62.2
  2010
    
    
    2009
    
    
    2008A$M
    
    
    A$M
    
    
    A$MCurrent service cost
    
    
    1.4
    
    
    
    2.1
    
    
    
    2.1Interest cost
    
    
    3.7
    
    
    
    5.0
    
    
    
    3.9Expected return on plan assets
    
    
    (3.6
    )
    
    
    (5.5
    )
    
    
    (5.5
    )1.5
    
    
    
    1.6
    
    
    
    0.5Actual return on plan assets
    
    
    8.2
    
    
    
    (11.3
    )
    
    
    (6.4
    )
  2010
    
    
    2009
    
    
    2008A$M
    
    
    A$M
    
    
    A$MCumulative amount at 1 July
    
    
    (13.9
    )
    
    
    (5.7
    )
    
    
    5.5Recognised during the period
    
    
    (3.8
    )
    
    
    (8.2
    )
    
    
    (11.2
    )Cumulative amount at 30 June
    
    
    (17.7
    )
    
    
    (13.9
    )
    
    
    (5.7
    )
 F-39




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##### Table of Contents



NOTES
TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 18  RETIREMENT BENEFIT OBLIGATIONS (CONTINUED)
  %2010
    
    
    2009
    
    
    2008AustraliaDiscount rate
    
    
    4.2
    
    
    
    4.6
    
    
    
    5.5Expected rate of return on plan assets
    
    
    7.3
    
    
    
    8.0
    
    
    
    8.0Future salary increases
    
    
    4.0
    
    
    
    3.0
    
    
    
    5.0United KingdomDiscount rate
    
    
    5.3
    
    
    
    6.2
    
    
    
    6.2Expected rate of return on plan assets
    
    
    5.4
    
    
    
    6.1
    
    
    
    6.4Future salary increases
    
    
    3.6
    
    
    
    4.0
    
    
    
    5.0United StatesDiscount rate
    
    
    5.5
    
    
    
    6.5
    
    
    
    6.0Expected rate of return on plan assets
    
    
    8.0
    
    
    
    8.0
    
    
    
    8.0Future salary increases
    
    
    3.5
    
    
    
    3.5
    
    
    
    3.5
       2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006A$M
    
    
    A$M
    
    
    A$M
    
    
    A$M
    
    
    A$MDefined benefit plan obligation
    
    
    72.9
    
    
    
    73.4
    
    
    
    81.6
    
    
    
    70.0
    
    
    
    87.0Plan assets
    
    
    (61.9
    )
    
    
    (62.2
    )
    
    
    (76.8
    )
    
    
    (77.4
    )
    
    
    (82.2
    )Deficit/(surplus)
    
    
    11.0
    
    
    
    11.2
    
    
    
    4.8
    
    
    
    (7.4
    )
    
    
    4.8Experience adjustments arising on plan liabilities
    
    
    8.4
    
    
    
    (8.7
    )
    
    
    (0.5
    )
    
    
    (2.8
    )
    
    
    (2.6
    )Experience adjustments arising on plan assets
    
    
    (4.6
    )
    
    
    16.9
    
    
    
    11.8
    
    
    
    (3.9
    )
    
    
    (3.3
    )
 F-40




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 19  CONTRIBUTED EQUITY
   NUMBEROF SHARES
    
    
    A$MBalance at 1 July 2008
    
    
    180,416,948
    
    
    
    2,325.9Issued under long-term incentive plans
    
    
    257,282
    
    
    
    Issued under the employee share scheme recognised as issued following
repayment of associated employee loans
    
    
    27,838
    
    
    
    0.4Issued under the DRP
    
    
    1,384,554
    
    
    
    26.6Shares issued to employees for integration bonus
    
    
    60,096
    
    
    
    Balance at 30 June 2009
    
    
    182,146,718
    
    
    
    2,352.9Issued under long-term incentive plans
    
    
    224,361
    
    
    
    0.5Issued under the DRP
    
    
    442,346
    
    
    
    9.2Issued under the Institutional Placement1
    
    
    19,047,620
    
    
    
    391.4Issued under the Share Purchase Plan2
    
    
    1,973,398
    
    
    
    41.2Balance at 30 June 2010 for accounting purposes
    
    
    203,834,443
    
    
    
    2,795.2Issue of ordinary shares under the employee share scheme deemed
to be options for accounting purposes
    
    
    46,831
    
    
    
    Balance at 30 June 2010 per share register
    
    
    203,881,274
    
    
    
    2,795.2
 1
    
    On 20 November 2009, the Company issued 19,047,620
ordinary shares at A$21.00 per share.2
    
    On 17 December 2009, the Company issued 1,973,398 ordinary
shares at A$21.00 per share.
        2010
    
    
    2009A$M
    
    
    A$MTotal borrowings
    
    
    117.2
    
    
    
    175.1Less: cash and cash equivalents
    
    
    (132.3
    )
    
    
    (69.5
    )Net debt
    
    
    (15.1
    )
    
    
    105.6Plus: total equity
    
    
    3,278.8
    
    
    
    2,859.0Total capital
    
    
    3,263.7
    
    
    
    2,964.6Gearing ratio
    
    
    
    
    
    
    3.6
    %
  F-41




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 20  RESERVES AND RETAINED EARNINGS
  2010
    
    
    2009A$M
    
    
    A$MShare-based payments reserve
    
    
    53.7
    
    
    
    38.4Available-for-sale investments reserve
    
    
    (0.8
    )
    
    
    Cash flow hedging reserve
    
    
    (0.7
    )
    
    
    0.4Foreign currency translation reserve
    
    
    5.9
    
    
    
    127.258.1
    
    
    
    166.0
  2010
    
    
    2009A$M
    
    
    A$MShare-based payments reserveBalance at 1 July
    
    
    38.4
    
    
    
    36.1Share-based payment expense
    
    
    16.9
    
    
    
    9.2Shares issued to employees for integration bonus
    
    
    
    
    
    
    0.8Deferred tax on current year movements
    
    
    (1.6
    )
    
    
    (7.7
    )Balance at 30 June
    
    
    53.7
    
    
    
    38.4Available-for-sale investments reserveBalance at 1 July
    
    
    
    
    
    
    Revaluation
 gross
    
    
    (1.4
    )
    
    
    Deferred tax
    
    
    0.6
    
    
    
    Balance at 30 June
    
    
    (0.8
    )
    
    
    Cash flow hedging reserveBalance at 1 July
    
    
    0.4
    
    
    
    (0.6
    )Revaluation
 gross
    
    
    (0.9
    )
    
    
    0.6Deferred tax on revaluation
    
    
    0.2
    
    
    
    (0.2
    )Transfer to
profit or loss  gross
    
    
    (0.6
    )
    
    
    Deferred tax on transfer
    
    
    0.2
    
    
    
    0.6Balance at 30 June
    
    
    (0.7
    )
    
    
    0.4Foreign currency translation reserveBalance at 1 July
    
    
    127.2
    
    
    
    (209.9
    )Currency translation differences arising during the year
    
    
    (121.3
    )
    
    
    337.1Balance at 30 June
    
    
    5.9
    
    
    
    127.2
   2010
    
    
    2009A$M
    
    
    A$MBalance at 1 July
    
    
    340.1
    
    
    
    682.3Profit/(loss) after tax
    
    
    126.7
    
    
    
    (150.3
    )Dividends paid
    
    
    (38.6
    )
    
    
    (186.5
    )Actuarial loss on defined benefit plans, net of tax
    
    
    (2.7
    )
    
    
    (5.4
    )Balance at 30 June
    
    
    425.5
    
    
    
    340.1
 F-42




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
          NOTE 21  DIVIDENDS
  2010
    
    
    2009
    
    
    2008A$M
    
    
    A$M
    
    
    A$MDeclared and paid during the yearInterim dividend 2010 paid at 10 cents per share franked 100% at a 30% tax rate
    
    
    20.4
    
    
    
    
    
    
    
    Final dividend 2009 paid at 10 cents per share franked 100% at a 30% tax rate
    
    
    18.2
    
    
    
    
    
    
    
    Interim dividend 2009 paid at 28 cents per share franked 100% at a 30% tax rate
    
    
    
    
    
    
    50.9
    
    
    
    Final dividend 2008 paid at 75 cents per share franked 23% at a 30% tax rate
    
    
    
    
    
    
    135.6
    
    
    
    Interim dividend 2008 paid at 55 cents per share franked 47% at a 30% tax rate
    
    
    
    
    
    
    
    
    
    
    99.0Final dividend 2007 paid at 60 cents per share franked 51% at a 30% tax rate
    
    
    
    
    
    
    
    
    
    
    75.7Total dividends paid
    
    
    38.6
    
    
    
    186.5
    
    
    
    174.7Shares issued under the DRP
    
    
    (9.2
    )
    
    
    (26.6
    )
    
    
    (18.1
    )Total cash dividends paid
    
    
    29.4
    
    
    
    159.9
    
    
    
    156.6
     2010
    
    
    2009A$M
    
    
    A$MFranking credits available for the subsequent financial years based on tax rate of 30%
(2009: 30%)
    
    
    16.2
    
    
    
    27.5
  
    
    franking credits that will arise from the payment of the amount of the provision for
income tax and franking debits that will arise from refunds;
 
    
    franking debits that will arise from the payment of dividends recognised as a liability as at the reporting date; and
    
    franking credits that will arise from the receipt of dividends recognised as receivables as at the reporting date.
  F-43




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 22  CONTINGENCIES
   2010
    
    
    2009A$M
    
    
    A$MBank guarantees  subsidiaries
    
    
    45.7
    
    
    
    64.3Borrowing guarantee  SA Recycling LLC
    
    
    
    
    
    
    83.9Total
guarantees
    
    
    45.7
    
    
    
    148.2
           NOTE 23  COMMITMENTS
   2010
    
    
    2009A$M
    
    
    A$MPayable within one-year
    
    
    26.3
    
    
    
    34.2Payable later than one-year but not later than five-years
    
    
    0.7
    
    
    
    0.527.0
    
    
    
    34.7
  F-44




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
   2010
    
    
    2009A$M
    
    
    A$MNot later than one-year
    
    
    59.0
    
    
    
    69.8Later than one-year, but not later than three-years
    
    
    95.6
    
    
    
    107.5Later than three-years, but not later than five-years
    
    
    41.1
    
    
    
    53.2Later than five-years
    
    
    121.0
    
    
    
    127.8Total
lease commitments not recognised as liabilities
    
    
    316.7
    
    
    
    358.3
    2010
    
    
    2009A$M
    
    
    A$MPayable within one-year
    
    
    2.6
    
    
    
    7.8Payable later than one-year but not later than five-years
    
    
    2.3
    
    
    
    4.7Total
remuneration commitments not recognised as liabilities
    
    
    4.9
    
    
    
    12.5
 NOTE 24  SHARE OWNERSHIP PLANS
       ORDINARY SHARES
    
    
    ADS2010
    
    
    2009
    
    
    2010
    
    
    2009Risk-free interest rate
    
    
    5.2
    %
    
    
    4.7
    %
    
    
    2.7
    %
    
    
    3.0
    %Dividend yield
    
    
    4.0
    %
    
    
    3.9
    %
    
    
    4.0
    %
    
    
    3.9
    %Volatility
    
    
    49.0
    %
    
    
    46.3
    %
    
    
    59.0
    %
    
    
    55.7
    %Expected life (years)
    
    
    4.2
    
    
    
    4.3
    
    
    
    4.3
    
    
    
    4.3Share price at grant date
    
    A$
    21.26
    
    
    A$
    20.10
    
    
    US$
    19.21
    
    
    US$
    16.07Weighted average fair value
    
    A$
    6.78
    
    
    A$
    6.27
    
    
    US$
    6.56
    
    
    US$
    5.48
 F-45




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 24  SHARE OWNERSHIP PLANS (CONTINUED)
   WEIGHTED
    
    
    
    
    
    
    WEIGHTEDAVERAGE
    
    
    
    
    
    
    AVERAGENUMBER
    
    
    EXERCISE
    
    
    NUMBER
    
    
    EXERCISEOF OPTIONS
    
    
    PRICE $
    
    
    OF OPTIONS
    
    
    PRICE $OPTIONS OUTSTANDING
    
    2010
    
    
    2010
    
    
    2009
    
    
    2009Ordinary Shares:Balance at 1 July
    
    
    558,792
    
    
    A$
    20.48
    
    
    
    
    
    
    A$
    0.00Granted
    
    
    270,207
    
    
    A$
    21.95
    
    
    
    558,792
    
    
    A$
    20.48Forfeited
    
    
    (47,420
    )
    
    A$
    18.50
    
    
    
    
    
    
    A$
    0.00Exercised
    
    
    
    
    
    A$
    0.00
    
    
    
    
    
    
    A$
    0.00Balance at 30 June
    
    
    781,579
    
    
    A$
    21.11
    
    
    
    558,792
    
    
    A$
    20.48Exercisable at 30 June
    
    
    173,149
    
    
    A$
    20.68
    
    
    
    
    
    
    A$
    0.00ADSs:Balance at 1 July
    
    
    1,182,472
    
    
    US$
    16.78
    
    
    
    
    
    
    US$
    0.00Granted
    
    
    729,933
    
    
    US$
    20.57
    
    
    
    1,182,472
    
    
    US$
    16.78Forfeited
    
    
    (109,817
    )
    
    US$
    20.68
    
    
    
    
    
    
    US$
    0.00Exercised
    
    
    
    
    
    US$
    0.00
    
    
    
    
    
    
    US$
    0.00Balance at 30 June
    
    
    1,802,588
    
    
    US$
    18.08
    
    
    
    1,182,472
    
    
    US$
    16.78Exercisable at 30 June
    
    
    368,898
    
    
    US$
    16.51
    
    
    
    
    
    
    US$
    0.00
  OUTSTANDING
    
    
    EXERCISABLEWEIGHTED
    
    
    
    
    
    
    
    
    
    
    WEIGHTEDWEIGHTED
    
    
    AVERAGE
    
    
    
    
    
    
    WEIGHTED
    
    
    AVERAGEAVERAGE
    
    
    REMAINING
    
    
    
    
    
    
    AVERAGE
    
    
    REMAININGNUMBER OF
    
    
    EXERCISE
    
    
    CONTRACTUAL
    
    
    NUMBER OF
    
    
    EXERCISE
    
    
    CONTRACTUALEXERCISE PRICE RANGE
    
    OPTIONS
    
    
    PRICE
    
    
    LIFE (YEARS)
    
    
    OPTIONS
    
    
    PRICE
    
    
    LIFE (YEARS)Ordinary shares:A$8  A$20
    
    
    231,919
    
    
    A$
    15.06
    
    
    
    5.55
    
    
    
    77,307
    
    
    A$
    15.06
    
    
    
    5.55A$20  A$30
    
    
    549,660
    
    
    A$
    23.66
    
    
    
    6.20
    
    
    
    95,842
    
    
    A$
    25.22
    
    
    
    5.97781,579
    
    
    A$
    21.11
    
    
    
    6.01
    
    
    
    173,149
    
    
    A$
    20.68
    
    
    
    5.78ADSs:US$8  US$20
    
    
    466,562
    
    
    US$
    10.71
    
    
    
    5.62
    
    
    
    155,519
    
    
    US$
    10.71
    
    
    
    5.62US$20  US$30
    
    
    1,336,026
    
    
    US$
    20.65
    
    
    
    6.21
    
    
    
    213,379
    
    
    US$
    20.73
    
    
    
    5.971,802,588
    
    
    US$
    18.08
    
    
    
    6.06
    
    
    
    368,898
    
    
    US$
    16.51
    
    
    
    5.82
   ORDINARY SHARES
    
    ADS2010
    
    
    2009
    
    
    2010
    
    
    2009Dividend yield
    
    
    4.0
    %
    
    
    4.0
    %
    
    
    4.0
    %
    
    
    4.0
    %Risk-free interest rate
    
    
    5.2
    %
    
    
    4.1
    %
    
    
    2.7
    %
    
    
    2.5
    %Volatility
    
    
    49.0
    %
    
    
    44.6
    %
    
    
    59.0
    %
    
    
    54.0
    %Share price at grant date
    
    A$
    21.26
    
    
    A$
    16.04
    
    
    US$
    19.26
    
    
    US$
    12.30
 F-46




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 WEIGHTED
    
    
    
    
    
    
    WEIGHTEDAVERAGE
    
    
    
    
    
    
    AVERAGENUMBER
    
    
    FAIR VALUE AT
    
    
    NUMBER
    
    
    FAIR VALUE ATOF SHARES
    
    
    GRANT DATE $
    
    
    OF SHARES
    
    
    GRANT DATE $RIGHTS OUTSTANDING
    
    2010
    
    
    2010
    
    
    2009
    
    
    2009Ordinary Shares:Non-vested balance at 1 July
    
    
    930,775
    
    
    A$
    24.07
    
    
    
    1,124,468
    
    
    A$
    25.36Granted
    
    
    125,323
    
    
    A$
    15.95
    
    
    
    98,785
    
    
    A$
    13.03Forfeited/cancelled
    
    
    (215,070
    )
    
    A$
    23.98
    
    
    
    (35,196
    )
    
    A$
    24.71Vested
    
    
    (187,188
    )
    
    A$
    23.77
    
    
    
    (257,282
    )
    
    A$
    25.37Non-vested balance at 30 June
    
    
    653,840
    
    
    A$
    22.63
    
    
    
    930,775
    
    
    A$
    24.07ADSs:Balance at 1 July
    
    
    198,039
    
    
    US$
    9.41
    
    
    
    
    
    
    
    Granted
    
    
    581,832
    
    
    US$
    12.68
    
    
    
    198,039
    
    
    US$
    9.41Forfeited/cancelled
    
    
    (20,668
    )
    
    US$
    12.11
    
    
    
    
    
    
    
    Vested
    
    
    (5,173
    )
    
    US$
    18.80
    
    
    
    
    
    
    
    Non-vested balance at 30 June
    
    
    754,030
    
    
    US$
    11.80
    
    
    
    198,039
    
    
    US$
    9.41
        WEIGHTED
    
    
    
    
    
    
    WEIGHTEDAVERAGE
    
    
    
    
    
    
    AVERAGENUMBER
    
    
    PURCHASE
    
    
    NUMBER
    
    
    PURCHASEOF SHARES
    
    
    PRICE A$
    
    
    OF SHARES
    
    
    PRICE A$2010
    
    
    2010
    
    
    2009
    
    
    2009Balance at 1 July
    
    
    80,851
    
    
    $
    17.66
    
    
    
    108,689
    
    
    $
    17.21Forfeited
    
    
    (34,020
    )
    
    $
    18.73
    
    
    
    
    
    
    $
    0.00Exercised
    
    
    
    
    
    $
    0.00
    
    
    
    (27,838
    )
    
    $
    15.90Balance at 30 June
    
    
    46,831
    
    
    $
    16.88
    
    
    
    80,851
    
    
    $
    17.66Exercisable at 30 June
    
    
    46,831
    
    
    $
    16.88
    
    
    
    46,831
    
    
    $
    16.88
  F-47




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 24  SHARE OWNERSHIP PLANS (CONTINUED)
     WEIGHTED
    
    
    
    
    
    
    WEIGHTEDAVERAGE
    
    
    
    
    
    
    AVERAGENUMBER
    
    
    EXERCISE
    
    
    NUMBER
    
    
    EXERCISEOF OPTIONS
    
    
    PRICE US$
    
    
    OF OPTIONS
    
    
    PRICE US$2010
    
    
    2010
    
    
    2009
    
    
    2009Balance at 1 July
    
    
    738,000
    
    
    $
    15.54
    
    
    
    738,000
    
    
    $
    15.54Exercised
    
    
    (32,000
    )
    
    $
    15.29
    
    
    
    
    
    
    $
    0.00Balance at 30 June
    
    
    706,000
    
    
    $
    15.58
    
    
    
    738,000
    
    
    $
    15.54Exercisable at 30 June
    
    
    706,000
    
    
    $
    15.58
    
    
    
    738,000
    
    
    $
    15.54
     WEIGHTED
    
    
    
    
    
    
    WEIGHTEDAVERAGE FAIR
    
    
    
    
    
    
    AVERAGE FAIRNUMBER
    
    
    VALUE AT
    
    
    NUMBER
    
    
    VALUE ATOF SHARES
    
    
    GRANT DATE
    
    
    OF SHARES
    
    
    GRANT DATE2010
    
    
    US$2010
    
    
    2009
    
    
    US$2010Non-vested balance at 1 July
    
    
    142,281
    
    
    $
    25.27
    
    
    
    249,485
    
    
    $
    25.27Forfeited
    
    
    (12,916
    )
    
    $
    25.27
    
    
    
    (29,179
    )
    
    $
    25.27Vested
    
    
    (68,399
    )
    
    $
    25.27
    
    
    
    (78,025
    )
    
    $
    25.27Non-vested balance at 30 June
    
    
    60,966
    
    
    $
    25.27
    
    
    
    142,281
    
    
    $
    25.27
      F-48




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
 FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 25  KEY MANAGEMENT PERSONNEL DISCLOSURES
   2010
    
    
    2009A$
    
    
    A$Short-term benefits
    
    
    11,989,245
    
    
    
    19,434,908Long-term benefits
    
    
    2,050,041
    
    
    
    166,344Post-employment benefits
    
    
    784,335
    
    
    
    616,273Termination benefits
    
    
    1,551,200
    
    
    
    3,130,316Share-based payments
    
    
    7,249,463
    
    
    
    5,167,31123,624,284
    
    
    
    28,515,152
       RECEIVED ON
    
    
    
    
    
    
    OTHEREXERCISE OF
    
    
    
    
    
    
    CHANGES2010
    
    BALANCE AT
    
    
    OPTIONS OR
    
    
    PURCHASES/
    
    
    DURING
    
    
    BALANCE ATNAME
    
    1 JULY 2009
    
    
    RIGHTS
    
    
    (SALES)
    
    
    THE YEAR
    
    
    30 JUNE 2010Non-Executive Directors:N Bobins (ADS)
    
    
    54,600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54,600G Brunsdon1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,870
    
    
    
    3,870M Feeney
    
    
    26,674
    
    
    
    
    
    
    
    1,115
    
    
    
    
    
    
    
    27,789R Lewon (ADS)
    
    
    
    
    
    
    32,000
    
    
    
    (32,000
    )
    
    
    
    
    
    
    P Mazoudier2
    
    
    15,201
    
    
    
    
    
    
    
    
    
    
    
    (15,201
    )
    
    
    G Morris (ADS)
    
    
    20,000
    
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    25,000C Renwick
    
    
    3,144
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,144P Varello (ADS)
    
    
    30,825
    
    
    
    
    
    
    
    21,300
    
    
    
    
    
    
    
    52,125Executive Directors:D Dienst (ADS)
    
    
    1,156,872
    
    
    
    
    
    
    
    (555,579
    )
    
    
    
    
    
    
    601,293J Sutcliffe3
    
    
    32,577
    
    
    
    
    
    
    
    
    
    
    
    (32,577
    )
    
    
    Senior Executives:G Davy
    
    
    3,003
    
    
    
    54,683
    
    
    
    
    
    
    
    
    
    
    
    57,686R Kelman (ADS)
    
    
    30,048
    
    
    
    14,931
    
    
    
    (30,000
    )
    
    
    
    
    
    
    14,979R Larry (ADS)
    
    
    90,972
    
    
    
    
    
    
    
    (10,000
    )
    
    
    
    
    
    
    80,972D McGree
    
    
    11,924
    
    
    
    30,175
    
    
    
    
    
    
    
    
    
    
    
    42,099A Ratner (ADS)
    
    
    101,249
    
    
    
    
    
    
    
    (13,290
    )
    
    
    
    
    
    
    87,959
 
 1
    
    Mr Brunsdon was appointed to the Board on 20 November 2009. Other changes comprise 3,851
shares held by Mr Brunsdon on the date of his appointment and 19 shares acquired through
the DRP.2
    
    Mr Mazoudier retired from the Board on 20 November 2009. Other changes for Mr Mazoudier
represent his share holdings on the date of his retirement.3
    
    Mr Sutcliffes service agreement was terminated by way of redundancy on 26 August 2009.
Other changes for Mr Sutcliffe represent his share holdings on 26 August 2009. F-49




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
 FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 25  KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
   RECEIVED ON
    
    
    
    
    
    
    OTHEREXERCISE OF
    
    
    
    
    
    
    CHANGES2009
    
    BALANCE AT
    
    
    OPTIONS OR
    
    
    PURCHASES/
    
    
    DURING
    
    
    BALANCE ATNAME
    
    1 JULY 2008
    
    
    RIGHTS
    
    
    (SALES)
    
    
    THE YEAR
    
    
    30 JUNE 2009Non-Executive Directors:N Bobins (ADS)
    
    
    54,600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54,600M Feeney
    
    
    25,734
    
    
    
    
    
    
    
    940
    
    
    
    
    
    
    
    26,674P Mazoudier
    
    
    14,639
    
    
    
    
    
    
    
    562
    
    
    
    
    
    
    
    15,201G Morris (ADS)
    
    
    20,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000C Renwick
    
    
    1,444
    
    
    
    
    
    
    
    1,700
    
    
    
    
    
    
    
    3,144P Varello (ADS)
    
    
    6,225
    
    
    
    
    
    
    
    24,600
    
    
    
    
    
    
    
    30,825Executive Directors:D Dienst (ADS)
    
    
    1,156,872
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,156,872R Cunningham1
    
    
    
    
    
    
    32,433
    
    
    
    (14,989
    )
    
    
    (17,444
    )
    
    
    J Sutcliffe
    
    
    52,255
    
    
    
    82,577
    
    
    
    (102,255
    )
    
    
    
    
    
    
    32,577Senior Executives:T Bird2
    
    
    
    
    
    
    6,732
    
    
    
    (6,732
    )
    
    
    
    
    
    
    G Davy
    
    
    3,003
    
    
    
    12,903
    
    
    
    (12,903
    )
    
    
    
    
    
    
    3,003R Kelman (ADS)3
    
    
    
    
    
    
    14,931
    
    
    
    (14,931
    )
    
    
    30,048
    
    
    
    30,048R Larry (ADS)
    
    
    90,972
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,972D McGree
    
    
    
    
    
    
    11,924
    
    
    
    
    
    
    
    
    
    
    
    11,924A Ratner (ADS)3
    
    
    74,316
    
    
    
    
    
    
    
    (3,115
    )
    
    
    30,048
    
    
    
    101,249
 
 1
    
    Mr Cunningham retired from the Board on 21 November 2008. Other changes for Mr
Cunningham represent his share holdings on the date of his retirement.2
    
    The Company accepted the resignation of Mr Bird on 17 August 2009.3
    
    Other changes for Messrs Kelman and Ratner represent shares they each received as part of an
integration bonus.   2010
    
    BALANCE AT
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    BALANCE ATNAME
    
    1 JULY 2009
    
    
    GRANTED
    
    
    EXERCISED
    
    
    FORFEITED
    
    
    30 JUNE 2010
    
    
    VESTED
    
    
    UNVESTEDNon-Executive Directors:R Lewon (ADS)
    
    
    123,000
    
    
    
    
    
    
    
    (32,000
    )
    
    
    
    
    
    
    91,000
    
    
    
    91,000
    
    
    
    G Morris (ADS)
    
    
    205,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    205,000
    
    
    
    205,000
    
    
    
    Executive Directors:D Dienst (ADS)
    
    
    591,654
    
    
    
    178,037
    
    
    
    
    
    
    
    
    
    
    
    769,691
    
    
    
    470,551
    
    
    
    299,140J Sutcliffe1
    
    
    135,435
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135,435
    
    
    
    45,145
    
    
    
    90,290Senior Executives:T Bird2
    
    
    39,347
    
    
    
    
    
    
    
    
    
    
    
    (39,347
    )
    
    
    
    
    
    
    
    
    
    
    G Davy
    
    
    48,950
    
    
    
    37,231
    
    
    
    
    
    
    
    
    
    
    
    86,181
    
    
    
    16,317
    
    
    
    69,864R Kelman (ADS)
    
    
    87,664
    
    
    
    44,914
    
    
    
    
    
    
    
    
    
    
    
    132,578
    
    
    
    29,221
    
    
    
    103,357R Larry (ADS)
    
    
    109,580
    
    
    
    56,142
    
    
    
    
    
    
    
    
    
    
    
    165,722
    
    
    
    36,526
    
    
    
    129,196D McGree
    
    
    47,534
    
    
    
    46,908
    
    
    
    
    
    
    
    
    
    
    
    94,442
    
    
    
    15,845
    
    
    
    78,597A Ratner (ADS)
    
    
    87,664
    
    
    
    44,914
    
    
    
    
    
    
    
    
    
    
    
    132,578
    
    
    
    29,221
    
    
    
    103,357
 
 1
    
    Mr Sutcliffes service agreement was terminated by way of redundancy on 26 August 2009.
Balance represents options that will vest in future periods based on satisfaction of
performance criteria as a result of good-leaver provisions in his share-based awards.2
    
    The Company accepted Mr Birds resignation on 17 August 2009 and, as a result, he forfeited his
outstanding options. F-50




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
 FOR THE YEAR ENDED 30 JUNE 2010
 2009
    
    BALANCE AT
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    BALANCE ATNAME
    
    1 JULY 2008
    
    
    GRANTED
    
    
    EXERCISED
    
    
    FORFEITED
    
    
    30 JUNE 2009
    
    
    VESTED
    
    
    UNVESTEDNon-Executive Directors:R Lewon (ADS)
    
    
    123,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    123,000
    
    
    
    123,000
    
    
    
    G Morris (ADS)
    
    
    205,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    205,000
    
    
    
    205,000
    
    
    
    Executive Directors:D Dienst (ADS)
    
    
    410,000
    
    
    
    181,654
    
    
    
    
    
    
    
    
    
    
    
    591,654
    
    
    
    410,000
    
    
    
    181,654J Sutcliffe
    
    
    
    
    
    
    135,435
    
    
    
    
    
    
    
    
    
    
    
    135,435
    
    
    
    
    
    
    
    135,435Senior Executives:T Bird
    
    
    
    
    
    
    39,347
    
    
    
    
    
    
    
    
    
    
    
    39,347
    
    
    
    
    
    
    
    39,347G Davy
    
    
    
    
    
    
    48,950
    
    
    
    
    
    
    
    
    
    
    
    48,950
    
    
    
    
    
    
    
    48,950R Kelman (ADS)
    
    
    
    
    
    
    87,664
    
    
    
    
    
    
    
    
    
    
    
    87,664
    
    
    
    
    
    
    
    87,664R Larry (ADS)
    
    
    
    
    
    
    109,580
    
    
    
    
    
    
    
    
    
    
    
    109,580
    
    
    
    
    
    
    
    109,580D McGree
    
    
    
    
    
    
    47,534
    
    
    
    
    
    
    
    
    
    
    
    47,534
    
    
    
    
    
    
    
    47,534A Ratner (ADS)
    
    
    
    
    
    
    87,664
    
    
    
    
    
    
    
    
    
    
    
    87,664
    
    
    
    
    
    
    
    87,664
   2010
    
    BALANCE AT
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    OTHER
    
    
    BALANCE ATNAME
    
    1 JULY 2009
    
    
    GRANTED
    
    
    VESTED
    
    
    FORFEITED
    
    
    CHANGES
    
    
    30 JUNE 2010Executive Directors:D Dienst (ADS)
    
    
    61,092
    
    
    
    197,006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    258,098J Sutcliffe1
    
    
    258,344
    
    
    
    
    
    
    
    
    
    
    
    (23,982
    )
    
    
    (86,212
    )
    
    
    148,150Senior Executives:T Bird2
    
    
    62,773
    
    
    
    
    
    
    
    
    
    
    
    (62,773
    )
    
    
    
    
    
    
    G Davy
    
    
    99,655
    
    
    
    16,928
    
    
    
    (54,683
    )
    
    
    (3,823
    )
    
    
    
    
    
    
    58,077R Kelman (ADS)
    
    
    78,155
    
    
    
    25,531
    
    
    
    (14,931
    )
    
    
    
    
    
    
    
    
    
    
    88,755R Larry (ADS)
    
    
    48,225
    
    
    
    47,696
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    95,921D McGree
    
    
    71,126
    
    
    
    20,728
    
    
    
    (30,175
    )
    
    
    (3,533
    )
    
    
    
    
    
    
    58,146A Ratner (ADS)
    
    
    55,664
    
    
    
    25,531
    
    
    
    (8,542
    )
    
    
    
    
    
    
    
    
    
    
    72,653
 
 1
    
    Mr Sutcliffes service agreement was terminated by way of redundancy on 26 August 2009.
Pursuant to the good-leaver provisions in his award agreement, Mr Sutcliffe retained his
rights. Other changes represent rights which were cash-settled as part of Mr Sutcliffes
redundancy.2
    
    The Company accepted Mr Birds resignation on 17 August 2009 and, as a result, he forfeited his
unvested rights. 2009
    
    BALANCE AT
    
    
    
    
    
    
    
    
    
    
    BALANCE ATNAME
    
    1 JULY 2008
    
    
    GRANTED
    
    
    VESTED
    
    
    30 JUNE 2009Executive Directors:D Dienst (ADS)
    
    
    
    
    
    
    61,092
    
    
    
    
    
    
    
    61,092R Cunningham1
    
    
    81,836
    
    
    
    
    
    
    
    (32,433
    )
    
    
    49,403J Sutcliffe
    
    
    296,481
    
    
    
    44,440
    
    
    
    (82,577
    )
    
    
    258,344Senior Executives:T Bird
    
    
    54,785
    
    
    
    14,720
    
    
    
    (6,732
    )
    
    
    62,773G Davy
    
    
    94,246
    
    
    
    18,312
    
    
    
    (12,903
    )
    
    
    99,655R Kelman (ADS)
    
    
    54,506
    
    
    
    38,580
    
    
    
    (14,931
    )
    
    
    78,155R Larry (ADS)
    
    
    
    
    
    
    48,225
    
    
    
    
    
    
    
    48,225D McGree
    
    
    66,737
    
    
    
    16,313
    
    
    
    (11,924
    )
    
    
    71,126A Ratner (ADS)
    
    
    25,625
    
    
    
    38,580
    
    
    
    (8,541
    )
    
    
    55,664
 
 1
    
    Mr Cunningham retired from the Board on 21 November 2008. Balance represents awards that
will vest in future periods based on satisfaction of performance criteria as a result of
good-leaver provisions in his share-based awards. F-51




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
      NOTE 26  REMUNERATION OF AUDITORS
   2010
    
    
    2009A$000
    
    
    A$000PricewaterhouseCoopers
 Australian Firm:Audit of financial statements
    
    
    2,042
    
    
    
    4,066Sarbanes-Oxley readiness advice
    
    
    
    
    
    
    1,705Taxation services
    
    
    30
    
    
    
    213Other assurance related services
    
    
    499
    
    
    
    1102,571
    
    
    
    6,094Related
practices of PricewaterhouseCoopers  Australian Firm:Audit of financial statements
    
    
    3,207
    
    
    
    4,319Sarbanes-Oxley readiness advice
    
    
    
    
    
    
    506Taxation services
    
    
    523
    
    
    
    710Acquisition due diligence and other
    
    
    86
    
    
    
    313,816
    
    
    
    5,566Total
remuneration for PricewaterhouseCoopers
    
    
    6,387
    
    
    
    11,660
 NOTE 27  BUSINESS COMBINATIONS AND DISPOSALS
   
    
    On 3 July 2009, the Group purchased the assets and business of Fairless Iron & Metal. The
business is a ferrous and non-ferrous metal recycler and is based in Morrisville,
Pennsylvania in the United States.
    
    On 1 September 2009, the Group purchased the assets and business of Technorecycle
Buromaschinen Verwertung GmbH. This e-recycling business specialises in asset recovery
and is located near Frankfurt in Hochheim am Main, Germany.
    
    On 18 November 2009, the Group obtained control of Port Albany Ventures by acquiring 50% of
the joint venture interest that it previously did not own. As a result the Groups equity
interest in Port Albany increased from 50% to 100%. Port Albany is a mixed-use bulk material
stevedoring operation located in Bethlehem, New York in the United States.
    
    On 1 April 2010, the Group purchased the assets and business of Border Metals Pty Ltd. The
business is a ferrous and non-ferrous metal recycler and is located in Victoria, Australia.
  F-52




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
   A$MCash paid for current year acquisitions
    
    
    100.6Payments for deferred consideration and contingent consideration on prior year acquisitions
    
    
    13.5Cash acquired
    
    
    (0.7
    )Cash
outflow for acquisitions
    
    
    113.4
  FAIRVALUEA$MCash
    
    
    0.7Trade and other receivables
    
    
    3.0Inventories
    
    
    1.0Property, plant and equipment (Note 12)
    
    
    41.9Deferred tax asset
    
    
    0.5Identified intangible assets (Note 14)
    
    
    6.0Trade and other payables
    
    
    (2.1
    )Borrowings
    
    
    (0.4
    )Net assets
acquired
    
    
    50.6
  A$MTotal cash consideration
    
    
    100.6Fair value of previously held equity interest in Port Albany
    
    
    14.3Less: net assets acquired
    
    
    (50.6
    )Goodwill
on acquisition
    
    
    64.3
       F-53




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 28  SUBSIDIARIES
  EQUITY HOLDING %NAME OF ENTITY
    
    COUNTRY OF INCORPORATION
    
    
    2010
    
    
    2009Sims Metal Management LimitedSims Group Australia Holdings Limited (i)
    
    Australia
    
    
    100
    %
    
    
    100
    %PNG Recycling Limited
    
    PNG
    
    
    100
    %
    
    
    100
    %Sims Aluminium Pty Limited (i)
    
    Australia
    
    
    100
    %
    
    
    100
    %Sims E-Recycling Pty Limited
    
    Australia
    
    
    90
    %
    
    
    90
    %Sims E-Recycling (NZ) Limited
    
    New Zealand
    
    
    90
    %
    
    
    90
    %Sims Group Canada Holdings Limited
    
    Canada
    
    
    100
    %
    
    
    100
    %Sims Group Mauritius Limited
    
    Mauritius
    
    
    100
    %
    
    
    100
    %Trishyiraya Recycling India Private Ltd
    
    India
    
    
    100
    %
    
    
    100
    %Sims Tyrecycle Properties Pty Ltd
    
    Australia
    
    
    100
    %
    
    
    100
    %Simsmetal Holdings Pty Limited
    
    Australia
    
    
    100
    %
    
    
    100
    %Sims Metal Management Asia Limited
    
    Hong Kong
    
    
    100
    %
    
    
    100
    %Sims Energy Pty Limited
    
    Australia
    
    
    100
    %
    
    
    100
    %Sims Industrial Pty Limited
    
    Australia
    
    
    100
    %
    
    
    100
    %Simsmetal Industries Limited
    
    New Zealand
    
    
    100
    %
    
    
    100
    %Simsmetal Services Pty Limited (i)
    
    Australia
    
    
    100
    %
    
    
    100
    %Sims Manufacturing Pty Limited
    
    Australia
    
    
    100
    %
    
    
    100
    %Simsmetal Executive Staff Superannuation Pty Limited
    
    Australia
    
    
    100
    %
    
    
    100
    %Sims Superannuation Management Pty Limited
    
    Australia
    
    
    100
    %
    
    
    100
    %Universal Inspection and Testing Company Pty Limited
    
    Australia
    
    
    100
    %
    
    
    100
    %Sims Recycling Solutions Pte Limited
    
    Singapore
    
    
    100
    %
    
    
    100
    %Sims Recycling Solutions Africa Pty Ltd (ii)
    
    Africa
    
    
    100
    %
    
    
    Simsmetal Staff Equity Pty Limited
    
    Australia
    
    
    100
    %
    
    
    100
    %Sims Group UK Holdings Limited
    
    UK
    
    
    100
    %
    
    
    100
    %Sims Group UK Intermediate Holdings Limited
    
    UK
    
    
    100
    %
    
    
    100
    %Sims Group UK Limited
    
    UK
    
    
    100
    %
    
    
    100
    %C Herring & Son Limited
    
    UK
    
    
    100
    %
    
    
    100
    %Life Cycle Services Limited
    
    UK
    
    
    100
    %
    
    
    100
    %All Metal Recovery Limited
    
    UK
    
    
    100
    %
    
    
    100
    %All Metal Recovery Cradley Heath Limited
    
    UK
    
    
    100
    %
    
    
    100
    %ER Coley (Steel) Limited
    
    UK
    
    
    100
    %
    
    
    100
    %ER Coley (Cast) Limited
    
    UK
    
    
    100
    %
    
    
    100
    %Evans & Mondon Limited
    
    UK
    
    
    100
    %
    
    
    100
    %Mirec BV
    
    The Netherlands
    
    
    100
    %
    
    
    100
    %Sims Recycling Solutions Cooperatief B.A. (ii)
    
    The Netherlands
    
    
    100
    %
    
    
    Sims Recycling Solutions NV
    
    Belgium
    
    
    100
    %
    
    
    100
    %Recommit Limited
    
    UK
    
    
    100
    %
    
    
    100
    %Sims Cymru Limited
    
    UK
    
    
    100
    %
    
    
    100
    %Sims Group German Holdings GmbH
    
    Germany
    
    
    100
    %
    
    
    100
    %Sims M+R GmbH
    
    Germany
    
    
    100
    %
    
    
    100
    %Sims Technorecycle GmBH (ii)
    
    Germany
    
    
    100
    %
    
    
    Sims Recycling Solutions AB
    
    Sweden
    
    
    100
    %
    
    
    100
    %Sims Group Recycling Solutions Canada Ltd
    
    Canada
    
    
    100
    %
    
    
    100
    %Accu-Shred Limited
    
    Canada
    
    
    100
    %
    
    
    100
    %Sims Recycling Solutions SARL
    
    France
    
    
    100
    %
    
    
    100
    %Sims Recycling Solutions Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Sims Recycling Solutions Holdings Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Global Investment Recovery, Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Sims Recycling Solutions UK Holdings Limited
    
    UK
    
    
    100
    %
    
    
    100
    %Sims Recycling Solutions UK Group Limited
    
    UK
    
    
    100
    %
    
    
    100
    %Sims Recycling Solutions UK Limited
    
    UK
    
    
    100
    %
    
    
    100
    %
 F-54




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 EQUITY HOLDING %NAME OF ENTITY
    
    COUNTRY OF INCORPORATION
    
    
    2010
    
    
    2009United Castings Limited
    
    UK
    
    
    100
    %
    
    
    100
    %Sims Group UK Pension Trustees Limited
    
    UK
    
    
    100
    %
    
    
    100
    %Sims Group Holdings 1 Pty Ltd
    
    Australia
    
    
    100
    %
    
    
    100
    %Sims Group Holdings 2 Pty Ltd
    
    Australia
    
    
    100
    %
    
    
    100
    %Sims Metal Management USA GP
    
    USA
    
    
    100
    %
    
    
    100
    %Sims Group USA Holdings Corporation
    
    USA
    
    
    100
    %
    
    
    100
    %SHN Co LLC
    
    USA
    
    
    100
    %
    
    
    100
    %HNW Recycling LLC
    
    USA
    
    
    100
    %
    
    
    100
    %HNE Recycling LLC
    
    USA
    
    
    100
    %
    
    
    100
    %Dover Barge Company
    
    USA
    
    
    100
    %
    
    
    100
    %North Carolina Resource Conservation LLC
    
    USA
    
    
    100
    %
    
    
    100
    %Simsmetal East LLC
    
    USA
    
    
    100
    %
    
    
    100
    %Sims Municipal Recycling of New York LLC
    
    USA
    
    
    100
    %
    
    
    100
    %Schiabo Larovo Corporation
    
    USA
    
    
    100
    %
    
    
    100
    %Simsmetal West LLC
    
    USA
    
    
    100
    %
    
    
    100
    %Sims Group Global Trade Corporation
    
    USA
    
    
    100
    %
    
    
    100
    %Sims Group USA Corporation
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management Inc
    
    USA
    
    
    100
    %
    
    
    100
    %MM Metal Dynamics Holdings Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Dynamics LLC
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Dynamics Detroit LLC
    
    USA
    
    
    100
    %
    
    
    100
    %TH Properties LLC
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management Midwest Inc
    
    USA
    
    
    100
    %
    
    
    100
    %CIM Trucking Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management Indiana Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management Memphis LLC
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management Ohio Inc
    
    USA
    
    
    100
    %
    
    
    100
    %SMM  North America Trade Corporation
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management Pittsburgh Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management Aerospace Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management West Coast Holdings Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management West Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management Arizona LLC
    
    USA
    
    
    100
    %
    
    
    100
    %Proler Southwest GP Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management Proler Southwest Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Proler Southwest LP
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management Alabama Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management Mississippi Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Naporano Iron & Metal Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management Northeast Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management Connecticut Inc
    
    USA
    
    
    100
    %
    
    
    100
    %New York Recycling Ventures Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Metal Management New Haven Inc
    
    USA
    
    
    100
    %
    
    
    100
    %Reserve Iron & Metal Limited Partnership
    
    USA
    
    
    100
    %
    
    
    100
    %Port Albany Ventures LLC (ii)
    
    USA
    
    
    100
    %
    
    
    50
    %
 
 (i)
    
    These subsidiaries and the Company are parties to a DCG 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 and
Investments Commission Class Order.(ii)
    
    These subsidiaries were acquired or incorporated during the year.  F-55




---



##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 28  SUBSIDIARIES (CONTINUED)
     2010
    
    
    2009A$M
    
    
    A$M(i) Condensed consolidated income statementProfit before income tax
    
    
    40.6
    
    
    
    244.3Income tax expense
    
    
    (12.5
    )
    
    
    (1.4
    )Profit after tax
    
    
    28.1
    
    
    
    242.9(ii) Summary of movements in consolidated retained earningsBalance at 1 July
    
    
    172.9
    
    
    
    113.6Transfer to reserves
    
    
    (0.6
    )
    
    
    Profit for the year
    
    
    28.1
    
    
    
    242.9Actuarial (loss)/gain on defined benefit plan, net of tax
    
    
    (7.3
    )
    
    
    2.9Dividends provided for or paid
    
    
    (38.6
    )
    
    
    (186.5
    )Balance at 30 June
    
    
    154.5
    
    
    
    172.9(iii) Consolidated statement of financial positionASSETSCurrent assetsCash and cash equivalents
    
    
    16.5
    
    
    
    19.3Trade and other receivables
    
    
    385.5
    
    
    
    275.0Current tax receivable
    
    
    
    
    
    
    16.6Inventory
    
    
    137.4
    
    
    
    82.3Other financial assets
    
    
    
    
    
    
    3.1Total current assets
    
    
    539.4
    
    
    
    396.3Non-current assetsReceivables
    
    
    2.0
    
    
    
    2.4Investments accounted for using the equity method
    
    
    19.9
    
    
    
    18.5Other financial assets
    
    
    2,502.7
    
    
    
    2,303.0Property, plant and equipment
    
    
    103.0
    
    
    
    101.5Deferred tax assets
    
    
    22.0
    
    
    
    15.4Goodwill
    
    
    14.9
    
    
    
    15.3Intangible assets
    
    
    0.4
    
    
    
    0.5Total non-current assets
    
    
    2,664.9
    
    
    
    2,456.6Total assets
    
    
    3,204.3
    
    
    
    2,852.9LIABILITIESCurrent liabilitiesTrade and other payables
    
    
    143.1
    
    
    
    266.5Other financial liabilities
    
    
    4.0
    
    
    
    0.8Current tax liabilities
    
    
    25.3
    
    
    
    Provisions
    
    
    9.7
    
    
    
    12.2Total current liabilities
    
    
    182.1
    
    
    
    279.5Non-current liabilitiesDeferred tax liabilities
    
    
    9.5
    
    
    
    4.4Provisions
    
    
    7.0
    
    
    
    8.8Retirement benefit obligations
    
    
    4.0
    
    
    
    6.1Total non-current liabilities
    
    
    20.5
    
    
    
    19.3Total liabilities
    
    
    202.6
    
    
    
    298.8Net assets
    
    
    3,001.7
    
    
    
    2,554.1EQUITYContributed equity
    
    
    2,795.2
    
    
    
    2,352.9Reserves
    
    
    52.0
    
    
    
    28.3Retained earnings
    
    
    154.5
    
    
    
    172.9Total equity
    
    
    3,001.7
    
    
    
    2,554.1
 F-56




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS  FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 29  INVESTMENTS IN ASSOCIATES AND JOINTLY CONTROLLED ENTITIES
  CARRYING AMOUNTNAME OF ASSOCIATE OR
    
    COUNTRY OF
    
    OWNERSHIP INTEREST %
    
    2010
    
    
    2009JOINTLY CONTROLLED ENTITY
    
    INCORPORATION
    
    2010
    
    
    2009
    
    
    A$M
    
    
    A$MSA Recycling LLC
    
    USA
    
    
    50
    %
    
    
    50
    %
    
    
    314.3
    
    
    
    329.9Metal Management Nashville LLC
    
    USA
    
    
    50
    %
    
    
    50
    %
    
    
    14.0
    
    
    
    22.4Rondout Iron & Metal LLC
    
    USA
    
    
    50
    %
    
    
    50
    %
    
    
    0.9
    
    
    
    0.6Port Albany Ventures LLC1
    
    USA
    
    
    100
    %
    
    
    50
    %
    
    
    
    
    
    
    6.6Richmond Steel Recycling Ltd
    
    Canada
    
    
    50
    %
    
    
    50
    %
    
    
    19.8
    
    
    
    21.6LMS Generation Pty Ltd
    
    Australia
    
    
    50
    %
    
    
    50
    %
    
    
    19.9
    
    
    
    18.5Australia Refined Alloys Pty Ltd
    
    Australia
    
    
    50
    %
    
    
    50
    %
    
    
    
    
    
    
    Extruded Metals Ltd
    
    New Zealand
    
    
    33
    %
    
    
    33
    %
    
    
    0.6
    
    
    
    0.6369.5
    
    
    
    400.2
 1
    
    On 18 November 2009, the Group obtained control of Port Albany by acquiring the
remaining 50% of the joint venture. As a result, the Groups equity interest in Port Albany
increased from 50% to 100%.  2010
    
    
    2009A$M
    
    
    A$MBalance at 1 July
    
    
    400.2
    
    
    
    332.2Share of profit before tax
    
    
    17.5
    
    
    
    57.6Associates share of income tax expense
    
    
    (2.4
    )
    
    
    (2.6
    )Accretion of deferred gain to equity accounted profit
    
    
    2.7
    
    
    
    3.2Dividends received
    
    
    (19.6
    )
    
    
    (41.5
    )Return of capital from jointly controlled entities
    
    
    (0.4
    )
    
    
    (3.6
    )Purchase of remaining 50% interest in Port Albany
    
    
    (5.6
    )
    
    
    Impairment of investment in Metal Management Nashville LLC
    
    
    (5.7
    )
    
    
    Other
    
    
    
    
    
    
    1.7Foreign exchange differences
    
    
    (17.2
    )
    
    
    53.2Balance at 30 June
    
    
    369.5
    
    
    
    400.2(c) Share of associates and jointly controlled entities profitProfit before income tax
    
    
    14.5
    
    
    
    60.8Associates share of income tax expense
    
    
    (2.4
    )
    
    
    (2.6
    )Profit after income tax recognised in equity accounted investment
    
    
    12.1
    
    
    
    58.2Jointly controlled entities income tax1
    
    
    (2.4
    )
    
    
    (19.2
    )Associates and jointly controlled entities profit after tax
    
    
    9.7
    
    
    
    39.0
 1
    
    The jointly controlled entities to which this relates are pass-through entities for
taxation purposes. As such, the Group incurs the income tax expense and associated tax
liability on its share of the profit and includes this amount as part of its income tax
expense. Refer to Note 8.   A$MFair value of 50% interest in Port Albany
    
    
    14.3Carrying amount of Port Albany
investment
    
    
    (5.6
    )Gain recognised on acquisition
    
    
    8.7
 F-57




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 29  INVESTMENTS IN ASSOCIATES AND JOINTLY CONTROLLED ENTITIES (CONTINUED)
  Investments in Associates Interests in
Joint Ventures,
  BOOKVALUEA$M
    
    
    FAIRVALUEA$M
    
    
    NON-CASHGAINA$MProperty, plant
and equipment
    
    
    71.4
    
    
    
    79.8
    
    
    
    (8.4
    )Goodwill and
intangible assets
    
    
    196.5
    
    
    
    265.7
    
    
    
    (69.2
    )Non-current
provisions
    
    
    (3.2
    )
    
    
    (3.2
    )
    
    
    264.7
    
    
    
    342.3
    
    
    
    (77.6
    )
 Jointly Controlled Entities  Non-Monetary Contributions
by Venturers,
  2010
    
    
    2009GROUPS SHARE OF ASSETS AND LIABILITIES
    
    A$M
    
    
    A$MCurrent assets
    
    
    104.0
    
    
    
    92.1Non-current assets
    
    
    289.8
    
    
    
    313.4Total assets
    
    
    393.8
    
    
    
    405.5Current liabilities
    
    
    30.0
    
    
    
    34.1Non-current liabilities
    
    
    100.0
    
    
    
    102.2Total liabilities
    
    
    130.0
    
    
    
    136.3Net assets
    
    
    263.8
    
    
    
    269.2
 2010
    
    
    2009
    
    
    2008GROUPS SHARE OF REVENUE, EXPENSES AND RESULTS
    
    A$M
    
    
    A$M
    
    
    A$MRevenues
    
    
    596.3
    
    
    
    814.2
    
    
    
    699.9Expenses
    
    
    (578.8
    )
    
    
    (756.6
    )
    
    
    (637.6
    )Profit before income tax
    
    
    17.5
    
    
    
    57.6
    
    
    
    62.3
   F-58




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 (G) JOINTLY CONTROLLED OPERATIONS
   2010A$M
    
    
    2009A$MCurrent assets
    
    
    17.0
    
    
    
    10.2Non-current assets
    
    
    6.9
    
    
    
    7.6Total assets
    
    
    23.9
    
    
    
    17.8Current liabilities
    
    
    18.9
    
    
    
    10.2Non-current liabilities
    
    
    0.1
    
    
    
    3.2Total liabilities
    
    
    19.0
    
    
    
    13.4Net assets
    
    
    4.9
    
    
    
    4.4
  NOTE 30  RELATED PARTY TRANSACTIONS
       2010A$M
    
    
    2009A$MSuperannuation contribution to superannuation funds on behalf of employees
    
    
    5.7
    
    
    
    7.7
  2010A$M
    
    
    2009A$M
    
    
    2008A$MSales
    
    
    85.0
    
    
    
    70.7
    
    
    
    8.3Purchases
    
    
    764.2
    
    
    
    1,139.6
    
    
    
    689.6Management fees and commissions
    
    
    10.7
    
    
    
    11.5
    
    
    
    10.0Other costs
    
    
    0.2
    
    
    
    0.4
    
    
    
    0.3
  2010A$M
    
    
    2009A$MCurrent receivables
    
    
    4.0
    
    
    
    16.3Current payables
    
    
    42.1
    
    
    
    18.8
   F-59




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 31  PARENT ENTITY FINANCIAL INFORMATION
 Business Combinations
  2010
    
    
    2009A$M
    
    
    A$MStatement of Financial positionCurrent assets
    
    
    20.4
    
    
    
    14.7Total assets
    
    
    4,252.1
    
    
    
    4,041.4Current liabilities
    
    
    75.6
    
    
    
    284.8Total liabilities
    
    
    77.5
    
    
    
    284.8Shareholders equityContributed equity
    
    
    4,115.9
    
    
    
    3,673.6Reserves
    
    
    53.7
    
    
    
    38.4Retained earnings
    
    
    5.0
    
    
    
    44.64,174.6
    
    
    
    3,756.6(Loss)/profit for the year
    
    
    (1.0
    )
    
    
    230.2Total comprehensive (loss)/income
    
    
    (1.0
    )
    
    
    230.2
     2010
    
    
    2009A$M
    
    
    A$MBank guarantees  subsidiaries
    
    
    39.9
    
    
    
    54.8Borrowing guarantee  SA Recycling LLC
    
    
    
    
    
    
    83.939.9
    
    
    
    138.7
   2010
    
    
    2009A$M
    
    
    A$MNot later than one-year
    
    
    2.1
    
    
    
    1.1Later than one-year, but not later than three-years
    
    
    4.3
    
    
    
    3.9Later than three-years, but not later than Five-years
    
    
    4.4
    
    
    
    3.9Later than Five-years
    
    
    51.2
    
    
    
    50.4Total lease commitments not recognised as liabilities
    
    
    62.0
    
    
    
    59.3
  F-60




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 32  EARNINGS PER SHARE
 2010
    
    
    2009
    
    
    2008Earnings/(loss) per share as previously reported (in cents)Basic
    
    
    64.9
    
    
    
    (82.9
    )
    
    
    310.9Diluted
    
    
    64.5
    
    
    
    (82.9
    )
    
    
    307.9Effect of equity issue1
    
    
    
    
    
    
    0.4
    
    
    
    (1.6
    )Earnings/(loss) per share as restated (in cents)Basic
    
    
    64.9
    
    
    
    (82.5
    )
    
    
    309.3Diluted
    
    
    64.5
    
    
    
    (82.5
    )
    
    
    306.3Weighted average number of shares used in the denominator (000)Number of shares for basic earnings per share
    
    
    194,417
    
    
    
    181,247
    
    
    
    141,574Effect of equity issue1
    
    
    929
    
    
    
    924
    
    
    
    722Basic shares
    
    
    195,346
    
    
    
    182,171
    
    
    
    142,296Dilutive effect of share-based awards
    
    
    1,129
    
    
    
    
    
    
    
    1,374Diluted shares
    
    
    196,475
    
    
    
    182,171
    
    
    
    143,670
 1
    
    In accordance with AASB 133 (IAS 33) Earnings Per Share, an adjustment to shares issued
is required in the calculation of earnings per share when shares are offered to existing
shareholders at a discount to the market price. This gives rise to a retrospective
restatement of the weighted average number of shares.
   NOTE 33  CASH FLOW INFORMATION
  2010
    
    
    2009
    
    
    2008A$M
    
    
    A$M
    
    
    A$MProfit/(loss) for the year
    
    
    126.7
    
    
    
    (150.3
    )
    
    
    440.1Adjustments for non-cash items:Depreciation and amortisation
    
    
    143.9
    
    
    
    170.8
    
    
    
    95.1Net gain on contribution of assets to SA Recycling LLC
    
    
    
    
    
    
    
    
    
    
    (38.8
    )Unrealised (gain)/loss on held for trading derivatives
    
    
    (3.7
    )
    
    
    10.3
    
    
    
    (3.9
    )Impairment of goodwill
    
    
    
    
    
    
    191.1
    
    
    
    3.3Impairment of property, plant and equipment
    
    
    14.5
    
    
    
    10.0
    
    
    
    0.1Impairment of intangible assets
    
    
    0.9
    
    
    
    
    
    
    
    Net (gain)/loss on disposal of non-current assets
    
    
    (3.0
    )
    
    
    (0.9
    )
    
    
    1.9Loss on sale of subsidiaries
    
    
    
    
    
    
    2.6
    
    
    
    Share-based payments
    
    
    16.9
    
    
    
    9.3
    
    
    
    13.4Non-cash pension expense
    
    
    1.5
    
    
    
    1.6
    
    
    
    0.5Non-cash compensation
    
    
    
    
    
    
    0.8
    
    
    
    Negative goodwill recognised on acquisition
    
    
    
    
    
    
    (0.4
    )
    
    
    Equity accounted profit net of dividends received
    
    
    5.1
    
    
    
    (16.7
    )
    
    
    (55.3
    )Gain on acquisition of Port Albany Ventures LLC
    
    
    (8.7
    )
    
    
    
    
    
    
    Other
    
    
    (0.3
    )
    
    
    0.2
    
    
    
    0.3Change in operating assets and liabilities, excluding the effects of acquisitions and disposals of entities:(Increase)/decrease in trade and other receivables
    
    
    (240.7
    )
    
    
    492.8
    
    
    
    (176.6
    )(Increase)/decrease in inventories
    
    
    (339.6
    )
    
    
    543.4
    
    
    
    (407.6
    )(Increase)/decrease in prepayments
    
    
    (2.8
    )
    
    
    1.7
    
    
    
    18.6(Decrease)/increase in provisions
    
    
    (7.7
    )
    
    
    (10.2
    )
    
    
    24.2Increase/(decrease) in income taxes
    
    
    106.8
    
    
    
    (194.8
    )
    
    
    80.3(Decrease)/increase in deferred taxes
    
    
    (11.1
    )
    
    
    38.8
    
    
    
    (11.2
    )Increase/(decrease) in trade and other payables
    
    
    153.8
    
    
    
    (545.7
    )
    
    
    263.1Net cash (outflow)/inflow from operating activities
    
    
    (47.5
    )
    
    
    554.4
    
    
    
    247.5
 F-61




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##### Table of Contents



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
 NOTE 33  CASH FLOW INFORMATION (CONTINUED)
   2010
    
    
    2009A$M
    
    
    A$MCash at bank and on hand
    
    
    132.2
    
    
    
    59.1Short-term deposits
    
    
    0.1
    
    
    
    10.4Cash and cash equivalents
    
    
    132.3
    
    
    
    69.5
   (i)
    
    During the year ended 30 June 2010, dividends of A$9.2 million (2009: A$26.6 million;
2008: A$18.1 million) were paid via the issue of ordinary shares pursuant to the DRP. Refer
to Note 21.(ii)
    
    On 14 March 2008, the Company acquired 100% of the share capital of Metal Management
Inc for A$1,500.6 million. The consideration given consists of
53,473,817 ordinary shares in Sims Metal Management
Limited with a fair value of A$1,490.1 million and A$10.5 million of fully vested share options
assumed at fair value. Refer to Note 27.(iii)
    
    On 1 September 2007, the Group completed the merger of its Southern Californian metal
recycling assets with those of Adams Steel LLC, amounting to an investment of A$342.3
million. For details of the assets and liabilities contributed to the SA Recycling joint
venture, refer to Note 29.
 NOTE 34  EVENTS OCCURRING AFTER THE REPORTING PERIOD
  F-62




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##### Table of Contents



PricewaterhouseCoopers LLP
 Report of Independent Registered Public Accounting Firm
      F-63




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##### Table of Contents



SA Recycling, LLC and Subsidiaries
Consolidated Balance Sheets
June 30, 2010 and 2009
 (in thousands of dollars)
    
    2010
    
    
    2009AssetsCurrent assetsCash
    
    $
    4,743
    
    
    $
    3,604ReceivablesTrade, net of allowance for doubtful accounts of $27 and
$138 at June 30 2010 and 2009, respectively
    
    
    19,726
    
    
    
    10,131Related party
    
    
    23,361
    
    
    
    12,258Other
    
    
    365
    
    
    
    292Inventories
    
    
    70,112
    
    
    
    48,432Restricted cash
    
    
    
    
    
    
    10,000Wear parts and spares
    
    
    10,056
    
    
    
    11,067Other current assets
    
    
    2,521
    
    
    
    2,759Total current assets
    
    
    130,884
    
    
    
    98,543Property, plant and equipment, net
    
    
    207,511
    
    
    
    205,800Intangible assets, net
    
    
    34,797
    
    
    
    43,273Goodwill
    
    
    163,252
    
    
    
    163,252Other assets
    
    
    7,911
    
    
    
    4,518Total assets
    
    $
    544,355
    
    
    $
    515,386Liabilities and EquityCurrent liabilitiesCash overdrafts
    
    $
    3,802
    
    
    $
    9,022Accounts payable
    
    
    18,339
    
    
    
    8,977Accrued liabilities
    
    
    8,067
    
    
    
    5,850Environmental liabilities
    
    
    900
    
    
    
    1,425Related party payables
    
    
    2,908
    
    
    
    13,099Current portion of long-term debt
    
    
    7,143
    
    
    
    271Other current liabilities
    
    
    1
    
    
    
    28Total current liabilities
    
    
    41,160
    
    
    
    38,672Environmental liabilities, net of current portion
    
    
    5,618
    
    
    
    5,847Deferred income tax liabilities
    
    
    996
    
    
    
    1,278Long-term debt
    
    
    142,857
    
    
    
    131,357Total liabilities
    
    
    190,631
    
    
    
    177,154Commitments and contingencies (Note 12)EquityMembers equity
    
    
    347,601
    
    
    
    331,035Noncontrolling interest
    
    
    6,123
    
    
    
    7,197Total equity
    
    
    353,724
    
    
    
    338,232Total liabilities and equity
    
    $
    544,355
    
    
    $
    515,386
  F-64




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##### Table of Contents



SA Recycling, LLC and Subsidiaries
Consolidated Statements of Operations
Years ended June 30, 2010, 2009 and 2008
 (in thousands of dollars)
    
    2010
    
    
    2009
    

    2008RevenueGross sales
    
    $
    894,115
    
    
    $
    983,699
    

$
921,928Less:Freight out
    
    
    (21,413
    )
    
    
    (31,572
    )


(43,184
)Other
    
    
    (13,976
    )
    
    
    (11,642
    )


(8,961
)Total net revenue
    
    
    858,726
    
    
    
    940,485
    


869,783Cost of sales (excluding depreciation)
    
    
    720,988
    
    
    
    742,145
    


709,702General and administrative expenses
    
    
    66,226
    
    
    
    72,548
    


47,780Depreciation and amortization expense
    
    
    27,311
    
    
    
    23,433
    


13,446Income from operations
    
    
    44,201
    
    
    
    102,359
    


98,855Other (income) expense, netLoss (income) from equity investment
    
    
    67
    
    
    
    (237
    )


(1,187
)Interest expense
    
    
    2,479
    
    
    
    7,200
    


4,843Other income
    
    
    (2,711
    )
    
    
    (3,022
    )


(2,636
)Total other (income) expense, net
    
    
    (165
    )
    
    
    3,941
    


1,020Income before provision for income taxes
    
    
    44,366
    
    
    
    98,418
    


97,835Provision for income taxes
    
    
    492
    
    
    
    592
    


313Net income
    
    
    43,874
    
    
    
    97,826
    


97,522(Income) loss attributable to noncontrolling interest
    
    
    (312
    )
    
    
    132
    


Net income attributable to members
    
    $
    43,562
    
    
    $
    97,958
    

$
97,522
  F-65




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##### Table of Contents



SA Recycling, LLC and Subsidiaries
Statements of Changes in Equity
Years ended June 30, 2010, 2009 and 2008
 Total
    
    
    Non-Adams
    
    
    Simsmetal
    
    
    Members
    
    
    controlling
    
    
    Total(in thousands of dollars)
    
    Steel
    
    
    West
    
    
    Equity
    
    
    Interest
    
    
    EquityBalances at June 30, 2007
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Members contribution
    
    
    73,762
    
    
    
    210,199
    
    
    
    283,961
    
    
    
    
    
    
    
    283,961Members distribution
    
    
    (43,937
    )
    
    
    (43,937
    )
    
    
    (87,874
    )
    
    
    
    
    
    
    (87,874
    )Net income
    
    
    48,761
    
    
    
    48,761
    
    
    
    97,522
    
    
    
    
    
    
    
    97,522Balances at June 30, 2008
    
    $
    78,586
    
    
    $
    215,023
    
    
    $
    293,609
    
    
    $
    
    
    
    $
    293,609Noncontrolling interest resulting from
acquisition of business
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,329
    
    
    
    7,329Members distribution
    
    
    (28,210
    )
    
    
    (28,210
    )
    
    
    (56,420
    )
    
    
    
    
    
    
    (56,420
    )Reduction in contributed capital (Note 2)
    
    
    (338
    )
    
    
    (3,774
    )
    
    
    (4,112
    )
    
    
    
    
    
    
    (4,112
    )Reclassification of contributed capital (Note 2)
    
    
    (6,897
    )
    
    
    6,897
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    
    48,979
    
    
    
    48,979
    
    
    
    97,958
    
    
    
    (132
    )
    
    
    97,826Balances at June 30, 2009
    
    $
    92,120
    
    
    $
    238,915
    
    
    $
    331,035
    
    
    $
    7,197
    
    
    $
    338,232Purchases of noncontrolling interest
    
    
    (1,820
    )
    
    
    (1,820
    )
    
    
    (3,640
    )
    
    
    (1,386
    )
    
    
    (5,026
    )Members distribution
    
    
    (11,135
    )
    
    
    (11,135
    )
    
    
    (22,270
    )
    
    
    
    
    
    
    (22,270
    )Reduction in contributed capital (Note 2)
    
    
    (1,086
    )
    
    
    
    
    
    
    (1,086
    )
    
    
    
    
    
    
    (1,086
    )Net income
    
    
    21,781
    
    
    
    21,781
    
    
    
    43,562
    
    
    
    312
    
    
    
    43,874Balances at June 30, 2010
    
    $
    99,860
    
    
    $
    247,741
    
    
    $
    347,601
    
    
    $
    6,123
    
    
    $
    353,724
  F-66




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##### Table of Contents



SA Recycling, LLC and Subsidiaries
Consolidated Statements of Cash Flows
Years ended June 30, 2010,  2009 and 2008
 (in thousands of dollars)
    
    2010
    
    
    2009
    
    
    2008Cash flows from operating activitiesNet income
    
    $
    43,874
    
    
    $
    97,826
    
    
    $
    97,522Adjustment to reconcile net income to net cash provided by
(used in) operating activitiesDepreciation and amortization
    
    
    27,311
    
    
    
    23,433
    
    
    
    13,446Amortization of lease acquisition
    
    
    34
    
    
    
    
    
    
    
    Non cash inventory write-down
    
    
    5,390
    
    
    
    487
    
    
    
    Equity method investment
    
    
    67
    
    
    
    (237
    )
    
    
    (1,187
    )Loss (gain) on sale of fixed assets
    
    
    667
    
    
    
    (266
    )
    
    
    74Provision for doubtful accounts
    
    
    (111
    )
    
    
    (148
    )
    
    
    286Deferred income taxes
    
    
    (282
    )
    
    
    (192
    )
    
    
    Changes in operating assets and liabilities, net of effect
of acquisitions and contributions from membersReceivables
    
    
    (9,557
    )
    
    
    21,229
    
    
    
    (9,470
    )Related party receivables
    
    
    (11,103
    )
    
    
    154,513
    
    
    
    (166,771
    )Inventories
    
    
    (27,070
    )
    
    
    23,019
    
    
    
    (4,580
    )Wear parts and spares
    
    
    1,011
    
    
    
    (3,214
    )
    
    
    (3,724
    )Other current assets
    
    
    238
    
    
    
    (411
    )
    
    
    (1,618
    )Other assets
    
    
    1
    
    
    
    (310
    )
    
    
    Cash overdrafts
    
    
    (5,220
    )
    
    
    (22,721
    )
    
    
    24,476Accounts payable
    
    
    9,362
    
    
    
    (20,510
    )
    
    
    15,804Accrued liabilities
    
    
    2,217
    
    
    
    (26,589
    )
    
    
    31,259Environmental liabilities
    
    
    (754
    )
    
    
    (1,224
    )
    
    
    Related party payables
    
    
    (10,191
    )
    
    
    9,461
    
    
    
    3,638Other current liabilities
    
    
    (27
    )
    
    
    (38
    )
    
    
    66Net cash provided by (used in) operating activities
    
    
    25,857
    
    
    
    254,108
    
    
    
    (779
    )Cash flows from investing activitiesAcquisition of businesses, net of cash acquired
    
    
    
    
    
    
    (57,952
    )
    
    
    (120,466
    )Purchase of property and equipment
    
    
    (21,886
    )
    
    
    (18,098
    )
    
    
    (29,135
    )Changes in restricted cash
    
    
    10,000
    
    
    
    (10,000
    )
    
    
    Proceeds from sale of property and equipment
    
    
    567
    
    
    
    1,322
    
    
    
    513Other
    
    
    
    
    
    
    
    
    
    
    155Net cash used in investing activities
    
    
    (11,319
    )
    
    
    (84,728
    )
    
    
    (148,933
    )Cash flows from financing activitiesProceeds on notes payable
    
    
    
    
    
    
    
    
    
    
    5,000Payments on notes payable
    
    
    (878
    )
    
    
    (5,651
    )
    
    
    (254
    )Proceeds on lines of credit
    
    
    1,034,350
    
    
    
    624,550
    
    
    
    429,900Payments on lines of credit
    
    
    (1,065,100
    )
    
    
    (632,600
    )
    
    
    (291,100
    )Proceeds on term loans
    
    
    50,000
    
    
    
    
    
    
    
    100,000Payments on term loans
    
    
    
    
    
    
    (100,000
    )
    
    
    Purchases of noncontrolling interest
    
    
    (5,026
    )
    
    
    
    
    
    
    Payments for debt issuance costs
    
    
    (4,475
    )
    
    
    
    
    
    
    (1,615
    )Payments of cash distributions to members
    
    
    (22,270
    )
    
    
    (56,420
    )
    
    
    (87,874
    )Net cash (used in) provided by financing activities
    
    
    (13,399
    )
    
    
    (170,121
    )
    
    
    154,057Net increase (decrease) in cash
    
    
    1,139
    
    
    
    (741
    )
    
    
    4,345Cash at beginning of period
    
    
    3,604
    
    
    
    4,345
    
    
    
    Cash at end of period
    
    $
    4,743
    
    
    $
    3,604
    
    
    $
    4,345Supplemental cash flow informationCash paid forIncome taxes
    
    $
    876
    
    
    $
    1,667
    
    
    $
    246Interest
    
    
    2,211
    
    
    
    4,924
    
    
    
    4,385
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 1.
    
    Organization, Business and Basis of Presentation
 SA Recycling, LLC, a Delaware limited liability company, (the Company), was formed on June
4, 2007 pursuant to a plan to form a joint venture by the combination of operations of Adams
Steel, LLC (Adams Steel) and Simsmetal West LLC (Simsmetal West) (collectively, the
Members) for the purpose of purchasing, processing and selling ferrous and non-ferrous
scrap metals. The Company is a full service scrap metal recycling company with multiple
locations located primarily throughout Southern California, which purchase and recycle all
types of scrap metal including car bodies, appliances, non-ferrous metals, and construction
and demolition materials. Other services include mobile car body smashing, demolition
contracting, certified destruction services, green waste and oil filter recycling.The Company formed a joint venture on September 1, 2007, at which time it received
contributions of assets and liabilities from Adams Steel and Simsmetal West and began
operations.
 2.
    
    Summary of Significant Accounting Policies
 Basis of PresentationThe accompanying consolidated financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United States of America.Principles of ConsolidationThe consolidated financial statements include the financial statements of the Company and its
majority-owned and wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.ReclassificationsCertain prior year amounts have been reclassified to conform to the current year
presentation. These changes had no significant impact on previously reported balance sheets,
statements of operations or statements of cash flows.Revenue RecognitionThe Companys primary source of revenue is from the sale of processed ferrous and non-ferrous
scrap metals. The Company also generates revenues from reselling new steel and performing
other recycling services.Revenues from ferrous and non-ferrous scrap metal sales are recognized when title and risk of
loss have passed to the customer, the price is fixed and determinable and collectibility is
reasonably assured. Revenues from services are recognized as the service is performed, when
the price is fixed and determinable and collectibility is reasonably assured. Sales
commissions and sales adjustments related to weight differences are recorded as a reduction
to revenue in the Other line item on the statement of operations.
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010,  2009 and 2008
 (in thousands of dollars)
 Revenues by product category were as follows for the years ended June 30:
 2010
    
    
    2009
    
    
    2008Ferrous metals (including non-ferrous by-products)
    
    $
    755,626
    
    
    $
    793,014
    
    
    $
    742,214Non-ferrous metals
    
    
    131,191
    
    
    
    181,531
    
    
    
    168,386Other recycling services
    
    
    7,298
    
    
    
    9,154
    
    
    
    11,328Gross revenue
    
    $
    894,115
    
    
    $
    983,699
    
    
    $
    921,928
 Cash
 Cash represents cash in banks and cash on hand. Cash balances at banks are insured by the
Federal Deposit Insurance Corporation (FDIC) up to $250,000 per bank. As of June 30, 2010
and 2009, and at various times throughout the years, the Company had deposits in excess of
FDIC limits.Restricted CashThe revolving line of credit with Fifth Third Bank (Note 9) required a compensating balance
of $10,000, which was legally restricted and recorded separately on the Companys balance
sheet at June 30, 2009. As the revolving line of credit with Fifth Third Bank was paid in
full on June 30, 2010, the contractual restriction was no longer required.Accounts ReceivableAccounts receivable represents amounts due from customers on product and other sales. The
carrying amount of accounts receivable approximates fair value. The Companys determination
of the allowance for doubtful accounts receivable includes a number of factors, including the
age of the balance, past experience with the customer account, changes in collection patterns
and general industry conditions.Concentrations of Credit Risk and Major CustomersFinancial instruments that subject the Company to credit risk consist primarily of accounts
receivable. Sales to related party customers accounted for approximately 70%,  84% and 78% of
total gross sales for the years ended June 30, 2010,  2009 and
2008, respectively. One related
party customer accounted for approximately 69%, 75% and 69% of total gross sales for the years
ended June 30, 2010,  2009 and 2008, respectively. See Note 16 for additional information on the
Companys related party activity.
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 Wear Parts and SparesThe Companys wear parts and spares consist of replacement parts and accessories used in the
production process. These parts are expensed as used and are included in cost of sales in
the statement of operations.Property, Plant and EquipmentProperty, plant and equipment are recorded at cost less accumulated depreciation. Major
rebuilds and improvements are capitalized, while repairs and maintenance costs are expensed
as incurred. Depreciation is calculated using the straight-line method over the following
estimated useful lives:
 Buildings
    
    20 to 39 yearsLand improvements
    
    5 to 20 yearsLeasehold improvements
    
    Lesser of useful life or remaining lease termPlant and equipment
    
    3 to 15 years
 When assets are sold or otherwise disposed of, the cost and related accumulated depreciation
are removed from the accounts and any gain or loss is recorded in the consolidated statement
of operations.Goodwill and Indefinite-Lived Intangible AssetsGoodwill is recorded as the difference, if any, between the aggregate consideration paid for
an acquisition and the fair value of the assets acquired and liabilities assumed resulting
from acquisitions. Goodwill and indefinite-lived intangible assets are not amortized but
instead tested for impairment at least annually or more frequently should an event or
circumstances indicate that a reduction in fair value of the reporting unit may have
occurred. The Company tests for impairment in the third quarter of each year, or more
frequently if events and circumstances warrant. Such events and circumstances may be a
significant change in business climate, economic and industry trends, legal factors, negative
operating performance indicators, significant competition, changes in strategy, or
disposition of a reporting unit or a portion thereof. The Company performs its goodwill and
indefinite-lived intangible assets impairment tests at the reporting unit and asset grouping
level and has determined it operates under one reporting unit and asset grouping.The annual evaluation for impairment of goodwill is based on a two-step test. The first step
identifies potential impairment by comparing the fair value of a reporting unit with its
carrying amount, including goodwill and other indefinite-lived intangible assets. If the
fair value exceeds its carrying amount, these assets are not considered impaired and the
second step of the test is unnecessary. If the carrying amount of goodwill exceeds their fair
value, the second step measures the impairment loss, if any. The second step compares the
implied fair value of these assets with their carrying amount. The implied fair value of
goodwill is determined in the same manner as the amount of these assets recognized in a
business combination. If the carrying amount of these assets exceed the implied fair value,
an impairment loss is recognized in an amount equal to that excess. The annual evaluation for
impairment of indefinite lived intangible assets is based upon a test which compares the fair
value of the intangible assets to its carrying value. If the carrying value exceeds the fair
value, an impairment loss is recorded for that excess.Determining the fair value of a reporting unit or an indefinite-lived intangible asset is
judgmental in nature and involves the use of significant estimates and assumptions. These
estimates and assumptions include revenue growth rates and operating margins used to
calculate projected future cash flows, risk-adjusted discount rates, and future economic and
market conditions. The
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 Company bases its fair value estimates on assumptions it believes to be reasonable but which
are unpredictable and inherently uncertain. Actual future results may differ from the
estimates.There were no impairment losses recognized for the years
ended June 30, 2010, 2009 and 2008.Intangible Assets Subject to AmortizationIntangible assets subject to amortization that are acquired by the Company are carried at
cost, less accumulated amortization. Depending on the materiality of the intangible asset
acquired, the Company utilizes a valuation specialist to value intangible assets and assist
the Company in the determination of the appropriate amortizable lives.Long-Lived AssetsLong-lived assets such as property, plant and equipment, subject to amortization are
reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to be held and
used is measured by a comparison of the carrying amount of an asset to estimated undiscounted
future net cash flows expected to be generated by the asset. If the carrying amount of an
asset exceeds its estimated future cash flows, an impairment charge is recognized in the
amount by which the carrying amount exceeds the fair value of the asset.There were no impairment losses recognized for the years
ended June 30, 2010, 2009 and 2008.Other AssetsIncluded in other assets as of June 30, 2010 and 2009, is $3,200 and $3,267, respectively,
related to a 50% ownership interest in T&L Properties, Inc. The Company uses the equity
method of accounting for this investment, with earnings and losses reported within other
(income) expense, net, in the consolidated statements of operations. This investment has
resulted in cumulative undistributed earnings of $3,200 as of June 30, 2010, that are
included as a part of equity of the investment.Also included in other assets as of June 30, 2010 is $4,475 of debt issuance costs related to
the new term loan, revolving credit and letter of credit facility (Note 9). These costs will
be amortized over the term of the facility.Environmental ProvisionThe Company maintains a reserve based upon its estimated liability associated with
environmental conditions caused by past operations. A reserve is established when it is
probable that a liability has been incurred and the amount of the loss can be reasonably
estimated. The Company maintained an environmental reserve at June 30, 2010 and 2009 of
$6,518 and $7,272, respectively. These estimated liabilities are subject to revision in
future periods based on actual costs or new information.Fair Value of Financial InstrumentsThe carrying amount of financial instruments, consisting of cash, trade accounts and other
receivables, accounts payable, short-term borrowings and other liabilities, approximates
their fair values at the balance sheet dates due to their relatively short maturities.
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 Noncontrolling InterestThe Company acquired a controlling interest in Silver Dollar Recycling, LLC during fiscal
2009 (Note 4). On July 1, 2009, the Company adopted new guidance for the recognition and
presentation of noncontrolling interest in a subsidiary. As of July 1, 2009, the
noncontrolling interest was reclassified from mezzanine to permanent equity. Net income or
loss attributable to the noncontrolling interest is still shown as a separate line item on
the consolidated statement of operations and increases or reduces the noncontrolling interest
account on the consolidated balance sheet. As of June 30, the net income attributable to the
Company and transfers from the noncontrolling interest was as follows:
 2010
    
    
    2009Net income attributable to members
    
    $
    43,562
    
    
    $
    97,958Transfers from the noncontrolling interest:Decrease in equity for purchase of Silver Dollar Recycling, LLC interest
    
    
    (3,640
    )
    
    
    Change from net income attributable to SA Recycling, LLC
and net transfers from noncontrolling interest
    
    $
    39,922
    
    
    $
    97,958
 Adjustments to Equity and GoodwillDue to facts and circumstances identified in fiscal years 2010 and 2009, immaterial
adjustments were made to members equity and goodwill as follows:
 i.
    
    Reclassification of contributed assets between goodwill and Simsmetal
West members equity of $3,774.ii.
    
    Reclassification of members equity from Adams Steel to Simsmetal West of
$6,897.iii.
    
    Reclassification between equity investment and Adams Steel members
equity of $338.iv.
    
    Reclassification of the purchase price of Oxnard Metals, Inc. between
goodwill and deferred tax liability of $1,577.v.
    
    Reclassification between property, plant and equipment and Adams Steel
members equity of $1,086.
 Income TaxesThe Company, as an LLC, operates as a limited liability company, which is treated as a
partnership for income tax purposes and consequently is not subject to federal income taxes.
For California tax purposes, the Company is subject to certain state franchise taxes. The
Members are required to include their proportionate share of the Companys income or loss in
their own tax returns.A number of the Companys consolidated wholly owned subsidiaries are corporations. Income
taxes for these entities are accounted for under the asset and liability method in accordance
with the accounting for income taxes. Deferred income tax assets and liabilities are
recognized for the
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 future tax consequences attributable to the differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases using
enacted tax rates in effect for the year in which the differences are expected to affect
taxable income. Valuation allowances are established when necessary to reduce deferred tax
assets to the amounts expected to be ultimately realized.On July 1, 2009, the Company adopted new guidance related to recognition and measurement of
uncertain tax positions taken or expected to be taken in a tax return (Note 14).Comprehensive IncomeThere are no comprehensive income (loss) items other than net income. Comprehensive income
equals net income for all of the periods presented.Use of EstimatesThe preparation of the consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the reporting period.
Actual results may differ from those estimates.Recent Accounting PronouncementsIn December 2007, the Financial Accounting Standards Board (FASB) issued a new accounting
standard for business combinations. The new standard establishes principles and requirements
for the manner in which the acquirer of a business recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree. The standard also provides guidance for recognizing and measuring
the goodwill acquired in the business combination and disclosure requirements to enable users
of the financial statements to evaluate the nature and financial effects of the business
combination. The standard applies to business combinations that are consummated on or after
the beginning of the first annual reporting period beginning on or after December 15, 2008.
The Company adopted this standard on July 1, 2009, which did not have a significant impact on
its financial position, results of operations, or cash flows as there have been no
acquisitions that have consummated after July 1, 2009.In April 2008, the FASB issued a new accounting standard over the determination of the useful
lives of acquired intangible assets. The new standard amends the factors that should be
considered in developing renewal or extension assumptions used to determine the useful life
of a recognized intangible asset under the impairment model. Under the new guidance,
companies are required to consider their own historical experience in renewing or extending
similar arrangements and in the absence of historical experience, companies are required to
consider the assumptions that market participants would use regarding renewal or extension,
adjusted for company-specific factors. The standard will be effective for fiscal years
beginning after December 15, 2008, and interim periods within those fiscal years. It must be
applied prospectively to intangible assets acquired after the effective date and early
adoption is prohibited. The Company adopted this standard on July 1, 2009, which did not have
a significant impact on its financial position, results of operations or cash flows.
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 In August 2008, the Emerging Issues Task Force (EITF) issued a new accounting standard to
clarify the initial recognition and measurement and subsequent measurement issues associated
with accounting for equity method investments. The issue is effective for transactions
occurring in the fiscal years beginning on or after December 15, 2008. The Company adopted
this standard on July 1, 2009, which did not have a significant impact on its financial
position, results of operations, or cash flows as there have been no transactions for which
these investments exist consummated after July 1, 2009.
 In August 2008, the EITF issued a new accounting standard to address the accounting for
defensive intangible assets after initial measurement. The issue applies to all intangible
assets acquired, including intangible assets acquired in a business combination, in
situations in which the acquirer does not intend to actively use the asset but intends to
hold the asset to prevent its competitors from obtaining access to the asset. The issue is
effective for intangible assets acquired on or after the fiscal year beginning on or after
December 15, 2008. The Company adopted this standard on July 1, 2009, which did not have a
significant impact on its financial position, results of operations, or cash flows as the
Company did not enter into a new business combination for which defensive intangible assets
exist.
 In April 2009, the FASB issued a position which clarifies initial recognition and
measurement, subsequent measurement, and accounting and disclosures for assets and
liabilities from contingencies in a business combination. The position has the same
effective date as the revised business combination standard, which was effective for all
business combinations on or after the beginning of fiscal years beginning on or after
December 15, 2008. The Company adopted this position on July 1, 2009, which did not have a
significant effect on its financial position, results of operations or cash flows as the
Company has not enter into any new business combinations.
 In August 2009, the FASB issued revised guidance regarding the measurement of liabilities at
fair value which provides clarification that in circumstances where a quoted market price in
an active market for an identical liability is not available, a reporting entity must measure
fair value of the liability using one of the following techniques: 1) the quoted price of the
identical liability when traded as an asset; 2) quoted prices for similar liabilities or
similar liabilities when traded as assets; or 3) another valuation technique, such as a
present value technique or the amount that the reporting entity would pay to transfer the
identical liability or would receive to enter into the identical liability. The statement
becomes effective for the first reporting period beginning after August 2009. The Company is
currently evaluating the impact, if any, this revised guidance will have on its financial
position, results of operations and cash flows.
 In January 2010, the FASB issued revised guidance regarding the disclosures for fair value
measurement. The revised guidance includes the following changes: (i) new disclosures over
transfers in and out of Level 1 and Level 2; (ii) additional disclosures regarding the
activity in Level 3 such as purchases, sales, issuances and settlements on a gross versus net
basis; (iii) improved disclosures over the level of disaggregation for each class of asset or
liability that is being fair valued; and (iv) reiterated disclosure requirements for Level 2
and Level 3 assets and liabilities which include both the valuation techniques and inputs.
The revised guidance is effective for interim and annual periods beginning after December 15,
2009, except for the disclosures about purchases, sales, issuances and settlements in the
roll forward of activities within Level 3 which becomes effective for interim and annual
periods beginning after December 31, 2010. The Company is currently evaluating the impact,
if any, this revised guidance will have on its financial position, results of operations and
cash flows.
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 3.
    
    Significant Noncash Investing and Financing Transactions
 The Company engaged in the following significant noncash investing and financing transactions
with regards to the contributions received from Adams Steel and Simsmetal West on September
1, 2007:
 2010
    
    
    2009
    
    
    2008Adjustments to contribution received from Adams Steel upon execution of
Operating Agreement on September 1, 2007
    
    $
    (1,086
    )
    
    $
    (7,235
    )
    
    $
    73,762Adjustments to contribution received from Simsmetal West upon execution of
Operating Agreement on September 1, 2007
    
    $
    
    
    
    $
    3,123
    
    
    $
    210,199
 The assets and liabilities contributed were recorded at net book value. The 2010 and
2009 activity reflects reclassifications made during 2010 and 2009 to the initial
contributions recorded during the year ended June 30, 2008 (Note 2).
 4.
    
    Acquisitions
 Silver Dollar Recycling, LLC Acquisition
 On September 5, 2008, the Company acquired 70.295% of the membership interest of Silver
Dollar Recycling, LLC (SDR) for $59,674. SDR is in the business of purchasing, processing
and selling ferrous and non-ferrous scrap metals. The following table summarizes the
allocation of purchase price to the acquired assets and assumed liabilities of SDR at the
date of acquisition.
 Purchase considerationCash consideration
    
    $
    55,192Promissory note
    
    
    4,236Direct transaction costs
    
    
    246$
    59,674AllocationTangible assets acquiredCash
    
    $
    1,722Inventories
    
    
    1,432Property, plant and equipment
    
    
    11,571Identifiable intangible assets acquiredNon-compete (amortization period of 4 years)
    
    
    351Tradename (amortization period of 15 months)
    
    
    2,397Supplier relationships (amortization period of 10 years)
    
    
    23,252Goodwill
    
    
    26,752Total assets acquired
    
    
    67,477Liabilities assumedEnvironmental liabilities
    
    
    (474
    )Noncontrolling Interest
    
    
    (7,329
    )$
    59,674
 Upon completion of purchase accounting, an indefinite-lived tradename was identified. In the
fourth quarter of 2009, the Company converted the indefinite-lived tradename to definite
lived and assigned a 15 month useful life. The Company has terminated the use of the
existing tradename as of June 30, 2010.
 The Amended and Restated Operating Agreement of SDR provided members with a total of 25.250%
interests, the right, at their option, to require the Company to purchase or redeem all or
part of their interests in SDR during the period from July 1, 2009 through December 31, 2011
(the Put Option). In conjunction with the Put Option, the Company had the right to
purchase the remaining 4.455% interest in SDR during the same time periods of each year as
the Put Option (the Call Option). The purchase price under the Put Option and Call Option
was the purchase price that would have been paid for these interests under the original
acquisition of the controlling interest of SDR, less proportionate distributions paid other
than tax distributions, plus 5% per annum compounded annually.
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 During fiscal year 2010, the Company and the other members of SDR amended its operating
agreement to extend the terms of the Put Option and Call Option to June 2016 for which their
ability to exercise is limited to certain periods of time during each fiscal year.
Also, the amendment to the operating agreement included a change to the purchase price for
these options to include consideration for the members proportionate share of the SDR net
current assets and to adjust the compounded increase in purchase price from 5% to 4%.
Finally, the amendment to the operating agreement also provided the Company with a Call
Option with an indefinite term and also provided a certain member with a Put Option expiring
in June 2015. The terms of these options are similar to those of the existing Put and Call
Options as it relates to purchase price calculations and limitations on the members ability
to exercise the options.
 Additionally in fiscal year 2010, members of SDR exercised their Put Options requiring the
Company to purchase a total of 5.875% in interests for a total purchase price of $5,026.
 On July 1, 2009, the Company adopted new standards for the accounting and reporting of
noncontrolling interest in a subsidiary. This new guidance required the reclassification of
the 23.830% and 29.705% noncontrolling interest in SDR from mezzanine equity to permanent
equity at June 30, 2010 and 2009, respectively.
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 Pacific Coast Recycling LLC Acquisition
  Purchase considerationCash consideration
    
    $
    109,469Direct transaction costs
    
    
    2,319$
    111,788AllocationTangible assets acquiredAccounts receivable
    
    $
    21,338Inventories
    
    
    65,646Prepaid expenses
    
    
    1,241Asset held for sale (Note 6)
    
    
    5,711Property, plant and equipment
    
    
    37,210Identifiable intangible assets acquiredSupplier relationship (amortization period of 10
years)
    
    
    2,478Total assets acquired
    
    
    133,624Liabilities assumedCurrent liabilities
    
    
    (21,345
    )Long term debt
    
    
    (491
    )Total liabilities assumed
    
    
    (21,836
    )$
    111,788
 Oxnard Metals, Inc. Acquisition
  Purchase considerationCash consideration
    
    $
    6,617Direct transaction costs
    
    
    429$
    7,046AllocationTangible assets acquiredCash
    
    $
    365Accounts and other receivable
    
    
    345Inventories
    
    
    227Property, plant and equipment
    
    
    1,957Identifiable intangible assets acquiredSupplier relationships and other (amortization period of 7 to 10 years)
    
    
    3,818Goodwill
    
    
    2,455Total assets acquired
    
    
    9,167Liabilities assumedCurrent liabilities
    
    
    (544
    )Deferred tax liabilities
    
    
    (1,577
    )Total liabilities assumed
    
    
    (2,121
    )$
    7,046
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 5.
    
    Inventories
 Inventories are stated at the lower of cost or market. Cost for ferrous and non-ferrous
metals is determined using the average cost method. Inventories consist of the following
categories at June 30:
 2010
    
    
    2009Ferrous metals (including non-ferrous by-products)
    
    $
    63,877
    
    
    $
    41,644Non-ferrous metals
    
    
    6,096
    
    
    
    6,610Other
    
    
    139
    
    
    
    178Total inventories
    
    $
    70,112
    
    
    $
    48,432
 The Company makes certain assumptions regarding future demand and net realizable value in
order to assess that inventory is properly recorded at the lower of cost or market. The
assumptions are based on both historical experience and current information. Due to declines
in the future selling prices of scrap metal in the first quarter of fiscal 2009 and in the
fourth quarter of fiscal 2010, the Company recognized $487 and $5,390, respectively, of
expense for production costs that could not be capitalized into inventory.
 6.
    
    Property, Plant and Equipment
 A summary of property, plant and equipment is as follows at June 30:
 2010
    
    
    2009Land
    
    $
    75,953
    
    
    $
    70,907Buildings and land improvements
    
    
    20,307
    
    
    
    13,920Leasehold improvements
    
    
    8,026
    
    
    
    11,330Plant and equipment
    
    
    136,672
    
    
    
    127,277Construction in progress
    
    
    10,790
    
    
    
    9,726251,748
    
    
    
    233,160Less: Accumulated depreciation
    
    
    (44,237
    )
    
    
    (27,360
    )Property, plant and equipment, net
    
    $
    207,511
    
    
    $
    205,800
 Depreciation expense amounted to $18,835, $17,070 and $10,485 for the years ended June 30, 2010,
 2009 and 2008, respectively.
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 7.
    
    Goodwill and Intangible Assets
 The change in net carrying amount of goodwill was as follows for the years ending June 30:
 2010
    
    
    2009Balance as of July 1Goodwill
    
    $
    163,252
    
    
    $
    138,697Adjustment (Note 2)
    
    
    
    
    
    
    (2,197
    )Accumulated impairment losses
    
    
    
    
    
    
    163,252
    
    
    
    136,500Goodwill acquired during the year
    
    
    
    
    
    
    26,752Impairment losses
    
    
    
    
    
    
    Balance as of June 30Goodwill
    
    
    163,252
    
    
    
    163,252Accumulated impairment losses
    
    
    
    
    
    
    $
    163,252
    
    
    $
    163,252
 Intangible assets consist of the following at June 30, 2010:
 GrossAmortization
    
    
    Carrying
    
    
    AccumulatedPeriod
    
    
    Amount
    
    
    Amortization
    
    
    NetIntangible assets
subject to amortizationSupplier relationships
    
    
    7 to 10 years
    
    
    $
    44,800
    
    
    $
    (13,728
    )
    
    $
    31,072Tradenames
    
    15 months
    
    
    2,822
    
    
    
    (2,822
    )
    
    
    Other
    
    Lesser of term 
of agreement 
or useful life
    
    
    1,685
    
    
    
    (1,210
    )
    
    
    47549,307
    
    
    
    (17,760
    )
    
    
    31,547Intangible assets not
subject to amortizationPermits
    
    
    
    
    
    $
    3,250
    
    
    $
    
    
    
    $
    3,250Total net intangible assets
    
    
    
    
    
    $
    52,557
    
    
    $
    (17,760
    )
    
    $
    34,797
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 Intangible assets consist of the following at June 30, 2009:
 GrossAmortization
    
    
    Carrying
    
    
    AccumulatedPeriod
    
    
    Amount
    
    
    Amortization
    
    
    NetIntangible assets
subject to amortizationSupplier relationships
    
    
    7 to 10 years
    
    
    $
    44,800
    
    
    $
    (7,880
    )
    
    $
    36,920Tradenames
    
    15 months
    
    
    2,822
    
    
    
    (571
    )
    
    
    2,251Other
    
    Lesser of term of agreement 
or useful life
    
    
    1,685
    
    
    
    (833
    )
    
    
    85249,307
    
    
    
    (9,284
    )
    
    
    40,023Intangible assets not
subject to amortizationPermits
    
    
    
    
    
    $
    3,250
    
    
    $
    
    
    
    $
    3,250Total net intangible assets
    
    
    
    
    
    $
    52,557
    
    
    $
    (9,284
    )
    
    $
    43,273
 Amortization expense amounted to $8,476, $6,363 and $2,961 for the years ended June 30, 2010, 2009 and 2008, respectively.
 A summary of the expected amortization expense for the succeeding periods as of June 30, 2010
is as follows:
 Fiscal years ending June 30,2011
    
    $
    5,9922012
    
    
    5,9702013
    
    
    4,0422014
    
    
    3,0562015
    
    
    3,056Thereafter
    
    
    9,431$
    31,547
 8.
    
    Fair Value of Financial Instruments
 Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. The
fair value is offset by the assessment of the Companys or counterpartys non-performance
risk. To determine fair value, the Company primarily utilizes reported market transactions
and discounted cash flow analyses. The Company fair values all financial and nonfinancial
assets and liabilities.
 Long-Term Debt Instruments
 The fair value of the long-term debt instruments are determined by a valuation model which is
based on discounted future cash flows of the instruments using current market rates. The
carrying amounts and fair values of the debt instruments were as follows at June 30:
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 2010
    
    2009Carrying
    
    Fair
    
    Carrying
    
    FairValue
    
    Value
    
    Value
    
    ValueRevolving credit
    
    $
    100,000
    
    
    $
    100,000
    
    
    $
    130,750
    
    
    $
    129,330Term loan
    
    
    50,000
    
    
    
    50,000
    
    
    
    
    
    
    
    Notes payable
    
    
    
    
    
    
    
    
    
    
    878
    
    
    
    878
 9.
    
    Credit Facilities and Long-Term Debt
 Credit facilities and long-term debt consist of the following at June 30:
 2010
    
    
    2009Noncurrent debtRevolving credit and letter of credit facility
    
    $
    100,000
    
    
    $
    130,750Term loan
    
    
    42,857
    
    
    
    Other
    
    
    
    
    
    
    607Total long-term debt
    
    
    142,857
    
    
    
    131,357Current debtTerm loan
    
    
    7,143
    
    
    
    Other
    
    
    
    
    
    
    271Total current debt
    
    
    7,143
    
    
    
    271Total debt
    
    $
    150,000
    
    
    $
    131,628
 Revolving Credit and Letter of Credit Facilities
 The Company maintained a $150,000 unsecured revolving line of credit and letter of credit
facility, which had a maturity date of October 1, 2010 with Bank of America, N.A. (the
Credit Agreement), in order to fund working capital requirements and other capital
requirements to operate the business. The debt was severally guaranteed by both of the
equity members of the Company.
 Borrowings under the facility bore interest, at the Companys option, at either the prime
rate plus the applicable margin as defined in the Credit Agreement (ranging from -1.4% to
-2.55%) or Eurocurrency rate loan (defined as London InterBank Offered Rates (LIBOR)) plus
the applicable margin as defined in the Credit Agreement (ranging from 0.875% to 1.4%).
Borrowings were deemed to be prime rate loans, unless a Eurocurrency rate loan was requested.
The interest rate at June 30, 2009 was 1.19%.
 In accordance with the Credit Agreement, the Company paid a quarterly unutilized facility fee
calculated as 1/4 of 1% per annum times the daily amount available to be drawn under the
facility, as well as for each standby letter of credit equal to the applicable margin (as
defined in the agreement) times the daily amount available to be drawn under any letter of
credit.
 The Credit Agreement contained, among other provisions, certain defined financial and
non-financial covenants including a maximum cash flow gearing ratio, interest coverage ratio,
a minimum tangible net worth and the requirement to provide audited financial
statements in
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 compliance with accounting principles generally accepted in the United States
of America within 120 days of the Companys year end.As of June 30, 2009, the Company had outstanding credit facility borrowings of $130,750, a
standing letter of credit in the amount of $5,370, and $13,880 available to borrow. At June
30, 2009, the Company was in compliance with these covenants. On June 30, 2010, the Credit
Agreement was paid in full and terminated. As such, the Company had no requirement to comply
with the covenants as the agreement was terminated.
 On September 10, 2008, the Company entered into a $50,000 unsecured revolving line of credit
(the 2008 Credit Agreement), which had a maturity date of June 30, 2010, with Fifth Third
Bank and Union Bank of California, in order to fund working capital and for other general
business purposes. The debt was severally guaranteed by both of the equity members of the
Company. On March 29, 2010, the 2008 Credit Agreement was modified to increase the borrowing
base to $65,000. Borrowings under the facility bore interest, at the Companys option, at
either the prime rate plus 0.5% or LIBOR plus 2.25%. The rate to be used was determined upon
each borrowing. In accordance with this agreement, the Company paid a quarterly unutilized
facility fee calculated as 0.30% per annum times the daily amount available to be drawn under
the facility, as well as 0.125% for each standby letter of credit equal to the applicable
margin (as defined in the agreement) times the daily amount available to be drawn under any
letter of credit.
 The 2008 Credit Agreement contained, among other provisions, certain defined financial and
non-financial covenants including a maximum cash flow gearing ratio, an interest coverage
ratio, a minimum tangible net worth and the requirement to provide audited financial
statements in compliance with accounting principles generally accepted in the United States
within 90 days of the Companys year end.
 As of June 30, 2009, the Company had no outstanding borrowings on this credit facility and
was in compliance with these covenants. On June 30, 2010, the 2008 Credit Agreement was paid
in full and terminated and therefore had no requirement to comply with these covenants as the
2008 Credit Agreement was terminated.
 Term Loan
 The Company maintained a one year $100,000 term loan agreement with Fifth Third Bank as the
agent, of which $40,000 was funded by Fifth Third Bank, $40,000 was funded by California Bank
& Trust and $20,000 was funded by HSBC. The term loan was paid in full during fiscal year
2009.
 New Term Loan, Revolving Credit and Letter of Credit Facility
 On June 30, 2010, the Company entered into a new facility with Bank of America, N.A., Fifth
Third Bank, Wells Fargo Bank, N.A., California Bank & Trust, JPMorgan Chase Bank, N.A., and
Union Bank, N.A. (the 2010 Credit Agreement). Included in the 2010 Credit Agreement is a
$50,000 term loan with a maturity date of June 30, 2014 and a $250,000 secured revolving line
of credit, with a $100,000 sub-limit for letters of credit which matures on June 30, 2014.
Borrowings are collateralized by substantially all of the Companys assets. As of June 30,
2010, the Company had outstanding term loan borrowings of $50,000, outstanding revolving
credit borrowings of $100,000, a standby letter of credit in the amount of $5,370, and
$144,630 available to borrow. The Company is required to repay the outstanding borrowings
against the term loan in equal quarterly installments of $1,786 with the remaining balance
due on June 30, 2014.
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 Interest rates on the outstanding indebtedness under the term loan portion of the 2010
Credit Agreement are based on either LIBOR plus a spread of between 2.00% and 3.50%, with the
amount of the spread based on a pricing level tied to the Companys consolidated debt to
capital
ratio or a Base Rate established by taking the highest of (a) the Federal Funds Rate plus
1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to
time by Bank of America as its prime rate, and (c) the Eurodollar Rate plus 1.00%. As of
June 30, 2010, the term loan interest rate was LIBOR plus 2.50%.
 Interest rates on the outstanding indebtedness under the revolving credit and letter of
credit portion of the 2010 Credit Agreement are based on either LIBOR plus a spread of
between 2.00% and 3.50%, with the amount of the spread based on a pricing level tied to the
Companys consolidated debt to capital ratio or a Base Rate established by taking the
highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for
such day as publicly announced from time to time by Bank of America as its prime rate, and
(c) the Eurodollar Rate plus 1.00%. In addition, quarterly commitment fees are payable on the
unused portion of the credit facility at rates between 0.30% and 0.60% based on a pricing
level tied to the Companys consolidated debt to capital ratio. Additionally, a letter of
credit fee payable quarterly equals 1.25% per annum times the daily amount available to draw
on such letters of credit. As of June 30, 2010, the revolving credit interest rate was LIBOR
plus 2.50% with a commitment fee of 0.40%.
 The 2010 Credit Agreement contains, among other provisions, certain defined financial and
non-financial covenants including an asset coverage ratio, fixed charge coverage ratio,
minimum tangible net worth and the requirement to provide audited financial statements in
compliance with accounting principles generally accepted in the United States of America
within 90 days of the Companys year end. As of June 30, 2010, which was the date the
Company entered into this Credit Agreement, the Company was not subject to the financial
covenants requirements at that time. Compliance with these new covenants is required on a
quarterly basis commencing on September 30, 2010.
 Other
 Additionally, the Company had $878 as of June 30, 2009, of notes payable to various
individuals as a result of 2008 acquisitions, which were paid in full during fiscal year
2010.
 Annual maturities are as follows:
 Years ending June 30,2011
    
    $
    7,1432012
    
    
    7,1432013
    
    
    7,1432014
    
    
    128,571$
    150,000
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 10.
    
    Members Equity
 The Company was formed as a limited liability company (LLC) in the State of Delaware on
June 4, 2007. The Operating Agreement of SA Recycling, LLC (the Operating Agreement) was
made effective as of September 1, 2007 by and between Adams Steel and Simsmetal West, both
limited liability companies organized in the State of Delaware. In consideration for assets
received, both Adams Steel and Simsmetal West received a 50% percentage interest in the
Company. The Companys profit and losses are allocated in proportion to the Members
respective percentage interest. Additional capital contributions are not permitted unless
unanimously approved by all Members. If approved, contributions will be at pro rata portions
of the aggregate capital contributions approved based on each Members percentage interest.
No Member has an obligation to make any loans or advances or guarantee any of the
obligations, although they have chosen to guarantee certain obligations. Distributions are
to be made, as determined by the Board of Directors and to the extent of available cash, pro
rata according to the Members unit percentage interests. Cash distributions will be made
solely from cash available for distributions as defined in the Operating Agreement.
Additionally, tax distributions will be made quarterly to each Member in accordance with the
methodology established in the Operating Agreement.
Total distributions of $11,135, $28,210 and $43,937 were made to each
Member during the years ended June 30, 2010, 2009 and 2008, respectively.
 11.
    
    Defined Contribution and Union Pension Plans
 The Company has a 401(k) defined contribution plan (the Plan) which covers substantially
all employees of the Company. Plan participants may make voluntary contributions up to the
lesser of 100% of their earnings or the statutory limitation. Employer contributions consist
of qualified non-elective contributions equal to 3% of compensation and qualified
non-elective contributions of 3% for income in excess of the social security wage base, but
less than the stated maximum. These contributions are not subject to vesting under safe
harbor provisions. Additionally, discretionary supplemental employer contributions in the
year following each plan year end may be made. The discretionary contributions, if
applicable, vest over a five-year service period; 20% vests after the first year and an
additional 20% vests for each year of service to the Company thereafter. Expense related to
the Plan was approximately $2,511, $1,565  and $1,485 for the years ended June 30, 2010, 2009 and 2008,
respectively.
 The Company made contributions to the union-sponsored trust fund, which provides pension
benefits to employees covered by collective bargaining agreements. The Companys
contributions amounted to $398 and $459 for the years ended June 30, 2010 and 2009,
respectively.
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 12.
    
    Commitments and Contingencies
 Operating Leases
 The Company has various operating lease agreements related to equipment and facilities, which
expire at various dates through August 2024. Rent expense under such agreements was $14,160, $12,833 and $3,930 for the years ended June 30, 2010, 2009 and 2008, respectively. A summary of minimum
future lease commitments under noncancelable long-term operating leases, including the
anticipated exercise of lease extension options, for the succeeding periods as of June 30,
2010 is as follows:
 Fiscal years ending June 30,2011
    
    $
    13,8022012
    
    
    12,9862013
    
    
    11,0792014
    
    
    7,4402015
    
    
    6,094Thereafter
    
    
    32,294$
    83,695
 Legal Matters
 From time to time, the Company is involved in various litigation matters involving ordinary
and routine claims incidental to its business. A portion of these matters result from
environmental compliance issues and workers compensation related claims arising from the
Companys operations. There are presently no legal proceedings pending against the Company,
which, in the opinion of the Companys management, is likely to have a material adverse
effect on its business, financial condition or results of operations.
 Environmental Matters
 The Company is subject to comprehensive local, state, federal and international regulatory
and statutory environmental requirements relating to, among others, the acceptance, storage,
treatment, handling and disposal of solid waste and hazardous waste, the discharge of
materials into the air, the management and treatment of wastewater and storm water, the
remediation of soil and groundwater contamination, the restoration of natural resource
damages and the protection of employees health and safety. The Company believes that it and
its subsidiaries are in material compliance with currently applicable statutes and
regulations governing the protection of human health and the environment, including employee
health and safety. However, environmental legislation may in the future be enacted and
create liability for past actions and the Company or its subsidiaries may be fined or held
liable for such damages.
 The Companys environmental risk analysis indicates that significant remedial costs are
possible if regulatory actions are triggered; however, there are certain mitigating factors that
decrease the likelihood that major remedial actions will be required over the next five years. The
primary factor is that a majority of the known and suspected impacts at these facilities currently
lack a regulatory trigger and a related factor is the industrial nature of the general site areas.
These factors, in conjunction with plans to continue to expand the paved portions of the sites,
serve to reduce the likelihood of new agency-driven remedial actions. To the extent that issues
arise, the Company should continue to be able to address them through its normal operating and
capital budgets. It
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 appears unlikely that the management of potential impact issues, in the aggregate, would
significantly exceed the recorded reserve balance over the next five years.
 The Company evaluates the adequacy of its environmental reserves on an annual basis in
accordance with Company policy. Adjustments to the liabilities are made when additional
information becomes available that affects the estimated costs to study or remediate any
environmental issues or expenditures for which reserves were established.
 13.
    
    Balance Sheet Information
 Accrued Liabilities
 Accrued liabilities consist of the following at June 30:
 2010
    
    
    2009Accrued payroll, bonus and other employee benefits
    
    $
    7,406
    
    
    $
    5,260Other
    
    
    661
    
    
    
    590$
    8,067
    
    
    $
    5,850
 14.
    
    Income Taxes
 The provision for income taxes primarily relates to tax on the income before provision for
income taxes of the Companys wholly owned subsidiaries that are corporations.
 Significant components of the income tax provision are as follows for the years ending June
30:
 2010
    
    
    2009CurrentFederal
    
    $
    533
    
    
    $
    652State
    
    
    241
    
    
    
    132774
    
    
    
    784DeferredFederal
    
    
    (242
    )
    
    
    (166
    )State
    
    
    (40
    )
    
    
    (26
    )(282
    )
    
    
    (192
    )Total income tax provision
    
    $
    492
    
    
    $
    592
 Deferred tax liabilities consist of the following components as of June 30:
 2010
    
    
    2009Noncurrent deferred tax liabilitiesIntangible asset amortization
    
    $
    966
    
    
    $
    1,247Other, net
    
    
    30
    
    
    
    31Total deferred tax liabilities
    
    
    996
    
    
    
    1,278Noncurrent deferred tax liabilities
    
    $
    996
    
    
    $
    1,278
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010, 2009 and 2008
 (in thousands of dollars)
 On July 1, 2009, the Company adopted authoritative guidance over the accounting for
uncertainty in income taxes. The guidance prescribes a recognition threshold and measurement
attribute for financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. The literature also provides guidance on various
related matters such as recognition, interest, penalties and required disclosures. Interest
and penalties, if any, related to unrecognized tax benefits are recognized in income tax
expense.
 A tax position is recognized as a benefit only if it is more likely than not that the tax
position would be sustained in a tax examination, with a tax examination being presumed to
occur. The amount recognized is the largest amount of tax benefit that is greater than 50%
likely of being realized on examination. For tax positions not meeting the more likely than
not test, no tax benefit is recorded. The Company has no uncertain tax positions requiring
an adjustment to its consolidated financial statements. As of June 30, 2010, the Company has
partnership and corporate tax returns for tax years 2007 through 2009 that remain open to
examination by the Internal Revenue Service. The Company is also subject to certain state
franchise taxes and all such tax returns for tax years 2006 through 2009 remain open to
examination by the related states taxing authorities.
 15.
    
    Sales Commitments
 The Company entered into a foreign sales agreement with Sims Group Global Trade Corporation
(Global Trade), a subsidiary of Sims Metal Management Ltd, effective September 1, 2007.
The Company appointed Global Trade on an exclusive basis to export the Companys ferrous
goods to non-domestic locations (defined as locations outside of the United States of America
and Mexico). As part of the agreement, the Company must make available to Global Trade no
less than 85% of the Companys total inventory each month for foreign sales. The agreement
defines total inventory as the existing ferrous inventory for the month and the forecasted
ferrous inventory of scrap for the following 90 calendar days. The agreement terminates upon
written notification by either party and 90 days notice.
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SA Recycling, LLC and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2010 and 2009
 (in thousands of dollars)
 16.
    
    Related Party Transactions
 In addition to those described elsewhere, the Company had the following transactions with
related parties:
 The Companys largest customer, Global Trade, is a related party. The Company experienced
the following sales to and amounts due from Global Trade for the years ended June 30, 2010
and 2009 as part of operating activities:
 2010Gross sales
    
    $
    617,418Total due to the Company
    
    $
    21,928
 2009Gross sales
    
    $
    736,453Total due to the Company
    
    $
    12,065
 2008Gross sales
    
    $
    635,668Total due to the Company
    
    $
    153,014
 The Company had aggregated related party payables of $2,908 and $13,099 at June 30, 2010 and
2009, respectively, to various Sims Metal Management entities.
 During fiscal years 2010, 2009 and 2008, the Company
purchased inventory of $36,588, $51,837 and $5,598,
respectively, from various Sims Metal Management Entities and other related parties.
 Additionally, the Company paid commissions during fiscal years 2010, 2009 and 2008, respectively,
of $1,022, $0 and $0 to a Sims Metal Management Entity for its services as a commissioned sales
agent.
 17.
    
    Subsequent Events
 The Company has performed an evaluation of subsequent events through August 3, 2010, which is
the date the financial statements were available to be issued.
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