SIMS LIMITED — Interim / Quarterly Report 2011

Feb 17, 2011

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SIMS METAL MANAGEMENT LIMITED

ABN 69 114 838 630

APPENDIX 4D HALF YEAR REPORT Pursuant to ASX Listing Rule 4.2A

31 DECEMBER 2010

ASX code: SGM

Sims Metal Management Limited Half year ended: 31 December 2010

Previous corresponding period: 31 December 2009

Results for announcement to the market
	Up/	%		Current Period
	Down	Change		A$M
Revenue from ordinary activities	Up	16.6%	to	3,954.3
Profit from ordinary activities after tax attributable
to members	Up	23.6%	to	49.3
Net profit for the period attributable to members	Up	23.6%	to	49.3
Dividends for the half year period
		Cents per		% Franked per
		Security		Security
Current period interim dividend		12.0		42%
Previous corresponding period interim dividend		10.0		100%
Record date		18	March 2011
Payment date		8	April 2011
Net tangible asset backing
		December		December
		2010		2009
Net tangible asset backing per ordinary share		A$8.51		A$8.87

For further explanation of the above figures, please refer to the Directors’ Report, press release and market presentations filed with the Australian Securities Exchange Limited (“ASX”).

The remainder of the information required by Listing Rule 4.2A is contained in the attached additional information.

The half year financial report is based on accounts which have been subject to an independent review and are not subject to dispute or qualification.

Sims Metal Management Limited Contents

Directors’ Report Auditor’s Independence Declaration Consolidated Income Statements Consolidated Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows Notes to the Consolidated Financial Statements Directors’ Declaration Independent Auditor’s Review Report	Page
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Sims Metal Management Limited Contents

Directors’ report

Your directors present their report on the consolidated entity (the “Group”) consisting of Sims Metal Management Limited (the “Company”) and the entities it controlled at the end of, or during, the half year ended 31 December 2010.

Directors

The following persons listed below were Directors of the Company during the half year ended 31 December 2010 and up to the date of this report:

Name Title Executive Directors: Daniel W. Dienst Group Chief Executive Officer

Non-Executive Directors: Paul J. Varello Chairman and Independent Non-Executive Director Norman R. Bobins Independent Non-Executive Director Geoffrey N. Brunsdon Independent Non-Executive Director J. Michael Feeney Independent Non-Executive Director Robert Lewon Independent Non-Executive Director Gerald E. Morris Independent Non-Executive Director Christopher J. Renwick[1] Independent Non-Executive Director Makoto P. Sukagawa Non-Independent, Non-Executive Director James T. Thompson Independent Non-Executive Director

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1 Mr Renwick was re-elected as an Independent Non-Executive Director at the Company’s annual general meeting on 19 November 2010.

Review of Operations

A review of the operations of the Group during the half year and the results of those operations are set out in the press release announcing the results for the half year as filed with the ASX.

Significant changes in the state of affairs

There were no significant changes in the state of affairs of the Group during the half year not otherwise disclosed elsewhere in this report.

Subsequent events after the balance sheet date

Other than the items disclosed in Note 11 of the half year financial report, the directors are not aware of any other matter or circumstance that has arisen since the end of the half year which will significantly affect, or may significantly affect, the operations of the Group, the results of those operations or the state of affairs of the Group entity in subsequent financial years.

Auditor’s Independence Declaration

A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 3.

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Sims Metal Management Limited Directors’ Report (“continued”)

Rounding of Amounts to Nearest Hundred Thousand Dollars

The amounts in this report, where appropriate and unless otherwise stated, have been rounded off to the nearest hundred thousand dollars in accordance with ASIC Class Order 98/100.

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

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P J Varello D W Dienst Chairman Group Chief Executive Officer Houston New York 17 February 2011 17 February 2011

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Auditor’s Independence Declaration

As lead auditor for the rev i ew of Sims Metal Management Limited for the h a lf year ended 31 December 2010, I declare that to the b est of my knowledge and belief, there have bee n :

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

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

This declaration is in resp e ct of Sims Metal Management Limited and the e n tities it controlled during the period.

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Andrew J Parker Partner PricewaterhouseCoopers

Sydney 18 February 2011

PricewaterhouseCoopers, ABN 52 780 433 757 Darling Park Tower 2, 201 S u ssex Street, GPO BOX 2650, SYDNEY NSW 1171 DX 77 Sydney, Australia T +61 2 8266 0000, F +61 2 8 266 9999, www.pwc.com.au

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

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Sims Metal Management Limited Consolidated Income Statements For the half year ended 31 December 2010

Revenue Other income Raw materials used and changes in inventories Freight expense Employee benefits expense Depreciation and amortisation expense Repairs and maintenance expense Other expenses Finance costs Share of pre-tax profit of investments accounted for using the equity method Profit before income tax Income tax expense Profit for the half year Earnings per share: Basic Diluted	Note 2 4 4 5 3 3	Half year ended 31 December	Half year ended 31 December
		2010 A$M 3,954.3 18.4 (2,936.4) (343.5) (200.0) (66.5) (59.0) (286.9) (12.1) 3.8 72.1 (22.8) 49.3 A¢ 24.1 24.0	2009 A$M
			3,391.4 19.8 (2,348.7) (372.7) (206.8) (73.9) (55.4) (291.9) (7.9) 1.6 55.5 (15.6) 39.9 A¢
			21.3 21.2

The consolidated income statements should be read in conjunction with the accompanying notes.

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Sims Metal Management Limited Consolidated Statements of Comprehensive Income For the half year ended 31 December 2010

Profit for the half year Other comprehensive (loss)/income Changes in the fair value of other financial assets Changes in the fair value of derivatives held as cash flow hedges Exchange differences on translation of foreign operations Actuarial gains on retirement benefit obligations Income tax on other comprehensive (loss)/income Other comprehensive loss for the half year, net of tax Total comprehensive loss for the half year	Note	Half year ended 31 December	Half year ended 31 December
		2010 A$M 49.3 1.4 2.8 (419.6) 3.7 (2.5) (414.2) (364.9)	2009 A$M 39.9 - (0.9) (213.0) 1.5 (0.2) (212.6) (172.7)

The consolidated statements of comprehensive income should be read in conjunction with the accompanying notes.

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Sims Metal Management Limited Consolidated Statements of Financial Position As at 31 December 2010

ASSETS Current assets Cash and cash equivalents Trade and other receivables Tax receivable Inventory Other financial assets Total current assets Non-current assets Receivables Investments accounted for using the equity method Other financial assets Property, plant and equipment Deferred tax assets Goodwill Other intangible assets Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Borrowings Other financial liabilities Current tax liabilities Provisions Total current liabilities Non-current liabilities Payables Borrowings Deferred tax liabilities Provisions Retirement benefit obligations Total non-current liabilities Total liabilities Net assets EQUITY Contributed equity Reserves Retained earnings Total equity	Note 6 7 8	31 December 2010 A$M 106.0 427.3 7.4 832.6 8.0 1,381.3 8.1 315.3 - 850.7 88.9 995.1 153.1 2,411.2 3,792.5 562.5 0.2 13.7 14.8 24.5 615.7 4.9 142.9 112.3 19.5 4.9 284.5 900.2 2,892.3 2,810.4 (348.6) 430.5 2,892.3	30 June 2010 A$M
			132.3 576.2 - 776.9 8.7 1,494.1 7.9 369.5 21.4 925.8 74.1 1,151.7 195.2 2,745.6 4,239.7 614.2 0.6 5.0 23.2 31.1 674.1 3.3 116.6 133.7 22.2 11.0 286.8 960.9 3,278.8 2,795.2 58.1 425.5 3,278.8

The consolidated statements of financial position should be read in conjunction with the accompanying notes.

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Sims Metal Management Limited Consolidated Statements of Changes in Equity For the half year ended 31 December 2010

Balance at 1 July 2010 Total comprehensive (loss)/income for the half year Transactions with owners in their capacity as owners: Dividends provided for or paid Share-based payments Dividend reinvestment plan Balance at 31 December 2010 Balance at 1 July 2009 Total comprehensive (loss)/income for the half year Transactions with owners in their capacity as owners: Dividends provided for or paid Share-based payments Issue of shares under institutional placement Issue of shares under share purchase plan Dividend reinvestment plan Balance at 31 December 2009	Note 9 8 9 8 8 8	Contrib- uted equity A$M 2,795.2 - - 3.7 11.5 15.2 2,810.4 2,352.9 - - - 391.4 41.4 2.7 435.5 2,788.4	Reserves A$M 58.1 (416.8) - 10.1 - 10.1 (348.6) 166.0 (213.6) - 6.9 - - - 6.9 (40.7)	Retained earnings A$M 425.5 51.9 (46.9) - - (46.9) 430.5 340.1 40.9 (18.2) - - - - (18.2) 362.8	Total equity A$M 3,278.8 (364.9) (46.9) 13.8 11.5 (21.6) 2,892.3 2,859.0 (172.7) (18.2) 6.9 391.4 41.4 2.7 424.2 3,110.5

The consolidated statements of changes in equity should be read in conjunction with the accompanying notes.

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Sims Metal Management Limited Consolidated Statements of Cash Flows For the half year ended 31 December 2010

Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received Interest paid Dividends received from associates and jointly controlled entities Income taxes (paid)/refunded Net cash inflow from operating activities Cash flows from investing activities Payments for property, plant and equipment Payments for acquisition of subsidiaries, net of cash acquired Proceeds from sale of property, plant and equipment Payments for other financial assets Proceeds from sale of other financial assets Return of capital from jointly controlled entities Loan to a third party Proceeds from repayment on a third party loan Net cash outflow from investing activities Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Fees paid for loan facilities Proceeds from issue of shares Transaction costs associated with issue of shares Dividends paid Net cash inflow from financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the half year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the half year	Note 7 8	Half year ended 31 December	Half year ended 31 December
		2010 A$M 4,052.0 (3,944.4) 1.9 (9.7) 1.9 (27.7) 74.0 (79.6) (42.9) 2.3 (27.7) 54.4 - (6.0) 0.1 (99.4) 1,437.7 (1,389.8) (1.0) 3.7 - (35.4) 15.2 (10.2) 132.3 (16.1) 106.0	2009 A$M 3,394.3 (3,377.0) 1.3 (7.8) 4.6 46.4 61.8 (49.8) (110.3) 3.4 - - 0.4 - - (156.3) 521.9 (681.7) - 441.4 (8.6) (15.5) 257.5 163.0 69.5 (7.5) 225.0

The consolidated statements of cash flows should be read in conjunction with the accompanying notes.

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Sims Metal Management Limited Notes to the Consolidated Financial Statements For the half year ended 31 December 2010

Note 1 – Summary of significant accounting policies

(a) Reporting entity

Sims Metal Management Limited (the “Company”) is a company domiciled in Australia. The consolidated financial statements for the half year ended 31 December 2010 comprise the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in associates, jointly controlled entities and joint venture operations. The consolidated financial statements are presented in Australian dollars (A$), which is the Group’s presentational currency.

(b) Statement of compliance

The half year financial report is a general purpose financial report prepared in accordance with Australian Accounting Standards Board (“AASB”) 134 Interim Financial Reporting and the requirements of the Corporations Act 2001 . International Financial Reporting Standards form the basis of Australian Accounting Standards adopted by the AASB. The half year financial report also complies with International Accounting Standard (“IAS”) 34 Interim Financial Reporting as issued by the International Accounting Standards Board.

The half year financial report does not include all the notes normally included in an annual report. Accordingly, the half year financial report should be read in conjunction with the annual financial report for the year ended 30 June 2010 and any public announcements made by the Company during the half year ended 31 December 2010 in accordance with the continuous disclosure requirements of the Corporations Act 2001 .

(c) Basis of preparation

The preparation of the consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 3 of the annual financial report for the year ended 30 June 2010.

Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation with no significant impact effect on the previously reported consolidated financial statements. The Group reclassified unrealised gains on held for trading commodity derivatives of A$3.6 million from “other income” to “other expenses” in the consolidated income statement for the half year ended 31 December 2009 to be consistent with the current period presentation.

(d) Changes in significant accounting policies

The Group’s significant accounting policies have remained unchanged from the annual financial report for the year ended 30 June 2010.

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Sims Metal Management Limited Notes to the Consolidated Financial Statements For the half year ended 31 December 2010

Note 2 – Segment information

(a) Description of segments

The Group is principally organised geographically and then by line of business. While the Group Chief Executive Officer evaluates results in a number of different ways, the geographical areas of operation is the primary basis for which the allocations of resources and financial results are assessed. The major geographic areas of operations are as follows:

• 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 United Kingdom, Sweden, Belgium, the Netherlands and Germany.

The Group also reports 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 aluminium, lead, copper, zinc and nickel bearing materials.

• Secondary processing – comprising value added process involving the melting, refining and ingoting of certain non-ferrous metals and the reclamation and reprocessing of plastics.

• Recycling solutions – comprising the provision of environmentally responsible solutions for the disposal of post-consumer 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.

There have been no changes to the basis of segmentation or the measurement basis for the segment profit before income tax since 30 June 2010.

(b) Information about reportable segments

Half year ended 31 December 2010 Total sales revenue Other revenue/income Total segment revenue Segment EBIT Interest income Finance costs Profit before income tax Other items: Depreciation and amortisation expense Share of pre-tax profit of investments accounted for using the equity method Acquisitions of property, plant and equipment	North America A$M 2,575.4 0.4 2,575.8 26.6 43.4 1.9 50.0	Austral- asia A$M 679.4 2.8 682.2 19.3 10.5 1.9 15.7	Europe A$M 696.1 0.2 696.3 36.4 12.6 - 13.9	A$M
				3,950.9 3.4 3,954.3 82.3 1.9 (12.1) 72.1 66.5 3.8 79.6

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Sims Metal Management Limited Notes to the Consolidated Financial Statements For the half year ended 31 December 2010

Note 2 – Segment information (continued)

(b) Information about reportable segments (continued)

Half year ended 31 December 2009 Total sales revenue Other revenue/income Total segment revenue Segment EBIT Interest income Finance costs Profit before income tax Other items: Depreciation and amortisation expense Share of pre-tax profit/(loss) of investments accounted for using the equity method Acquisitions of property, plant and equipment Impairment of property, plant and equipment	North America A$M 2,236.6 1.0 2,237.6 28.0 49.4 (1.1) 31.8 -	Austral- asia A$M 597.8 1.4 599.2 12.3 11.2 2.7 9.0 (0.2)	Europe A$M 554.5 0.1 554.6 21.8 13.3 - 9.0 -	A$M
				3,388.9 2.5 3,391.4 62.1 1.3 (7.9) 55.5 73.9 1.6 49.8 (0.2)

Segment balance sheet information is as follows:

31 December 2010 Total assets Investments in associates and jointly controlled entities 30 June 2010 Total assets Investments in associates and jointly controlled entities	North America A$M 2,617.4 293.3 3,032.3 348.9	Austral- asia A$M 546.8 22.0 562.8 20.6	Europe A$M 628.3 - 644.6 -	A$M
				3,792.5 315.3 4,239.7 369.5

• (c) Revenue by product

Ferrous metal recycling Non-ferrous metal recycling Secondary processing Recycling solutions Total sales revenue		Half year ended 31 December	Half year ended 31 December
		2010 A$M 2,663.0 796.8 100.1 391.0 3,950.9	2009 A$M 2,322.3 663.1 95.8 307.7 3,388.9

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Sims Metal Management Limited Notes to the Consolidated Financial Statements For the half year ended 31 December 2010

Note 3 – Earnings per share

Earnings per share as previously reported (in cents) Basic Diluted Effect of equity issue1 Earnings per share as restated (in cents) Basic Diluted Weighted average number of shares used in the denominator (’000) Number of shares for basic earnings per share Effect of equity issue1 Basic shares Dilutive effect of share based awards Diluted shares	Half year ended 31 December	Half year ended 31 December
	2010 - - - 24.1 24.0 204,175 - 204,175 1,111 205,286	2009 21.4 21.3 (0.1) 21.3 21.2 186,584 717 187,301 1,065 188,366

___ 1 In accordance with AASB 133 (IAS 33) Earnings per Share , an adjustment to shares issued was required in the calculation of earnings per share for the prior half year as a result of the equity offering completed by the Company in November and December 2009. These shares were offered to existing shareholders at a discount to the market price. This gave rise to a retrospective restatement of the weighted average number of shares.

Note 4 – Profit before income tax

Profit before income tax includes the following items whose disclosures are relevant to explaining the financial performance of the Group:

(a) Other income Gain on sale of other financial assets Net gain on held for trading currency derivatives Remeasurement at fair value of existing interest in Port Albany Ventures LLC (“Port Albany”) (Note 6) Net gain on disposal of property, plant and equipment Arbitration settlement Net foreign exchange gain Government grants Other (b) Depreciation and amortisation Depreciation expense Amortisation expense	Half year ended 31 December	Half year ended 31 December
	2010 A$M 11.0 - - 0.9 3.0 0.4 0.4 2.7 18.4 51.7 14.8 66.5	2009 A$M - 7.3 8.7 1.0 - - 0.4 2.4 19.8 56.3 17.6 73.9

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Sims Metal Management Limited Notes to the Consolidated Financial Statements For the half year ended 31 December 2010

Note 4 – Profit before income tax (continued)

Note 4 – Profit before income tax (continued)
(c) Expenses included due to their size or nature Write-down of inventories to net realisable value Redundancies Net loss on held for trading currency derivatives Net loss on held for trading commodity derivatives Net foreign exchange loss	Half year ended 31 December
	2010 A$M 0.7 - 1.1 39.1 -	2009 A$M 0.3 5.3 - 26.5 13.8

Note 5 – Income tax

The prima facie income tax on profit before income tax differs from the income tax charged in the consolidated income statement and is reconciled as follows:

Profit before income tax Tax at the standard Australian rate of 30% Effect of tax rates in other jurisdictions Non-deductible expenses Share-based payments Losses not tax effected Non-assessable income Adjustments for prior years Non-assessable gain on acquisition of a remaining interest in a jointly controlled entity Prior year tax loss not previously recognised Other Income tax expense	Half year ended 31 December	Half year ended 31 December
	2010 A$M 72.1 21.6 2.6 0.8 (0.5) 0.3 (0.3) (0.2) - - (1.5) 22.8	2009 A$M 55.5 16.7 0.9 0.5 1.3 - (1.0) 1.5 (2.6) (0.1) (1.6) 15.6

Note 6 – Investments in associates and jointly controlled entities

At 30 June 2009, the Group held a 50% interest in Port Albany. This jointly controlled entity was accounted for using the equity method. On 18 November 2009, the Group purchased the remaining 50% ownership interest in Port Albany that it previously did not own. In accordance with AASB 3 (IFRS 3) Business Combinations , and AASB 127 (IAS 27) Consolidated and Separate Financial Statements , the Group was required to remeasure its previously held equity interest in Port Albany at its acquisition-date fair value and recognise the resulting gain or loss in profit or loss. This transaction resulted in the recognition of a gain in the half year ended 31 December 2009, calculated as follows:

Fair value of 50% interest in Port Albany Less: carrying amount of Port Albany investment Gain recognised on acquisition	2009 A$M 14.3 (5.6) 8.7

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Sims Metal Management Limited Notes to the Consolidated Financial Statements For the half year ended 31 December 2010

Note 7 – Business combinations

Summary of acquisitions

• On 13 August 2010, the Group purchased the recycling assets and business of Wincanton PLC. This e- recycling business has recycling plants at various locations in the United Kingdom.

• On 20 October 2010, the Group purchased the issued capital of TIC Group India Private Limited. This e-recycling business is located in Delhi, India.

• On 2 December 2010, the Group purchased the issued capital of Cooper Metals Recycling Limited. This business is a ferrous and non-ferrous scrap metal recycler located in the United Kingdom.

• On 3 December 2010, the Group purchased certain assets and the business of Crash’s Auto Parts and Sales, Inc. This business is a ferrous and non-ferrous scrap processor located in Utica, New York in the United States.

Had the above acquisitions occurred on 1 July 2010, there would not have been a significant change to the Group’s revenue and net profit. Additionally, revenue and net profit contribution by the above acquisitions to the Group post acquisition was not significant.

Purchase consideration for the above acquisitions and cash outflow were as follows:

Cash paid for current year acquisitions Payments for contingent consideration on prior year acquisitions Cash acquired Cash outflow for acquisitions	A$M 43.3 0.9 (1.3) 42.9

The Group has provisionally recognised the fair values of the identifiable assets and liabilities of the above acquisitions based upon the best information available as of the reporting date. The provisional fair values were as follows:

Cash Trade and other receivables Inventory Property, plant and equipment Identified intangible assets Trade and other payables Current tax liabilities Non-current payables Net assets acquired	A$M 1.3 0.3 0.1 21.0 2.8 (3.6) (0.3) (1.2) 20.4

Goodwill recognised as a result of the above acquisitions was as follows:

Total cash consideration Less: net assets acquired Goodwill on acquisition	A$M 43.3 (20.4) 22.9

The goodwill is attributable to several factors including site locations, synergies existing in the operations acquired and the assembled workforce, which together contribute to the profitability of the acquired businesses. Some of the goodwill recognised is expected to be deductible for income tax purposes.

Acquisition-related costs amounting to A$0.4 million have been excluded from the consideration transferred and have been recognised in the period, within the “other expenses” line item.

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Sims Metal Management Limited Notes to the Consolidated Financial Statements For the half year ended 31 December 2010

Note 8 – Contributed equity

Movements in the ordinary share balance were as follows:

On issue at the beginning of the period Issued under long-term incentive plans Issued under the institutional placement Issued under the share purchase plan Issued under the dividend reinvestment plan On issue at the end of the period	Half year ended 31 December	Half year ended 31 December
	2010 ’000 203,881 358 - - 683 204,922	2009 ’000 182,228 88 19,048 1,973 127 203,464

Note 9 – Dividends

Details of dividends paid are as follows:

Final ordinary dividend for the year ended 30 June 2010 of 23 cents (74% franked) per share paid on 22 October 2010 Final ordinary dividend for the year ended 30 June 2009 of 10 cents (100% franked) per share paid on 9 October 2009	Half year ended 31 December	Half year ended 31 December
	2010 A$M 46.9 -	2009 A$M - 18.2

Since the end of the half year, the directors have determined the payment of an interim dividend of 12.0 cents per share, franked at 42% based on tax paid at 30%. The estimated amount of the dividend expected to be paid on 8 April 2011 out of consolidated retained earnings, but not recognised as a liability at the end of the half year, is approximately A$24.6 million.

Note 10 – Contingencies

In the ordinary course of business, the Group is required to provide guarantees and letters of credit in respect of the performance of contracts and workers compensation insurance. The amounts of the guarantees provided by the Group as at 31 December 2010 and 30 June 2010 were A$43.4 million and A$45.7 million, respectively.

Note 11 – Events occurring after the balance sheet date

On 14 January 2011, the Group purchased certain assets and the business of Commercial Metal Recycling Services. This business is a ferrous and non-ferrous scrap processor that operates a network of eight yards across Queensland, Australia. The purchase consideration was not significant to the Group.

The Group’s business in Queensland is well recovered from the recent natural disasters and is nearly completely operational. There have been disruptions, as well as property damage, which will be largely recovered from commercial insurance. There will be some impact on the Group’s third quarter financial results, but it is not expected to be material on the fiscal 2011 financial results.

No other matters or circumstances have arisen since the end of the half year which have significantly affected or may significantly affect the Group’s operations, the results of those operations, or the state of affairs of the Group in future financial years.

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Sims Metal Management Limited Directors’ Declaration

In the Directors’ opinion:

• (a) the financial statements and notes set out on pages 4 to 15 are in accordance with the Corporations Act 2001 , including:

• i. complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and

• ii. giving a true and fair value view of the consolidated entity’s financial position as at 31 December 2010 and of its performance for the half year ended on that date, and

• (b) there are reasonable grounds to believe that Sims Metal Management Limited will be able to pay its debts as and when they become due and payable.

The declaration is made in accordance with a resolution of the Directors.

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P J Varello Chairman Houston 17 February 2011

D W Dienst Group Chief Executive Officer

New York 17 February 2011

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Independent auditor’s review report to the members of Sims Metal Management Limited

Report on the Half-Year Financial Report

We have reviewed the acc o mpanying half-year financial report of Sims Met a l Management Limited which comprises the bala n ce sheet as at 31 December 2010, and the incom e statement, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, select e d explanatory notes and the directors’ declaratio n for the Sims Metal Management Limited Gro u p (the consolidated entity). The consolidated en t ity comprises both Sims Metal Management Limit e d (the company) and the entities it controlled du r ing that half-year.

Directors’ responsibility f o r the half-year financial report

The directors of the comp a ny are responsible for the preparation of the hal f -year financial report that gives a true and fair view i n accordance with Australian Accounting Standa r ds (including the Australian Accounting Int e rpretations) and the Corporations Act 2001 and for such control as the directors determine is nec e ssary to enable the preparation of the half-year f inancial report that is free from material misstateme n t whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to ex p ress a conclusion on the half-year financial repo r t based on our review. We conducted our review in a c cordance with Auditing Standard on Review En g agements ASRE 2410 Review of an Interim Fin a ncial Report Performed by the Independent Au d itor of the Entity , in order to state whether, on the b a sis of the procedures described, we have become aware of any matter that makes us believe that the f inancial report is not in accordance with the Cor p orations Act 2001 including: giving a true an d fair view of the consolidated entity’s financial position as at 31 December 2010 and its performance f or the half-year ended on that date; and comply i ng with Accounting Standard AASB 134 Interi m Financial Reporting and the Corporations Re g ulations 2001 . As the auditor of Sims Metal Ma n agement Limited, ASRE 2410 requires that we c o mply with the ethical requirements relevant to t h e audit of the annual financial report.

A review of a half-year fin a ncial report consists of making enquiries, prima r ily of persons responsible for financial and accounti n g matters, and applying analytical and other rev i ew procedures. It also includes reading the other information included with the financial report t o determine whether it contains any material inc o nsistencies with the financial report. A review is substantially less in scope than an audit conducted i n accordance with Australian Auditing Standards and consequently does not enable us to obtain assura n ce that we would become aware of all significan t matters that might be identified in an audit. Acc o rdingly, we do not express an audit opinion.

While we considered the e f fectiveness of management’s internal controls o v er financial reporting when determining the nature and extent of our procedures, our review was not d e signed to provide assurance on internal con t rols.

PricewaterhouseCoopers, ABN 52 780 433 757 Darling Park Tower 2, 201 S u ssex Street, GPO BOX 2650, SYDNEY NSW 1171 DX 77 Sydney, Australia T +61 2 8266 0000, F +61 2 8 266 9999, www.pwc.com.au

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

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Our review did not involv e an analysis of the prudence of business decision s made by directors or management.

Independence

In conducting our review, w e have complied with the independence requir e ments of the Corporations Act 2001 .

Conclusion

Based on our review, whic h is not an audit, we have not become aware of a n y matter that makes us believe that the half-year f i nancial report of Sims Metal Management Limit e d is not in accordance with the Corporations Act 200 1 including:

• (a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2010 and of its performa n ce for the half-year ended on that date; and

• (b) complying with Acc o unting Standard AASB 134 Interim Financial R e porting and Corporations Regulations 2001 .

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PricewaterhouseCoopers

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Andrew J Parker Partner

Sydney 18 February 2011

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