SMSMY Sims Ltd (PK)

ACCOUNTS AND REPORTS

To receive and consider the financial statements of the Company and its controlled entities for the year ended 30 June 2014 and the related Directors’ Report, Directors’ Declaration and Auditor’s Report.

RE-ELECTION OF DIRECTORS

MRS HEATHER RIDOUT

RESOLUTION 1

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“That Mrs Heather Ridout, who retires by rotation at the Annual General Meeting in accordance with the Company’s Constitution and the ASX Listing Rules and having offered herself for re-election and being eligible, be re-elected as a Director of the Company.”

MR JOHN DILACQUA

RESOLUTION 2

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“That Mr John DiLacqua, who retires by rotation at the Annual General Meeting in accordance with the Company’s Constitution and the ASX Listing Rules and having offered himself for re-election and being eligible, be re-elected as a Director of the Company.”

MR CHRISTOPHER RENWICK

RESOLUTION 3

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“That Mr Christopher Renwick, who retires at this Annual General Meeting as Mitsui & Co., Ltd’s designated independent director and having offered himself for re-election and being eligible, be re-elected as a Director of the Company.”

MS DEBORAH O’TOOLE

RESOLUTION 4

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“That Ms Deborah O’Toole, who having been appointed as an additional Director since the last Annual General Meeting retires at the Annual General Meeting in accordance with the Company’s Constitution and the ASX Listing Rules, be elected as a Director of the Company.”

MS GEORGIA NELSON

RESOLUTION 5

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“That Ms Georgia Nelson, who having been appointed as an additional Director since the last Annual General Meeting retires at the Annual General Meeting in accordance with the Company’s Constitution and the ASX Listing Rules, be elected as a Director of the Company.”

Messrs Norman Bobins and Gerry Morris have informed the Company that they will each be retiring at the conclusion of the Annual General Meeting and will not be standing for re-election.

APPOINTMENT OF DELOITTE TOUCHE TOHMATSU AS AUDITOR OF THE COMPANY

RESOLUTION 6

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“That:

REMUNERATION REPORT

RESOLUTION 7

To consider and, if thought fit, pass the following resolution as a non-binding ordinary resolution:

“That the Remuneration Report for the year ended 30 June 2014 (as set out in the Directors’ Report) is adopted.”

BUSINESS

PARTICIPATION IN THE COMPANY’S LONG TERM INCENTIVE PLAN BY MR CLARO

RESOLUTION 8

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“That approval is given for the purposes of ASX Listing Rules 7.1 and 10.14 and for all other purposes, for the Company to issue to Mr Galdino Claro, the Chief Executive Officer and Managing Director of the Company, 219,248 Performance Rights and 172,866 Options under the terms of the Company’s Long Term Incentive Plan, as more particularly described in the Explanatory Memorandum accompanying the Notice of Meeting convening this meeting.”

TERMINATION BENEFITS

RESOLUTION 9

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“That approval be given for all purposes, including sections 200B and 200E of the Corporations Act 2001 (Cth), for the giving of benefits to any persons who, from time to time, are key management personnel of the Company or who hold a managerial or executive office in the Company or a related body corporate, in connection with that person ceasing to hold an office or position of employment in the Company or a related body corporate, on the terms set out in the Explanatory Memorandum accompanying the Notice of Meeting convening this meeting.”

By order of the Board

Frank Moratti

Company Secretary

13 October 2014

INFORMATION FOR SHAREHOLDERS

VOTING ENTITLEMENTS

For the purpose of the Meeting, shares will be taken to be held by persons who are registered as shareholders as at 7.00pm (Sydney time) on Tuesday, 11 November 2014. Accordingly, transactions registered after that time will be disregarded in determining shareholders entitled to attend and vote at the Meeting.

PROXIES

A shareholder who is entitled to attend and cast a vote at the Meeting has the right to appoint a proxy to attend and vote on behalf of the shareholder. The proxy need not be a shareholder of the Company and may be an individual or a body corporate. If a shareholder is entitled to cast two or more votes they may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the proxy appointments do not specify a proportion or number, each proxy may exercise half of the shareholder’s votes.

The Proxy Form must be signed by you or your attorney. Proxies given by corporations must be executed either in accordance with section 127 of the Corporations Act 2001 (Cth) (Corporations Act) or under the hand of a duly authorised officer or attorney.

Voting restrictions apply to members of the key management personnel for the Sims Metal Management Limited consolidated group whose remuneration details are included in the Remuneration Report (each a KMP) and their closely related parties, which affect proxy voting.

The KMP (which includes, amongst others, each of the non-executive directors, the managing director and the chief financial officer) and their closely related parties will not be able to vote your proxy on Resolutions 7, 8 or 9 unless you direct them how to vote by marking the voting boxes for those items. The term “closely related party” is defined in the Corporations Act and includes the KMP’s spouse, dependants and certain other close family members, as well as any companies controlled by the KMP, or the KMP’s spouse, dependants and certain other close family members.

If you intend to appoint a KMP as your proxy, please ensure that you direct them how to vote on Resolutions 7, 8 and 9. If you intend to appoint the Chairman of the Meeting as your proxy, you can direct him to vote by marking the relevant boxes on the Proxy Form. If you sign and return your Proxy Form and do not provide any voting directions, you will be deemed to have expressly authorised the Chairman of the Meeting (where he is appointed your proxy or becomes your proxy by default) to cast your vote on each of Resolutions 7, 8 and 9 even though each of those Resolutions is connected with the remuneration of a KMP.

The Chairman of the Meeting intends to vote any undirected proxies held by him in favour of all items of business (subject to the requirements for voting directions noted above in relation to Resolutions 7, 8 and 9).

INFORMATION FOR SHAREHOLDERS

WHERE TO LODGE A PROXY

The Proxy Form and the power of attorney or other authority under which it is signed (if any), or a certified copy of the power of attorney or authority, must be:

ELECTRONIC PROXY

You may lodge an electronic proxy online at www.investorvote.com.au. To do so, you will need to enter the Control Number shown on the front of the Proxy Form, followed by your Securityholder Reference Number (SRN) or Holder Identification Number (HIN).

You will be taken to have signed the Proxy Form if you lodge an electronic proxy online in accordance with the online instructions. Custodians, nominees, non-broker participants, portfolio administrators, portfolio aggregators and eligible financial advisers may lodge their proxy vote via Computershare’s Intermediary Online Vote and Confirmation website. Go to www.intermediaryonline.com.

To be effective, proxies must be lodged by 10.30am (Sydney time) on Tuesday, 11 November 2014. Proxies lodged or received after that time will be invalid.

CORPORATE REPRESENTATIVES

A body corporate which is a shareholder, or which has been appointed as a proxy, is entitled to appoint any person to act as its representative at the Meeting. The appointment of the representative must comply with the requirements under section 250D of the Corporations Act. The representative should bring to the Meeting a properly executed letter or other document confirming their authority to act as the shareholder’s representative.

SHAREHOLDER QUESTIONS

If you would like a question to be put to the Chairman of the Meeting or the Auditor and you are not able to attend the Meeting, please email your question to the Company Secretary at frank.moratti@simsmm.com.

To allow time to collate questions and prepare answers, questions are to be received by the Company Secretary by 10.30am (Sydney) on Tuesday, 11 November 2014.

The Company’s shareholders (Shareholders) should read the Explanatory Memorandum accompanying, and forming part of, this Notice of Meeting (Notice) for more details on the resolutions to be voted on at the Meeting.

EXPLANATORY MEMORANDUM FOR THE 2014 ANNUAL GENERAL MEETING (MEETING)

BUSINESS OF THE MEETING

ACCOUNTS AND REPORT

The Financial Report, Directors’ Report and the Auditor’s Report for the financial year ended 30 June 2014 will be laid before the Meeting.

Together, the Financial Report, Directors’ Report and the Auditor’s Report constitute the Company’s 2014 Annual Report. Unless the Company’s Share Registry has been notified otherwise, Shareholders will not be sent a hard copy of the Annual Report. All Shareholders can view the 2014 Annual Report on the Company’s website at www.simsmm.com.

Following the consideration of the Reports, the Chairman will give Shareholders a reasonable opportunity to ask questions about or comment on the management of the Company.

The Chairman will also give Shareholders a reasonable opportunity to ask the Auditor questions relevant to:

The Chairman will also give the Auditor a reasonable opportunity to answer written questions submitted by Shareholders that are relevant to the content of the Auditor’s Report or the conduct of the audit. A list of written questions, if any, submitted by Shareholders will be made available at the start of the Meeting and any written answers tabled by the Auditor at the Meeting will be made available as soon as practicable after the Meeting.

RESOLUTION 1 – RE-ELECTION OF DIRECTOR – HEATHER RIDOUT AO BEC (HONS) (AGE 60)

INDEPENDENT NON-EXECUTIVE DIRECTOR

The ASX Listing Rules require that the Company hold an election of Directors at least once per year. The Company’s Constitution requires that at least one Director, excluding the Managing Director, must retire each year. The retiring Director is then eligible to offer themself for re-election by Shareholders.

Mrs Ridout retires by rotation and, being eligible, offers herself for re-election as a Director.

Mrs Ridout was appointed as a Director in September 2011. She is a member of the Safety, Health, Environment & Community Committee, the Remuneration Committee, the Risk, Audit & Compliance Committee and the Nomination/Governance Committee. Mrs Ridout was formerly the Chief Executive Officer of the Australian Industry Group from 2004 until her retirement in April 2012. She is a member of the Board of the Reserve Bank of Australia (since December 2011), and is a director of Australian Securities Exchange Limited (since August 2012) and Chair of the AustralianSuper Trustee Board, the largest industry fund in Australia. Mrs Ridout also serves on the Board of the Australian Chamber Orchestra. She has an economics degree, with honours, from the University of Sydney.

The Board considers Mrs Ridout to be an Independent Director.

Mrs Ridout’s broad industry experience includes having served as CEO of the Australian Industry Group—a major, national employer organisation representing a diverse cross section of industry. She has a long history as a leading figure in the public policy debate in Australia, and was recently made an Officer (AO) in the general division of the Order of Australia (for distinguished service to business and industry through significant contributions to the development of economic and public policy). Mrs Ridout’s standing in the business community is evidenced by her membership of the Reserve Bank Board, and her role as co-Chair of the Australian-Canada Economic Leadership Dialogue and a delegate to the B20—which is the key business advisory body to the international economic forum. Mrs Ridout sits on, and contributes significantly to the undertakings of, four Board Committees.

Prior to submitting herself for re-election, Mrs Ridout acknowledged to the Company that she would have sufficient time to properly fulfil her duties to the Company.

Board’s recommendation

The Board, with Mrs Ridout absent and not voting, unanimously recommends you vote in favour of the re-election of Mrs Ridout.

RESOLUTION 2 – RE-ELECTION OF DIRECTOR – JOHN DILACQUA MBA (AGE 62)

INDEPENDENT NON-EXECUTIVE DIRECTOR

Mr DiLacqua retires by rotation and, being eligible, offers himself for re-election as a Director.

Mr DiLacqua was appointed as a Director in September 2011. He is Chairperson of the Finance & Investment Committee, and is a member of the Risk, Audit & Compliance Committee. Mr DiLacqua was formerly a director of Metal Management, Inc (since 2001), and was a director of Sims Metal Management Limited between March and November 2008. He was the Executive Chairman of Envirosource, Inc from May 2004 to December 2004 and had served as President and Chief Executive Officer of Envirosource from January 1999 to May 2004. From October 1997 to December 1998, Mr DiLacqua served as President of the US Ferrous Operations of Philip Metals, Inc, and, prior to that, from May 1994, as the President of Luria Brothers. He is a graduate of Temple University and received an MBA from Carnegie Mellon University. Mr DiLacqua is a Certified Public Accountant.

The Board considers Mr DiLacqua to be an Independent Director.

Mr DiLacqua strongly believes that he has the appropriate experience to serve on the Board of the Company. He has 15 years of metals recycling experience and an additional

15 years of Fortune 500 experience. He was formerly the CFO for five years, and subsequently, President/CEO, of a metals recycling company. He was also the CEO of a publicly listed steel service company for two years. Mr DiLacqua serves as Chairman of the Board Finance & Investment Committee where he believes his financial discipline has helped the Company achieve the goals of zero debt and controlled capital expenditures.

Prior to submitting himself for re-election, Mr DiLacqua acknowledged to the Company that he would have sufficient time to properly fulfil his duties to the Company.

Board’s recommendation

The Board, with Mr DiLacqua absent and not voting, unanimously recommends you vote in favour of the re-election of Mr DiLacqua.

RESOLUTION 3 – RE-ELECTION OF DIRECTOR—CHRISTOPHER RENWICK AM, FAIM, FAIE, FTSE—BA, LLB (AGE 72)

INDEPENDENT NON-EXECUTIVE DIRECTOR

Mr Renwick is retiring as Mitsui & Co., Ltd’s (Mitsui) designated independent director at this Annual General Meeting and, being eligible, offers himself for re-election as a Director.

Mr Renwick was appointed as a Director in June 2007 as Mitsui’s designated independent director, but is not standing for re-election in that capacity at this Annual General Meeting. Consequently, if re-elected, Mr Renwick will not be Mitsui’s designated independent director. Mitsui has not nominated anyone else to the Board for election at this Annual General Meeting. Of course, Mr Sato continues as the Mitsui Associate director in accordance with Mitsui’s right of nomination under the Company’s Constitution. Mr Renwick is Chairperson of the Remuneration Committee, and is a member of the Safety, Health, Environment & Community Committee and the Nomination/Governance Committee. Mr Renwick was employed with the Rio Tinto Group for over 35 years, rising, in 1997, to Chief Executive, Rio Tinto Iron Ore, a position he held until his retirement in 2004. He has previously served as Chairman and director of Coal and Allied Industries Limited (2004 to 2011) and Chairman of the Rio Tinto Aboriginal Fund (2004 to 2011).

Mr Renwick has had substantial experience in the mining industry working for large global organisations. Such experience has been extremely beneficial in Mr Renwick’s contribution to the Board. Mr Renwick was previously Chairman of the Safety, Health, Environment & Community Committee, and currently serves as Chairman of the Remuneration Committee where he believes his skillset has assisted the Company in setting incentive plans carefully to control remuneration and cost in FY 2014.

The Board considers Mr Renwick to be an Independent Director.

Prior to submitting himself for re-election, Mr Renwick acknowledged to the Company that he would have sufficient time to properly fulfil his duties to the Company.

Board’s recommendation

The Board, with Mr Renwick absent and not voting, unanimously recommends you vote in favour of the re-election of Mr Renwick.

RESOLUTION 4 – ELECTION OF DIRECTOR – DEBORAH O’TOOLE LLB, MAICD (AGE 57)

INDEPENDENT NON-EXECUTIVE DIRECTOR

Ms O’Toole has agreed to be appointed as a Director, with effect from 1 November 2014. Following her appointment, Ms O’Toole is to become a member of the Risk, Audit & Compliance Committee, and the Finance & Investment Committee. Ms O’Toole has extensive executive experience across a number of sectors including over 20 years in the mining industry and, more recently, in transport and logistics which included managerial, operational and financial roles. She has been Chief Financial Officer in three ASX listed companies, M.I.M Holdings Limited, Queensland Cotton Holdings Limited and, most recently, through the privatisation of Aurizon Holdings Limited. Ms O’Toole’s board experience includes directorships of the CSIRO, Norfolk Group, various companies in the MIM and Aurizon Groups, and Government and private sector advisory boards. She has acted as Chairman of the Audit Committees of CSIRO, Norfolk Group and Pacific Aluminium. Ms O’Toole is currently a director of Credit Union Australia and the Wesley Research Institute.

As Ms O’Toole’s appointment is to take effect before this Annual General Meeting, in accordance with the Company’s Constitution and the ASX Listing Rules, she offers herself for election as a Director at this Annual General Meeting.

The Board considers that Ms O’Toole will be an Independent Director.

Ms O’Toole brings a skillset comprising strategic, financial, commercial and operational expertise, as well as substantial knowledge and understanding of global metals markets and supply chains. She has also been at the frontline of large business transformations and organisational change.

Prior to submitting herself for election, Ms O’Toole acknowledged to the Company that she would have sufficient time to properly fulfil her duties to the Company.

Board’s recommendation

The Board unanimously recommends you vote in favour of the election of Ms O’Toole.

RESOLUTION 5 – ELECTION OF DIRECTOR – GEORGIA NELSON BS, MBA (AGE 64)

INDEPENDENT NON-EXECUTIVE DIRECTOR

Ms Nelson has agreed to be appointed as a Director, with effect from 1 November 2014. Following her appointment, Ms Nelson will become a member of the Safety, Health, Environment & Community Committee, and the Remuneration Committee. Ms Nelson is the former founding president of Midwest Generation EME, LLC, an Edison International company with its corporate headquarters in Chicago. Previously, Ms Nelson was senior vice president of worldwide operations for Edison Mission Energy where she was responsible for worldwide power plant construction, as well as international environmental, fuel and technical policy, and plant personnel and operations on four continents. Ms Nelson previously spent more than 25 years with Southern California Edison, a large U.S. electric utility. Ms Nelson serves as a director of three publicly traded corporations: Cummins Inc. (CMI) a global engine and equipment manufacturer, Ball Corporation (BLL) a global metals container manufacturing company, and TransAlta Corporation (TAC), a power generation and wholesale marketing company. Ms Nelson has been appointed by the Secretary of Energy in the last four administrations to the Executive Committee of the National Coal Council, a federal advisory committee to the US Department of Energy. She served as Chair of this Council from May 2006 to May 2008. She also serves on the advisory committee of the Center for Executive Women at Northwestern University and formerly served on the Women’s Advisory Board of the JFK School of Government at Harvard University. Ms Nelson holds an MBA from the University of Southern California and a BS from Pepperdine University.

As Ms Nelson’s appointment is to take effect before this Annual General Meeting, in accordance with the Company’s Constitution and the ASX Listing Rules, she offers herself for election as a Director at this Annual General Meeting.

The Board considers that Ms Nelson will be an Independent Director.

Ms Nelson has broad experience as a corporate director with particular expertise in large and complex organizations, international and domestic operations, and manufacturing and human resources. She has been responsible for the construction and operation of large power projects in both Melbourne and Perth. In addition, her previous responsibilities have also included environmental policy for a global energy company, and she has lectured at Northwestern University in Chicago on global sustainability and environmental policy. Ms Nelson firmly

believes that she will be able to apply this knowledge to a global organization like Sims Metal Management Limited.

Prior to submitting herself for election, Ms Nelson acknowledged to the Company that she would have sufficient time to properly fulfil her duties to the Company.

Board’s recommendation

The Board unanimously recommends you vote in favour of the election of Ms Nelson.

RESOLUTION 6 – APPOINTMENT OF AUDITOR

It is the policy of the Company and its Risk, Audit & Compliance Committee (RAC Committee) to appoint external auditors who clearly demonstrate quality and independence. In accordance with the Company’s External Auditor Policy, applications for tender of external audit services are requested as deemed appropriate, taking into consideration assessment of performance, existing value and tender costs.

PricewaterhouseCoopers (PwC) was appointed as the external auditor of the Company in 1991 at the time of the listing of Simsmetal Limited on the Australian Securities Exchange. The Board believed that it was in the interests of best corporate governance practice to undertake a tender process for the audit services. Following this tender process, in which PwC was also invited to participate, the Board, on the recommendation of the RAC Committee, selected Deloitte Touche Tohmatsu (Deloitte) to, subject to Shareholder approval, act as the Company’s auditor. The Board believes that Deloitte has the capabilities to serve a group of the scale, scope and global reach of Sims Metal Management, as well as the experience and expertise in providing services to a leading participant in the metals recycling and e-recycling industries. Consequently, the Board believes that the appointment of Deloitte is in the best interests of the Company and its Shareholders. Non-Executive Director, Mr Bass, a retired former partner of Deloitte, abstained from voting both on the recommendation of the RAC Committee, and the vote of the Board, in respect of the appointment of Deloitte.

PwC has submitted its resignation as auditor of the Company and advised the Company that it has applied to ASIC for consent to resign effective from the later of the conclusion of this Annual General Meeting and the day on which ASIC gives its consent. The Company expects that ASIC will give its consent prior to the Annual General Meeting.

Deloitte has provided consent to its appointment as auditor of the Company, subject to ASIC consenting to the resignation of PwC as auditor of the Company and the approval by Shareholders.

On the assumption that ASIC consents to PwC’s resignation as auditor, the Chairman of the Company, Mr Brunsdon, as a member of the Company, nominated Deloitte to act as the auditor of the Company. In accordance with section 328B(3) of the Corporations Act, a copy of the notice of nomination is included in Annexure 4.

Under the Corporations Act, Shareholder approval is required for the appointment of a new auditor. Subject to this approval being obtained, the appointment of Deloitte will become effective from the later of the conclusion of this Annual General Meeting and the day on which ASIC gives its consent to PwC’s resignation.

If passed, this Resolution also authorises the Board to fix the remuneration from time to time of Deloitte as the Company’s new auditor.

Board’s recommendation

The Board, with Mr Bass absent and not voting, unanimously recommends you vote in favour of Resolution 6.

RESOLUTION 7 – REMUNERATION REPORT

The Remuneration Report is contained in the Directors’ Report of the Company’s 2014 Annual Report. The Report explains the Company’s executive remuneration practices and the link between the remuneration of employees and the Company’s performance and sets out remuneration details for each Director and for each named Executive.

The Corporations Act requires listed companies to put the Remuneration Report for each financial year to a resolution of members at their Annual General Meeting. Under section 250R(3) of the Corporations Act, the vote is advisory only and does not bind the Directors or the Company. However, if at least 25% of the votes cast on Resolution 7 are against adoption of the Remuneration Report at this Meeting, and then again at the 2015 Annual General Meeting, the Company will be required to put to Shareholders at the 2015 Annual General Meeting a resolution proposing the calling of an extraordinary general meeting to consider a spill of the Board (spill resolution).

If more than 50% of Shareholders vote in favour of the spill resolution, the Company must convene the extraordinary general meeting (spill meeting) within 90 days of the 2015 Annual General Meeting. All of the Directors who were in office when the 2015 Directors’ Report was approved, other than the Managing Director, will cease to hold office immediately before the end of the spill meeting but may stand for re-election at the spill meeting. Following the spill meeting those persons whose election or re-election as Directors is approved will be the Directors of the Company.

The Chairman will give Shareholders a reasonable opportunity to ask questions about or make comments on the Remuneration Report.

Voting exclusion statement

The Company will disregard any votes cast on Resolution 7 by or on behalf of a member of the key management personnel for the Sims Metal Management Limited consolidated group whose remuneration details are included in the Remuneration Report (each a KMP), or a closely related party (such as close family members and any companies the person controls) of a KMP, in any capacity (including as proxy), unless the vote is cast as proxy for a person entitled to vote on Resolution 7:

Board’s recommendation

The Board unanimously recommends you vote in favour of adopting the Remuneration Report.

RESOLUTION 8 – PARTICIPATION IN THE COMPANY’S LONG TERM INCENTIVE PLAN (LTIP) BY MR CLARO

The Board (with Mr Claro absent and not voting) believes it is appropriate that Group CEO, Mr Claro be entitled to be granted Performance Rights (which are subject to the performance hurdles described below) and Options (collectively Equity Rights), under the LTIP.

The Board believes that the grant of the Equity Rights, more fully described below, pursuant to the LTIP which was introduced in 2007, is an important element of the Company’s remuneration

strategy for the Group CEO, which includes fixed remuneration and other benefits (Total Fixed Remuneration or TFR), a short-term incentive (STI) and a long-term incentive (LTI) as set out in the Company’s Annual Report. Mr Claro’s total compensation currently comprises TFR of US$1,150,000 per annum, an annual STI opportunity of 100% of TFR (target) and 200% (maximum), and an annual LTI award equal to 200% of TFR. Consequently, the FY2015 LTI Award has a value of US$2,300,000. Subject to this Resolution 8 being passed, Mr Claro will be entitled to an LTI award (FY2015 LTI Award), comprising:

More details regarding the terms of these Equity Rights are set out below.

Reasons for the Equity Rights structure for the 2015 financial year grant

The Company is an organisation with approximately 60% of its revenue generated from North America, and a significant number of its executive team are based there.

Consequently, the Company must ensure that its executive remuneration approach reflects United States (US) compensation systems/practices, while being cognisant of Australian practices. The Board is of the view that Mr Claro’s FY2015 LTI Award meets both these requirements.

Reasons for approval

The approval of Shareholders is sought under Resolution 8 for the purposes of ASX Listing Rules 7.1 and 10.14.

If Resolution 8 is passed, then the Equity Rights, and any Shares issued on vesting and exercise of the Equity Rights, will not count towards the 15% limit imposed by ASX Listing Rule 7.1.

Exception 4 of ASX Listing Rule 7.2 provides that ASX Listing Rule 7.1 does not apply to an issue of equity securities on the conversion of convertible securities if the Company complied with the ASX Listing Rules when it issued the convertible securities. Therefore, if Resolution 8 is passed, Shareholder approval is not required under ASX Listing Rule 7.1 for the future issue of any Shares on exercise of any of the Equity Rights.

ASX Listing Rule 10.11 provides that unless a specified exception applies, the Company must not issue or agree to issue equity securities to a related party (which includes a director of the Company) without the approval of Shareholders. One of the exceptions to ASX Listing Rule 10.11 is if the issue of the securities is approved under ASX Listing Rule 10.14. Therefore, Shareholder approval is sought for the purposes of ASX Listing Rule 10.14, and if Resolution 8 is passed, Shareholder approval is not required under ASX Listing Rule 10.11 for the grant of the Equity Rights.

Additionally, Exception 7 of ASX Listing Rule 10.12 provides that ASX Listing Rule 10.11 does not apply if the director receives the securities on the conversion of convertible securities, if the Company complied with the ASX Listing Rules when it issued the convertible securities. Therefore, if Resolution 8 is passed, Shareholder approval is also not required under ASX Listing Rule 10.11 for the future issue of any Shares on exercise of any of the Equity Rights.

Detail of FY2015 LTI Award

If approved by Shareholders, Mr Claro will receive his FY2015 LTI Award in three components:

The grant of the FY2015 LTI Award will provide:

with vesting based both on performance and on continued employment.

This LTI structure ensures that Mr Claro focuses on shareholder value creation relative to companies within the Company’s industry, as well as earnings growth and absolute share price growth. This structure is more rigorous than other structures typically seen in the Australian market where, in difficult economic conditions, 100% of the LTI opportunity can still vest even if relative TSR performance is strong but no shareholder value has been created.

Accordingly, the Board believes that the proposed grant of the FY2015 LTI Award to Mr Claro is an approach which will support both the business direction of the Company in accordance with its 5 year strategic plan, and shareholder expectations.

Key terms of FY2015 Performance Rights

The performance period for the FY2015 Performance Rights is the three-year period commencing 1 July 2014 (Start Date) and ending 30 June 2017 (Test Date) (Performance Period).

The FY2015 Performance Rights will be tested for satisfaction of their vesting conditions at the Test Date. Any FY2015 Performance Rights which have not vested as at the Test Date will immediately lapse.

If the FY2015 Performance Rights vest, they will be automatically exercised (with no further action required on the part of Mr Claro) into Shares on 31 August 2017, being the last business day in August following the Test Date (Rights Vesting Date).

The TSR Performance Rights are subject to a vesting condition based on a TSR performance hurdle.

TSR measures the growth over a particular period in the price of shares plus dividends notionally re-invested in shares.

In order for any of Mr Claro’s TSR Performance Rights granted to him under the FY2015 LTI Award to vest, the Company’s TSR for the relevant Performance Period must be at the 50th percentile or higher against the TSRs of an international peer group of 15 specified comparator companies in the Company’s sector. The list of these comparators is in Annexure 1 to this Explanatory Memorandum.

Based on the Company’s relative TSR performance over the Performance Period, Mr Claro’s TSR Performance Rights will vest in accordance with the following table:

TSR is calculated in each case on the following basis:

(d) Earnings Performance Hurdle:

The Earnings Performance Rights are subject to a vesting condition based on an earnings performance hurdle. This hurdle measures the Company’s cumulative Earnings per Share (EPS) growth over the Performance Period.

The proportion of Earnings Performance Rights that vest will be determined in accordance with the vesting schedule below. The EPS hurdle assesses the success of the business in generating continued growth in earnings.

The EPS vesting schedule is as follows:

The EPS figure of the Company for a particular financial year (EPS Figure) is calculated taking the profit after tax of the Company and dividing it by the number of Company shares outstanding on the basis of diluted shares that takes into account the dilutive effect of share-based awards.

In the case of a bonus or pro-rata issue of shares, or certain other reorganisations of capital of the Company, then the methodology for calculating the EPS Figure shall be adjusted accordingly so that parity is preserved.

The Board may adjust the EPS Figure to exclude the effects of material business acquisitions or divestments and for certain one-off costs.

In addition to the Company meeting the applicable TSR performance hurdle and the earnings performance hurdle specified above, Mr Claro must also continue to be a full-time employee of the Company (or its subsidiary) at the Rights Vesting Date for the FY2015 Performance Rights to vest.

Unvested FY2015 Performance Rights lapse upon Mr Claro ceasing to be an employee, subject to his Executive Employment Agreement dated 7 October 2013 which may allow continued vesting in certain circumstances (referred to as a Qualifying Cessation). A Qualifying Cessation allowing continued vesting of any unvested FY2015 Performance Rights will occur in the following circumstances:

In the event of a Qualifying Cessation on or prior to the Test Date, Mr Claro’s unvested FY2015 Performance Rights will not immediately lapse, but instead will be retained and tested for satisfaction of vesting conditions at the end of the Performance Period (that is, the Test Date).

Where there is a Qualifying Cessation after the Test Date but prior to the Rights Vesting Date, Mr Claro’s vested FY2015 Performance Rights will, assuming they have satisfied the vesting conditions, not lapse but will instead be automatically exercised on the Rights Vesting Date.

All FY2015 Performance Rights will lapse and be immediately forfeited in cases of fraud, gross dishonesty or termination of Mr Claro’s employment for cause.

The Board has the discretion to immediately vest Mr Claro’s unvested FY2015 Performance Rights if:

Key terms of FY2015 Options

Vesting Schedule

Mr Claro must continue to be a full-time employee of the Company (or its subsidiary) at the relevant Options Vesting Date for the relevant tranche of FY2015 Options to vest.

Unvested FY2015 Options lapse upon Mr Claro ceasing to be an employee, subject to his Executive Employment Agreement dated 7 October 2013 which may allow continued vesting in certain circumstances (referred to as a Qualifying Cessation). These circumstances are detailed above in paragraph (e) under the heading ‘Key terms of FY2015 Performance Rights’.

In the event of a Qualifying Cessation, Mr Claro’s unvested FY2015 Options will not immediately lapse, but instead will vest in accordance with the original Vesting Schedule.

All FY2015 Options will lapse and be immediately forfeited in cases of fraud, gross dishonesty or termination of Mr Claro’s employment for cause.

The Board has the discretion to immediately vest Mr Claro’s unvested FY2015 Options if:

Equity Rights generally

In relation to both Performance Rights and Options, the Plan Rules:

issue or issue for cash), the terms of the Equity Rights will be changed to the extent necessary to comply with the ASX Listing Rules as they apply at the relevant time to a reorganisation of capital at the time of the reorganisation; and

ASX Listing Rules requirements

The following information is provided for the purposes of these ASX Listing Rules 7.3 and 10.15A:

No exercise price is payable to exercise the FY2015 Performance Rights (subject to the vesting conditions being satisfied).

The exercise price of the FY2015 Options is based on the average of the closing prices of the Shares traded on the ASX in the ordinary course of trade during the five trading days up to, but not including, the grant date of the FY2015 Options.

Voting exclusion statement

The Company will disregard any votes cast on Resolution 8:

unless the vote is cast as proxy for a person entitled to vote on Resolution 8:

Board’s recommendation

The Board, with Mr Claro absent and not voting, unanimously recommends you vote in favour of Resolution 8 which will complete the Company’s remuneration strategy for Mr Claro for the 2015 financial year.

RESOLUTION 9 – TERMINATION BENEFITS

Background

Under section 200B of the Corporations Act, the Company must not give a person a benefit in connection with the person’s retirement from an office, or position of employment, in the Company (or a related body corporate of the Company) (each, a Group Company) if:

unless Shareholder approval is obtained under section 200E of the Corporations Act for the giving of the benefit (or if a specified exception applies).

A “benefit” is defined broadly in the Corporations Act to include a payment or other valuable consideration. It also includes the accelerated or automatic vesting of share-based payments on or as a result of retirement from an office or position, a payment made in lieu of giving of notice of termination and a payment that

is made as part of a restrictive covenant, restraint-of-trade clause or non-compete clause.

There are exceptions for the provision of certain kinds of benefits, such as statutory entitlements to accrued annual and long service leave and certain benefits within a monetary cap. This monetary cap is, in broad terms, equivalent to one year’s annual average base salary of the relevant person over the period during which that person held a managerial or executive office (up to a period of three years).

If a termination benefit is given in excess of what is permitted under the Corporations Act, a breach of the Corporations Act can occur even if the person receiving the benefit is entitled to the benefit under their contractual arrangements with a Group Company.

Having regard to the potentially wide application of the restriction under section 200B of the Corporations Act, the Directors consider it to be appropriate and prudent to seek Shareholder approval under sections 200B and 200E of the Corporations Act, so that termination benefits may be paid or provided to relevant executives without breach of the Corporations Act.

Who does the approval relate to?

Persons affected by the restriction under section 200B of the Corporations Act, and in respect of whom approval is being sought under this Resolution 9, are any current or future director or employee who, at the time of his or her cessation from his or her office or employment, or at any time during the last three years before his or her cessation from his or her office or employment, held a managerial or executive office in a Group Company (Relevant Executives). These include members of the Company’s KMP and directors of the Company’s subsidiaries.

Relevant Executives are employed through a number of Group Companies and, due to the Group’s global scale, many of the Relevant Executives are employed outside Australia, particularly in the United States where the Group competes for much of its talent and business. The remuneration practices of the Group have therefore been designed to be consistent with local practices and regulations in the jurisdictions where these Relevant Executives are employed.

As at the date of this Explanatory Memorandum, the Relevant Executives include:

Details about the remuneration of these executives (other than Mr Knechtel who will commence employment with the Company in November 2014) are included in the Remuneration Report; and

Although the number will vary from time to time, the Company estimates that there are currently approximately 30 Relevant Executives that the restriction under section 200B of the Corporations Act could apply to.

It is important to note that Resolution 9 seeks approval, not just for the persons identified above, but also for any other current or future director or employee who, at the time of his or her termination or at any time in the three years prior to that date, was a KMP of the Company or held a managerial or executive office in the Company or a related body corporate.

Categories of termination benefits approval is being sought for

Shareholder approval is sought for the purposes of sections 200B and 200E of the Corporations Act for termination benefits that may be provided to Relevant Executives under the following agreements or plans:

Further information about these potential termination benefits is set out in Annexure 2.

Aspects of the Group’s Employment Agreements, STI Plan, LTI Plan, Redundancy Policies and other employment practices and policies may be varied from time to time by the Company in line with market practice, changing governance standards and needs of the Group. Where relevant, these changes will be reported in the Company’s Remuneration Report. However, it is intended that the approval set out in Resolution 9 will remain valid despite such variation, as long as the termination benefits continue to be within the scope of benefits set out in this Explanatory Memorandum.

Value of the termination benefits

Under section 200E of the Corporations Act, when seeking Shareholder approval of a termination benefit, Shareholders must be given details of the amount or value of the proposed payment or benefit, or if that amount or value cannot be ascertained at the time of disclosure, the manner in which that amount or value is to be calculated and any matter, event or circumstance that will, or is likely to, affect the calculation of that amount or value.

The amount and value of the termination benefits that may be provided to each Relevant Executive cannot be ascertained in advance. This is because various matters, events and circumstances (including the manner in which the individual retires from their role, the length of time they have been in their role, fluctuations in the Company’s share price and the exercise of discretions by the Board or Remuneration Committee), some of which are not within the Company’s control, will or are likely to affect the calculation of the amount or value. Annexure 3 sets out the manner in which the amount or value of the potential benefits will be calculated, and the matters, events and circumstances that will affect the calculation of that amount or value.

The amount and value of the benefits for which Shareholder approval is being sought under Resolution 9 is the maximum

amount or value of the benefit that could be provided to the Relevant Executive in connection with that person ceasing to hold an office, or position of employment, in the Company or a related body corporate.

Effect of the approval

Enables the Group to provide maximum benefits set out in this Explanatory Memorandum

If Shareholder approval is obtained to Resolution 9, then the Group will be able to provide termination benefits to Relevant Executives up to the maximum scope, amount and value described in this Explanatory Memorandum (including in Annexures 2 and 3). In particular, the Board will be able to exercise the discretions described in Annexure 2.

If approved by Shareholders, these benefits may be given to current or future Relevant Executives, and under existing, varied or new arrangements.

KMPs

All of the current KMPs of the Company (other than Mr McGree, who has a pre-existing employment agreement) have entered into new employment agreements with the Company (or a related body corporate) which entitle them to, subject to Shareholder approval, termination benefits on substantially similar terms to those approved by Shareholders at the Company’s 2013 Annual General Meeting for the Group Chief Executive Officer, Mr Claro. Shareholder approval to Resolution 9 will enable the Company to implement these new arrangements. If Shareholder approval is not obtained, the Company would need to consider potential alternative arrangements for these KMPs which may affect the Company’s ability to treat the KMPs on a consistent basis and impact on its ability to retain them or recruit new executives, particularly in the United States. The signing of these KMPs to new employment agreements was an integral precursor to the Company’s five year strategic plan that was announced to the market on 23 July 2014. The termination benefits that these KMPs would be entitled to, if approved, are linked to 12 month non-compete and non-solicitation provisions contained in their employment agreements.

If Shareholder approval is obtained, it is the Company’s current intention that all future KMPs will be provided termination benefits on terms which are substantially similar. Annexure 2 contains details of the potential benefits that the Company proposes to provide to current and future KMPs.

Any termination benefits provided to KMPs from time to time will be disclosed in the Company’s Remuneration Report for the relevant year.

Non KMP Executives

As noted above, Resolution 9 also covers other Relevant Executives who are not KMPs (Non KMP Executives). A number of these Non KMP Executives are entitled to termination benefits under their existing agreements with the Company (or a related body corporate), where some of these benefits are in accordance with local market practice in the jurisdiction in which that Non KMP Executive is employed.

Approval by Shareholders of Resolution 9 will also enable the Group to meet its contractual obligations to provide termination benefits to these Non KMP Executives where it might otherwise have been prohibited from providing that benefit under the Corporations Act.

Other effects

Further, Shareholder approval to Resolution 9 will enable the Group to:

If Resolution 9 is not passed, the Group’s ability to achieve the objectives mentioned above may be affected. It may also affect the willingness of employees to join the Group or serve as a KMP or a director of a Group Company, and the Group’s ability to retain employees or recruit new executives, particularly in the United States.

Voting exclusion statement

A vote must not be cast on Resolution 9:

unless the vote is cast as proxy for a person entitled to vote on Resolution 9:

Board’s recommendation

The Board (with Mr Claro absent) has formed the view that the termination benefits described in this Explanatory Memorandum are fair and reasonable. The Board, with Mr Claro absent and not voting, therefore unanimously recommends you vote in favour of Resolution 9.

		We are growing our metals recycling volumes through organic market share and selective acquisitions, while returning to growth in electronics recycling through asset management and services.

$40 million

increase in EBIT expected through internal growth initiatives.

ABOVE SACRAMENTO, CA

– METALS RECYCLING

MIDDLE JERSEY CITY, NJ

– METALS RECYCLING

BELOW BROOKLYN, NY

– MUNICIPAL RECYCLING

RESULTS AT A GLANCE

STRATEGIC PROGRESS

During FY14 the Company continued actions to streamline and develop the North American operational footprint. In July 2013, the Company announced the sale of its US-based Aerospace Metals business, a non-core business specialising in the recycling of titanium alloys and high temperature metals. Further rationalisation measures included the sale of metal recycling assets in Utah and Birmingham, Alabama as well as the idling of the underperforming Mobile, Alabama-based operations.

Additionally, in June 2014, restructuring initiatives were announced which determined the electronics recycling business of SRS Canada to be outside of the Group’s long term strategic interests. Further to the exit from SRS Canada, the operations of smaller US SRS facilities in Edison, New Jersey and Dallas, Texas were consolidated with other sites during FY14 in order to lower fixed costs and increase throughput rates across the remaining facilities.

These decisions have benefited the Company by creating a more efficient operating structure, reducing controllable costs, and allowing management to focus on better performing and higher growth potential operations. Proceeds from these asset sales are being invested in projects anticipated to have higher returns. This includes the development of a New England metals recycling footprint, with a greenfield yard, shredder and export facility in Rhode Island, and stage one of the NYC Municipal Recycling project, both of which were completed during the first half of FY14.

OUTLOOK

The majority of key leading indicators for secondary metal generation continued to improve during FY14. Consumer confidence, new vehicle sales, and major appliance shipments all improved meaningfully over the prior year. Despite these encouraging signals, and hampered by abnormally severe winter weather and a decline in commodity prices, North American metals recycling business conditions remained difficult during the past 12 months.

The Company is resolved to improve earnings through factors within its own control. As part of its five year strategic plan announced near the end of FY14, the Company delivered further streamline actions which will positively impact the North America businesses. These include consolidating North America metals recycling from seven operating regions to three, and reducing overhead costs at the regional level. These actions are expected to deliver annual EBIT benefits of $11 million, with anticipations that 50% of the target will be achieved in FY15 and the full 100% in FY16.

ABOVE NEW ZEALAND

– METALS RECYCLING

MIDDLE ST MARYS, NSW

– METALS RECYCLING

BELOW HAMPTON PARK, VIC

– LMS ENERGY

RESULTS AT A GLANCE

STRATEGIC PROGRESS

The Company continued to reinvest in businesses across the Australian region during FY14. Most notably, this included the commencement of development on a new shredding facility in Western Australia for the metals recycling business, but also included further growth in the small, but expanding SRS business in the emerging markets of South Africa, Dubai and India.

The new operation in Kwinana, Western Australia will represent the final stage of our shredder replacement placement program and off-line downstream non-ferrous recovery plant installations in Australia. Upon completion, all operations will have expanded processing capacity with the most up-to-date metals recovery technology available. Kwinana itself will be the Company’s largest operation in Australia, and will replace the current footprint-constrained operations running outdated equipment. The Company expects the Kwinana shredder to be operational late in the second half of FY15.

OUTLOOK

The outlook for economic activity in Australia appears to be diminishing after a decade of consistent growth driven by strong demand for raw materials and rising commodity prices. Declining investment in the mining sector, coupled with weak manufacturing activity, caused unemployment levels to reach a 12 year high in July 2014. Consequently, consumer confidence, a key leading indicator for consumer secondary metal generation, has begun to retreat.

Within this challenging environment, several metal recycling competitors have either left markets or scaled back operations. These developments have created opportunities for the Company to better service suppliers in several markets, as well as investing in the new shredding operation in Western Australia.

In order to spur growth, the Reserve Bank of Australia has held interest rates at a historic low of 2.50%. As a result, the Australian dollar has weakened materially against the US dollar and other major currencies. While low interest rates and a lower Australian dollar should assist in stimulating greater economic activity and improve the attractiveness of exports, significant tangible benefits to the Australian economy have not yet been seen.

In line with the Company’s five year strategic plan to generate stronger earnings and margins, the Australian business remains focused on the actions within its control. Optimising the business based on the core drivers of profitability will remain a priority for FY15.

ABOVE NEWPORT, UK

– METALS RECYCLING

MIDDLE HARTLEPOOL, UK

– METALS RECYCLING

BELOW DUMFRIES, UK

– ELECTRONICS RECYCLING

RESULTS AT A GLANCE

STRATEGIC PROGRESS

In June 2014, the Group announced restructuring initiatives which determined a substantial portion of UK SRS to be outside the Group’s long-term strategic interests. These loss-making businesses operated under hypercompetitive conditions where competitive advantages could not be gained or past technology investments could not be successfully commercialised. The Group’s UK Metals operations, fridge recycling and IT asset management solutions were not impacted by the restructuring activities. Post the restructuring actions, the remaining metals recycling and SRS businesses in Europe remain profitable and are in supportive legislative environments.

OUTLOOK

Economic conditions in the European region have shown signs of improvement, with particular strength noted in the UK. Consumer confidence in the UK lifted materially in FY14, reaching a nine year high in June, while GDP growth in the June quarter of 3.1% was above the pre-GFC peak. Encouragingly for the UK Metals business, the 2013 UK new car market had its best year since 2007 with 2.3 million cars registered, an 11% increase over the prior year.

More broadly considered though, Europe continues to exhibit slow and unbalanced growth which is exacerbated by high levels of debt. Unemployment remains problematic and there is an absence of inflation. As well, political instability evidenced by military conflict in the Ukraine and the Middle East has added uncertainty to the economic conditions in the Group’s markets. These characteristics demonstrate the challenging environment our businesses face in Europe.

During FY15, the initial benefits related to the Streamline portion of the five year strategic plan are expected to be realised. Of this, $20 million in annual EBIT benefits are expected to be gained across the Global SRS business due to footprint rationalisation and cost reductions, with 50% to be achieved in FY15 and the full 100% in FY16. The majority of these benefits are associated with the exit from loss making operations in UK SRS.

HIGHLIGHTS

ENVIRONMENT

Energy use and CO₂ emissions reduced by 6% and 4% respectively over the prior year. The 11.8 million tonnes of material recycled by the Company in FY14 saved 13.5 million Mwh of energy and 12.8 million tonnes of CO₂ by replacing virgin materials. That is equivalent to the energy used by 7.3 million average homes, the carbon footprint of around 700,000 people living in Australia or the USA, or the carbon mitigated by the planting of 12.8 million trees over a 100 year lifespan

HEALTH AND SAFETY

Lost time injury and medically treated injury frequency rates declined by 25% and 13% respectively through a focus on pre-emptive awareness training

PEOPLE AND DIVERSITY

The percentage of females employed in middle, senior and executive management increased to 20%

COMMUNITY

As one of the world’s leading metals and electronics recycler, we take a proactive approach to working with governments, industry, educational facilities and environmental advocacy groups on matters of sustainability and resource efficiency

ENVIRONMENT

ENERGY, FUEL AND ELECTRICITY

Total energy use for the Group in FY14 was 2,487,899 GJ, a decrease of 6% from FY13. This trend was the result of energy efficiency measures as well as reduced production in our North American operations. Diesel usage remained the highest energy component at 53%, followed by electricity at 36%, gas at 8%, LPG at 2%, and petrol at 1%.

North America: Solar arrays at the Brooklyn and Claremont facilities were completed and commissioned, generating more than 500Mwh and 200Mwh respectively since start-up. The region also continued with its mobile equipment upgrade to tier 4 diesel engines. At the SRS plant in Roseville, upgrading the shredder line has introduced significant energy savings along with the upgrading of lighting at SRS West Chicago, which will provide estimated energy savings of more than 360,000Kwh per year.

Europe: The “Energy Forum”, comprising all major operational stakeholders, was established and tasked with identifying opportunities for continued and sustainable reductions in energy consumption. The “Switch Off” campaign was launched to further assist in the reduction of unnecessary energy consumed in lighting, heating and other areas. A comprehensive survey of equipment run-down times and idling was conducted to eliminate non-beneficial running of equipment.

Australasia: During the year, the remaining secondary aluminium smelter at Laverton, Victoria was closed, with significant reductions in gas and associated energy consumption.

HEALTH AND SAFETY

Safety is the first and most important priority in every task and operational activity that we undertake. An enormous amount of training and resources is dedicated to this most crucial aspect of our operations. As an executive rule, operational activity will be shut down if a near miss or unsafe situation is identified, and will not recommence until the issue is fully understood and rectified. At an individual level, working safely is a non-negotiable condition of being present on the Company’s sites. It is integral to every task performed, be it by an employee, a contractor or a visitor. Not only are the traditional lagging indicators, such as LTI’s, MTI’s, as well as minor incidents, recorded in the Company’s global data base but, equally, leading indicators raised within safety conversations (known as Observational Behaviour Audits – OBA’s) of any unsafe act and near miss are recorded and analysed with the objective of eliminating any repeat. A considerable amount of the more than 150,000 training hours delivered during FY14 were specifically dedicated to safety.

It is pleasing to report, through the Company’s unwavering focus on safety, incidents declined meaningfully over the prior year. The lost time injury frequency rate (LTIFR) for the Group in FY14 was 2.7, a decrease of 25% on FY13. Similarly, the medically treated injury frequency rate (MTIFR) for FY14 was 11.0, a decrease of 13% over the prior year. The Company also tracks, on par with its full time employees, the incident statistics for contractors and temporary workers, although the nature of individual contracts does not allow the Company to calculate the associated frequency rates.

Under this Company wide safety framework, each region pursues and implements specific safety initiatives of immediate and individual relevance to its operations. During YF14, these included:

North America Metals: The quality of safety observations and their allocated corrective actions was targeted across all divisions, and training delivered improved performance in this area. Supervisors and managers were also retrained with the aim of delivering improved information value on incident investigations. A specific safety campaign “A Hundred Days of Summer” highlighted issues relating to employees standing in for others on leave.

UK Metals and SRS Global: Each facility was tasked with providing specific site action plans to maintain and implement the deliverables of the SimsMMway safety platform. These included site managers receiving formal training on behavioural science to better understand and influence behaviour. A “Stop the Yard” initiative was introduced, where all operational activities are stopped for ten minutes each day to discuss yard activities and their interaction, in a safety context. Specific to SRS, training targeted pedestrian and vehicle interaction and the expected standards of safety performance as it relates to manual de-manufacturing and dismantling of components.

Australia and New Zealand Metals: The shared values of “Think Safe – Work Safe – Home Safe” were strongly promoted and supported by a range of targeted training and workshops. “Simsafe” – an individual risk assessment process incorporating responsibility, accountability and authority was also implemented, combined with specific presentations to management and delivery of training to all workers. Initiatives relating to the most common injuries, improvements, and what SHEC Managers will do differently in the future, were target issues during FY14.

Statutory loss per share improved to 43.5 cents in FY14 compared to a statutory loss per share of 228.6 cents in FY13. Underlying diluted earnings per share increased to 33.6 cents in FY14 from 7.7 cents per share in FY13.

The Company determined to pay a final dividend for FY14 of 10.0 cents per share, which will be fully franked. This is an exception to the Company’s dividend policy which is to distribute 45% to 55% of NPAT, subject to the discretion of the Board and remains unchanged.

CASH FLOW AND BORROWINGS

Cash flow from operating activities of $210.1 million in FY14 decreased by $87.2 million versus FY13 due to increased working capital requirements, higher income tax payments and lower dividends received from associates and joint ventures.

Capital expenditures were $64.1 million during FY14 which was significantly lower than capital expenditures of $149.0 million in FY13. Lower capital expenditures reflect the recent completion of a number of major capital investments. The primary capital expenditures in FY14 relate to the following projects:

As at 30 June 2014, the Group had a net cash position of $42.3 million. The Group’s gearing ratio as at 30 June 2013 was as follows:

The Group’s strong cash flow and balance sheet position provides the capacity to fund the ongoing operational requirements of the business, as well as potential increased working capital requirements as underlying business conditions improve. Maintaining low gearing and a secure balance sheet remains a focus of the Group.

CORPORATE GOVERNANCE STATEMENT

The directors and management of Sims Metal Management Limited (the “Company” or the “Group”) are committed to operating the Company’s business ethically and in a manner consistent with high standards of corporate governance. The directors consider the establishment and implementation of sound corporate governance practices to be a fundamental part of promoting investor confidence and creating value for shareholders, through prudent risk management and a culture which encourages ethical conduct, accountability and sound business practices. The Corporate Governance Statement of the Company for the 2014 financial year has been prepared with reference to the Australian Securities Exchange (ASX) Corporate Governance Principles and Recommendations (including 2010 Amendments) (Recommendations). The Company has complied with the Recommendations.

PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

1.1 BOARD OF DIRECTORS

The board is responsible for the corporate governance and overall performance of the Company and the Group and for providing strategic guidance for the Group. The responsibilities of the board encompass the setting of key objectives, monitoring performance and ensuring the Group’s internal control, risk management and reporting procedures are adequate and effective.

1.2 THE ROLE AND RESPONSIBILITIES OF THE BOARD AND SENIOR EXECUTIVES

The role and responsibilities of the board are formally set out in its charter. The board charter identifies the functions reserved for the board and those delegated to senior executives.

The board’s key responsibilities include:

The board has delegated general authority to manage the businesses of the Company to the CEO, who in turn may delegate functions to other senior management. However, the CEO remains answerable to the board and must comply with any limits on his authority established by the board from time to time. Effective 1 July 2013 the board created a Global Leadership Team to serve in lieu of the CEO while a search was accomplished to appoint a new CEO. Galdino Claro was appointed CEO of the Company on 4 November 2013.

Letters of appointment have been provided to all non-executive directors, covering responsibilities, time commitments, performance evaluation, indemnity and insurance arrangements, and induction and development. The responsibilities and terms of employment of certain senior executives of the Group are also set out in formal contracts of employment.

1.3 PERFORMANCE EVALUATION OF SENIOR EXECUTIVES

Annual performance objectives are set each financial year for all senior executives of the Group. These performance objectives include both financial and non-financial measures. A year-end appraisal is conducted to assess performance against the executive’s personal priorities and the responsibilities and demands of their role. The outcome of the performance review process is reflected in training and development/executive coaching programs, as needed, and succession planning for each executive, as well as an annual remuneration review. For the 2014 financial year, annual performance reviews were completed in accordance with the process disclosed.

The Remuneration Report on pages 48 to 74 contains further information regarding the process for evaluating the performance of senior executives for the purpose of determining their fixed and variable remuneration.

1.4 EXECUTIVE INDUCTION PROGRAMS

Senior executives are able to attend formal induction programs which provide an overview of the Group, and its key policies and processes. Meetings are arranged with other senior executives in the Group to brief the new executives on the Group’s businesses, strategic objectives, risk management practices and other information necessary to meet the requirements of their roles. Site visits are also arranged to familiarise the executives with the Group’s operations and key operating personnel.

A copy of the board charter is available from the corporate governance section on the Company’s website.