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Sigma Company Limited Annual Report 2004/2005

Our Strategy: To be the leading Australian

pharmaceutical manufacturer and marketer, and
the most efficient and effective pharmaceutical
wholesale and retail service provider in Australia.

01 Key Highlights
02 Company Profile
03 Five Year Summary
05 Chairman’s Report
07 Managing Director’s Report
08 Chief Financial Officer’s Report
10 Pharmaceutical Division
14 Healthcare Division
18 Sigma Products
20 Management Profiles
22 Board Of Directors
24 Corporate Governance
27 Financial Report
80 Security Holders Information
IBC Shareholder Information
Key Highlights

Maintaining Strategic Focus Continued Financial Success Pharmaceutical Division Healthcare Division
Sigma’s focus on its strategy All key financial performance Sales in the Pharmaceutical Sales in Healthcare are up
has again seen strong indicators are at record high Division are up 9.3% and 10.8% and EBIT is up 27.7%.
shareholder returns. Full levels for Sigma. Profit After Earnings Before Interest Healthcare has maintained
year dividend is up 30% to Tax (PAT) is up 34.8%, Return and Tax (EBIT) is up 19.9%. its focus on continuing to
26 cents per share, and the on Capital Employed (ROCE) Pharmaceuticals have improve the service to our
share price continues to is 19.9%. centralised regulatory customers whilst driving
reflect our sustained success. We have maintained our and quality assurance operational efficiencies.
Sigma is also committed to focus on improving returns processes under the Healthcare will complete the
reinvesting in our business to whilst managing risk to Scientific Affairs umbrella. implementation of the new
lay the foundations for future the business. This places We continue our focus on integrated Information
growth and success. Sigma in a strong position acquiring brands and Technology solution during
Page to reinvest in the business businesses that fit our strategy the 2005/2006 year.
and further strengthen our and add value to our business. Healthcare has recently
05 ability to continue to deliver
returns for shareholders in
The Pharmaceutical Division
has commenced a significant
launched a new Retail brand,
Amcal Max. Amcal Max
the years ahead. redevelopment of our provides Sigma with a
Page Dandenong manufacturing complete suite of pharmacy
plant that will deliver business solutions to offer our current
07 efficiencies, improved capacity
and provide a platform for our
and potential customers.
future growth.
Page 15

Sigma’s History • Acquisition of QDL in 1996 • Acquisition of SmithKline • Acquisition of the Herron Group in
• Listing on Exempt Stock Beecham’s Dandenong May 2003
• Founded in Melbourne in 1912 by
Exchange in 1997 manufacturing facility in 1999 • Included in the ASX Top 100 in
two pharmacists
• Acquisition of Guardian pharmacy • Full ASX listing in 1999 October 2003
• Manufacturing activities
commenced in 1942 banner group in 1997 and Amcal • Acquisition of Aventis’ Baulkham
in 1998 Hills manufacturing business in
June 2000 Sigma Company Limited Annual Report 2004/2005
Company Profile
Sigma is a leading Australian pharmaceutical
manufacturer, wholesaler and retailer with annual
sales of $2.1 billion and EBIT of $104.8 million.

Divisional Sales contribution: Divisional Margins contribution:

Healthcare Pharmaceuticals Healthcare Pharmaceuticals





02 Sigma Company Limited Annual Report 2004/2005

Five Year Summary

2005 2004 2003 2002 2001

Operating results A$’000 (excludes significant items)
Sales revenue 2,095,788 1,903,119 1,733,403 1,663,970 1,522,130
EBITDA 124,427 101,280 74,224 61,641 53,614
EBIT 104,849 83,600 57,246 46,454 38,575
Profit before tax 83,855 67,297 47,040 35,886 28,717
Profit after tax 57,262 44,195 30,963 21,935 16,809
Financial Position A$’000
Working Capital 180,466 145,299 129,108 147,525 172,597
Fixed assets (incl intangibles) 366,625 342,056 212,560 184,254 194,634
Other assets & liabilities 2,732 (6,895) (9,202) (5,644) (8,127)
Capital Employed (year end) 549,823 480,460 332,466 326,135 359,104
Net debt 192,209 155,862 56,303 64,854 108,460
Net assets 357,614 324,598 276,163 261,281 250,644
Shareholder Related
– per share 26.0 c 20.0 c 13.5 c 10.0 c 7.5 c
– total ($’000) 37,140 28,344 18,866 13,813 10,295
Earnings per share
– Before significant items 40.3 c 31.4 c 22.4 c 16.0 c 12.3 c
– After significant items 41.9 c 31.4 c 22.4 c 16.0 c 6.5 c
Dividend payout ratio 65% 64% 61% 63% 61%
Market Capitalisation (year-end) $1,284m $999m $554m $548m $193m
Shares on issue (thousands) 142,869 141,737 138,863 138,138 137,216
Ratios & Returns
Return on Adjusted Capital Employed 19.9% 18.6% 17.0% 14.2% 10.7%
Return on Shareholders’ Equity 16.7% 13.6% 11.2% 8.4% 3.6%
EBIT margin 5.0% 4.4% 3.3% 2.8% 2.5%
Gearing 35.0% 32.4% 16.9% 19.9% 30.2%
Net tangible assets per share 182 c 157 c 160 c 147 c 137 c
Interest cover (times) 5.0 5.1 5.6 4.4 2.8
Current ratio 1.5 1.1 1.4 1.6 1.3

Sigma Company Limited Annual Report 2004/2005

“Sigma has again had a very strong year, by
all standards. This strong performance enables
reinvestment in the business and lays the
foundations for our future growth.”
John Stocker AO

Sigma Company Limited Annual Report 2004/2005
Chairman’s Report

The Year in Review Our strong performance is Corporate Governance

Five years ago, Sigma’s Board reflected in the returns offered remains paramount. The
and Management devised a to shareholders by way of Board is fully committed to
strategy to optimise the dividends and through the ensuring that we comply in
growth and performance of share price. Dividends paid all material respects with the
the company. Sigma has and to shareholders have best practice principles in
continues to be focussed on increased to 26 cents per corporate governance and
the execution of that strategy ordinary share for the risk management.
and the pursuit of our goals. 2004/2005 year. This is a very exciting time for
The strategy has four key The market has again Sigma; the investments we
elements aimed at ensuring rewarded our strategic focus have made provide the
our future success: and performance with a strong platform from which the
share price performance. growth of this great Australian
• Profitably growing our company will continue.
pharmaceuticals business Investing in our Future
Finally, the Board would like
through strategically Last year I reported that the to acknowledge the efforts of
aligned acquisitions and Board had endorsed a our employees who have
organic growth; facilities strategy review in our been instrumental in Sigma’s
• Driving operational Pharmaceutical business. achievements. We look
efficiencies and profitable This review has been forward to their continuing
sales growth; completed and work enthusiastic contributions in
• Investing in our banner has commenced to what promises to be a
memberships to improve significantly extend and rewarding period ahead.
redevelop our Dandenong
offerings for pharmacists
facility to provide operational
and increase support for
efficiencies and increase
Sigma distributed and capacity. This is an important
manufactured products; step in laying the foundations
• Maximising returns whilst for our future growth in
managing risk. pharmaceuticals.
Dr John Stocker AO
Our success in implementing In our Healthcare business,
this strategy has been evident we have further demonstrated
in the performance of the our ongoing commitment
company over the past 5 years. to both our pharmacists and
The financial year just the community with the
completed is no exception. development of a new banner
All key indicators of financial group – Amcal Max. This
health showed continued banner complements the
improvement during the existing Amcal and Guardian
2004/2005 year. Sales, banner groups and provides
Earnings Before Interest pharmacists with a greater
and Tax (EBIT), Profit Before flexibility in their choice of
Tax, Profit After Tax and banner offerings.
Return on Capital Employed Amcal Max will continue
(ROCE) have all improved to the profitable growth of
record levels. Sigma’s Healthcare business
and contribute to the
success of our individual
pharmacist customers.

Sigma Company Limited Annual Report 2004/2005

“The performances of both our Pharmaceutical
and Healthcare businesses have combined to
deliver 34.8% growth in profit after tax including
a 29.6% growth in underlying profit after tax.
This strong result is recognition that our
strategy is working; we are confident that Sigma
can continue to deliver in this way.”
Elmo de Alwis
Managing Director

Sigma Company Limited Annual Report 2004/2005
Managing Director’s

Financial Results Ensuring our Future Success for improved returns and
Sigma has achieved At the same time as better service to our customers.
$59.6 million in Profit After delivering strong profit growth Healthcare has also launched
Tax (PAT), including one-off and return to shareholders, the new pharmacy banner
impacts of $2.3 million we are continuing to invest in group, Amcal Max. This
from the entry into tax Sigma’s future. new brand offers consumers
consolidations, representing The Pharmaceutical business a fresh retail pharmacy
a 34.8% increase from the continues to seek brand and experience and now provides
$44.2 million achieved in business acquisitions that will our pharmacist customers
2003/04. Underlying growth contribute to our sustained with a complete suite of retail
excluding one off impacts profit performance. We have service offerings through the
was 29.6%. Return on Capital been successful in concluding Amcal, Guardian and Amcal
Employed has improved to strategic acquisitions thus far Max banners.
19.9%, up from 18.6% in and integrating them into the These are significant and
2003/2004. Sigma business and we remain exciting re-investments in our
The most pleasing aspect of confident of our ability to Pharmaceutical and Healthcare
this solid performance is the continue to do so in the future. businesses. We are building
continuation of the growth Given the critical importance the basis of Sigma’s continued
trend of recent years. The of regulatory compliance, growth and prosperity well
consistency of the results Sigma has centralised quality into the future.
over the past four years is control and regulatory affairs
testimony to the strategy The management team and
functions into the newly
Sigma has in place and the I are confident that the
formed Scientific Affairs
commitment and ability of underlying business
department. This is a
staff and management to significant and necessary (excluding the one-off impact
implement it. investment of resources in this of Tax Consolidations) will
Our Pharmaceutical business area and we are confident it deliver organic growth of15%
has continued to grow will further strengthen our in PAT for the 2005/2006 year.
profitably, with sales up 9.3% commitment to quality control The strong performance
and EBIT up 19.9% over the and assurance. reported for the year in review
prior year. Our strategy of Our Dandenong facility has has been delivered through
both organic growth and the begun a redevelopment the combined efforts of all
strategic acquisition of involving the construction of a employees of Sigma and the
brands has continued to new raw materials continued guidance and
deliver, despite the warehouse. As part of our support of the Board. I would
significantly increased level of facilities strategy, our plant at like to thank them for their
expenditure on compliance- Croydon is scheduled to efforts and I look forward to
related costs and continued cease operations in the their continued support in the
product rationalisation. second half of 2005/2006 with year ahead.
Our Healthcare business operations being transferred
continues to lead the industry to Dandenong.
in operational performance. The Healthcare business has
Sales in Healthcare rose continued the implementation
10.8% to $1.82 billion and of its new integrated Information
EBIT margin increased from Technology solution. Integrated
2.2% in 2003/2004 to 2.5% in financial, customer and Elmo de Alwis
2004/2005. This sustained supply chain information is Managing Director
improvement is indicative of provided by the system to
our success in simultaneously enable Healthcare to further
focussing on growing sales enhance customer service
whilst striving for operational and drive operational
efficiencies. efficiencies as we search

Sigma Company Limited Annual Report 2004/2005

Chief Financial Officer’s Report
Sigma’s 2004/2005 profit performance represents the fourth consecutive year of
profit growth above 30%. The guiding principles of continued improvement in profit
from an efficient capital base at an acceptable level of risk continue to be our focus.

Improving Profits Profit after tax (A$m) This was offset by an increased
level of working capital reflecting
Sales revenue (A$m) 2005 2004 higher trade receivables in
2005 2004 Group wholesaling, which is the net
(Excluding tax effect of sales growth, timing
Pharmaceutical 323 295 consolidations) 57.3 44.2 differences on GST payments
Healthcare 1,825 1,647 on customer sales, offset by
the effect of continued growth
Inter group Sales (52) (39) (including tax
consolidations) 59.6 44.2 in the Sigma Rewards program.
Total Group 2,096 1,903
Profit after tax has increased Efficient Use of Capital
Sales for the Sigma Group grew by 34.8% including the one-off Sigma Rewards Program
by 10.1% over the past year. effect of tax consolidations.
Both divisions contributed Without this, underlying profit 2005 2004
strongly with Pharmaceutical increased by 29.6%. Number of
sales increasing by 9.3% to The impact of Sigma entering participants 887 788
$323 million, and Healthcare the tax consolidation regime
sales increasing by 10.8%, Annual sales
was a one-off benefit of
compared to industry growth (A$m) 855 686
approximately $2.3 million.
of 6.75%. This is included within tax The Sigma Rewards program
EBIT (A$m) expense, which accounts for has continued to grow over
the lower effective tax rate in the past 12 months and now
2005 2004 the 2004/2005 year. accounts for just under 50%
Dividends (cents per share)
of wholesaling revenue.
Pharmaceutical 63.8 53.2
The program has now been in
Healthcare 46.3 36.3 2005 2004 place for 4 years and during
Corporate & Dividends paid the past 12 months all aspects
Unallocated (5.3) (5.9) and declared 26.0c 20.0c of the program were thoroughly
reviewed. The key change
Total 104.8 83.6 Franking 100% 100% has been for ANZ to assume
Group EBIT increased by Payout ratio 65% 64% the role of funding provider to
25.4% compared to the year the program from April 1st
ending January 2004. Sigma has maintained its 2005. WCM will continue to
Organic growth was the key approach of paying manage the administration of
driver within Pharmaceuticals approximately 60%-65% of the loyalty program.
and a combination of net profit after tax in dividends.
Net debt (A$m)
increased market share and Operating Cash Flow (A$m)
reduced operating costs were 2005 2004
the key drivers in a 27.7% 2005 2004
improvement in Healthcare. Group
Cash Working (Year end) 192 156
The Pharmaceutical result Profit 77 64
was particularly strong given Group
Working Capital (Average) 204 160
approximately $5 million of
movement (35) 11
additional compliance costs The increase in net debt
were included in the results. Net Cash flow levels over the past 12 months
from Operations 41 75 is a combination of the funds
Cash working profit from required for the Boots and
operations improved by $13m, Wyeth brand acquisitions, the
which was driven by stronger early cancellation of all bar
operating performance. one of Sigma’s Sale and
Lease back transactions and
higher working capital.

Sigma Company Limited Annual Report 2004/2005
Allowing for mid-month Managing Financial Risk Impact of International
funding peaks Sigma’s Accounting Standards
Pharmacy Guarantees ($m)
gearing continues to sit Sigma has been through a
between 35% and 40%, which 2005 2004 detailed process over the
allows Sigma to comfortably past 12 months to assess
take on small to medium size Gross Liability 122 170
the impact of adopting the
acquisitions. Our medium term Contingent Australian equivalent to
target continues to be to hold Liability 26 52 international financial reporting
gearing between 25% and 40%. standards (AIFRS), which are
All full-line wholesalers in
Adjusted Capital Employed Australia have traditionally applicable for Sigma from
(A$m) provided pharmacy February 1st 2005. A specific
guarantees to their customers project team was established
2005 2004 involving key corporate and
to support the purchase of
Group 527.4 449.7 pharmacy businesses. Sigma divisional representatives
has succeeded in working to ensure this process was
The increase in adjusted managed efficiently.
with its banks in developing
capital employed is a Sigma has completed the
more innovative solutions
reflection of the Boots and majority of the work required
that provide an improved
Wyeth purchases, the and where numbers are able
outcome for the pharmacist
cancellation of most of the to be reliably estimated these
and remove the obligation for
Sale and Lease back have been included in the
Sigma to provide a guarantee.
transactions noted earlier and financial report (see Note 32).
higher working capital. This is reflected in the
continued run down of the We expect to finalise this
Earnings Per Share/Return on guarantee balance achieved work and release full details
Capital Employed over the past 3 years. of the impact with our
accounts for the half year
2005 2004 Interest Rate Hedging ending 31 July 2005.
Return on The combination of Outlook
Adjusted outstanding corporate debt
Capital and the restructure of the Sigma currently expects that
Employed 19.9% 18.6% Sigma Rewards program profit after tax for the
now means Sigma has 2005/2006 year will grow by
arrangements totalling approximately 15%
Per Share
(excluding tax $350-$400m where bank bill (excluding the one-off impact
consolidations) 40.3 31.4 rates (BBSY) is the key of Tax Consolidations). We
determinant of the overall cost continue in our pursuit of
The 19.9% return is well in of these programs. opportunities to improve this
excess of the Group’s current performance further.
cost of capital, which is 12% At year-end Sigma has
(pre-tax). hedged $165m of this
exposure using a combination
Earnings per share growth of of swaps and options (full
28% is consistent with the details are shown at Note 31
movement in Group profit to the financial statements).
performance offset by the Mark Hooper
additional shares issued under
Chief Financial Officer
the employee share plan.

Sigma Company Limited Annual Report 2004/2005

The Pharmaceutical business has again
maintained strong growth. Sales increased by
9.3% and EBIT increased 19.9%. Our focus on
business development initiatives provides a
framework for Sigma to continue to grow sales
and profitibility through both organic growth
and strategic aquisitions.

Sigma Company Limited Annual Report 2004/2005

Financial Results Further development work is A key initiative in 2005/2006

The 2004/2005 year has anticipated following the will be the implementation
seen sales increase to completion of the review. of a national integrated
$322.9 million, up from As part of the review, our electronic management
$295.4 million in the year prior Croydon plant is scheduled system to manage the
– an increase of 9.3% – and to cease production in company’s quality systems.
EBIT increase by 19.9%, the second half of 2005, This is expected to deliver
to $63.9 million from with production being improvements both in
$53.3 million in 2003/2004. transferred to Dandenong. compliance and productivity.
Consistent with our strategy Wherever possible, Scientific Affairs is an
of accretive acquisitions and employees at the Croydon important function in the
investments in our business, plant are being relocated Pharmaceutical business that
Return on Adjusted Capital to the Dandenong facility. will continue to play a key role
Employed (ROCE) in in our future success.
Scientific Affairs
Pharmaceuticals has Business Development
continued to improve to 20.4%, During 2004/2005, Sigma
up from 20.0% in 2003/2004. further enhanced its Sigma has consistently
regulatory and quality delivered on our strategy of
Facilities assurance processes with the making commercially aligned
Last year we foreshadowed centralisation of teams into acquisitions every six months,
that we were undertaking a the newly created Scientific on average.
facilities strategy review. Affairs department. In November 2004 Sigma
This review has been largely Overseen by Dr Philip acquired a suite of prescription
completed and development Marshall, Scientific Affairs is products from Boots
work has commenced at responsible for ensuring (including Coumadin,
our Dandenong facility. Sigma’s quality and regulatory Marevan , Endone, Tertroxin
Initial work will see the policies, practices and and Dindevan). The
construction of a new Raw procedures comply with acquisition of these products
Materials Warehouse facility Australian regulatory and a second tranche of
that will improve our materials requirements. The Therapeutic prescription products
handling capabilities and create Goods Administration (TGA), acquired from Wyeth in July
extra capacity at the plant. which is a unit within the 2004 (Ledermix, Artane and
Federal Department of Diamox), illustrates our ability
Health and Ageing, is to deliver on our strategy of
Australia's medicine watchdog expanding our portfolio of
and ensures that all value adding products.
pharmaceutical companies, Sigma also acquired exclusive
including Sigma, comply rights to the distribution of the
with the federal regulations. Ferrosan range of products in
Scientific Affairs employs over Australia and New Zealand as
180 professional staff with of October 2004.
skills in a broad range of Sigma also continues to
disciplines such as pharmacy, evaluate opportunities for
pharmacology, pharmaceutics, acquiring new products or
engineering, chemistry, businesses. Critical to our
biochemistry and microbiology. success is ensuring the
During 2004/2005, advances acquisitions we make are
were made towards best aligned to our business goals
practice in compliance. This and add shareholder value.
work will continue in 2005/2006 In this regard, the opportunities
and beyond as we maintain we evaluate and do not
our commitment to the highest proceed with are just as
manufacturing standards. important to our success.

Sigma Company Limited Annual Report 2004/2005

The Pharmaceutical business is well advanced
in positioning itself as a premium quality
pharmaceutical company. Our commitment
to regulatory compliance and facilities
redevelopment will further enhance our
reputation and ability to continue to successfully
pursue strategic opportunties.

Sigma Company Limited Annual Report 2004/2005
Pharmaceutical Division

Revenue from contract We anticipate these sales

manufacturing has increased trends will continue.
by 4% for the year to Sales of Sigma Over-The-
$109.8 million. Contract Counter (OTC) products
manufacturing continues to were up 14%. The Ural
be a core business strategy brand that we acquired in
with the necessary investment December 2003 has met our
in staff and capacity being expectations, with sales up
made by the company. 6.5% since acquisition.
In addition to acquisitions, The Chemists’ Own range
we have continued to focus of OTC products performed
on improvements in our particularly well with sales
exports business, with sales growth of 26% over the
up 56% to $24.5 million. This previous year.
growth was achieved with
The Herron natural healthcare
strong growth in Europe and
range has continued to
continuing solid performance
grow, with total sales up
in our traditional export
15.7% over the previous year
markets such as New
following strong growth in the
Zealand, Japan, Mauritius
grocery channel, as well as
and Hong Kong.
increased levels of support
A business partnership in retail pharmacy.
established in Europe helped
Herron Paracetemol has
us to achieve approximately
maintained an average value
$8 million of sales into the
market share over the year of
European market by the end
28%. Since its launch in
of the year. Further growth Key Measures (A$m)
January 2004, Herron Blue
opportunities have been
has achieved a 15.9% share 2005 2004 Movement
identified and sales into other
of the Ibuprofen market in
European countries such as
grocery. This is a pleasing Operating Results
Spain, Portugal, Ireland and
result in a short period of time
Denmark are expected by the External Sales 271.2 255.6 +6.1%
in what is a very competitive
end of the current year.
market segment. Internal Sales 51.7 39.8 +30.1%
Sales and Marketing During the year, Herron Total Sales Revenue 322.9 295.4 +9.3%
Organic growth of our successfully launched the Depreciation
existing portfolio of brands Acticleanse brand in the and Amortisation 14.9 12.5 +18.8%
has continued with vigour. grocery channel. Acticleanse
Sales of prescription products is a 14-day liver cleansing EBIT 63.9 53.3 +19.9%
Capadex, Klacid, Oroxine and and detoxification program. Profit Before Tax 55.5 46.1 +20.3%
Aristocort were particularly Further growth is anticipated
strong. Sales of all Sigma in the year ahead. Capital Management
branded prescription Working Capital 66.8 52.0 +28.5%
products increased by 6%
Adjusted Capital Employed 312.8 266.5 +17.3%
during the 2004/2005 year.
Ferrosig achieved good sales Ratios
growth following our success EBIT margin 19.8% 18.0%
with hospital tenders. This
has seen sales of Ferrosig Return on Adjusted
double in 2004/2005. Capital Employed 20.4% 20.0%

Sigma Company Limited Annual Report 2004/2005

The strategic business focus has seen sales
increase by 10.8% and EBIT Margin improve
to 2.5%. Sigma has recently launched the new
Amcal Max pharmacy banner to complement
the existing Amcal and Guardian offerings
and provide a strengthened platform for
future growth.

Sigma Company Limited Annual Report 2004/2005
Healthcare Division

Financial Results The initiatives implemented The Logistics and Warehousing Logistics
The Sigma Healthcare have contributed to a components of the system The Logistics division of
Division has maintained Return on Adjusted Capital are being systematically Healthcare has continued to
its focus on improving Employed in Healthcare rolled out to all States, having focus on improving service
operational performance. (ROCE) of 22.4%, up from been implemented in levels and reducing costs.
Sales increased 10.8% to 20.2% in 2003/2004. Tasmania in the second half
Total Logistics costs as a
$1.82 billion in 2004/2005, Healthcare will continue to of the 2004 calendar year
percentage of Net Sales has
up from $1.65 billion in build on its financial success and Queensland in January
been further reduced in
2003/2004. and will continue to strive for 2005. The fully integrated
2004/2005. This reduction
further business and financial system will be operational in
The strength of the results in a significant
improvements while every State by January 2006.
Healthcare business has ongoing contribution to EBIT
delivered a consistent enhancing the service offered Merchandising for Healthcare.
improvement in EBIT margin to our customers. The first phase of a rollout
The Merchandise Division
from a 1.6% margin in the Information Technology made significant contributions of the new distribution
2000/2001 year to 2.5% in to overall growth in market system was completed in
2004/2005, confirming During 2004/2005, Healthcare
share and sales through June 2004 for the Melbourne
Sigma’s position as the commenced the implementation
high service levels, strong Metropolitan areas and
industry leader. of the Replacement
promotional programs involved a three-year
Healthcare System (RHS).
Profitable sales growth, margin focussed on major brands distribution contract with
This $12 million investment
enhancement, cost controls and a further strengthening of Blue Circle. Key to the
provides the business with
and improved capital efficiency strategic relationships with outcomes from these
an integrated Information optimised distribution
have resulted from the Technology solution that manufacturers and suppliers.
implementation and refinement arrangements include:
captures more and better Greater anticipation of
of strategies designed to information to assist in customer demand allowed • Implementation of
meet the challenges of an the management of our higher service levels. This was sophisticated computer
ever changing and increasingly business and the servicing further enhanced by faster software enabling Sigma to
competitive market. of our customers. reaction to abnormal peaks in optimise delivery runs and,
The financial module was sales and through increased importantly, enhance our
implemented in February 2004. stock holdings of key ethical ability to meet individual
and promoted OTCs. customer expectations and
Sigma Healthcare’s strategic requirements;
relationship with suppliers • Introduction of advanced
recognises the vital ‘partnership’ distribution technologies
needed between wholesalers including paperless
and suppliers in meeting the deliveries, real-time proof
health needs of pharmacists of deliveries, GPS and
and consumers. The role of improved security features.
Sigma Healthcare in optimising This project has delivered
the economic performance improved service combined
of Sigma’s products by with a reduction in
providing value added distribution costs from the
services, is well recognised in date of implementation.
the supplier community. This same process was
Sigma Healthcare continues completed in Adelaide, with
to play a leadership role in the distribution contract
electronic trading and data awarded to Toll Fast. The
provision to its suppliers. 2005/2006 year will see this
Financial investment in stock process replicated in Perth,
inventory continues to be Brisbane and Sydney, further
optimised with further reductions contributing to Healthcare
in excess, discontinued and Logistics goal of reducing costs
dated stock being achieved whilst improving service levels.
during the year.

Sigma Company Limited Annual Report 2004/2005

Initiatives within the Healthcare Division continue
to focus on those actions necessary for
maintaining our position as Australia’s leading
pharmaceutical wholesaler which also has
Australia’s leading retail pharmacy brands.

Sigma Company Limited Annual Report 2004/2005
Healthcare Division

Customer Service Retail

The emphasis on service at The Retail division continues
competitive pricing saw sales to work with pharmacists in
increased by 10.8%, compared improving services to banner
to the industry growth rate of members and to assist
7%. As a result, our Monthly banner members in further
Average Turnover (MAT) developing their business.
market share continues to Amcal and Guardian remain
increase and is now at a the number one and number
historically high level. two pharmacy banner
One pleasing aspect is that groups in Australia, with 365
both Amcal and Guardian and 247 pharmacy members
outlets showed increased respectively.
support for Sigma's wholesale The combined success of
division, demonstrating a initiatives in the Retail division
higher level of compliance from has seen the monthly average
this group of key customers percentage of wholesale
and the growing acceptance business sourced from Sigma
of the overall service Sigma is by Amcal increasing from 65%
able to provide. in January 2004 to 69% in
Our Sigma Rewards program January 2005 and an increase
has been operating since 2001. from 80% to 82% for Guardian
This program rewards loyalty over the same period.
from Sigma customers and Sigma Retail recently launched
greatly assists in the overall the new Amcal Max brand to
management of trade debt. complement the existing
By January 2005, Sigma Amcal and Guardian banners.
Rewards had grown to 887 Sigma has developed a Key Measures (A$m)
members, up from 788 concept store that showcases
members in January 2004. 2005 2004 Movement
the design and functions of the
Importantly, more than $855 new brand. Amcal Max allows
million of sales passed through Operating Results
Sigma to offer pharmacists
the program during 2004/05, far greater front-of-shop Sales Revenue 1,824.6 1,647.5 +10.8%
up from $686 million in 2003/04. sales opportunities. Depreciation
The Healthcare Division will The first operational Amcal and Amortisation 4.2 4.6 - 9.6%
continue to seek improvements Max is scheduled for mid EBIT 46.3 36.3 +27.7%
in sales growth, margin 2005. Feedback from the first
enhancement, cost control and Profit Before Tax 33.6 26.7 +25.9%
stores will be used to fine
working capital management. tune the final brand offering. Capital Management
Broader industry issues such We expect to have six to
as Government regulation, eight Amcal Max stores in Working Capital 123.3 103.0 +19.4%
the Pharmaceutical Benefits operation by December 2005. Adjusted Capital Employed 206.5 179.7 +14.9%
Scheme (PBS), greater The Reduced Fee Structure
penetration of generic (RFS) introduced in 2003/2004 Ratios
pharmaceuticals, and has continued. This program EBIT margin 2.5% 2.2%
increased competition will rewards pharmacists with lower Return on Adjusted
all be closely monitored banner member fees in
and their impact on the Capital Employed 22.4% 20.2%
recognition of their support of
business managed. Sigma which, in turn, contributes Debtor Days 47 43
to the growth of sales and
profitability for Sigma.

Sigma Company Limited Annual Report 2004/2005

Sigma products

Sigma Company Limited Annual Report 2004/2005
Key Highlights

trademark of Asta
Medica AG

trademark of Ferrosan
Asia Pacific Pty Ltd

Sigma Company Limited Annual Report 2004/2005

The combination of Sigma’s leadership group
with the strong team of dedicated employees
supporting them, is helping ensure Sigma
implements its strategy to achieve continued

Mark Hooper Jackie Toh Andria Wyman-Clarke Greg Fisher

Dr Richard Treagus Dr Philip Marshall Chris Wettasinghe Steven Thacker

Grant McKirdy Brendan Redmond

Sigma Company Limited Annual Report 2004/2005
Management Profiles

During the 2004/2005 year, mining industry, automotive over 25 years experience in experience spanning over
Sigma has continued to industry, and most recently scientific affairs and 20 years in the Logistics field
ensure it has the right highly Retail with Coles Myer. manufacturing gained with through consultancy work
skilled people in roles within large pharmaceutical companies and with such companies as
the company to drive our Pharmaceutical such as Pfizer, Mayne Simplot, Linfox, and TNT both
success. This focus has Greg Fisher, DipSc, joined Pharmaceuticals and as an in Australia and overseas,
provided Sigma with the skills Sigma in August 2004 as independent consultant to the and is well placed to challenge
to provide the strategy and General Manager Manufacturing pharmaceutical industry. traditional industry thinking.
lead the business in our and Contracts. Greg has over Steven and his team are in
current and future success. 30 years experience across a Healthcare the process of implementing
broad range of functions in The Healthcare division has significant changes that will
Corporate Pharmaceutical manufacturing continued to improve both the lay the foundations for a
Mark Hooper, B.Bus(Acc) CPA and Quality Assurance. At financial results and the service strong performance from
FTA MAICD, joined Sigma in various times, Greg has been level offerings to customers. Healthcare in future years.
2001 and is currently Chief responsible for the Australian, A major contributor to this Grant McKirdy, FCPA FACPP,
Financial Officer for the U.S. and global operations of progress has been the joined Sigma in October 1998
Sigma Group. Prior to this he multinational Pharmaceutical contributions from the existing in the role of General Manager
had an extensive career in companies. He has had management and staff. Healthcare Services. Grant
resources most recently as extensive experience in Chris Wettasinghe, FCA(SL) has significant industry
the Chief Financial Officer for the strategic development ACIS MNIA, joined the Sigma experience gained from 12 years
the Ashton Mining Group. and rationalisation of Healthcare business in with F.H. Fauldings in various
Throughout his career, Mark manufacturing facilities. February 2003 as General roles including General
has had a wide range of senior Dr Richard Treagus, BscMed Manager – Merchandise and Manager Operations and Asia.
positions across key financial MBChB MpharmMed MBA, joined Inventory. In this role, Chris Grant and his team have
and commercial activities. Sigma in the role of General has responsibility for supplier made significant contributions
Jackie Toh, B.Ec (Acct), CPA Manager New Business, after relations, national buying for towards ensuring Sigma
MBS, General Manager 5 years in a similar role with Pharmaceuticals, OTC, general provides a premium service
Group IT and Management Aspen Pharmaceuticals in South merchandise and private label. to customers, and continues
Systems has been with Sigma Africa. Richard has since Chris has over 24 years to profitably grow market share.
for 16 years, responsible for expanded this role to incorporate pharmaceutical industry Brendan Redmond, BSc,
IT and divisional finance for strategic management of experience, in various finance, joined Sigma in 2003 as
both the Healthcare and Sales and Marketing within merchandise and marketing General Manager Retail to lead
Pharmaceutical sides of the Pharmaceutical division. roles including General this division. Brendan and his
the business. Jackie has In this role, Richard has Manager-Merchandise and team have concentrated
played key roles in business played a major role in Inventory. Chris and his team significant effort towards
acquisitions, integrations negotiating new business have made significant defining Sigma’s strategy in
and system implementations. opportunities, and in contributions towards ensuring managing its banner groups,
Jackie is focussed on driving establishing a strong and that Sigma has strong and in encouraging greater
IT projects that support committed sales and marketing relationships with its suppliers purchasing pull through from
Sigma’s strategy and minimise team targeting sustained and in achieving high service banner members. More
costs and risks to the Group. growth for the business. levels in conjunction with recently, they have launched
Dr Philip Marshall, BSc (Hons) excellent stock turns and the new Amcal Max brand to
Andria Wyman-Clarke, BA
PhD FRACI CChem, joined the reduced stock obsolescence complement our existing retail
MBA, was appointed General
Pharmaceutical division in and holding costs. offers, Amcal and Guardian.
Manager Human Resources
in March 2005. Andria and February 2004 in the newly Steven Thacker, M.Bus(Log), Brendan has considerable
her team are responsible for created role of General Manager was appointed General retail experience obtained
supporting the business with Scientific Affairs. This role has Manager Logistics in May 2003. through 4 years with Repco
the people and culture been created to further elevate As a wholesaler and distributor, and 15 years with General
processes and initiatives that and integrate the Regulatory strategic management of the Electric in both Europe and
drive improved business Affairs, Quality Assurance and logistics function is critical in the USA, and has brought to
performance. Andria has GMP compliance functions the future success in Sigma a fresh approach in
considerable senior HR and across all Sigma sites. Philip Healthcare. Steven has retail management.
business experience in the has a PhD in chemistry with considerable broad logistics

Sigma Company Limited Annual Report 2004/2005

Sigma benefits from a Board with a diversity of
backgrounds, experience and skills.

Dr John W Stocker AO Mr Lewis C Butler Prof. William N Charman Mr Elmo R de Alwis

Ms Linda B Nicholls Mr William J Scott Mr H Kenneth Windle Mr Brian Jamieson

Sigma Company Limited Annual Report 2004/2005
Board of Directors

Dr John W Stocker AO experience in commercial and Ms Nicholls has not held any Science Council with a strong
MB, BS, BMedSc, PhD, FRACP, FTSE, academic pharmaceutical directorships of listed entities involvement in pharmaceutical
Non-Executive Chairman and Director. research and product in addition to those set out research committees and
development conducted above during the last 3 years. boards as well as in
Appointed a Director in in the USA, Europe and Australia, pharmaceutical and pharmacy
December 1998 and became Age 56.
and is a consultant to national education. Member of the Risk
Chairman on 1 February 1999. and international pharmaceutical Mr William J Scott Management & Audit Committee.
Dr Stocker is a Director of Telstra companies. Member of the Risk
Corporation Limited, Cambridge JP, BPharm, MPS, FAIPM, MACPP, Mr Windle has not held any
Management & Audit Committee. F.DipMgt, FAICD, CDA Dip, directorships of listed companies
Antibody Technology Group plc,
Circadian Technologies Ltd. Professor Charman has during Non-Executive Director. within the last 3 years other
and Nufarm Ltd. Formerly the last 3 years also been a Appointed a Director in February than those listed above.
Chief Scientist, Commonwealth Director of Acrux Limited. 1996. Mr Scott is a community Age 60.
of Australia 1996-1999 and Age 45. pharmacist and an active
former Chief Executive of participant in industry affairs. Mr Brian Jamieson
CSIRO Australia 1990-1995. Mr Elmo R de Alwis Mr Scott is the current President FCA, Non Executive Director
Chairman of the Remuneration CPA, MAICD, Executive Director. of The Pharmacy Guild of Appointed a Director in May
Committee and member of the Appointed Managing Director Australia (Victorian Branch) and 2003. Mr Jamieson is currently
Nomination and Corporate in February 2001. Mr de Alwis is also the National Vice President Managing Partner Melbourne
Governance Committee. has had over 25 years of The Pharmacy Guild. Mr Scott of Minter Ellison Lawyers.
Dr Stocker has not held any experience in the pharmaceutical is also Chairman of the Guild He is a Director of the Bionic
directorships of listed entities industry and during his career National Health Economics Ear Institute, Care Australia,
in addition to those set out with Sigma has managed Committee, Healthlinks. Oxiana Limited, The Menzies
above during the last 3 years. both the manufacturing and Net Pty Ltd and Community Foundation and is Deputy
wholesaling operations. Pharmacy Agreement Chairman of the Committee
Age 59. Management Committee.
President of the National for Melbourne. He is a former
Mr Lewis C Butler Pharmaceutical Services Mr Scott has not held a Chief Executive Officer of KPMG
BPharm, MPS, AFAIPM, MACPP, Association and Medicine directorship of any other listed Australia. He has over 30 years
MSHP, FAICD, CDA Dip, Partnership of Australia. entity during the last 3 years. experience in providing advice
Non-Executive Director. Trustee Director of LUCRF. Age 59. and audit services to a diverse
Mr de Alwis has not held a range of public and large
Appointed a Director in July Mr H Kenneth Windle private companies. Member
1995. Mr Butler, a community directorship of any other listed
entity during the last 3 years. BPharm, MPS, FAIM, of the Risk Management &
pharmacist, is an active member Audit Committee.
of the Amcal banner group and Age 52. Non-Executive Director.
is involved in the community Appointed a Director in August Mr Jamieson has not held any
aged care and private hospital Ms Linda B Nicholls 2000. Mr Windle is Chairman of directorships of listed entities
healthcare sectors. Chairman BA (Econ), MBA, FAICD, Advent Pharmaceuticals Limited in addition to those set out
of Nomination and Corporate Non-Executive Director. and Cerylid Biosciences above during the last 3 years.
Governance Committee. Appointed a Director in April Limited. He is a Director of Age 60.
Mr Butler has not held a 1997. Ms Nicholls is currently Acrux Limited, Woolcock
Institute of Respiratory Medicine, Mr James Orr
directorship of any other listed Chairman of Australia Post,
entity during the last 3 years. Deputy Chairman Healthscope Aus Bio Ltd, Centre for Drug LLB B Comm
Limited and a Director of Candidate Optimisation and Company Secretary
Age 51. RRC Company Pty Ltd.
Perpetual Trustees Australia James has worked as a
Prof. William N Charman Limited and St George Bank A former Regional Director, corporate lawyer and company
Limited. Ms Nicholls has over Glaxo Wellcome Asia Pacific secretary in a number of large
BPharm, PhD, MAICD, Pte. Ltd, with over 30 years
Non-Executive Director. 26 years experience in banking private and publicly listed
and finance in Australia, the experience in the Glaxo Group companies for over 15 years.
Appointed a Director in 1996. USA and New Zealand. Chairman and in the world-wide James joined Sigma in 2001
Professor Charman is currently of the Risk Management & pharmaceutical industry. as General Counsel and
Professor of Pharmaceutics Audit Committee and a member A former non-executive became Company Secretary
and Director, Centre for Drug of the Nomination and Director of the Singapore in March 2003.
Candidate Optimisation at the Corporate Governance and Economic Development Board,
Victorian College of Pharmacy, and former member of the Age 41.
Remuneration Committees.
Monash University. Professor Australian Prime Minister's
Charman has over 19 years

Sigma Company Limited Annual Report 2004/2005

Corporate Governance

Board Responsibilities and Board Composition All Directors (with the exception Euan Murdoch (who resigned
Objectives Your Board currently consists of the Managing Director) effective 31 January 2005)
Your Board of Directors is of one Executive and seven must retire from office no later had within the last 3 years
primarily responsible for Non-Executive Directors, than the third annual general been employed in an
setting the strategic direction including the Chairman. The meeting (AGM) following their executive capacity with
and corporate governance of maximum number of Directors last election. If eligible, a Director Herron Pharmaceuticals Pty
Sigma with the aim of allowed is nine, with at least may stand for re-election subject Ltd. Mr Murdoch was not
maximising long term returns six, including the Chairman, to the following limitations: considered independent
to shareholders at an required to be Non-Executive. • no Director (other than under the terms of our
acceptable level of risk. The There is also a requirement the Managing Director) definition of independence.
implementation of Sigma’s that there be a minimum should serve more than All other Non-Executive
strategic direction and the number of ‘Pharmacist fifteen years, and Directors are considered by
management of the business Directors’, depending on the • on attaining the age of the Board to be independent,
have been delegated to the number of shares held by 65 years a Director will retire, meaning that each one is
Managing Director as its ‘Pharmacist Shareholders’. by agreement, at the next generally free from any
Chief Executive Officer. Whilst Presently two community management role, or
AGM and not seek re-election.
there is ongoing interaction pharmacists serve as business interest or other
between the Board and Directors on your Board. Independence relationship that could
management, your Board On a regular basis your Board materially interfere with the
functions independently of Sigma has adopted a Director’s ability to act in the
reviews both the number and definition of “independence”
management. skills of Directors. Sigma sees best interests of the Sigma
for directors that is consistent Group as a whole.
Your Board draws on benefits in having a Board with that suggested by the
corporate governance best with a diversity of backgrounds, ASX Corporate Governance Only those transactions
practice to contribute to experience and skills. Council. This definition is permitted by Sigma’s
Sigma’s performance. On a regular basis your included in the Corporate Constitution and the
The Corporate Governance Board arranges for a formal, Governance section of the Corporations Act take place
section of Sigma’s website independent performance Company’s website. Applying with Directors or their related
( sets review of individual Directors this definition, Messrs Butler parties. These are on the
out the Company’s practices and the Board as a whole to and Scott as practising same commercial terms and
and procedures in the context ensure it is operating effectively. Pharmacists are not conditions applying to any
of the ASX Corporate The last formal review was independent, due to the level other external party, supplier
Governance Council’s undertaken in late 2004. The of transactions between the or customer. Directors are
“Principles of Good Corporate review comprised individual pharmacies they are required to disclose in writing
Governance and Best interviews with all directors, associated with and Sigma. any related party
Practice Recommendations”. selected senior managers, These transactions were on transactions. Related party
and a number of external the same terms and transactions are set out in
As at the date of the note 28 to the financial report.
Director’s Report, the Board parties who have dealings with conditions that would apply to
considers that Sigma the company. A presentation any customer of Sigma. In
complies with the ASX of the findings was given to addition to the constitutional
Corporate Governance the Board as a whole. In requirement, the Board
Council’s Best Practice addition, the Chairman greatly values the insight and
Recommendations in all reviewed the findings of the advice provided by the
material respects. report with each director on a pharmacist directors into this
one on one basis. important part of the
Company’s business.

Sigma Company Limited Annual Report 2004/2005
Directors are also required to The Non-Executive Directors Risk Management and Prior approval of the
identify any conflict of interest also meet independently with Audit Committee Committee must be gained
they may have in dealing with the internal and external The Risk Management and for any non-audit work to be
Sigma’s affairs and subsequently auditors at least twice per year. Audit Committee comprises performed by the external
to refrain from participating in Ms L B Nicholls (Chairman), auditor. There are specified
any discussion or voting on Independent Professional limits on this non-audit work
Advice and Access to Mr B Jamieson, Prof W N
those matters. If a potential Charman and Mr H K Windle. to ensure that the
conflict of interest is likely to Information independence of the auditor
arise, the Director concerned Directors have a right of access Its main responsibility is to is maintained.
does not receive copies of the to all Company information review the Company’s
financial reporting process, There is also a requirement
relevant Board papers and and executives. Subject to that the audit partner
withdraws from the Board prior consultation with the management of risks, audit
processes and compliance responsible for the audit not
meeting while those matters Chairman, Directors are perform in that role for greater
are considered. Accordingly entitled to seek independent processes. In particular, it is
responsible for making than 5 years.
the Director concerned professional advice at the
takes no part in discussion Company’s expense in recommendations to the Nomination and Corporate
nor exercises any influence connection with their duties Board with respect to all Governance Committee
over other members of the and responsibilities. Directors financial information released
by the Company. The Nomination and Corporate
Board if a potential conflict also execute an agreement Governance Committee
of interest exists. with Sigma giving them a right The Committee also comprises Mr L C Butler
of access to Board Papers after recommends the appointment, (Chairman), Dr J W Stocker
Board and Committee their directorship concludes. removal and remuneration and Ms L B Nicholls.
Meetings of the external auditor,
Board Committees together with the terms of Its main responsibility is to
There were 11 Board
The Board has established engagement. It also reviews the review the Board’s experience
meetings during the year. The
the following committees to activities and organisational and skills and assess
frequency of Board and
assist it in carrying out its structure of the internal audit individual Director and Board
Committee meetings and
duties and to allow detailed function and reviews the performance as well as
Directors’ attendance at those
consideration of issues: appointment or replacement succession planning. It also
meetings is set out in the
of the internal auditor. has responsibility for
Directors’ Report. • Nomination and Corporate
reviewing and making
In addition to their scheduled Governance The Committee receives regular recommendations on Sigma’s
meetings the Board and Board • Risk Management and Audit reports from management corporate governance
Committees meet as required to and from the internal and practices and procedures.
• Remuneration external auditors. It also
deal with any specific or urgent
matters requiring their attention Each committee is comprised meets with the internal and Remuneration Committee
or action. At their scheduled of Non-Executive Directors, external auditors without the The Remuneration Committee
meetings Directors receive although the Managing Managing Director or other comprises Dr J W Stocker
detailed financial, operational Director and relevant senior members of management (Chairman) and Ms L B Nicholls.
and strategy reports from senior executives attend by being present at least twice a
invitation. The committee The Committee’s main
managers. Management is year. The internal and external
structure, its membership responsibility is to advise the
available to discuss these auditors are free at any time
and its effectiveness are Board on remuneration
reports with the Board. to communicate directly with
reviewed on a regular basis. policies and practices
On a regular basis either the Chairman of the
generally, and to make
Non-Executive Directors Each committee has its own Committee or the Board.
specific recommendations
meet without the Managing written charter setting out its The Committee has authority, on remuneration packages
Director or other members role and responsibilities and within the scope of its for the Managing Director and
of management being the manner in which it is to responsibilities, to seek any Non-Executive Directors
present, to ensure that the operate. All matters determined information it requires from any based on an annual review.
Non-Executive Directors by committees are submitted employee or external party.
maintain independence of to the full Board as
thought and judgment. recommendations for decision.

Sigma Company Limited Annual Report 2004/2005

Corporate Governance

Remuneration packages are Risk Assessment and Health and Safety Trading is not permitted in the
set at levels that are intended Management Management week immediately prior to the
to attract and retain quality The Board is committed to the The Board receives regular release of full or half-year
Directors and executives identification, assessment and management reports that cover results or prior to the Annual
with the skills necessary to management of risk throughout compliance and performance General Meeting. In addition,
successfully manage the Sigma’s business activities. matters in respect of health Directors must obtain prior
Sigma Group’s operations and safety matters. approval for any trading from
and achieve strategic The Board’s committee the Chairman and staff must
objectives. structure forms an important The Company is committed to seek prior approval from the
part of the risk management the highest standards of Managing Director or the
Total remuneration for Non- process. Through the Risk occupational health and
Executive Directors is Company Secretary.
Management and Audit safety (OHS) in all its
determined by shareholders. Committee, the Board receives operations. Sigma: Regular reminders of the
Individual Non-Executive regular reports on specific • Monitors its compliance company’s share trading
Directors’ fees are business areas where there policy are issued to senior
with relevant legislation;
determined by the Board may exist significant business management.
within the maximum • Encourages employees
risk or exposure. Continuous Disclosure
aggregate amount approved to actively participate in
by shareholders. The Sigma recognises that risk the management of OHS Sigma is committed to ensuring
total fees and details of management is an intrinsic issues; and that all shareholders, the
remuneration paid to part of each manager’s day market and other stakeholders
to day activity. Each business • Undertakes annual systems
Non-Executive Directors for and performance reviews are provided with and have
the last financial year are division is individually access to full and timely
responsible and financially as part of its continuous
set out in the Directors’ information about its activities.
accountable for ensuring improvement program.
Report and in note 23 to the The Company has procedures
financial statements. that there are appropriate in place to satisfy this
systems and structures in Ethical Standards
A proportion (presently 25%) commitment and its continuous
of each Non-Executive place for the protection of its Sigma has adopted a Code disclosure obligations.
Director’s base remuneration people and assets. of Conduct that applies to all
Directors and employees. Regular briefings and
is taken in the form of Sigma The effectiveness and presentations are given in all
shares purchased on the appropriateness of specific The Code requires that at all Australian States and selected
ASX in accordance with risk management systems are times all Company personnel overseas locations. Any new
terms and conditions of the monitored and reviewed on a must act with the utmost information that is presented
Non-Executive Directors’ regular basis. For example, integrity and objectivity and will have been disclosed to
Share Plan. Details of the internal audit plan is in compliance with all laws the ASX and posted on the
director’s entitlements upon developed following risk and Company policies. Company’s website. All ASX
retirement and accrued analysis and assessment and releases are also posted on
is focussed to confirm the Share Trading
retirement benefits are set the Company website.
out in the Directors Report. operation of the internal Sigma’s share trading policy
controls and to assess the prohibits Directors or employees
Evaluation of senior executive
effectiveness and efficiency from trading in the Company’s
performance and remuneration
of the control environment. shares if they are in possession
is undertaken by the Managing
Further emphasising the of non-public price sensitive
Director on an annual basis.
importance of risk information. It also prohibits
management systems, a short-term trading.
Group Risk Manager was
appointed during the course
of the year to oversee
Sigma’s risk management.

Sigma Company Limited Annual Report 2004/2005
Financial Report

Sigma Company Limited and Controlled Entities

ACN 004 132 923
Financial Statements for year ended 31 January 2005

Contents Notes to the Financial Statements

Directors’ Report 28 1 Summary of Significant
Remuneration Report 32 Accounting Policies 47
Auditors’ Independence Declaration 43 2 Segment Information 51
Statements of Financial Performance 44 3 Revenue 52
Statements of Financial Position 45 4 Net Gains and Expenses 53
Statements of Cash Flows 46 5 Net Borrowing Costs 53
Directors’ Declaration 78 6 Income Tax 54
Independent Audit Report to the Members 79 7 Dividends 54
Security Holders Information 80 8 Earnings per Share 55
Shareholder Information IBC 9 Receivables 56
10 Inventories 56
11 Investments 56
12 Property, Plant and Equipment 57
13 Intangible Assets 57
14 Deferred Tax Assets 57
15 Payables 58
16 Interest Bearing Liabilities 58
17 Tax Liabilities 58
18 Provisions 58
19 Contributed Equity 59
20 Reserves and Retained Profits 60
21 Expenditure Commitments 61
22 Remuneration of Auditors 61
23 Director and Executive Disclosures 62
24 Contingent Liabilities 68
25 Details of Controlled Entities 69
26 Superannuation and Share
Ownership Plan 70
27 Standby Arrangements and
Credit Facilities 70
28 Related Party Information 71
29 Notes to the Statements of Cash Flows 71
30 Deed of Cross Guarantee 72
31 Financial Instruments 73
32 Impact of Adopting Australian
Equivalents to International
Financial Reporting Standards 75

Sigma Company Limited Annual Report 2004/2005

Directors’ Report

28 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Directors’ Report

30 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Remuneration Report

32 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Remuneration Report

34 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Remuneration Report

36 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Remuneration Report

38 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Remuneration Report

40 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Remuneration Report

42 Sigma Company Limited Annual Report 2004/2005

Auditors’ Independence Declaration

Sigma Company Limited Annual Report 2004/2005

Statements of Financial Performance
For the year ended 31 January 2005

44 Sigma Company Limited Annual Report 2004/2005

Statements of Financial Position
As at 31 January 2005

Sigma Company Limited Annual Report 2004/2005

Statements of Cash Flows
For the year ended 31 January 2005

46 Sigma Company Limited Annual Report 2004/2005

Notes to the Financial Statements
For the year ended 31 January 2005

Sigma Company Limited Annual Report 2004/2005

Notes to the Financial Statements
For the year ended 31 January 2005 – continued

48 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Notes to the Financial Statements
For the year ended 31 January 2005 – continued

50 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Notes to the Financial Statements
For the year ended 31 January 2005 – continued

52 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Notes to the Financial Statements
For the year ended 31 January 2005 – continued

54 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Notes to the Financial Statements
For the year ended 31 January 2005 – continued

56 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Notes to the Financial Statements
For the year ended 31 January 2005 – continued

58 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Notes to the Financial Statements
For the year ended 31 January 2005 – continued

60 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Notes to the Financial Statements
For the year ended 31 January 2005 – continued

62 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Notes to the Financial Statements
For the year ended 31 January 2005 – continued

64 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Notes to the Financial Statements
For the year ended 31 January 2005 – continued

66 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Notes to the Financial Statements
For the year ended 31 January 2005 – continued

68 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Notes to the Financial Statements
For the year ended 31 January 2005 – continued

70 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Notes to the Financial Statements
For the year ended 31 January 2005 – continued

72 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Notes to the Financial Statements
For the year ended 31 January 2005 – continued

74 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Notes to the Financial Statements
For the year ended 31 January 2005 – continued

76 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
Directors’ Declaration

78 Sigma Company Limited Annual Report 2004/2005

Independent Audit Report to the Members of
Sigma Company Limited

Sigma Company Limited Annual Report 2004/2005

Security Holders Information

80 Sigma Company Limited Annual Report 2004/2005

Shareholder Calendar*
Full Year Results Half Year Results
Results announced 21 March 2005 7 September 2005
Ex Dividend 24 March 2005 14 September 2005
Record 1 April 2005 20 September 2005
Dividend Payment 19 April 2005 4 October 2005
Annual General Meeting: 25 May 2005
*Dates may be subject to change

Recent Dividends Shareholder Offices

For year end 31 January Information
2005 Company Details Pharmaceuticals 31 Glenwood Drive,
Full Year Dividend 15.5c Sigma Company Limited 96 Merrindale Drive, Thornton NSW 2322
Interim Dividend 10.5c Croydon South VIC 3136 Tel: 02 4966 5444
Registered Office Tel: 03 9839 2800 Fax: 02 4966 5600
2004 1408 Centre Road, Fax: 03 9839 2752
Clayton VIC 3168 160 Wecker Road,
Full Year Dividend 12.5c
1408 Centre Road, Mt Gravatt QLD 4122
Interim Dividend 7.5c
Clayton VIC 3168 Tel: 07 3212 1621
2003 Tel: 03 9839 2800 Fax: 07 3849 4622
Corporate Head Office
Full Year Dividend 8.0c 96 Merrindale Drive, Fax: 03 8542 1432 271 Bolsover Road,
Interim Dividend 5.5c Croydon South VIC 3136 286-302 Frankston Dandenong Rockhampton QLD 4701
2002 Tel: 03 9839 2800 Road, Dandenong VIC 3175 Tel: 07 4922 1374
Full Year Dividend 5.0c Fax: 03 9839 2752 Tel: 03 8792 1000 Fax: 07 4922 7328
Interim Dividend 5.0c Fax: 03 9768 3978 31 Vanity Street,
Directors and Senior 428-444 Mt Dandenong Road, Toowoomba QLD 4350
Management Croydon VIC 3136 Tel: 07 4634 5155
Refer to profiles on pages Tel: 03 9724 2700 Fax: 07 4634 5465
20 to 23. Fax: 03 9725 1614 16-20 Bell Street,
Company Secretary 7 Maitland Place, Townsville QLD 4810
James Orr, LLB, BComm Northwest Business Park, Tel: 07 4771 2022
96 Merrindale Drive, Baulkham Hills NSW 2153 Fax: 07 4772 3454
Croydon South, Vic 3136 Tel: 02 9894 3500 227 South Road,
Fax: 02 9899 1600 Ridleyton SA 5008
Investor Relations 17 Curzon Street, Tel: 08 8346 9561
Gary Woodford, CPA,TIA Tennyson QLD 4106 Fax 08 8340 1448
96 Merrindale Drive, Tel: 07 3212 1111
Croydon South, Vic 3136 3/2205 Coonawara Road,
Fax: 07 3215 5230 Winnellie NT 0820
e-mail: Tel: 08 8984 4025 Healthcare
Fax: 08 8984 3875
1408 Centre Road,
Auditors Clayton VIC 3168 26 Wheeler Street,
PricewaterhouseCoopers Tel: 03 9542 9511 Belmont WA 6104
Fax: 03 9542 9769 Tel: 08 9478 9700
Share Registry Details Fax 08 9478 9788
158 Fitzgerald Rd,
ASX Perpetual Registrars Laverton VIC 3028 McKay Avenue,
Limited Tel: 03 9360 6000 Grove Estate,
Level 4, 333 Collins Street Fax: 03 9369 7094 Glenorchy TAS 7010
Melbourne VIC 3000
24-26 Watson Street, Tel: 03 6272 3211
GPO Box 1736 Fax:03 6272 3232
Shepparton VIC 3630
Melbourne Vic 3001
Tel: 03 5821 4255 17-19 Invermay Street,
Telephone: 1300 554 474 Fax: 03 5831 3006 Invermay TAS 7248
e-mail: 59-63 Garema Circuit, Tel: 03 6331 2011 Kingsgrove NSW 2208 Fax: 03 6331 6470 Tel: 02 9740 1000
Fax: 02 9740 1047
50-52 Redfern Street,
Wetherill Park NSW 2164
Tel: 02 9757 1166
Fax 02 9725 3276