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.

Contents
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
Sigma’s focus on its strategy
has again seen strong
shareholder returns. Full
year dividend is up 30% to
26 cents per share, and the
share price continues to
reflect our sustained success.
Sigma is also committed to
reinvesting in our business to
lay the foundations for future
growth and success.
Page
05
Sigma’s History
• Founded in Melbourne in 1912 by
two pharmacists
• Manufacturing activities
commenced in 1942
Continued Financial Success
All key financial performance
indicators are at record high
levels for Sigma. Profit After
Tax (PAT) is up 34.8%, Return
on Capital Employed (ROCE)
is 19.9%.
We have maintained our
focus on improving returns
whilst managing risk to
the business. This places
Sigma in a strong position
to reinvest in the business
and further strengthen our
ability to continue to deliver
returns for shareholders in
the years ahead.
Page
07
• Acquisition of QDL in 1996
• Listing on Exempt Stock
Exchange in 1997
• Acquisition of Guardian pharmacy
banner group in 1997 and Amcal
in 1998
Pharmaceutical Division
Sales in the Pharmaceutical
Division are up 9.3% and
Earnings Before Interest
and Tax (EBIT) is up 19.9%.
Pharmaceuticals have
centralised regulatory
and quality assurance
processes under the
Scientific Affairs umbrella.
We continue our focus on
acquiring brands and
businesses that fit our strategy
and add value to our business.
The Pharmaceutical Division
has commenced a significant
redevelopment of our
Dandenong manufacturing
plant that will deliver business
efficiencies, improved capacity
and provide a platform for our
future growth.
Page
11
• Acquisition of SmithKline
Beecham’s Dandenong
manufacturing facility in 1999
• Full ASX listing in 1999
• Acquisition of Aventis’ Baulkham
Hills manufacturing business in
June 2000
Healthcare Division
Sales in Healthcare are up
10.8% and EBIT is up 27.7%.
Healthcare has maintained
its focus on continuing to
improve the service to our
customers whilst driving
operational efficiencies.
Healthcare will complete the
implementation of the new
integrated Information
Technology solution during
the 2005/2006 year.
Healthcare has recently
launched a new Retail brand,
Amcal Max. Amcal Max
provides Sigma with a
complete suite of pharmacy
solutions to offer our current
and potential customers.
Page
15
• Acquisition of the Herron Group in
May 2003
• Included in the ASX Top 100 in
October 2003
Sigma Company Limited Annual Report 2004/2005
01
 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

87.1%

58%

42%

12.9%

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
Dividend
– 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

03
 “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
Chairman

04
Sigma Company Limited Annual Report 2004/2005
Chairman’s Report
The Year in Review
Five years ago, Sigma’s Board
and Management devised a
strategy to optimise the
growth and performance of
the company. Sigma has and
continues to be focussed on
the execution of that strategy
and the pursuit of our goals.
The strategy has four key
elements aimed at ensuring
our future success:
• Profitably growing our
pharmaceuticals business
through strategically
aligned acquisitions and
organic growth;
• Driving operational
efficiencies and profitable
sales growth;
• Investing in our banner
memberships to improve
offerings for pharmacists
and increase support for
Sigma distributed and
manufactured products;
• Maximising returns whilst
managing risk.
Our success in implementing
this strategy has been evident
in the performance of the
company over the past 5 years.
The financial year just
completed is no exception.
All key indicators of financial
health showed continued
improvement during the
2004/2005 year. Sales,
Earnings Before Interest
and Tax (EBIT), Profit Before
Tax, Profit After Tax and
Return on Capital Employed
(ROCE) have all improved to
record levels.
Our strong performance is Corporate Governance
reflected in the returns offered remains paramount. The
to shareholders by way of Board is fully committed to
dividends and through the ensuring that we comply in
share price. Dividends paid all material respects with the
to shareholders have best practice principles in
increased to 26 cents per corporate governance and
ordinary share for the risk management.
2004/2005 year. This is a very exciting time for
The market has again Sigma; the investments we
rewarded our strategic focus have made provide the
and performance with a strong platform from which the
share price performance. growth of this great Australian
company will continue.
Investing in our Future
Finally, the Board would like
Last year I reported that the to acknowledge the efforts of
Board had endorsed a our employees who have
facilities strategy review in our been instrumental in Sigma’s
Pharmaceutical business. achievements. We look
This review has been forward to their continuing
completed and work enthusiastic contributions in
has commenced to what promises to be a
significantly extend and rewarding period ahead.
redevelop our Dandenong
facility to provide operational
efficiencies and increase
capacity. This is an important
step in laying the foundations
for our future growth in
pharmaceuticals.
Dr John Stocker AO
In our Healthcare business,
Chairman
we have further demonstrated
our ongoing commitment
to both our pharmacists and
the community with the
development of a new banner
group – Amcal Max. This
banner complements the
existing Amcal and Guardian
banner groups and provides
pharmacists with a greater
flexibility in their choice of
banner offerings.
Amcal Max will continue
the profitable growth of
Sigma’s Healthcare business
and contribute to the
success of our individual
pharmacist customers.
Sigma Company Limited Annual Report 2004/2005
05
 “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

06
Sigma Company Limited Annual Report 2004/2005
Managing Director’s
Report
Financial Results
Sigma has achieved
$59.6 million in Profit After
Tax (PAT), including one-off
impacts of $2.3 million
from the entry into tax
consolidations, representing
a 34.8% increase from the
$44.2 million achieved in
2003/04. Underlying growth
excluding one off impacts
was 29.6%. Return on Capital
Employed has improved to
19.9%, up from 18.6% in
2003/2004.
The most pleasing aspect of
this solid performance is the
continuation of the growth
trend of recent years. The
consistency of the results
over the past four years is
testimony to the strategy
Sigma has in place and the
commitment and ability of
staff and management to
implement it.
Our Pharmaceutical business
has continued to grow
profitably, with sales up 9.3%
and EBIT up 19.9% over the
prior year. Our strategy of
both organic growth and the
strategic acquisition of
brands has continued to
deliver, despite the
significantly increased level of
expenditure on compliance-
related costs and continued
product rationalisation.
Our Healthcare business
continues to lead the industry
in operational performance.
Sales in Healthcare rose
10.8% to $1.82 billion and
EBIT margin increased from
2.2% in 2003/2004 to 2.5% in
2004/2005. This sustained
improvement is indicative of
our success in simultaneously
focussing on growing sales
whilst striving for operational
efficiencies.
Ensuring our Future Success
At the same time as
delivering strong profit growth
and return to shareholders,
we are continuing to invest in
Sigma’s future.
The Pharmaceutical business
continues to seek brand and
business acquisitions that will
contribute to our sustained
profit performance. We have
been successful in concluding
strategic acquisitions thus far
and integrating them into the
Sigma business and we remain
confident of our ability to
continue to do so in the future.
Given the critical importance
of regulatory compliance,
Sigma has centralised quality
control and regulatory affairs
functions into the newly
formed Scientific Affairs
department. This is a
significant and necessary
investment of resources in this
area and we are confident it
will further strengthen our
commitment to quality control
and assurance.
Our Dandenong facility has
begun a redevelopment
involving the construction of a
new raw materials
warehouse. As part of our
facilities strategy, our plant at
Croydon is scheduled to
cease operations in the
second half of 2005/2006 with
operations being transferred
to Dandenong.
The Healthcare business has
continued the implementation
of its new integrated Information
Technology solution. Integrated
financial, customer and
supply chain information is
provided by the system to
enable Healthcare to further
enhance customer service
and drive operational
efficiencies as we search
for improved returns and
better service to our customers.
Healthcare has also launched
the new pharmacy banner
group, Amcal Max. This
new brand offers consumers
a fresh retail pharmacy
experience and now provides
our pharmacist customers
with a complete suite of retail
service offerings through the
Amcal, Guardian and Amcal
Max banners.
These are significant and
exciting re-investments in our
Pharmaceutical and Healthcare
businesses. We are building
the basis of Sigma’s continued
growth and prosperity well
into the future.
The management team and
I are confident that the
underlying business
(excluding the one-off impact
of Tax Consolidations) will
deliver organic growth of15%
in PAT for the 2005/2006 year.
The strong performance
reported for the year in review
has been delivered through
the combined efforts of all
employees of Sigma and the
continued guidance and
support of the Board. I would
like to thank them for their
efforts and I look forward to
their continued support in the
year ahead.
Elmo de Alwis
Managing Director
Sigma Company Limited Annual Report 2004/2005
07
 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
Group
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.

08
Sigma Company Limited Annual Report 2004/2005
Allowing for mid-month
funding peaks Sigma’s
gearing continues to sit
between 35% and 40%, which
allows Sigma to comfortably
take on small to medium size
acquisitions. Our medium term
target continues to be to hold
gearing between 25% and 40%.
Adjusted Capital Employed
(A$m)
2005 2004
Group 527.4 449.7
The increase in adjusted
capital employed is a
reflection of the Boots and
Wyeth purchases, the
cancellation of most of the
Sale and Lease back
transactions noted earlier and
higher working capital.
Earnings Per Share/Return on
Capital Employed
2005 2004
Return on
Adjusted
Capital
Employed 19.9% 18.6%
Earnings
Per Share
(excluding tax
consolidations) 40.3 31.4
The 19.9% return is well in
excess of the Group’s current
cost of capital, which is 12%
(pre-tax).
Earnings per share growth of
28% is consistent with the
movement in Group profit
performance offset by the
additional shares issued under
the employee share plan.
Managing Financial Risk
Pharmacy Guarantees ($m)
2005 2004
Gross Liability 122 170
Contingent
Liability 26 52
All full-line wholesalers in
Australia have traditionally
provided pharmacy
guarantees to their customers
to support the purchase of
pharmacy businesses. Sigma
has succeeded in working
with its banks in developing
more innovative solutions
that provide an improved
outcome for the pharmacist
and remove the obligation for
Sigma to provide a guarantee.
This is reflected in the
continued run down of the
guarantee balance achieved
over the past 3 years.
Interest Rate Hedging
The combination of
outstanding corporate debt
and the restructure of the
Sigma Rewards program
now means Sigma has
arrangements totalling
$350-$400m where bank bill
rates (BBSY) is the key
determinant of the overall cost
of these programs.
At year-end Sigma has
hedged $165m of this
exposure using a combination
of swaps and options (full
details are shown at Note 31
to the financial statements).
Impact of International
Accounting Standards
Sigma has been through a
detailed process over the
past 12 months to assess
the impact of adopting the
Australian equivalent to
international financial reporting
standards (AIFRS), which are
applicable for Sigma from
February 1st 2005. A specific
project team was established
involving key corporate and
divisional representatives
to ensure this process was
managed efficiently.
Sigma has completed the
majority of the work required
and where numbers are able
to be reliably estimated these
have been included in the
financial report (see Note 32).
We expect to finalise this
work and release full details
of the impact with our
accounts for the half year
ending 31 July 2005.
Outlook
Sigma currently expects that
profit after tax for the
2005/2006 year will grow by
approximately 15%
(excluding the one-off impact
of Tax Consolidations). We
continue in our pursuit of
opportunities to improve this
performance further.
Mark Hooper
Chief Financial Officer
Sigma Company Limited Annual Report 2004/2005
09
 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.

10
Sigma Company Limited Annual Report 2004/2005
Pharmaceutical
Division
Financial Results
The 2004/2005 year has
seen sales increase to
$322.9 million, up from
$295.4 million in the year prior
– an increase of 9.3% – and
EBIT increase by 19.9%,
to $63.9 million from
$53.3 million in 2003/2004.
Consistent with our strategy
of accretive acquisitions and
investments in our business,
Return on Adjusted Capital
Employed (ROCE) in
Pharmaceuticals has
continued to improve to 20.4%,
up from 20.0% in 2003/2004.
Facilities
Last year we foreshadowed
that we were undertaking a
facilities strategy review.
This review has been largely
completed and development
work has commenced at
our Dandenong facility.
Initial work will see the
construction of a new Raw
Materials Warehouse facility
that will improve our materials
handling capabilities and create
extra capacity at the plant.
Further development work is
anticipated following the
completion of the review.
As part of the review, our
Croydon plant is scheduled
to cease production in
the second half of 2005,
with production being
transferred to Dandenong.
Wherever possible,
employees at the Croydon
plant are being relocated
to the Dandenong facility.
Scientific Affairs
During 2004/2005, Sigma
further enhanced its
regulatory and quality
assurance processes with the
centralisation of teams into
the newly created Scientific
Affairs department.
Overseen by Dr Philip
Marshall, Scientific Affairs is
responsible for ensuring
Sigma’s quality and regulatory
policies, practices and
procedures comply with
Australian regulatory
requirements. The Therapeutic
Goods Administration (TGA),
which is a unit within the
Federal Department of
Health and Ageing, is
Australia's medicine watchdog
and ensures that all
pharmaceutical companies,
including Sigma, comply
with the federal regulations.
Scientific Affairs employs over
180 professional staff with
skills in a broad range of
disciplines such as pharmacy,
pharmacology, pharmaceutics,
engineering, chemistry,
biochemistry and microbiology.
During 2004/2005, advances
were made towards best
practice in compliance. This
work will continue in 2005/2006
and beyond as we maintain
our commitment to the highest
manufacturing standards.
A key initiative in 2005/2006
will be the implementation
of a national integrated
electronic management
system to manage the
company’s quality systems.
This is expected to deliver
improvements both in
compliance and productivity.
Scientific Affairs is an
important function in the
Pharmaceutical business that
will continue to play a key role
in our future success.
Business Development
Sigma has consistently
delivered on our strategy of
making commercially aligned
acquisitions every six months,
on average.
In November 2004 Sigma
acquired a suite of prescription
products from Boots
(including Coumadin,
Marevan , Endone, Tertroxin
and Dindevan). The
acquisition of these products
and a second tranche of
prescription products
acquired from Wyeth in July
2004 (Ledermix, Artane and
Diamox), illustrates our ability
to deliver on our strategy of
expanding our portfolio of
value adding products.
Sigma also acquired exclusive
rights to the distribution of the
Ferrosan range of products in
Australia and New Zealand as
of October 2004.
Sigma also continues to
evaluate opportunities for
acquiring new products or
businesses. Critical to our
success is ensuring the
acquisitions we make are
aligned to our business goals
and add shareholder value.
In this regard, the opportunities
we evaluate and do not
proceed with are just as
important to our success.
Sigma Company Limited Annual Report 2004/2005
11
 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.

12
Sigma Company Limited Annual Report 2004/2005
Pharmaceutical Division
continued
Revenue from contract
manufacturing has increased
by 4% for the year to
$109.8 million. Contract
manufacturing continues to
be a core business strategy
with the necessary investment
in staff and capacity being
made by the company.
In addition to acquisitions,
we have continued to focus
on improvements in our
exports business, with sales
up 56% to $24.5 million. This
growth was achieved with
strong growth in Europe and
continuing solid performance
in our traditional export
markets such as New
Zealand, Japan, Mauritius
and Hong Kong.
A business partnership
established in Europe helped
us to achieve approximately
$8 million of sales into the
European market by the end
of the year. Further growth
opportunities have been
identified and sales into other
European countries such as
Spain, Portugal, Ireland and
Denmark are expected by the
end of the current year.
Sales and Marketing
Organic growth of our
existing portfolio of brands
has continued with vigour.
Sales of prescription products
Capadex, Klacid, Oroxine and
Aristocort were particularly
strong. Sales of all Sigma
branded prescription
products increased by 6%
during the 2004/2005 year.
Ferrosig achieved good sales
growth following our success
with hospital tenders. This
has seen sales of Ferrosig
double in 2004/2005.
We anticipate these sales
trends will continue.
Sales of Sigma Over-The-
Counter (OTC) products
were up 14%. The Ural
brand that we acquired in
December 2003 has met our
expectations, with sales up
6.5% since acquisition.
The Chemists’ Own range
of OTC products performed
particularly well with sales
growth of 26% over the
previous year.
The Herron natural healthcare
range has continued to
grow, with total sales up
15.7% over the previous year
following strong growth in the
grocery channel, as well as
increased levels of support
in retail pharmacy.
Herron Paracetemol has
maintained an average value
market share over the year of
28%. Since its launch in
Key Measures (A$m)
January 2004, Herron Blue
has achieved a 15.9% share 2005 2004 Movement
of the Ibuprofen market in
grocery. This is a pleasing Operating Results
result in a short period of time
External Sales 271.2 255.6 +6.1%
in what is a very competitive
market segment. Internal Sales 51.7 39.8 +30.1%
During the year, Herron Total Sales Revenue 322.9 295.4 +9.3%
successfully launched the Depreciation
Acticleanse brand in the and Amortisation 14.9 12.5 +18.8%
grocery channel. Acticleanse
is a 14-day liver cleansing EBIT 63.9 53.3 +19.9%
and detoxification program. Profit Before Tax 55.5 46.1 +20.3%
Further growth is anticipated
in the year ahead. Capital Management
Working Capital 66.8 52.0 +28.5%
Adjusted Capital Employed 312.8 266.5 +17.3%
Ratios
EBIT margin 19.8% 18.0%
Return on Adjusted
Capital Employed 20.4% 20.0%
Sigma Company Limited Annual Report 2004/2005
13
 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.

14
Sigma Company Limited Annual Report 2004/2005
Healthcare Division
Financial Results
The Sigma Healthcare
Division has maintained
its focus on improving
operational performance.
Sales increased 10.8% to
$1.82 billion in 2004/2005,
up from $1.65 billion in
2003/2004.
The strength of the
Healthcare business has
delivered a consistent
improvement in EBIT margin
from a 1.6% margin in the
2000/2001 year to 2.5% in
2004/2005, confirming
Sigma’s position as the
industry leader.
Profitable sales growth, margin
enhancement, cost controls
and improved capital efficiency
have resulted from the
implementation and refinement
of strategies designed to
meet the challenges of an
ever changing and increasingly
competitive market.
The initiatives implemented
have contributed to a
Return on Adjusted Capital
Employed in Healthcare
(ROCE) of 22.4%, up from
20.2% in 2003/2004.
Healthcare will continue to
build on its financial success
and will continue to strive for
further business and financial
improvements while
enhancing the service offered
to our customers.
Information Technology
During 2004/2005, Healthcare
commenced the implementation
of the Replacement
Healthcare System (RHS).
This $12 million investment
provides the business with
an integrated Information
Technology solution that
captures more and better
information to assist in
the management of our
business and the servicing
of our customers.
The financial module was
implemented in February 2004.
The Logistics and Warehousing
components of the system
are being systematically
rolled out to all States, having
been implemented in
Tasmania in the second half
of the 2004 calendar year
and Queensland in January
2005. The fully integrated
system will be operational in
every State by January 2006.
Merchandising
The Merchandise Division
made significant contributions
to overall growth in market
share and sales through
high service levels, strong
promotional programs
focussed on major brands
and a further strengthening of
strategic relationships with
manufacturers and suppliers.
Greater anticipation of
customer demand allowed
higher service levels. This was
further enhanced by faster
reaction to abnormal peaks in
sales and through increased
stock holdings of key ethical
and promoted OTCs.
Sigma Healthcare’s strategic
relationship with suppliers
recognises the vital ‘partnership’
needed between wholesalers
and suppliers in meeting the
health needs of pharmacists
and consumers. The role of
Sigma Healthcare in optimising
the economic performance
of Sigma’s products by
providing value added
services, is well recognised in
the supplier community.
Sigma Healthcare continues
to play a leadership role in
electronic trading and data
provision to its suppliers.
Financial investment in stock
inventory continues to be
optimised with further reductions
in excess, discontinued and
dated stock being achieved
during the year.
Logistics
The Logistics division of
Healthcare has continued to
focus on improving service
levels and reducing costs.
Total Logistics costs as a
percentage of Net Sales has
been further reduced in
2004/2005. This reduction
results in a significant
ongoing contribution to EBIT
for Healthcare.
The first phase of a rollout
of the new distribution
system was completed in
June 2004 for the Melbourne
Metropolitan areas and
involved a three-year
distribution contract with
Blue Circle. Key to the
outcomes from these
optimised distribution
arrangements include:
• Implementation of
sophisticated computer
software enabling Sigma to
optimise delivery runs and,
importantly, enhance our
ability to meet individual
customer expectations and
requirements;
• Introduction of advanced
distribution technologies
including paperless
deliveries, real-time proof
of deliveries, GPS and
improved security features.
This project has delivered
improved service combined
with a reduction in
distribution costs from the
date of implementation.
This same process was
completed in Adelaide, with
the distribution contract
awarded to Toll Fast. The
2005/2006 year will see this
process replicated in Perth,
Brisbane and Sydney, further
contributing to Healthcare
Logistics goal of reducing costs
whilst improving service levels.
Sigma Company Limited Annual Report 2004/2005
15
 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.

16
Sigma Company Limited Annual Report 2004/2005
Healthcare Division
continued
Customer Service
The emphasis on service at
competitive pricing saw sales
increased by 10.8%, compared
to the industry growth rate of
7%. As a result, our Monthly
Average Turnover (MAT)
market share continues to
increase and is now at a
historically high level.
One pleasing aspect is that
both Amcal and Guardian
outlets showed increased
support for Sigma's wholesale
division, demonstrating a
higher level of compliance from
this group of key customers
and the growing acceptance
of the overall service Sigma is
able to provide.
Our Sigma Rewards program
has been operating since 2001.
This program rewards loyalty
from Sigma customers and
greatly assists in the overall
management of trade debt.
By January 2005, Sigma
Rewards had grown to 887
members, up from 788
members in January 2004.
Importantly, more than $855
million of sales passed through
the program during 2004/05,
up from $686 million in 2003/04.
The Healthcare Division will
continue to seek improvements
in sales growth, margin
enhancement, cost control and
working capital management.
Broader industry issues such
as Government regulation,
the Pharmaceutical Benefits
Scheme (PBS), greater
penetration of generic
pharmaceuticals, and
increased competition will
all be closely monitored
and their impact on the
business managed.
Retail
The Retail division continues
to work with pharmacists in
improving services to banner
members and to assist
banner members in further
developing their business.
Amcal and Guardian remain
the number one and number
two pharmacy banner
groups in Australia, with 365
and 247 pharmacy members
respectively.
The combined success of
initiatives in the Retail division
has seen the monthly average
percentage of wholesale
business sourced from Sigma
by Amcal increasing from 65%
in January 2004 to 69% in
January 2005 and an increase
from 80% to 82% for Guardian
over the same period.
Sigma Retail recently launched
the new Amcal Max brand to
complement the existing
Amcal and Guardian banners.
Sigma has developed a Key Measures (A$m)
concept store that showcases
2005 2004 Movement
the design and functions of the
new brand. Amcal Max allows
Operating Results
Sigma to offer pharmacists
far greater front-of-shop Sales Revenue 1,824.6 1,647.5 +10.8%
sales opportunities. Depreciation
The first operational Amcal and Amortisation 4.2 4.6 - 9.6%
Max is scheduled for mid EBIT 46.3 36.3 +27.7%
2005. Feedback from the first
Profit Before Tax 33.6 26.7 +25.9%
stores will be used to fine
tune the final brand offering. Capital Management
We expect to have six to
eight Amcal Max stores in Working Capital 123.3 103.0 +19.4%
operation by December 2005. Adjusted Capital Employed 206.5 179.7 +14.9%
The Reduced Fee Structure
(RFS) introduced in 2003/2004 Ratios
has continued. This program EBIT margin 2.5% 2.2%
rewards pharmacists with lower Return on Adjusted
banner member fees in
Capital Employed 22.4% 20.2%
recognition of their support of
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
17
 Sigma products

18
Sigma Company Limited Annual Report 2004/2005
Key Highlights

Licensed
trademark of Asta
Medica AG

Licensed
trademark of Ferrosan
Asia Pacific Pty Ltd

Sigma Company Limited Annual Report 2004/2005

19
 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
growth.

Mark Hooper Jackie Toh Andria Wyman-Clarke Greg Fisher

Dr Richard Treagus Dr Philip Marshall Chris Wettasinghe Steven Thacker

Grant McKirdy Brendan Redmond

20
Sigma Company Limited Annual Report 2004/2005
Management Profiles
During the 2004/2005 year,
Sigma has continued to
ensure it has the right highly
skilled people in roles within
the company to drive our
success. This focus has
provided Sigma with the skills
to provide the strategy and
lead the business in our
current and future success.
Corporate
Mark Hooper, B.Bus(Acc) CPA
FTA MAICD, joined Sigma in
2001 and is currently Chief
Financial Officer for the
Sigma Group. Prior to this he
had an extensive career in
resources most recently as
the Chief Financial Officer for
the Ashton Mining Group.
Throughout his career, Mark
has had a wide range of senior
positions across key financial
and commercial activities.
Jackie Toh, B.Ec (Acct), CPA
MBS, General Manager
Group IT and Management
Systems has been with Sigma
for 16 years, responsible for
IT and divisional finance for
both the Healthcare and
Pharmaceutical sides of
the business. Jackie has
played key roles in business
acquisitions, integrations
and system implementations.
Jackie is focussed on driving
IT projects that support
Sigma’s strategy and minimise
costs and risks to the Group.
Andria Wyman-Clarke, BA
MBA, was appointed General
Manager Human Resources
in March 2005. Andria and
her team are responsible for
supporting the business with
the people and culture
processes and initiatives that
drive improved business
performance. Andria has
considerable senior HR and
business experience in the
mining industry, automotive
industry, and most recently
Retail with Coles Myer.
Pharmaceutical
Greg Fisher, DipSc, joined
Sigma in August 2004 as
General Manager Manufacturing
and Contracts. Greg has over
30 years experience across a
broad range of functions in
Pharmaceutical manufacturing
and Quality Assurance. At
various times, Greg has been
responsible for the Australian,
U.S. and global operations of
multinational Pharmaceutical
companies. He has had
extensive experience in
the strategic development
and rationalisation of
manufacturing facilities.
Dr Richard Treagus, BscMed
MBChB MpharmMed MBA, joined
Sigma in the role of General
Manager New Business, after
5 years in a similar role with
Aspen Pharmaceuticals in South
Africa. Richard has since
expanded this role to incorporate
strategic management of
Sales and Marketing within
the Pharmaceutical division.
In this role, Richard has
played a major role in
negotiating new business
opportunities, and in
establishing a strong and
committed sales and marketing
team targeting sustained
growth for the business.
Dr Philip Marshall, BSc (Hons)
PhD FRACI CChem, joined the
Pharmaceutical division in
February 2004 in the newly
created role of General Manager
Scientific Affairs. This role has
been created to further elevate
and integrate the Regulatory
Affairs, Quality Assurance and
GMP compliance functions
across all Sigma sites. Philip
has a PhD in chemistry with
over 25 years experience in
scientific affairs and
manufacturing gained with
large pharmaceutical companies
such as Pfizer, Mayne
Pharmaceuticals and as an
independent consultant to the
pharmaceutical industry.
Healthcare
The Healthcare division has
continued to improve both the
financial results and the service
level offerings to customers.
A major contributor to this
progress has been the
contributions from the existing
management and staff.
Chris Wettasinghe, FCA(SL)
ACIS MNIA, joined the Sigma
Healthcare business in
February 2003 as General
Manager – Merchandise and
Inventory. In this role, Chris
has responsibility for supplier
relations, national buying for
Pharmaceuticals, OTC, general
merchandise and private label.
Chris has over 24 years
pharmaceutical industry
experience, in various finance,
merchandise and marketing
roles including General
Manager-Merchandise and
Inventory. Chris and his team
have made significant
contributions towards ensuring
that Sigma has strong
relationships with its suppliers
and in achieving high service
levels in conjunction with
excellent stock turns and
reduced stock obsolescence
and holding costs.
Steven Thacker, M.Bus(Log),
was appointed General
Manager Logistics in May 2003.
As a wholesaler and distributor,
strategic management of the
logistics function is critical in
the future success in
Healthcare. Steven has
considerable broad logistics
experience spanning over
20 years in the Logistics field
through consultancy work
and with such companies as
Simplot, Linfox, and TNT both
in Australia and overseas,
and is well placed to challenge
traditional industry thinking.
Steven and his team are in
the process of implementing
significant changes that will
lay the foundations for a
strong performance from
Healthcare in future years.
Grant McKirdy, FCPA FACPP,
joined Sigma in October 1998
in the role of General Manager
Healthcare Services. Grant
has significant industry
experience gained from 12 years
with F.H. Fauldings in various
roles including General
Manager Operations and Asia.
Grant and his team have
made significant contributions
towards ensuring Sigma
provides a premium service
to customers, and continues
to profitably grow market share.
Brendan Redmond, BSc,
joined Sigma in 2003 as
General Manager Retail to lead
this division. Brendan and his
team have concentrated
significant effort towards
defining Sigma’s strategy in
managing its banner groups,
and in encouraging greater
purchasing pull through from
banner members. More
recently, they have launched
the new Amcal Max brand to
complement our existing retail
offers, Amcal and Guardian.
Brendan has considerable
retail experience obtained
through 4 years with Repco
and 15 years with General
Electric in both Europe and
the USA, and has brought to
Sigma a fresh approach in
retail management.
Sigma Company Limited Annual Report 2004/2005
21
 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

22
Sigma Company Limited Annual Report 2004/2005
Board of Directors
Dr John W Stocker AO
MB, BS, BMedSc, PhD, FRACP, FTSE,
Non-Executive Chairman and Director.
Appointed a Director in
December 1998 and became
Chairman on 1 February 1999.
Dr Stocker is a Director of Telstra
Corporation Limited, Cambridge
Antibody Technology Group plc,
Circadian Technologies Ltd.
and Nufarm Ltd. Formerly
Chief Scientist, Commonwealth
of Australia 1996-1999 and
former Chief Executive of
CSIRO Australia 1990-1995.
Chairman of the Remuneration
Committee and member of the
Nomination and Corporate
Governance Committee.
Dr Stocker has not held any
directorships of listed entities
in addition to those set out
above during the last 3 years.
Age 59.
Mr Lewis C Butler
BPharm, MPS, AFAIPM, MACPP,
MSHP, FAICD, CDA Dip,
Non-Executive Director.
Appointed a Director in July
1995. Mr Butler, a community
pharmacist, is an active member
of the Amcal banner group and
is involved in the community
aged care and private hospital
healthcare sectors. Chairman
of Nomination and Corporate
Governance Committee.
Mr Butler has not held a
directorship of any other listed
entity during the last 3 years.
Age 51.
Prof. William N Charman
BPharm, PhD, MAICD,
Non-Executive Director.
Appointed a Director in 1996.
Professor Charman is currently
Professor of Pharmaceutics
and Director, Centre for Drug
Candidate Optimisation at the
Victorian College of Pharmacy,
Monash University. Professor
Charman has over 19 years
experience in commercial and
academic pharmaceutical
research and product
development conducted
in the USA, Europe and Australia,
and is a consultant to national
and international pharmaceutical
companies. Member of the Risk
Management & Audit Committee.
Professor Charman has during
the last 3 years also been a
Director of Acrux Limited.
Age 45.
Mr Elmo R de Alwis
CPA, MAICD, Executive Director.
Appointed Managing Director
in February 2001. Mr de Alwis
has had over 25 years
experience in the pharmaceutical
industry and during his career
with Sigma has managed
both the manufacturing and
wholesaling operations.
President of the National
Pharmaceutical Services
Association and Medicine
Partnership of Australia.
Trustee Director of LUCRF.
Mr de Alwis has not held a
directorship of any other listed
entity during the last 3 years.
Age 52.
Ms Linda B Nicholls
BA (Econ), MBA, FAICD,
Non-Executive Director.
Appointed a Director in April
1997. Ms Nicholls is currently
Chairman of Australia Post,
Deputy Chairman Healthscope
Limited and a Director of
Perpetual Trustees Australia
Limited and St George Bank
Limited. Ms Nicholls has over
26 years experience in banking
and finance in Australia, the
USA and New Zealand. Chairman
of the Risk Management &
Audit Committee and a member
of the Nomination and
Corporate Governance and
Remuneration Committees.
Ms Nicholls has not held any
directorships of listed entities
in addition to those set out
above during the last 3 years.
Age 56.
Mr William J Scott
JP, BPharm, MPS, FAIPM, MACPP,
F.DipMgt, FAICD, CDA Dip,
Non-Executive Director.
Appointed a Director in February
1996. Mr Scott is a community
pharmacist and an active
participant in industry affairs.
Mr Scott is the current President
of The Pharmacy Guild of
Australia (Victorian Branch) and
is also the National Vice President
of The Pharmacy Guild. Mr Scott
is also Chairman of the Guild
National Health Economics
Committee, Healthlinks.
Net Pty Ltd and Community
Pharmacy Agreement
Management Committee.
Mr Scott has not held a
directorship of any other listed
entity during the last 3 years.
Age 59.
Mr H Kenneth Windle
BPharm, MPS, FAIM,
Non-Executive Director.
Appointed a Director in August
2000. Mr Windle is Chairman of
Advent Pharmaceuticals Limited
and Cerylid Biosciences
Limited. He is a Director of
Acrux Limited, Woolcock
Institute of Respiratory Medicine,
Aus Bio Ltd, Centre for Drug
Candidate Optimisation and
RRC Company Pty Ltd.
A former Regional Director,
Glaxo Wellcome Asia Pacific
Pte. Ltd, with over 30 years
experience in the Glaxo Group
and in the world-wide
pharmaceutical industry.
A former non-executive
Director of the Singapore
Economic Development Board,
and former member of the
Australian Prime Minister's
Science Council with a strong
involvement in pharmaceutical
research committees and
boards as well as in
pharmaceutical and pharmacy
education. Member of the Risk
Management & Audit Committee.
Mr Windle has not held any
directorships of listed companies
within the last 3 years other
than those listed above.
Age 60.
Mr Brian Jamieson
FCA, Non Executive Director
Appointed a Director in May
2003. Mr Jamieson is currently
Managing Partner Melbourne
of Minter Ellison Lawyers.
He is a Director of the Bionic
Ear Institute, Care Australia,
Oxiana Limited, The Menzies
Foundation and is Deputy
Chairman of the Committee
for Melbourne. He is a former
Chief Executive Officer of KPMG
Australia. He has over 30 years
experience in providing advice
and audit services to a diverse
range of public and large
private companies. Member
of the Risk Management &
Audit Committee.
Mr Jamieson has not held any
directorships of listed entities
in addition to those set out
above during the last 3 years.
Age 60.
Mr James Orr
LLB B Comm
Company Secretary
James has worked as a
corporate lawyer and company
secretary in a number of large
private and publicly listed
companies for over 15 years.
James joined Sigma in 2001
as General Counsel and
became Company Secretary
in March 2003.
Age 41.
Sigma Company Limited Annual Report 2004/2005
23
 Corporate Governance
Board Responsibilities and
Objectives
Your Board of Directors is
primarily responsible for
setting the strategic direction
and corporate governance of
Sigma with the aim of
maximising long term returns
to shareholders at an
acceptable level of risk. The
implementation of Sigma’s
strategic direction and the
management of the business
have been delegated to the
Managing Director as its
Chief Executive Officer. Whilst
there is ongoing interaction
between the Board and
management, your Board
functions independently of
management.
Your Board draws on
corporate governance best
practice to contribute to
Sigma’s performance.
The Corporate Governance
section of Sigma’s website
(www.sigmaco.com.au) sets
out the Company’s practices
and procedures in the context
of the ASX Corporate
Governance Council’s
“Principles of Good Corporate
Governance and Best
Practice Recommendations”.
As at the date of the
Director’s Report, the Board
considers that Sigma
complies with the ASX
Corporate Governance
Council’s Best Practice
Recommendations in all
material respects.
24
Sigma Company Limited Annual Report 2004/2005
Board Composition
Your Board currently consists
of one Executive and seven
Non-Executive Directors,
including the Chairman. The
maximum number of Directors
allowed is nine, with at least
six, including the Chairman,
required to be Non-Executive.
There is also a requirement
that there be a minimum
number of ‘Pharmacist
Directors’, depending on the
number of shares held by
‘Pharmacist Shareholders’.
Presently two community
pharmacists serve as
Directors on your Board.
On a regular basis your Board
reviews both the number and
skills of Directors. Sigma sees
benefits in having a Board
with a diversity of backgrounds,
experience and skills.
On a regular basis your
Board arranges for a formal,
independent performance
review of individual Directors
and the Board as a whole to
ensure it is operating effectively.
The last formal review was
undertaken in late 2004. The
review comprised individual
interviews with all directors,
selected senior managers,
and a number of external
parties who have dealings with
the company. A presentation
of the findings was given to
the Board as a whole. In
addition, the Chairman
reviewed the findings of the
report with each director on a
one on one basis.
All Directors (with the exception
of the Managing Director)
must retire from office no later
than the third annual general
meeting (AGM) following their
last election. If eligible, a Director
may stand for re-election subject
to the following limitations:
• no Director (other than
the Managing Director)
should serve more than
fifteen years, and
• on attaining the age of
65 years a Director will retire,
by agreement, at the next
AGM and not seek re-election.
Independence
Sigma has adopted a
definition of “independence”
for directors that is consistent
with that suggested by the
ASX Corporate Governance
Council. This definition is
included in the Corporate
Governance section of the
Company’s website. Applying
this definition, Messrs Butler
and Scott as practising
Pharmacists are not
independent, due to the level
of transactions between the
pharmacies they are
associated with and Sigma.
These transactions were on
the same terms and
conditions that would apply to
any customer of Sigma. In
addition to the constitutional
requirement, the Board
greatly values the insight and
advice provided by the
pharmacist directors into this
important part of the
Company’s business.
Euan Murdoch (who resigned
effective 31 January 2005)
had within the last 3 years
been employed in an
executive capacity with
Herron Pharmaceuticals Pty
Ltd. Mr Murdoch was not
considered independent
under the terms of our
definition of independence.
All other Non-Executive
Directors are considered by
the Board to be independent,
meaning that each one is
generally free from any
management role, or
business interest or other
relationship that could
materially interfere with the
Director’s ability to act in the
best interests of the Sigma
Group as a whole.
Only those transactions
permitted by Sigma’s
Constitution and the
Corporations Act take place
with Directors or their related
parties. These are on the
same commercial terms and
conditions applying to any
other external party, supplier
or customer. Directors are
required to disclose in writing
any related party
transactions. Related party
transactions are set out in
note 28 to the financial report.
Directors are also required to
identify any conflict of interest
they may have in dealing with
Sigma’s affairs and subsequently
to refrain from participating in
any discussion or voting on
those matters. If a potential
conflict of interest is likely to
arise, the Director concerned
does not receive copies of the
relevant Board papers and
withdraws from the Board
meeting while those matters
are considered. Accordingly
the Director concerned
takes no part in discussion
nor exercises any influence
over other members of the
Board if a potential conflict
of interest exists.
Board and Committee
Meetings
There were 11 Board
meetings during the year. The
frequency of Board and
Committee meetings and
Directors’ attendance at those
meetings is set out in the
Directors’ Report.
In addition to their scheduled
meetings the Board and Board
Committees meet as required to
deal with any specific or urgent
matters requiring their attention
or action. At their scheduled
meetings Directors receive
detailed financial, operational
and strategy reports from senior
managers. Management is
available to discuss these
reports with the Board.
On a regular basis
Non-Executive Directors
meet without the Managing
Director or other members
of management being
present, to ensure that the
Non-Executive Directors
maintain independence of
thought and judgment.
The Non-Executive Directors
also meet independently with
the internal and external
auditors at least twice per year.
Independent Professional
Advice and Access to
Information
Directors have a right of access
to all Company information
and executives. Subject to
prior consultation with the
Chairman, Directors are
entitled to seek independent
professional advice at the
Company’s expense in
connection with their duties
and responsibilities. Directors
also execute an agreement
with Sigma giving them a right
of access to Board Papers after
their directorship concludes.
Board Committees
The Board has established
the following committees to
assist it in carrying out its
duties and to allow detailed
consideration of issues:
• Nomination and Corporate
Governance
• Risk Management and Audit
• Remuneration
Each committee is comprised
of Non-Executive Directors,
although the Managing
Director and relevant senior
executives attend by
invitation. The committee
structure, its membership
and its effectiveness are
reviewed on a regular basis.
Each committee has its own
written charter setting out its
role and responsibilities and
the manner in which it is to
operate. All matters determined
by committees are submitted
to the full Board as
recommendations for decision.
Risk Management and
Audit Committee
The Risk Management and
Audit Committee comprises
Ms L B Nicholls (Chairman),
Mr B Jamieson, Prof W N
Charman and Mr H K Windle.
Its main responsibility is to
review the Company’s
financial reporting process,
management of risks, audit
processes and compliance
processes. In particular, it is
responsible for making
recommendations to the
Board with respect to all
financial information released
by the Company.
The Committee also
recommends the appointment,
removal and remuneration
of the external auditor,
together with the terms of
engagement. It also reviews the
activities and organisational
structure of the internal audit
function and reviews the
appointment or replacement
of the internal auditor.
The Committee receives regular
reports from management
and from the internal and
external auditors. It also
meets with the internal and
external auditors without the
Managing Director or other
members of management
being present at least twice a
year. The internal and external
auditors are free at any time
to communicate directly with
either the Chairman of the
Committee or the Board.
The Committee has authority,
within the scope of its
responsibilities, to seek any
information it requires from any
employee or external party.
Prior approval of the
Committee must be gained
for any non-audit work to be
performed by the external
auditor. There are specified
limits on this non-audit work
to ensure that the
independence of the auditor
is maintained.
There is also a requirement
that the audit partner
responsible for the audit not
perform in that role for greater
than 5 years.
Nomination and Corporate
Governance Committee
The Nomination and Corporate
Governance Committee
comprises Mr L C Butler
(Chairman), Dr J W Stocker
and Ms L B Nicholls.
Its main responsibility is to
review the Board’s experience
and skills and assess
individual Director and Board
performance as well as
succession planning. It also
has responsibility for
reviewing and making
recommendations on Sigma’s
corporate governance
practices and procedures.
Remuneration Committee
The Remuneration Committee
comprises Dr J W Stocker
(Chairman) and Ms L B Nicholls.
The Committee’s main
responsibility is to advise the
Board on remuneration
policies and practices
generally, and to make
specific recommendations
on remuneration packages
for the Managing Director and
Non-Executive Directors
based on an annual review.
Sigma Company Limited Annual Report 2004/2005
25
 Corporate Governance
continued
Remuneration packages are
set at levels that are intended
to attract and retain quality
Directors and executives
with the skills necessary to
successfully manage the
Sigma Group’s operations
and achieve strategic
objectives.
Total remuneration for Non-
Executive Directors is
determined by shareholders.
Individual Non-Executive
Directors’ fees are
determined by the Board
within the maximum
aggregate amount approved
by shareholders. The
total fees and details of
remuneration paid to
Non-Executive Directors for
the last financial year are
set out in the Directors’
Report and in note 23 to the
financial statements.
A proportion (presently 25%)
of each Non-Executive
Director’s base remuneration
is taken in the form of Sigma
shares purchased on the
ASX in accordance with
terms and conditions of the
Non-Executive Directors’
Share Plan. Details of
director’s entitlements upon
retirement and accrued
retirement benefits are set
out in the Directors Report.
Evaluation of senior executive
performance and remuneration
is undertaken by the Managing
Director on an annual basis.
26
Sigma Company Limited Annual Report 2004/2005
Risk Assessment and
Management
The Board is committed to the
identification, assessment and
management of risk throughout
Sigma’s business activities.
The Board’s committee
structure forms an important
part of the risk management
process. Through the Risk
Management and Audit
Committee, the Board receives
regular reports on specific
business areas where there
may exist significant business
risk or exposure.
Sigma recognises that risk
management is an intrinsic
part of each manager’s day
to day activity. Each business
division is individually
responsible and financially
accountable for ensuring
that there are appropriate
systems and structures in
place for the protection of its
people and assets.
The effectiveness and
appropriateness of specific
risk management systems are
monitored and reviewed on a
regular basis. For example,
the internal audit plan is
developed following risk
analysis and assessment and
is focussed to confirm the
operation of the internal
controls and to assess the
effectiveness and efficiency
of the control environment.
Further emphasising the
importance of risk
management systems, a
Group Risk Manager was
appointed during the course
of the year to oversee
Sigma’s risk management.
Health and Safety
Management
The Board receives regular
management reports that cover
compliance and performance
matters in respect of health
and safety matters.
The Company is committed to
the highest standards of
occupational health and
safety (OHS) in all its
operations. Sigma:
• Monitors its compliance
with relevant legislation;
• Encourages employees
to actively participate in
the management of OHS
issues; and
• Undertakes annual systems
and performance reviews
as part of its continuous
improvement program.
Ethical Standards
Sigma has adopted a Code
of Conduct that applies to all
Directors and employees.
The Code requires that at all
times all Company personnel
must act with the utmost
integrity and objectivity and
in compliance with all laws
and Company policies.
Share Trading
Sigma’s share trading policy
prohibits Directors or employees
from trading in the Company’s
shares if they are in possession
of non-public price sensitive
information. It also prohibits
short-term trading.
Trading is not permitted in the
week immediately prior to the
release of full or half-year
results or prior to the Annual
General Meeting. In addition,
Directors must obtain prior
approval for any trading from
the Chairman and staff must
seek prior approval from the
Managing Director or the
Company Secretary.
Regular reminders of the
company’s share trading
policy are issued to senior
management.
Continuous Disclosure
Sigma is committed to ensuring
that all shareholders, the
market and other stakeholders
are provided with and have
access to full and timely
information about its activities.
The Company has procedures
in place to satisfy this
commitment and its continuous
disclosure obligations.
Regular briefings and
presentations are given in all
Australian States and selected
overseas locations. Any new
information that is presented
will have been disclosed to
the ASX and posted on the
Company’s website. All ASX
releases are also posted on
the Company website.
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

27
 Directors’ Report

28 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
29
 Directors’ Report
continued

30 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
31
 Remuneration Report

32 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
33
 Remuneration Report
continued

34 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
35
 Remuneration Report
continued

36 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
37
 Remuneration Report
continued

38 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
39
 Remuneration Report
continued

40 Sigma Company Limited Annual Report 2004/2005

Sigma Company Limited Annual Report 2004/2005
41
 Remuneration Report
continued

42 Sigma Company Limited Annual Report 2004/2005

Auditors’ Independence Declaration

Sigma Company Limited Annual Report 2004/2005

43
 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

45
 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

47
 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
49
 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
51
 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
53
 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
55
 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
57
 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
59
 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
61
 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
63
 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
65
 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
67
 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
69
 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
71
 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
73
 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
75
 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
77
 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

79
 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 www.sigmaco.com.au
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
investor.relations@signet.com.au 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
registrars@asxperpetual.com.au Kingsgrove NSW 2208 Fax: 03 6331 6470
www.asxperpetual.com.au Tel: 02 9740 1000
Fax: 02 9740 1047
50-52 Redfern Street,
Wetherill Park NSW 2164
Tel: 02 9757 1166
Fax 02 9725 3276