Sigma Healthcare : Annual Report 2023

Annual Report 2022/23

Contents

Directors' Report											01
Operating and financial review											05
Remuneration Report											10
Auditor's independence declaration										32
Consolidated financial statements											33
Consolidated statement of comprehensive income									33
Consolidated balance sheet											34
Consolidated statement of changes in equity									35
Consolidated statement of cash flows											36
Notes to the consolidated financial statements									37
About this report											37
	Financial performance	Operating assets and liabilities		Capital structure and financing			Group structure			Other disclosures
	38-43		43-50			51-55			56-59			59-64
1.	Segment information	8.	Trade and other receivables	15.	Contributed equity	19.	Business acquisitions	25.	Expenditure commitments
2.	Sales and other revenue	9.	Inventories	16.	Reserves	20.	Non-controlling interest	26.	Auditors' remuneration
3.	Expenses	10.	Trade and other payables	17.	Borrowings	21.	Details of controlled entities	27.	Guarantees
4.	Taxation	11.	Property, plant and equipment	18.	Financial risk management	22.	Related party disclosures	28.	Key management personnel
														compensation
5.	Earnings per share	12.	Goodwill and other				23.	Parent company financial	29.	Employee share plans and
					intangible assets						information			share-based payments
6.	Dividends	13.	Provisions and contingencies				24.	Deed of cross guarantee	30.	Notes to the statement
														of cash flows
7.	Subsequent events	14.	Right-of-use assets							31.	New accounting standards
					and lease liabilities
Directors' declaration											65
Independent auditor's report											66
Shareholder information											69
Five-year summary											71
Contacts											72

Sigma Healthcare Limited | Annual Report 2022/23

Directors' Report

For the year ended 31 January 2023

The Directors present their report on Sigma Healthcare Limited (the Company) and its controlled entities (the Group) for the year ended 31 January 2023.

Directors

The names of the Directors and Company Secretary of the Company as at 31 January 2023 (unless otherwise stated) were:

Name	Particulars
Mr Michael Sammells	Appointed a Director of Sigma Healthcare Limited in
BBus (Acc), FCPA, GAICD.	February 2020 and Chairman of Sigma Healthcare Ltd in
Chairman, Non-Executive	August 2022. Mr Sammells is currently a Non-Executive
Director at AMP. Mr Sammells has 35 years of broad experience
Director, Member of the	in finance, corporate services and has held operational roles
Risk Management and	with expertise in finance, accounting, treasury, investor relations,
Audit Committee	capital developments, mergers and acquisitions and IPOs.
	Mr Sammells is a former Chief Financial Officer of Healthscope
	Limited and Medibank Private.
	Mr Sammells has not held any other directorships in listed
	entities over the past three years.
Mr Vikesh Ramsunder	Vikesh Ramsunder commenced as the Managing Director
B.Com Logistics, (MBL)	and CEO of Sigma Healthcare Limited on 1 February 2022.
Corporate Strategy	From January 2019 to December 2021 Vikesh was Group CEO
CEO and Managing	of the Clicks Group in South Africa, the culmination of a 28-year
career with the Clicks Group which included 18 years as part of
Director (appointed
the executive team. Before becoming Clicks CEO Vikesh held
1 February 2022)
a number of roles within the Group, including Chief Operating
	Officer from 2015 and Managing Director of the pharmaceutical
	wholesaler business, United Pharmaceutical Distributors.
	Mr Ramsunder has not held a directorship of any other listed
	entity during the last three years.

Name	Particulars
Mr David G Manuel	Appointed a Director of Sigma Healthcare Limited in October
BPharm, MPS, MAICD.	2009. Mr Manuel is a community pharmacist proprietor and
an active participant in industry affairs with a special interest
Non-Executive Director,
in cognitive services such as Opiate Dependency treatments,
Member of the Risk	Compounding, Medical Technology and Aged Care pharmacy
Management and Audit	services. Mr Manuel is a Director of Alchemy Healthcare Pty Ltd,
Committee, Member	Black Swan Healthcare Ltd, Elements Health Care Pty Ltd and
of the Nomination &	Oqea Pty Ltd. He is a current Western Australian representative
Remuneration Committee	on the Amcal Guardian National Council (AGNC) and a current
	Branch Committee Member of The Pharmacy Guild of Australia
	(WA Branch).
	Mr Manuel has not held any other directorship during the last
	three years.
Ms Kathryn (Kate)	Appointed a Director of Sigma Healthcare Limited in December
D Spargo	2015. Ms Spargo holds a Bachelor of Law with Honours, an Arts
LLB (Honours), BA, FAICD.	degree from the University of Adelaide and is a fellow of the
Non-Executive Director,	Australian Institute of Company Directors. She has gained broad
business experience as both an advisor, having worked in private
Member of the Risk	practice and government, and as a director of listed and unlisted
Management and Audit	companies. Ms Spargo is currently a Non-Executive Director at
Committee (Interim	the following listed entities: Sonic Healthcare Limited, Adairs
Committee Chair	Limited and Bapcor Ltd. In addition Ms Spargo is also currently
October 22 - to date)	a Non-Executive Director at CIMIC Ltd (now unlisted).
	Over the last three years, Ms Spargo was a Non-Executive
	Director at Xenith IP Ltd. In September 2021, Ms Spargo retired
	from her position as Chairman of CoInvest and at the same time
	joined the board of the unlisted company Jellis Craig.
	Ms Spargo is also Director at the Geelong Football Club and
	Future Fuels Cooperative Research Centre.

Sigma Healthcare Limited | Annual Report 2022/23

01

Directors' Report continued

For the year ended 31 January 2023

Name	Particulars
Ms Christine Bartlett	Appointed a Director of Sigma Healthcare Limited in March 2016.
BSc, MAICD.	Ms Bartlett holds a Bachelor of Science (Pharmacology and
Physiology) from the University of Sydney and has completed
Non-Executive
the Harvard University Advanced Management Training and
Director, Chairman	Global Executive Program. As an experienced CEO and senior
of the Nomination &	executive, Ms Bartlett has broad commercial expertise, with a
Remuneration Committee	particular focus in areas of financial discipline, risk management,
	innovation, technology, and strategy execution. Ms Bartlett's
	current directorships in listed entities include Non-Executive
	Director at Mirvac Group and Reliance Worldwide Corporation
	Ltd. Ms Bartlett resigned as a director of GBST Ltd in
	November 2019.
	Ms Bartlett has not held any other directorships in listed entities
	over the past three years.
	In addition, Ms Bartlett's current directorships in unlisted
	companies include Non-Executive Director of TAL. Ms Bartlett
	is a member of Chief Executive Women and the Australian
	Institute of Company Directors.
Mr Neville Mitchell	Appointed a Director of Sigma Healthcare Limited in
B.Com, CA. Non-Executive	February 2023. Mr Mitchell has extensive financial experience
Director, Chair Risk	coupled with broad experience as an active Non-Executive
Director. Mr Mitchell is a current Director and Chair of the
Management and	Audit Committee of Sonic Healthcare and is a Director and
Audit Committee	Chair of the Audit and Risk Committee of Fisher and Paykel
(appointed a Director	Healthcare and QBiotics. Previously, Mr Mitchell has held other
2 February 2023,	Director roles including South Eastern Sydney Local Health
Chair of RMAC from	District, The Board of Taxation, Sirtex Medical and Osprey
April 2023 onwards)	Medical Inc. Mr Mitchell is a qualified Chartered Accountant
	with international healthcare and finance experience. Prior to
	becoming a Non-Executive Director, Mr Mitchell had a career
	spanning 27 years with Cochlear Limited, 22 of those years
	as Chief Financial Officer and Company Secretary.

Name	Particulars
Kara McGowan	Appointed Sigma Healthcare's General Counsel and Company
LLB (Hons), BCom,	Secretary in October 2021. Ms McGowan has been a Company
Secretary for over 10 years for a broad range of corporate
BbusEc, ACIS, GAICD
structures and businesses. Prior to joining Sigma, Ms McGowan
General Counsel &
was General Counsel and Company Secretary at Transdev,
Company Secretary	an international public transport operator where she was
	responsible for the provision of strategic legal advice for all
	operations in Australia and New Zealand. Over the years she has
	held a variety of legal and commercial roles including Company
	Solicitor at Kmart and Head of Joint Ventures for Australian
	Unity Investments. She began her legal career at Clayton Utz
	as a competition lawyer. Ms McGowan is admitted as a Barrister
	& Solicitor of the Supreme Court of Victoria, holds a Graduate
	Diploma of Applied Corporate Governance and is a Graduate
	and Member of the Australian Institute of Company Directors.
	Ms. McGowan also holds a Bachelor of Commerce and Bachelor
	of Business Economics.

Principal activities

The principal activities of the Group during the year were the wholesale distribution of pharmaceutical goods and medical consumables to community pharmacies, including the provision of retail support services to our branded network of pharmacy members, dose administration aid services, technology and data analytics solutions to our customers, and the provision of third and fourth party logistics services to pharmaceutical manufacturers and other supplier partners.

No significant changes have occurred in the nature of the principal activities during the financial year.

The Group has its principal place of business at Level 6, 2125 Dandenong Road, Clayton, Victoria 3168, Australia.

Operating and financial review

The operating and financial review, which forms part of this Directors' Report, is presented separately on pages 5 to 9.

Environmental regulations

The Group is not licenced or otherwise subject to conditions for the purposes of environmental legislation or regulation.

02	Sigma Healthcare Limited | Annual Report 2022/23

Dividends

Since the end of the year, the Directors have resolved to pay a final dividend of 0.5 cent per share fully franked, accordingly this dividend is not provided for in the balance sheet at 31 January 2023. The ex-dividend date is 30 March 2023, the record date is 31 March 2023 and it is expected to be paid on 18 April 2023. The total amount payable is $5.3 million.

Rounding of amounts

The Company is a Company of the kind referred to in the Australian Securities and Investments Commission (ASIC) Corporations (Rounding in Financials/Directors' Reports) Instrument 2016/191, dated 24 March 2016, and in accordance with that Corporations Instrument amounts in the Directors' Report and the financial statements are rounded off to the nearest thousand dollars, unless otherwise indicated.

Proceedings on behalf of the Company

The Directors are not aware of any persons applying for leave under s.237 of the Corporations Act 2001 to bring, or intervene in, proceedings on behalf of the Company.

Directors' and officers' indemnities and insurance

As provided under the Constitution, the Company indemnifies Directors and Officers to the extent permitted by law for any liability incurred to persons other than the Company or its related bodies corporate in their capacity as directors or officers unless the liability arises out of conduct involving a lack of good faith.

During the year, the Company paid an insurance premium in respect of a contract insuring its Directors and Officers against a liability of this nature. In accordance with normal commercial practices, under the terms of the insurance contracts, the nature of the liabilities insured against and the amounts of premiums paid are confidential.

Non-audit services

Details of the amounts paid to the auditor of the Company, Deloitte Touche Tohmatsu, and its related practices, for audit and other services provided during the year and the comparative period are set out in Note 26.

The Directors are aware of the issues relating to auditor independence and have in place policies and procedures to address actual, potential and perceived conflicts in relation to the provision of non-audit related services by the Company's auditor. Specifically, through the Risk Management and Audit Committee (RMAC), the independence of the auditor is maintained by:

• Limiting the scope and nature of non-audit services that may be provided; and
• Requiring that permitted non-audit services must be pre-approved by the Chairman of the RMAC.

During the current year, the external auditor did not provide any non-audit services.

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 32.

Remuneration Report

Details of the Group's Remuneration Policy in respect of the Directors and Key Management Personnel are included in the Remuneration Report on pages 10 to 31, which forms part

of this Directors' Report. Details of the remuneration paid to each Non-Executive Director, the CEO and Managing Director and other Key Management Personnel are also detailed in the Remuneration Report.

Environmental, social and governance

Sigma recognises the importance of environmental, social and governance matters to our shareholders, suppliers, customers and our team members.

Since 2020/21 Sigma has published a Sustainability Report which includes 2030 targets and is informed by an annual materiality assessment. The materiality assessment is a detailed analysis and stakeholder engagement exercise to identify the areas of greatest risk and opportunity for Sigma and where the company can have the greatest positive influence on the environment and society. This assessment also underpins Sigma's Plan to 2030 targets.

The Sustainability Report is an integrated whole of business sustainability report approved by the Sigma Board, with key themes being:

• Identifying and effectively managing and mitigating environmental risks from all work practices;
• Providing safe and healthy workplaces that empower our team members to perform at their best;
• Cultivating an inclusive employee culture that is committed and equipped to lead through change and to achieving our objectives under this policy; and
• Implementing strategies and a reporting framework to give effect to our objectives stated under this policy.

More details on Sigma's ESG commitment are available in our Sustainability Report, which is available on the Sigma website.

Sigma Healthcare Limited | Annual Report 2022/23

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