AFT Pharmaceuticals poised for strong earnings growth

NZX and Media release 21 May 2019

AUDITED FINANCIAL RESULTS FOR THE YEAR TO 31 MARCH 2019
AFT Pharmaceuticals poised for strong earnings
growth
Highlights
• Revenue increases 5% to $85.1 million with strong growth in the core over the
counter (OTC) medicine portfolio; revenue excluding divested non-core
medicines up 14%
• Operating profits of $6.1 million, a $16.2 million reversal of the prior year’s $10.1
million operating loss, benefitting from an easing in the research and
development programme expenditure
• Operating cash flow rises to $1.1 million, a sharp turnaround on the prior year’s
$9.2 million operating cash outflow
• Maxigesic pain relief formulations now registered in 42 territories up from 32 at the
same time a year ago and is licensed in over 125 territories
• Development of key products continues with NasoSURF drug delivery device and
Pascomer skin treatment making progress with the US Food and Drug
Administration (FDA)
• Negotiations commence to refinance debt with a New Zealand bank at more
favourable interest rates and offer the potential for significant savings
• Operating earnings for the year to 31 March 2020 forecast to rise to between $9.0
million - $12.0 million
AFT Pharmaceuticals (NZX:AFT, ASX:AFT) today reports a strong rise in operating
earnings as it benefits from growth in its main over-the-counter medicine portfolio and
the successful conclusion of clinical trials on the key Maxigesic pain relief products.
Revenue for the year to 31 March 2019 increased 5% to $85.1 million from $81.2 million
in the prior financial year. Adjusting for the divestment of the group’s lower margin
hospital products to Baxter Healthcare at the end of the 2018 financial year for New
Zealand and the start of the 2019 financial year for Australia, revenue increased 14%.
Operating profit rose strongly to $6.1 million, reversing last year’s $10.1 million
operating loss by $16.2 million, a result that is in line with the guidance given at the
start of the financial year.
The result reflected sales growth, tight control of operating costs and lower research
and development expenditure following the successful completion of key clinical
trials on the Maxigesic intravenous, liquid and tablet formulations.

Operating costs, which exclude financing charges, fell 21% to $36.9 million from $46.6
million at the same time a year ago. This included a 69% reduction in research and
development expenditure to $2.6 million from $8.2 million in the same period last year.
Meanwhile selling, distribution and general administrative expenses fell 8% to $33.7
million from $36.8 million in the same period a year ago as the company drove
operating efficiencies in sales and distribution, particularly in the second half of the
financial year. Losses after tax narrowed to $2.4 million from $12.7 million in the 2018
financial year.
AFT Pharmaceuticals Chairman David Flacks said: “We are delighted with the
company’s progress. The completion of the key Maxigesic clinical trials, the return to
generating positive operating profits and cashflow and the continued strong growth
in our broad portfolio of OTC medicines represent significant achievements.”
“We are now at a pivotal point in our development. We are well positioned to
continue to build on the strong position we enjoy particularly in OTC medicines in New
Zealand and Australia. We have made good progress in Southeast Asia and we have
continued to deliver on the significant out-licensing potential we see for Maxigesic in
large international markets.”
AFT Pharmaceuticals Founder and Managing Director Dr Hartley Atkinson said: “All of
AFT’s operating divisions are performing well. The Australian, New Zealand and
international operations have all contributed to a positive operating result and we
expect the Southeast Asian division to achieve the same in the coming year. We have
achieved this growth while maintaining tight control on costs and expect to deliver a
strongly improved operating earnings in the coming year.”
Summary Financial Results

Year Ended 31 March
2019 2018
$'000 $'000
Revenue 85,127 81,176
Cost of Sales 44,397 45,880
Gross Profit 40,730 35,296
Other Income 2,237 1,130
Selling and distribution expenses (26,540) (28,533)
General and administrative expenses (7,202) (8,308)
Research and development expenses (2,588) (8,230)
Equity Accounted Loss of joint venture entity (521) (1,494)
Operating Profit / (Loss) 6,116 (10,139)

AUSTRALIA
Sales in Australia increased 2% to $50.3 million from $49.2 million in the same period a
year ago. Adjusting for the divestments to Baxter Healthcare, revenue grew by 13%.
Operating profits rose strongly from $1.2 million to $5.3 million.
The main OTC channel grew 11%, while Maxigesic revenues grew by 14% following
regulatory changes, effective in February 2018, that saw codeine-based painkillers
becoming prescription only medicines.
The shift has caused some disruption to markets, with Australian pharmacies stocking
up on Maxigesic in the last quarter of the 2018 financial year in anticipation of this
switch. Additionally, consumers stockpiled codeine-based products with some buying
up to 12 months’ worth of product. However, we believe Maxigesic sales will benefits
as pharmacies and consumers run down their stocks.
Sales to hospital channels declined with the lower margin product divestments, but
this was partially recovered with the introduction of new hospital products, such as
antibiotic Piptaz, which we expect to drive growth in the channel in the 2020 financial
year.
NEW ZEALAND
New Zealand revenue fell by 1% to $26.8 million from $27.1 million in the same period
a year ago, but revenue was up 5% after adjusting for the divestments to Baxter
Healthcare.
Operating profit, which includes head office costs, rose to $0.5 million from a $2.7
million loss in the same period a year ago. Excluding these Head Office costs, which
the New Zealand operation carries for the benefit of all territories, operating profits
rose $4.1 million to $5.5 million from $1.4 million in the same period a year ago.
The New Zealand OTC channel grew 16% with strong allergy sales supported by
growth in the pain and eyecare categories and new product launches of Vitamin C
Liposachets, Maxigesic PE and Novatears. New Zealand also benefitted from a 21%
increase in Maxigesic sales.
These gains were offset by the divestments to Baxter Healthcare and the cessation of
our sole supply contract of the cardio-vascular drug Metoprolol. Final sales of the
medication were made in the prior financial year.
The New Zealand government appears set to follow Australia’s lead in the
rescheduling of codeine-based products as early as 2020 and we are monitoring
developments closely.
SOUTHEAST ASIA
Southeast Asia revenue grew by 66% to $2.1 million from $1.3 million in the same period
a year ago, reflecting strong growth in OTC revenues including growth in Maxigesic
tablets, which launched in Malaysia and relaunched in Singapore with its re-
classification to an over-the-counter product.

Our Hong Kong distributor is meanwhile preparing for a launch of Maxigesic in the
coming months. The region posted an operating loss of $0.3 million up from a $0.7
million operating loss in the same period a year ago and we are confident it will turn
in a positive operating result in the 2020 financial year.
INTERNATIONAL
The international division, which is mainly focussed on the out-licensing, registration
and enabling the sale (via licensees) of the Maxigesic range of pain relief products,
grew revenue by 63% to $5.9 million from $3.6 million in the same period a year ago.
Operating profit rose to $0.6 million from a $7.9 million loss in the same period a year
ago reflecting a 87% increase in sales of products and royalties and the reduction in
research and development expenditure.
Product Maxigesic Tablets

Maxigesic IV

Maxigesic oral
solution

Territories 2019 2018

2019 2018

2019 2018

Licensed 125+ 125 - % 68 62 10% 122 118 4%
Registered 42 32 28% - - - % - - - %
Sold in 20 10 100% - - - % - - - %

We have now out-licensed Maxigesic in its various forms in more than 125 territories.
To date our focus has been on the Maxigesic tablet form. Key tablet out-licensing
additions over the last year included Russia and Switzerland. We are continuing to
progress licensing discussions for the oral form in significant territories such as the USA,
Canada, Germany, South Korea and Latin America.
Following the successful conclusion of clinical trials, we are now able to turn our
attention to the hospital-based intravenous form, Maxigesic IV. In the 2019 financial
year, we out licensed Maxigesic IV in to 6 new countries including Mexico and South
Korea.
A key target in the coming year is to increase the number of countries in which
Maxigesic IV is licensed, which in turn will generate further income prior to these
countries registering a product, making sales and AFT earning royalties. At balance
date Maxigesic IV was licensed in 68 countries up from 62 the same time a year ago.
MAXIGESIC REGISTRATIONS
The registration of each of our products in each of these territories is the next and most
consequential step towards commercialisation of our intellectual property.
Registrations now stand at 42, up from 32 in the same period a year ago. They are for
the tablet form of Maxigesic, leaving a significant pipeline of opportunities still to be
developed.
The first Maxigesic IV registration, which will be in a market that will facilitate
registration in other territories such as the Middle East and Southeast Asia, is expected
during the 2020 financial year.

We have meanwhile completed the clinical development work on the oral liquid form
of Maxigesic and the first regulatory filings have been made in 23 regulated markets.
Finally, we are aiming in the 2020 year to file for registration of a faster dissolving version
of Maxigesic tablets. This follows our licence from a US company of a rapid solution
forming technology.
MAXIGESIC SALES
Maxigesic in its various forms is now for sale in 20 countries, up from 10 in the same
period last year. Sales in the established United Arab Emirates and Italian markets grew
at more than 50% over the 2019 financial year. These sales were supplemented with
launches in to new markets, including Ireland, Iraq, El Salvador and Malaysia.
Meanwhile, we are processing orders for a further nine countries.
“Exact launch timings - and the flow of royalties to AFT - are difficult to forecast given
hurdles ranging from regulatory issues to matters specific to licensees or distributors.
However, regardless we see ongoing progress, which will contribute and drive sales
growth going forward,” Dr Atkinson said.
“A further income source as sales grow are sales milestone payments, which exist in
most of our licensing agreements. For example, the first sales milestone in the
European Union of €500k on the Maxigesic tablet form was triggered in April.”
PRODUCT DEVELOPMENT
Development of the Maxigesic dose forms outlined at the time of our 2015 IPO have
been largely completed. In the 2019 financial year the most important development
milestone was the successful completion of the large study on Maxigesic IV. Some
additional studies specific to US registration requirements for the product are
underway. Meanwhile, further development work continues on the sachet form and
we are working on other line extension ideas for the drug platform.
Our NasoSURF nasal drug delivery device is undergoing some redesign following
human factor studies. These have been largely completed and we are now targeting
a type IIa medical device filing with the FDA this financial year. Market research in the
USA and UK identified that our first targeted indication for the device has potential to
deliver AFT a significant income stream.
We have completed the initial development work on Pascomer, a treatment for a
hereditary skin condition. It offers the potential to access a market worth US$400 million
to US$450 million in sales. We have opened an Investigational New Drug (IND)
application following a successful FDA meeting, which allows us to initiate our first
multi-center international clinical study on the medication.
Presently our joint venture partnership DSLP has funded all the development work to
date and is funding the first clinical study. We are however actively seeking to out-
license the product with interested parties for at least one major territory to minimise
our expenditure on this project.

BALANCE SHEET
AFT remains well funded, completing the year with a cash balance of $6.9 million, up
from $6.8 million a year ago. Total assets of $63.6 million, up from $56.6 million a year
earlier, have increased primarily due to increased working capital and the capitalised
components of the investment made into research and development and
registrations.
At 31 March 2019, we had an interest-bearing loan from specialist healthcare investor
CRG of $41.8 million up from $30.7 million at the same time a year ago. The loan, which
attracts an interest rate of 13.5%, matures at the end of the 2020 financial year.
Although CRG has offered to extend the loan, we have begun negotiations with local
banks to refinance our facilities at more attractive rates. Reflecting the positive
outlook for the business we are confident we will achieve that goal.
As an interim step and to reduce the cost of interest, we have on 21 May 2019
established a $15 million interim facility, which matures on 31 March 2020, from a local
commercial bank utilising the existing security arrangements. We will be repaying
US$9.5 million of the CRG loan using this facility in the next few days.
OUTLOOK
“We see significant potential for our products in global markets. The timing is always
difficult to forecast with certainty, not least because it is important that we find the
right partners to take our products through to commercialisation,” Dr Atkinson said.
“At the same time, we continue to develop and commercialise line extensions of the
Maxigesic range and other products such as NasoSurf and Pascomer. Once
achieved, all have the potential to generate significant shareholder value and
improve healthcare outcomes for patients around the globe.
“We have progressed further down the pathway to realisation of this goal since last
year which is pleasing but there remains significant work to be done to reach our true
potential and fully reward our shareholders.
“Despite these challenges we are looking to the remainder of the 2020 financial year
with confidence. We are targeting continuing positive cashflow and an operating
profit of between $9 million - $12 million. We will update the market at our annual
meeting in August.”
For further information:
Investors Media
Dr Hartley Atkinson Richard Inder
Managing Director The Project
AFT Pharmaceuticals +64 21 645 643
Tel: +64 9 488 0232

About AFT Pharmaceuticals
AFT is a growing multinational pharmaceutical company that develops, markets and
distributes a broad portfolio of pharmaceutical products across a wide range of
therapeutic categories which are distributed across all major pharmaceutical
distribution channels: over-the-counter (OTC), prescription and hospital. Our product
portfolio comprises both proprietary and in-licensed products, and includes patented,
branded and generic drugs. Our business model is to develop and in-license products
for sale by our own dedicated sales teams in our home markets of Australia and New
Zealand and in certain Southeast Asian markets, and to out-license our products to
local licensees and distributors to the rest of the world.

---

Template
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Updated as at 8 May 2019




Results for announcement to the market
AFT Pharmaceuticals Limited
Reporting Period 12 months to March 31 2019
Previous Reporting Period 12 months to March 31 2018
Currency NZ$
Amount (000s) Percentage change
Revenue from continuing
operations
$85,127 Up 5%
Total Revenue $85,127 Up 5%
Net profit/(loss) from continuing
operations
$(2,427) Down 81%
Total net profit/(loss) $(2,427) Down 81%
Interim/Final Dividend
Amount per Quoted Equity
Security
No dividends have been paid on ordinary shares and it is
currently not proposed to pay dividends.
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per Quoted
Equity Security
$0.03 $0.02
A brief explanation of any of the
figures above necessary to
enable the figures to be
understood
Accompanying this announcement are the Group’s audited
consolidated financial statements for the twelve months
ended March 31 2019. These financial statements and the
full year results commentary dated May 22 2019 provide the
balance of information requirements in accordance with NZX
Listing Rule 3.5 and Appendix 2.
Pursuant to ASX listing rule 1.15.3 AFT Pharmaceuticals
Limited confirms that it continues to comply with the rules of
its home exchange (NZX Main Board).
The unlisted Redeemable preference shares issued on
March 24 2017 attract a dividend rate of 9.4% per annum, or
25.8 cents per share per annum. None of the quarterly
dividends (with effective dates of June 30 2018, September
30 2018, December 31 2018 and March 31 2019) were paid
in cash. Accordingly, they have not been included in the table
above. The dividends net of withholding taxes for these four

quarters have been accumulated in the Redeemable
Preference Share Reserve.
Authority for this announcement
Name of person

authorised to
make this announcement
Malcolm Tubby
Contact person for this
announcement
Malcolm Tubby, Chief Financial Officer,
AFT Pharmaceuticals Ltd
Contact phone number +64 9 488 0232
Contact email address malcolm@aftpharm.com
Date of release through MAP

21 May 2019

Audited financial statements accompany this announcement.

---

ANNUAL REPORT 2019
Now, to
our future

02 AFT at a Glance
04 Key Highlights
06 Chairman and
CEO’s Report
12 Full Year Financial
Results Summary
16 Maxigesic developments
20 Product developments
22 Directors and
management team
26 Sustainability
Now, in the targeted time period
of FY2019, we celebrate a significant
milestone – a return to operating
profitability. It’s an accomplishment
that we’ve worked hard to achieve.
We continue to drive further value,
increasing market share and securing
new markets.

In 2015 AFT Pharmaceuticals listed on
the NZX to enable the acceleration
of bringing key innovative products
to global markets, together with
expanding home market sales. As
with all pharmaceutical development
projects, sales and profit would take
time, but we have remained steadfastly
committed to our strategy and targets.
2015
2019

Rest of world
Operating revenue
$5.9m
Number of products
5
Growth drivers
- Further increase sales of
Maxigesic through growth
in existing markets,
additional registrations
followed by new launches
during FY2020 and
following financial years.
- Additional regulatory
filings during FY2020
of new dose forms of
Maxigesic, registrations
and then additional sales.
- Sales of Maxigesic
are expected to grow
significantly over the
next few years driven by
new launches but it is
important to note that
there is a lag in these
sales from the time of an
out-licensing agreement
due to registration
timelines which vary
widely country to country
and are difficult to
estimate with accuracy
.
New Zealand
Operating revenue
$26.8m
Number of products
115
Growth drivers
- OTC products. Maxigesic,
Eyecare range, Vitamin
C Liposachets and the
launch of new products.
- Prescription product
growth from new product
launches.
- Gross Profit Margins have
improved significantly
and are now close to
the company margin
of 48% due to the OTC
sales growth and the
divestment and cessation
of lower margin Hospital
and prescription products.
This margin is expected to
be maintained.
Australia
Operating revenue
$50.3m
Number of products
70
Growth drivers
- Over the counter (OTC)
products. Maxigesic,
Eyecare range, Ferro
range and other pain
products range.
- The continuing
significant opportunity
for increased Maxigesic
sales offered by the
rescheduling of codeine-
based painkillers which
became prescription
only medicines on 1st
February 2018. There
was a significant amount
of stock piling prior to
this change, however, we
believe Maxigesic sales
will benefit as pharmacies
and consumers run down
their stocks.
- Further expansion of
the Hospital portfolio
of products such as the
antibiotic Piptaz.
- Gross profit margins have
continued to grow as OTC
product sales increase
and we expect continued
significant sales growth
and growth in profit in
Australia in FY2020.
Southeast Asia
Operating revenue
$2.1m
Number of products
9
Growth drivers
- Maxigesic launch in Hong
Kong and re-launch in
Singapore with its re-
classification to an OTC
product.
- Launch of new Hospital
products
Gross profit margin up to
+48
%
Operating profit growth
+15
%
over FY2018
Total operating revenue by market
(Percentage)
31.5%
6.9%
59.1%
2.5%
Total operating revenue
(NZ$m)
FY17FY18FY16FY15FY14FY13FY12FY11FY10FY09FY08FY07FY06FY05FY04FY03FY02FY01FY00
0
10
20
30
40
50
60
70
80
90
0
10
20
30
40
50
60
70
80
FY19
Total operating revenue
$85.1m

Australia

New Zealand

Rest of World

Southeast Asia
At a glance
Gross profit growth
+15
%
underlying +19%
Operating revenue growth
+5
%
underlying +14%
AT A GLANCEAFT PHARMACEUTICALS LIMITED
Annual Report 2019
0203

MAXIGESIC
42 countries
Maxigesic currently registered in.
Up from 32 in PY
125+ countries
Maxigesic currently licensed in.
20 countries
Maxigesic plus launch orders under
manufacture for 9 new countries.
$81.2m
$85.1m
REGULATORY FILINGS FY2019
Maxigesic IV
Regulatory filings underway in
multiple countries.
Maxigesic Oral Liquid
Regulatory filings underway in
multiple countries.
Maxigesic Hot Drink Sachets
Preparing first regulatory filings.
FINANCIAL HIGHLIGHTS (NZ$)
Operating revenue
$85.1m
Operating profit
$6.1m
Turnaround of
$16.2m on PY
Operating cashflow
$1.1m
Turnaround of
$10.2m on PY
Cash available at 31 March 2019
$6.9m
Onwards
and upwards
$69.2m
$64.0m
2019201820172016
TOTAL OPERATING REVENUE 2016 – 2019
OUR KEY PRODUCTS
Key highlights
KEY HIGHLIGHTS05AFT PHARMACEUTICALS LIMITED
Annual Report 2019
04

Poised for
strong growth
in earnings
Chairman and CEO’s Report
Hartley Atkinson
Founder and CEO
David Flacks
Chairman
Dear shareholders,
AFT Pharmaceuticals is delighted with the
progress made in the 2019 financial year.
We have returned to generating positive
operating earnings as we benefited from
continuing growth in our main over the
counter (OTC) medicine portfolio. At the
same time we have significantly expanded
the pipeline of growth opportunities
following the successful conclusion of
clinical trials on the key Maxigesic pain
relief products.
We are now at a pivotal point in our development.
We are also now well positioned to continue to build
on the strong position we enjoy particularly in OTC
medicines in New Zealand and Australia. We have
made good progress in Southeast Asia, and we have
continued to deliver on the significant out-licensing
potential we see for Maxigesic in large international
markets.
Revenue for the year to 31 March 2019 increased
5% to $85.1 million from $81.2 million in the prior
financial year. Adjusting for the divestment of the
Group’s lower margin hospital products to Baxter
Healthcare at the end of the 2018 financial year for
New Zealand and the start of the 2019 financial year
for Australia, revenue increased 14%.
AFT PHARMACEUTICALS LIMITED
Annual Report 2019
0607CHAIRMAN AND CEO’S REPORT

Operating profit rose strongly to $6.1
million, reversing last year’s $10.1 million
operating loss by $16.2 million, a result
that is in line with the guidance given at
the start of the financial year.
The result reflected sales growth,
tight control of operating costs and
lower research and development
expenditure following the successful
completion of key clinical trials on the
Maxigesic intravenous, liquid and tablet
formulations.
Operating costs, which exclude
financing charges, fell 21% to $36.9
million from $46.5 million at the same
time a year ago. This included a 69%
reduction in research and development
expenditure to $2.6 million from
$8.2 million in the same period last year.
Meanwhile selling, distribution and
general administrative expenses fell
8% to $33.7 million from $36.8 million
in the same period a year ago as the
company drove operating efficiencies in
sales and distribution, particularly in the
second half of the financial year. Losses
after tax narrowed to $2.3 million from
$12.7 million in the 2018 financial year.
All of AFT’s operating divisions are
performing well. The Australian,
New Zealand and international
operations have all contributed to a
positive operating result and we expect
the Southeast Asian division to achieve
the same in the coming year. We have
achieved this growth while maintaining
tight control on costs and expect to
deliver a strongly improved operating
earnings in the coming year.
Excluding these Head Office costs,
which the New Zealand operation
carries for the benefit of all territories,
operating profits rose $4.1 million to
$5.5 million from $1.4 million in the
same period a year ago.
The New Zealand OTC channel grew
16% with strong allergy sales supported
by growth in the pain and eyecare
categories and new product launches
of Vitamin C Liposachets, Maxigesic
PE and Novatears. New Zealand also
benefitted from a 21% increase in
Maxigesic sales.
These gains were offset by the
divestments to Baxter Healthcare
and the cessation of our sole supply
contract of the cardiovascular drug
Metoprolol. Final sales of the medication
were made in the 2018 financial year.
The New Zealand government
appears set to follow Australia’s lead
in the rescheduling of codeine-based
products as early as 2020 and we are
monitoring developments closely.
Southeast Asia
Southeast Asia revenue grew by 66% to
$2.1 million from $1.3 million in the same
period a year ago, reflecting strong
growth in OTC revenues including
growth in Maxigesic tablets, which
launched in Malaysia and relaunched
in Singapore with its re-classification
to an OTC product. Our Hong Kong
distributor is meanwhile preparing for
a launch of Maxigesic in the coming
months.
The region posted an operating loss
of $0.3 million up from a $0.7 million
operating loss in the same period a year
ago and we are confident it will turn in
a positive operating result in the 2020
financial year.
Rest of World
The Rest of World division, which is
mainly focussed on the out-licensing,
registration and enabling the sale (via
licensees) of the Maxigesic range of
pain relief products, grew revenue by
63% to $5.9 million from $3.6 million in
the same period a year ago. Operating
profit rose to $0.6 million from a $7.9
million loss in the same period a year
ago reflecting a 87% increase in sales
of products and royalties and the
reduction in research and development
expenditure.
We have now out-licensed Maxigesic
in its various forms in more than 125
territories. To date our focus has been
on the Maxigesic tablet form. Key tablet
out-licensing additions over the last
year included Russia and Switzerland.
We are continuing to progress licensing
discussions for the oral form in
significant territories such as the USA,
Canada, Germany, South Korea and
Latin America.
Following the successful conclusion of
clinical trials, we are now able to turn
our attention to the hospital-based
intravenous form, Maxigesic IV. In the
2019 financial year, we out licensed
Maxigesic IV in to 6 new countries
including Mexico and South Korea.
A key target in the coming year is to
increase the number of countries in
which Maxigesic IV is licensed, which in
turn will generate further income prior
to these countries registering a product,
making sales and AFT earning royalties.
At balance date Maxigesic IV was
licensed in 68 countries up from 62 the
same time a year ago.
Maxigesic registrations
The registration of each of our products
in each of these territories is the next
and most consequential step towards
commercialisation of our intellectual
property. Registrations now stand at
42, up from 32 in the same period a
year ago. They are for the tablet form of
Maxigesic, leaving a significant pipeline
of opportunities still to be developed.
The first Maxigesic IV registration, which
will be in a market that will facilitate
registration in other territories such as
the Middle East and Southeast Asia, is
expected during the 2020 financial year.
We have meanwhile completed the
clinical development work on the oral
liquid form of Maxigesic and the first
regulatory filings have been made
in 23 regulated markets. Finally, we
are aiming in the 2020 year to file
for registration of a faster dissolving
version of Maxigesic tablets. This
follows our licence from a US company
of a rapid solution forming technology.
Australia
Sales in Australia increased 2% to
$50.3 million from $49.2 million in the
same period a year ago. Adjusting for
the divestments to Baxter Healthcare,
revenue grew by 13%. Operating profits
rose strongly from $1.2 million to
$5.3 million.
The main OTC channel grew 11%,
while Maxigesic revenues grew by 14%
following regulatory changes, effective
in February 2018, that saw codeine-
based painkillers becoming prescription
only medicines.
The shift has caused some disruption
to markets, with Australian pharmacies
stocking up on Maxigesic in the last
quarter of the 2018 financial year in
anticipation of this switch. Additionally,
consumers stockpiled codeine-based
products with some buying up to 12
months’ worth of product. However, we
believe Maxigesic sales will benefits as
pharmacies and consumers run down
their stocks.
Sales to hospital channels declined with
the lower margin product divestments,
but this was partially recovered with the
introduction of new hospital products,
such as antibiotic Piptaz, which we
expect to drive growth in the channel in
the 2020 financial year.
New Zealand
New Zealand revenue fell by 1% to $26.8
million from $27.1 million in the same
period a year ago, but revenue was up
5% after adjusting for the divestments
to Baxter Healthcare.
Operating profit, which includes Head
Office costs, rose to $0.5 million from
a $2.7 million loss in the same period a
year ago.
Maxigesic sales
Maxigesic in its various forms is now
for sale in 20 countries, up from 10 in
the same period last year. Sales in the
established United Arab Emirates and
Italian markets grew at more than 50%
over the 2019 financial year. These sales
were supplemented with launches in to
new markets, including Ireland, Iraq, El
Salvador and Malaysia. Meanwhile, we
are processing orders for a further nine
countries.
Exact launch timings and the flow of
royalties to AFT are difficult to forecast
given hurdles ranging from regulatory
issues to matters specific to licensees or
distributors. However, regardless we see
ongoing progress, which will contribute
and drive sales growth going forward.
A further income source as sales
grow are sales milestone payments,
which exist in most of our licensing
agreements. For example, the first sales
milestone in the European Union of
€500k on the Maxigesic tablet form was
triggered in April.
“ We continue to develop and commercialise line
extensions of the Maxigesic range and other
products... all have the potential to generate
significant shareholder value and improve healthcare
outcomes for patients around the globe.”

Product
Maxigesic TabletsMaxigesic IV
Maxigesic oral
solution
Territories 2019 2018 +% 2019 2018+%2019 2018+%
Licensed125+ 125 -%686210%1221184%
Registered4232 28%---%---%
Sold in2010100%---%---%
TOTAL REVENUE
Up from $81.2 million
$
85.1m
TOTAL OPERATING PROFIT
Turnaround of $16.2 million
TOTAL MAXIGESIC
REGISTRATIONS
Up from 32
$
6.1m
42
AFT PHARMACEUTICALS LIMITED
Annual Report 2019
0809CHAIRMAN AND CEO’S REPORT

Product development
Development of the Maxigesic dose
forms outlined at the time of our 2015
IPO have been largely completed. In the
2019 financial year the most important
development milestone was the
successful completion of the large study
on Maxigesic IV. Some additional studies
specific to US registration requirements
for the product are underway.
Meanwhile, further development work
continues on the sachet form and we are
working on other line extension ideas for
the drug platform.
Our NasoSURF nasal drug delivery
device is undergoing some redesign
following human factor studies. These
have been largely completed and we
are now targeting a type IIa medical
device filing with the FDA this financial
year. Market research in the USA and
UK identified that our first targeted
indication for the device has potential to
deliver AFT a significant income stream.
We have completed the initial
development work on Pascomer, a
treatment for a hereditary skin condition.
It offers the potential to access a market
worth US$400 million to US$450
million in sales. We have opened
an Investigational New Drug (IND)
application following a successful FDA
meeting, which allows us to initiate our
first multi-center international clinical
study on the medication.
Presently our joint venture partnership
DSLP has funded all the development
work to date and is funding the first
clinical study. We are however actively
seeking to out-license the product with
interested parties for at least one major
territory to minimise our expenditure on
this project.
Balance sheet
AFT remains well funded, completing
the year with a cash balance of $6.9
million, up from $6.7 million a year
ago. Total assets of $62.5 million, up
from $56.6 million a year earlier, have
increased primarily due to increased
working capital and the capitalised
components of the investment made
into research and development and
registrations.
At 31 March 2019, we had an interest-
bearing loan from specialist healthcare
investor CRG of $41.7 million up from
$30.7 million at the same time a year
ago. The loan, which attracts an interest
rate of 13.5%, matures at the end of the
2020 financial year.
Although CRG has offered to extend the
loan, we have begun negotiations with
local banks to refinance our facilities
at more attractive rates. Reflecting the
positive outlook for the business we are
confident we will achieve that goal.
As an interim step and to reduce the
cost of interest, we have on 21 May 2019
established a $15 million interim facility,
which matures on 31 March 2020, from
BNZ utilising the existing security
arrangements. We will be repaying
US$9.5 million of the CRG loan in the
next few days.
Outlook
We see significant potential for our
products in global markets. The
timing is always difficult to forecast
with certainty, not least because it
is important that we find the right
partners to take our products through to
commercialisation.
At the same time, we continue to
develop and commercialise line
extensions of the Maxigesic range and
other products such as NasoSurf and
Pascomer. Once achieved, all have
the potential to generate significant
shareholder value and improve
healthcare outcomes for patients around
the globe.
We have progressed further down the
pathway to realisation of this goal since
last year which is pleasing but there
remains significant work to be done to
reach our true potential and fully reward
our shareholders.
Despite these challenges we are looking
to the remainder of the 2020 financial
year with confidence. We are targeting
continuing positive cashflow and an
operating profit of between $9 million –
$12 million. We will update the market at
our annual meeting in August.
On behalf the board and shareholders we
thank our AFT team for the significant
contribution they have made to the
success of the company over the last year.
David Flacks
CHAIRMAN
Hartley Atkinson
FOUNDER AND CEO
“ We are now at a pivotal
point in our development.”
AFT PHARMACEUTICALS LIMITED
Annual Report 2019
1011CHAIRMAN AND CEO’S REPORT

Operating revenues grew 5% to $85.1
million, with an underlying growth rate
of 14% (adjusting the prior FY2018
year for divested products). Australia,
our largest market, grew by 2% with
underlying growth of 13%. New Zealand
fell by 1% with underlying growth of 5%.
The rest of the world segment grew
63% and Southeast Asia grew 66%.
Gross profit grew 15% to $40.7 million
with underlying growth of 19%. Our
gross profit margin grew 4 points to
48%. The main driver was from the
growth in OTC revenues in all markets.
Licence income from out licensing
agreements is now classified as
revenue under the new IFRS reporting
requirement. Other income comprises
the consideration we have received
from the divestment of non-core
products together with the Callaghan
Innovation growth grant that we receive
on eligible research and development
expenditure.
Operating Revenue
Operating revenue grew 5% to $85.1 million for the year ended 31 March 2019 from
$81.2 million for the year ended 31 March 2018. Licence income from out licensing
agreements is now classified as revenue under the new IFRS reporting requirement,
and the prior comparative period has been restated to include this. Underlying
growth was 14% (adjusting the prior year for those hospital product sales which were
fully divested by the first quarter of FY2019).
The following tables set out the revenues from our four markets:

Australia

New Zealand

Rest of World

Southeast Asia
SUMMARY FINANCIAL RESULTS
(Year Ended 31 March 2019)

$NZ000s 2019 2018
Revenue
85,127 81,176
Cost of sales44,39745,880
Gross Profit
40,73035,296
Other income2,237 1,130
Selling and distribution expenses(26,540)(28,533)
General and administrative expenses(7, 202)(8,308)
Research and development expenses(2,588)(8,230)
Equity Accounted Loss of joint venture entity(521)(1,494)
Operating Profit / (Loss)
6,116(10,139)
Research and development expenditure
reduced to 4% of revenue with the
successful completion of the clinical trial
program that we identified at the time
of the IPO in December 2015. Selling
and distribution expenses reduced to
31% of revenue supporting the OTC
products in Australia, New Zealand
and Southeast Asia. In total, operating
expenses now represent 43% of revenue
down from 58% in the prior year.
This growth in revenue and gross profit
margin together with cost control,
principally reflecting the successful
completion of our main clinical trial
programme, returned the Group back
to generating operating profit for the
year of $6.1 million. This represents
a turnaround of $16.2 million from
FY2018.
Overall revenue by market FY2019
(Percentage)
AFT PHARMACEUTICALS LIMITED
Annual Report 2019
1213FULL YEAR FINANCIAL RESULTS SUMMARY
Full Year Financial
Results Summary
Net revenue FY2018
(NZ$m)
Net revenue FY2019
(NZ$m)
0
10
20
30
40
60
50
Rest of
World
South
East Asia
New
Zealand
Australia
0
10
20
30
40
60
50
Rest of
World
South
East Asia
New
Zealand
Australia
Overall revenue by market FY2018
(Percentage)
33.4%
31.5%
1.6%2.5%
4.4%
6.9%
60.6%
59.1%
The FY2019 results mark the return of the Group to operating profit.
This is a result of the ongoing strategy of expanding our presence
in our home markets of Australia, New Zealand and Southeast Asia,
while succeeding in our key Research and Development programme to
also grow our international revenues.

Operating Overheads
Total research and development
investment reduced to $3.1 million
from $9.7 million. This includes $0.5
million expensed on Pascomer which
under IFRS accounting standards
we are required to record as a joint
venture equity accounted loss in the
consolidated income statement.
The significant reduction in research
and development expenditure is as a
result of the successful completion of
a significant proportion of the clinical
trial program that we identified at the
time of the IPO in December 2015 [see
Section: Maxigesic Development].
Selling and distribution expenses
reduced to $26.5 million from the prior
year’s $28.5 million and these expenses
reduced again as a percentage of
operating revenue to 31% from 36%
in the prior year. They comprise
primarily the support of OTC products
in the Australian, New Zealand and
Southeast Asia markets. We continually
monitor this spend and identified some
efficiencies which we implemented in
the second half of the year in Australia
and the Asian markets.
General and administration expenses
reduced to $7.2 million from $8.3
million, primarily due to one off legal
costs incurred in FY2018 relating
to competitor legal action that is
challenging certain Maxigesic claims.
The legal proceedings remain ongoing
and AFT remains confident of its
legal position.
Balance Sheet
Maxigesic. Total assets of $63.6 million
rose from $56.6 million primarily due
to increased working capital and
the capitalised components of the
investment made into research and
development and registrations.
The cash position of $6.9 million at
March 31 2019 is up slightly from the
prior year’s $6.8 million and reflects
the return to positive cash flows from
operating activities to $1.1 million from
a $9.2 million out flow in the prior
year; the reduction in cash required for
investing activities (to $4.9 million from
$5.9 million) and the reduction in cash
generated from financing activities (to
$3.7 million from $5.9 million).
Balance sheet changes are primarily
working capital driven with current
assets rising to $51.3 million compared
to $48.3 million in the prior year and
trade payables and provisions falling
to $16.4 million ($18.5 million in the
prior year).
Intangible assets have increased to
$8.2 million from $5.1 million, reflecting
the capitalised components of the
investment made into research and
development and registrations. The
balance of intangible assets comprise
capitalised patents and trademarks. The
investment in the Pascomer joint venture
entity has increased to $3.0 million from
$2.1 million in the prior year with spend
of $1.4 million on product development.
Our structured term loan from CRG
matures on 31 March 2020. Given the
return to profitability we expect to have
a new long-term facility in place with a
local commercial bank prior to 31 March
2020 which, together with the positive
operating cashflow surpluses, will enable
full repayment of the CRG loan on 31
March 2020.
Australia revenue grew by 2% to $50.3
million from $49.2 million in the prior
year. Underlying growth was 13%
(adjusting the prior year for the lower
margin hospital products, which were
divested in the first quarter of FY2019).
Australia generates 59% of Group
operating revenue.
The main OTC channel grew 11%,
Maxigesic revenues grew by 14%
following the regulatory shift of
codeine based painkillers from OTC to
prescription only in February 2018.
The hospital channel declined with the
hospital product sales divestment and
this was partially recovered with the
introduction of new products, which we
expect to bring growth back in to the
hospital channel in FY2020.
New Zealand revenue declined by 1%
to $26.8m (PCP $27.1m). Underlying
growth was 5% (adjusting the PCP for
the hospital product sales which
were divested at the end of FY2018).
New Zealand generates 32% of Group
operating revenue. The main OTC
channel grew 16% with strong allergy
sales supported by good growth in the
pain and eyecare categories and new
product launches.
The prescription channel was impacted
by the cessation of the sole supply
tender prescription product Metoprolol,
but the upside of this shift, together
with the divestments is that gross profit
in New Zealand grew by 22%.
Rest of World revenue grew by 63%
to $5.9 million from $3.6 million in
the prior year. Licence income from
out licensing agreements is now
classified as revenue under the new
IFRS reporting requirement, and the
prior year has been restated to include
this. Underlying growth for the sale of
products and royalties grew by 87%.
The Rest of World generates 6.9% of
Group operating revenue.
Southeast Asia Revenue grew by 66% to
$2.1 million from $1.3 million in the prior
year and this market generates 2.6% of
Group Operating Revenue. Sales were
predominantly in the Singapore and
Malaysian markets The Hospital channel
accounts for two thirds of the revenue.
The OTC channel grew at 67% with
strong growth in Maxigesic from the
launch in Malaysia with the initial sell in
to the distributor there, the re-launch
in Singapore with its re-classification
to an OTC product and the sale of
product to the Hong Kong distributor in
preparation for launch.
Gross Margin
Gross profit grew 15% to $40.7 million
from $35.3 million in the prior year
and the gross margin grew 4 points to
48%. Underlying gross profit growth
was 19% (adjusting for the hospital
product sales). The main drivers for the
improvement were from the growth
in OTC revenues across all markets
and this channel has the highest gross
margin. The inclusion of licence income
in revenue in line with IFRS reporting
requirements increases the margin
by around 1%. The gross margin is
expected to continue in this range in
the future as the Australian and Rest of
World OTC revenues continue to grow.
Other Income
Licence income from out licensing
agreements is now classified as
revenue under the new IFRS reporting
requirement, and the prior year has
been restated to include this. Other
income comprise the contribution
we received from the divestment of
non-core hospital products together
with the Callaghan innovation growth
grant that we receive on eligible
research and development expenditure.
“ The Group’s range of products in Australia will
continue to grow strongly and in particular Maxigesic
due to the re-scheduling of codeine-based painkillers
from OTC to prescription.”
Maxigesic
Development of the Maxigesic dose
forms outlined at the time of our 2015
IPO have been largely completed. In the
2019 financial year the most important
development milestone was the
successful completion of the large study
on Maxigesic IV. Some additional studies
specific to US registration requirements
for the product are underway.
Meanwhile, further development work
continues on the sachet form and we are
working on other line extension ideas for
the drug platform.
NasoSURF
NasoSURF nasal drug delivery device
is undergoing some redesign following
human factor studies. These have been
largely completed and we are now
targeting a type IIa medical device filing
with the FDA this financial year. Market
research in the USA and UK identified
that our first targeted indication for the
device has potential to deliver AFT a
significant income stream.
Pascomer
The initial development work on
Pascomer, a treatment for a hereditary
skin condition, has been completed. It
offers the potential to access a market
worth US$400 million to US$450
million in sales. We have opened
an Investigational New Drug (IND)
application following a successful FDA
meeting, which allows us to initiate our
first multi-center international clinical
study on the medication.
Our key products
TOTAL ASSETS
$
63.6m
We are targeting an operating
profit in the $9 million to $12
million range and this is based
on the following revenue
assumptions, together with
planned expenditure and no
significant unforeseen events.
Maxigesic is currently sold in 20
countries and we have confirmed
orders for a further nine countries.
During FY2020 it will be launched
into more of the 125 + countries in
which it is out licensed.
The Group’s range of products
in Australia will continue to
grow strongly and in particular
Maxigesic due to the re-scheduling
of codeine-based painkillers from
OTC to prescription only from
1 February 2018.
In addition, we believe that further
licensing agreements will be
agreed and that we will generate
future international revenues
for the key innovative products:
Maxigesic, Pascomer and NasoSurf.
Given the uncertainty on
the timing of new licensing
agreements sales, these have
not been included in the forecast
assumptions other than for a small
amount of essentially business
as usual upfront license income
for Maxigesic.
AFT PHARMACEUTICALS LIMITED
Annual Report 2019
1415FULL YEAR FINANCIAL RESULTS SUMMARY

Licensed/Registered:
not yet launched
Licensed/Registered:
not yet launched
Launched
Launch Pending
Available
Spain & Portugal –
launched April 2019
Ireland – launched
United Kingdom – launched
Licensing discussions
starting for USA. Canada
distributor to be appointed
Belgium, Luxembourg & France
– launches pending Q319
Netherlands – licensing
discussions underway
Switzerland – licensed March 2019
Germany – licensing
negotiations underway
Nordics – launch
pending Q219
Eastern Europe & Balkans
– launches pending 2019
Iraq – Kurdistan launched
Italy – successful launch
and sales growing still
United Arab Emirates –
sales growth still strong
Mexico – launch pending
2019 IV Licensed –
launch 2020
Brazil – licensing
negotiations underway
Columbia, Peru, Chile.
Distributor to be
appointed
Australia – sales growing
strongly post codeine
rescheduling.
No. #1 Para-Ibu Combo
New Zealand –
increasing sales
and codeine
rescheduling
confirmed.
Maxigesic PE
launched
Singapore & Brunei –
launched including OTC
Licensed in Russia
Hong Kong launched 2019
Licenced in Taiwan
Korea – licensing
negotiations underway
IV licensed
Malaysia – launched
Philippines – distributor
to be appointed
Maxigesic
Now, the world
Maxigesic continues from strength to strength
with further registrations, launch orders, and
licenses in the period.
Licensed in over 125 countries, Maxigesic is now
available to more people than ever before.
AFT PHARMACEUTICALS LIMITED
Annual Report 2019
1617MAXIGESIC DEVELOPMENTS

Maxigesic launches in
Ireland and Malaysia
Maxigesic launches continued
around the globe this year and
an important part of this is AFT
Pharma helping licensees and
distributors with their launches.
Two memorable launches in these last
12 months were Ireland and Malaysia.
The Malaysian launch took place in the
middle of 2018. The launch coincided
with the historical Malaysian election,
which saw the first regime change
since the country became independent
in 1 957.
The result brought the country to a halt
as the government changed for the
first time in many years and a National
holiday was declared for two days after
the election.
Despite this, the launch meeting
proceeded well with 3 venues, Penang
in the North, Ipoh in the center of
Malaysia and culminating with the
final event at Kuala Lumpur where we
were fortunate enough to be allowed
to use the New Zealand Ambassador’s
residence as the launch venue. The
company founders, Dr Hartley Atkinson
and Marree Atkinson both attended all
the meetings and helped our local team
(pictured above) with the successful
launch together with our distributor,
Zuellig Pharma.
On the other side of the globe, the Irish
launch occurred in Dublin toward the
end of 2018 with our Irish Licensee,
Clonmel Healthcare. Dr Hartley
Atkinson attended the launch meeting
of local doctors and pharmacists
to discuss the clinical benefits of
Maxigesic. Additionally, salesforce
training meetings were also held
to ensure their team was equipped
with the required technical product
knowledge. Clonmel Healthcare is the
leading supplier of Paracetamol based
and Ibuprofen based analgesics to Irish
Pharmacies so the combination is a
very logical addition to their existing
product range. Consequently, in Ireland
Maxigesic has been called Easolief
Duo to fit in with the existing Clonmel
Healthcare analgesic product range.
The launch meeting was a great success
and sales to date are progressing well in
the country.
* Nicholas Hall report October 2017
Accelerating International
growth for Maxigesic
Maxigesic is now for sale in 20
markets, with orders currently
under manufacture for a further
nine countries and this gives AFT
a strong base of consistent sales
to drive further launches and new
market agreements in the new
financial year.
A key focus is Europe and Latin
America, with launches confirmed for
the first half of this year in the Nordics
(five countries), and in the second half in
Eastern Europe, the Baltics, France, and
Mexico, along with a number of counties
in Central America.
The launch of the Maxigesic patented
formula in France, ‘Cetafen’, is imminent
with our licensee partner Expanscience.
We will launch in the second half of this
financial year in what is a significant and
exciting market. France has the second
largest analgesic category in the world,
worth over $750 Million USD MAT*.
In Europe, we have submitted
applications to register the Intravenous
and Oral Liquid forms of Maxigesic.
This will further expand the product
range and drive the long-term growth
of Maxigesic worldwide.
With these now submitted, there is
strong interest from a new mix of
licensees focussed on selling non-
Opioid analgesia to Hospitals and
Clinics.
Executing a number of licensing deals
in large countries such as the United
States and China of the various dose
forms is a key focus throughout the
new financial year. This together
with growing Maxigesic launches in
existing markets, ongoing sales in core
established markets and new market
launches, will deliver strong sales
growth for the region now and in the
near future.
Dr Hartley Atkinson,
Marree Aktinson, and
the AFT Malaysia team.
19AFT PHARMACEUTICALS LIMITED
Annual Report 2019
18MAXIGESIC DEVELOPMENTS

Development and Progress
Eyecare product overview
1 Stapleton, F., Alves, M., Bunya, V.Y., Jalbert, I., Lekhanont, K., Malet, F., Na, K.S., Schaumberg, D., Uchino, M.,
Vehof, J. and Viso, E., 2017. TFOS DEWS II Epidemiology Report. The ocular surface, 15(3), pp.334-365.
2 Lemp MA, Crews LA, Bron AJ, Foulks GN, Sullivan BD. Distribution of aqueous-deficient and evaporative
dry eye in a clinic-based patient cohort: a retrospective study. Cornea. 2012 May 1;31(5):472-8.
3 Daniel Nelson, J et al, TFOS DEWS II : New Dry Eye Report Updates Research. The Ocular Surface. 2017
Our portfolio of eye products has
been significantly growing with
the introduction of new innovative
products as well as growth of
existing products. We are riding
an enormous ‘dry eye’ wave, and
our new product additions could
not have come at a better time.
Dry Eye Disease is becoming more
and more prevalent worldwide and is
the most common ocular dysfunction
presenting to primary eye care
practitioners.
1
Prevalence rates are likely
to rise year on year, particularly due to
the ageing population and increased
digital screen usage.
There are two types of Dry Eye Disease:
Aqueous Deficient Dry Eye, which
is caused by a lack of aqueous tear
secretion, and Evaporative Dry Eye,
which is caused by an increase in tear
evaporation. More than one third of Dry
Eye Disease is a combination of
the two.
2

Research is continually carried out
within this field; in 2017 an extensive
report (which took 2 years to
complete and involved 150 experts
from 23 countries) highlighted the
recommendation of a three-step
regime for the management of Dry Eye
Disease and related eye conditions.
3
The
recommended daily routine consists of:
heat applied to the eyes, eyelid hygiene,
and preservative-free lubricants.
AFT are proud to have a complete
range of effective and innovative eye
care products on the market to help
relieve patients’ symptoms. For a
preservative-free eye care regime, we
have implemented three simple steps: 1)
Heat, 2) Cleanse, 3) Hydrate.
In early 2019 we expanded outside of
the eye lubricant realm to complete
our dry eye range with the introduction
of two new products: Opti-Soothe®
Moist Heat Mask and Opti-Soothe®
Preservative-Free Eyelid Wipes. The
early success of this launch has been in
part due to the success of our current
eye lubricants HYLO-Forte®, HYLO®-
Fresh, VitA-POS®, and NovaTears®, along
with continued support from many
key opinion leaders within the field of
optometry and ophthalmology.
The Opti-Soothe® Moist Heat Mask
serves step one of the daily eye
care regime, utilising HydroBead
TM

technology to provide the
recommended 10 minutes of controlled
moist heat to patients.
To cleanse the eye, we have the
Opti-Soothe® Preservative-Free
Eyelid Wipes, which has a unique
formulation of Tea Tree Oil, Hyaluronic
Acid, Chamomile, and Aloe Vera. The
textured wipe is preservative-free,
has anti-inflammatory, anti-microbial,
moisturising and soothing properties,
which are ideal for daily cleansing.
Hydration is the final step. AFT offers
two preservative-free eye lubricants
which serve different purposes.
The HYLO® range uses the patented
COMOD® application system which
protects the sodium hyaluronate
solution from contaminated ambient
air, and ensures the precise measured
delivery of at least 300 sterile drops
without the use of preservatives.
NovaTears®, in-licensed last year, is a
unique water-free eye drop specifically
designed for Evaporative Dry Eye
and Meibomian Gland Dysfunction.
NovaTears® utilises patented EyeSol®
technology, which lubricates the eye
and reduces excessive tear evaporation
by stabilising and thickening the
outer tear film layer. Both HYLO® and
NovaTears® can be used for 6 months
after opening without the use of
preservatives. Patients can use HYLO®
first to replenish the aqueous layer of
the tear film and NovaTears® second to
provide an evaporative barrier.
The AFT eye care portfolio has
increasing uptake from patients and
healthcare professionals alike which
is expected to continue to provide
increasing sales in this growing
category.
Maxigesic Development
The successful conclusion this
year of several clinical trials of
Maxigesic represents a significant
development that opens the door
to the registration and then sale
of new therapeutic delivery forms
around the globe. However, we
are focussed on the important
US market.
The pivotal study of the Maxigesic IV
form has been submitted to a major US
journal and we expect publication to
follow. Meanwhile, the major US journal
Clinical Therapeutics published a study
of the US tablet form of Maxigesic and
it showed that our combination therapy
delivered more rapid and effective
pain relief than paracetamol or
ibuprofen alone.
A study, published in Paediatrics
Anaesthesia Journal, showed that
Maxigesic liquid is a well-tolerated and
efficacious analgesic for children (2-12
years of age). A further review of safety
data has also been published. These
and other studies will back up Maxigesic
commercialisation and key marketing
claims and allow the commencement
of regulatory filings of both Maxigesic
IV and Maxigesic liquid. Additional oral
dose forms, hot drink sachets and dry
stick sachets, are still in development
and first regulatory filings are targeted
to commence this year.
A pre-New Drug Application (NDA)
filing meeting with FDA for Maxigesic
IV has clarified some additional data
requirements and this will result in
clinical trial expenditure before the
US regulatory filing, which is targeted
this year.
Formulation work has been completed
on a fast dissolving form, Maxigesic
Rapid, which utilizes proprietary
technology in-licensed from a US
company. Presently we are pursuing
registration of this dose form in the US.
Additionally, a new product, Maxigesic
Cold & Flu is being developed and is
expected to be commercially attractive
for the Australian market and additional
territories. The development costs
for this program are modest and not
expected to contribute significantly to
Group research and development costs.
Pascomer Development
The Pascomer development program
has confirmed the formulation is
stable at room temperature. This
is a significant result as the active
ingredient is easily oxidized in
topical formulations. The preclinical
development program has now been
completed and a successful FDA
meeting, in late 2018 allowed us to
open an Investigational New Drug
(IND) application for the first phase II/
III clinical trial. This first global multi-
center clinical study (out of two clinical
trials) is being funded by our joint
venture the DSLP partnership, and
ongoing discussions are underway to
find a commercialisation partner for at
least the US market.
NasoSURF Development
NasoSURF device development has
also advanced. Some device redesign
was required following the initial
human factor studies in USA. This has
now been completed. Human factor
studies are a relatively new regulatory
requirement and a further additional
human factor study will still be required.
Class II Medical Device filing in USA
was targeted for April/May 2019 but
the redesign features identified in the
human factor studies and subsequent
redesign and testing has delayed
this until the end of this year. The key
to commercialisation remains the
initiation and completion of the clinical
programme which is targeted to start
towards the end of the current financial
year after approval to open an IND is
obtained from US FDA.
Child trialling
NasoSurf device.
21
AFT PHARMACEUTICALS LIMITED
Annual Report 2019
20PRODUCT DEVELOPMENTS

/ David Flacks
CHAIRMAN AND
INDEPENDENT DIRECTOR
Appointed 22 June 2015
David has a number of
governance roles and is also a
corporate lawyer with boutique
corporate law firm Flacks &
Wong. David is chair of the
NZX Regulatory Governance
Committee, Harmoney Corp
and biotech start up Upside
Biotechnologies, and is a director
of the Suncorp NZ group of
companies and NZ Venture
Investment Fund.
David was previously chair of
the NZX Markets Disciplinary
Tribunal and was a member of the
Takeovers Panel. He also holds a
number of pro bono directorships.
David was for many years a senior
corporate partner at Bell Gully
and was general counsel and
company secretary of Carter Holt
Harvey during the 1990’s. He is
a law graduate from Cambridge
University.
/ Dr Hartley Atkinson
FOUNDER, EXECUTIVE DIRECTOR
AND CHIEF EXECUTIVE OFFICER
Appointed 4 September 1997
Hartley founded AFT in 1997.
Before founding AFT, Hartley
worked at Swiss multinational
pharmaceutical company, Roche,
for eight years where he held
positions as Sales & Marketing
Director, Medical Director, Product
Manager and Medical Manager.
Prior to his work at Roche,
Hartley was a Drug Information
Pharmacist and Researcher
at the Department of Clinical
Pharmacology, Christchurch
Hospital. Hartley is the author of a
number of scientific publications.
Hartley’s work has been published
in the prestigious The New
England Journal of Medicine.
Hartley holds a doctorate in
Pharmacology, a Masters in
Pharmaceutical Chemistry with
distinction, and a Degree in
Pharmacy, all from the University
of Otago.
/ Maree Atkinson
EXECUTIVE DIRECTOR
AND CHIEF OF STAFF
Appointed 4 September 2012
Marree has been involved in all
aspects of AFT’s business since
its establishment in 1997, including
roles in sales, regulatory affairs,
customer services and logistics.
Marree’s role as Chief of Staff
sees her involved in the day-to-
day running of AFT’s head office
including managing staffing
requirements and special projects
involving AFT’s head and affiliate
offices.
Marree is a registered nurse
previously practising at Waikato
Hospital.
/ Nathan (Nate) Hukill
NON-EXECUTIVE DIRECTOR
Appointed 14 May 2014
Nate is the President and
Chairman of CRG, a US-based
investment management firm
focused on the healthcare
industry. Mr. Hukill oversees
all aspects of the investment
process, including investment
sourcing, due diligence, portfolio
construction and portfolio
management. Mr. Hukill also
oversees the investor relations
process, including fund raising,
reporting and limited partner
relationship management.
Nate joined CRG in 2009,
bringing more than 16 years of
investing experience. Prior to
joining CRG, he was a Portfolio
Manager at Highland Capital,
where he invested and managed
approximately $4.5 billion
in the healthcare, consumer
products, and technology sectors.
Before Highland Capital, Nate
co-founded a pharmaceutical-
focused enterprise software
company called OpenQ, Inc. He
started his career as a credit
/ Jon Lamb
INDEPENDENT DIRECTOR
Appointed 4 September 2012
Jon has led the strategic planning,
marketing and restructuring of
various companies throughout
his career. He has held various
roles at Beecham (a multinational
pharmaceutical company
that would later merge with
a predecessor company to
GlaxoSmithKline) including CEO
in New Zealand and Marketing
Manager in both Australia
and South Africa. He has also
held roles as CEO of Nylex in New
Zealand, Managing Director within
the Rural Division of Fletcher
Challenge, Director
of Southland Frozen Meats
and Marketing Director of the
New Zealand Kiwifruit Marketing
Board (where he was responsible
for creating the Zespri brand of
kiwifruit, and restructuring Zespri
into a retail focussed operation).
More recently, Jon was a Director
of Virionyx, a New Zealand
company that developed an
antiviral drug designed to combat
AIDS. He was Deputy Chair of
Australian diagnostic company
ATF Group that developed a
real time tool for measuring the
Hepatitis B virus in individual
patients.
Jon has been involved with AFT
since 2004, firstly as a consultant,
and then in his current capacity
as a director. Jon is a Member of
the Institute of Directors and has
a Diploma from the Marketing
Institute of the UK (now the
Chartered Institute of Marketing).
INDEPENDENT DIRECTOR
Appointed 4 September 2012
Doug was an Associate Professor
at the Auckland Medical School
before taking a role as Senior
Vice President and Head of
Medicine and Regulatory Affairs
in the US for German drug
company Boehringer Ingelheim
Pharmaceuticals. He then carried
these same responsibilities to
Boehringer’s worldwide medical
research group in Germany,
overseeing all research and drug
development programmes. He
supervised sixteen drugs to the
US market through FDA and
many others into global markets.
Since his return to New Zealand,
Doug has been a consultant to
pharmaceutical and biotech
companies in New Zealand,
Australia, Italy, the UK, Ireland and
New York. He has been a director
of Neuren Pharmaceuticals,
of a drug discovery company
Phylogica in Perth Australia, and
of Adherium - a medical device
company. He is currently Chief
Medical Officer of Ferghana
Partners, an investment bank in
the health care space in New York
and London.
Doug has a medical degree
from New Zealand, is a Fellow of
the Royal Australian College of
Physicians, a Fellow of the College
of Pathologists of Australia and
has a PhD from the University of
London.
/ Dr James (Jim) Burns
INDEPENDENT DIRECTOR
Appointed 17 September 2015
Jim has extensive executive
experience in pharmaceuticals,
biotechnology, medical devices,
and diagnostics. Jim has served
in leadership roles at large
multinational corporations,
early-stage companies, venture
capital funds and private equity.
From 2009-2016, Jim served as
Chairman of the Board, Executive
Chairman and Chief Executive
Officer of Assurex Health, a
precision medicine company
focused on neuropsychiatric and
pain disorders. Previous roles
include President & CEO of cancer
drug development company
CASI Pharmaceuticals; President
of MedPointe Pharmaceuticals,
a specialty pharmaceutical
company; President & CEO of
biotechnology company Osiris
Therapeutics; General Partner
of Healthcare Ventures; Group
President of Becton Dickinson, a
global medical device company;
and Partner at Booz & Company,
an international strategy
consulting firm.
Jim is a Board Leadership Fellow
of the National Association of
Corporate Directors (NACD), a
Director of Vermillion (NASDAQ),
and a Director of Precera
Bioscience. Jim earned B.S. and
M.S. degrees in biological sciences
from the University of Illinois, an
M.B.A. from DePaul University,
and a D.L.S. from Georgetown
University.
BOARD OF DIRECTORS
/ Dr John Douglas (Doug) Wilson
AFT PHARMACEUTICALS LIMITED
Annual Report 2019
2223DIRECTORS AND MANAGEMENT TEAM
Governance
Directors and management team
AFT has an experienced and balanced Board with a diverse range of skills.
The Board comprises an independent Chairman, three other independent
directors, one non-executive director and two executive directors. Their names
and information about their skills, experience and background, together with
information about AFT’s management team, are set out below.

/ Malcom Tubby
CHIEF FINANCIAL OFFICER
Malcolm is a qualified
Chartered Accountant
in the United Kingdom
and New Zealand with a
wealth of senior corporate
governance expertise in the
commerce sector including
roles in significant public
companies as Chief Financial
Officer. He has experience
in senior positions in public
and private companies in
pharmaceuticals, beverages,
insurance and aged care
facilities in Australia and New
Zealand. Malcolm has been
involved in the AFT board
since its foundation. Malcolm
is also the CFO for AFT
Pharmaceuticals.
/ Ioana Stanescu
HEAD OF DRUG DEVELOPMENT
Ioana has overall
responsibility for the research
& development functions of
the company. She has more
than 20 years’ experience
in the pharmaceutical
industry with previous
positions, including VP QA
& Regulatory Affairs, Head
of Vaccine Business Area at
FIT Biotech Ltd, and a World
Health Organisation adviser
performing institutional
assessments of National
Regulatory Authorities within
Central and Eastern Europe.
She has coordinated a variety
of European FP6 and FP7
funded research grants. In
1999 she was selected as
an Expert by the European
Health Committee - Council
of Europe to participate in the
coordinated research study
of viral inactivation of labile
blood products. She is also a
Member of the European QP
Association.
/ Vladimir Illievski
REGULATORY AFFAIRS MANAGER
Vladimir was born and
raised in Macedonia. He
holds a master’s degree
in Pharmacy from the
University of Ljubljana,
Slovenia, where he started
his career as a pre-clinical
researcher before moving
to New Zealand. Prior to
joining AFT Pharmaceuticals,
Vladimir worked for
Douglas Pharmaceuticals
in various roles including
as QC and QA analyst and
regulatory/senior regulatory
associate. He joined AFT
Pharmaceuticals in 2006 as
Regulatory Affairs Manager.
Vladimir has responsibility
for product registrations in
various countries such as New
Zealand, Australia, South-East
Asia (Malaysia, Singapore,
Hong Kong, Philippines) as
well as the European Union
and USA.
/ Louise Clayton
DIRECTOR INTERNATIONAL
BUSINESS
Louise has worked
with brands within the
supplement, OTC, Health,
and Beauty Channels. Her
experience has given her
the opportunity to drive
international brands through
a variety of management
roles encompassing sales,
brand marketing, product
sourcing/new product
development, and new market
expansion. She has over 20
years’ functional experience
with International business,
key accounts, sales and
marketing teams, with a core
focus on brand growth and
development within local and
International markets such as
Australia, US, Asia, UK, and
ROW.
/ Calvin Mackenzie
GENERAL MANAGER AUSTRALIA
Calvin joined AFT in February
2010 and has since led
AFT’s Australian team and is
responsible for AFT’s business
in Australia. Calvin has over
20 years’ experience in the
pharmaceutical industry
in a diverse range of roles
with a pharmacy, medical
and specialist focus for
brand originator and generic
companies including Johnson
& Johnson, Janssen Cilag,
Arrow and Sigma. Calvin
has significant experience
in building high-performing
sales teams.
/ Murray Keith
GROUP MARKETING MANAGER
Murray joined AFT in October
2011 and has since been
responsible for managing the
marketing function of AFT,
with a primary focus on the
Australian and New Zealand
markets. His extensive
marketing career prior to
joining AFT includes roles
within Nestlé, Lion Nathan,
Bay of Plenty Rugby, Nestlé
Purina, New Zealand Lotteries
and Fonterra Brands (Tip
Top).
/ Scott Crawford
GENERAL MANAGER –
PROMOTED PRODUCTS
AUSTRALASIA & SOUTHEAST ASIA
Scott joined AFT in March
2013 and is responsible
for the OTC sales in New
Zealand across all retail
channels including pharmacy,
supermarkets and petrol &
convenience. His role involves
the account management,
field supervision and trade
marketing. Scott has over 20
years’ experience in fast-
moving consumer goods
in both Australia and New
Zealand and has previously
held roles with Red Bull and
Ferrero Rocher.
MANAGEMENT TEAM
AFT PHARMACEUTICALS LIMITED
Annual Report 2019
2425DIRECTORS AND MANAGEMENT TEAM

Towards
sustainability
AFT is strongly committed to sustainability and
contributing positively to the development of the
world, and we’ve continued to demonstrate this
commitment over the last year.
The table (right) details our initiatives in relation to
the Sustainable Development Goals (SDGs) as the
SDGs are a way to see how our community initiatives
relate to a larger vision for positive change. To assist
with understanding how these initiatives align with
our business, we have organised them under three
areas of focus, Innovate, Respect, and Perform.
On the following pages are just a few examples
of how we deliver on these initiatives in our
day-to-day business.
Providing medicines for a diverse range of patients
• 29 AFT products on the World Health
Organisation Model list of essential medicines
• Products range from juvenile- to aged-specific
• Products distributed for use in hospitals,
prescription and general medicines
Being a trustworthy partner
• All of our critical product suppliers have been
risk assessed.
• 20 or so partnerships in Pharmaceuticals
Delivering continued growth
• 16% growth in underlying operating revenues
• Return to profitability
Innovating medicines to improve the
health of our end customers
• Developing products that we genuinely believe
will improve the health of our end customers.
• Repurposing existing approved pharmaceuticals
to minimise risk to user of our products
• Innovating new delivery methods for improved
delivery of medication. For example, via the
development of the NasoSURF.
Providing a great work place
• Diversity in the workplace with 21 cultures
represented amongst the staff of 88
• 58% of staff are female with 40% of senior
executives female
Providing medicines solutions for under-privileged
or under-represented groups
• Making medicines available for rare diseases,
designated with orphan status under the US Food
and Drug Administration.
• Donate medicines to under-privileged groups,
such as patients in the Pacific Islands.
• Work with government agencies to make specific
medicines available to under-privileged groups.
Protecting the environment
• Donating product that would otherwise be
wasted to charity organisations
• Working with suppliers (within regulatory
guidelines) to reduce packaging or use eco-
packaging, wherever possible while preserving
the integrity of the product
InnovateRespectPerform
AFT PHARMACEUTICALS LIMITED
Annual Report 2019
KEY HIGHLIGHTS2627

Local and global
community support
AFT was approached by Dr
Nguyen Nguyen, the WA
Representative on behalf of the
AusViet Charity Foundation. This
foundation is a non-profit charity
established in 2015 by a number
of Australian professionals who
want to serve the community
by bringing hope and health to
disadvantaged people in Australia
and Vietnam.
Their mission goals are:
• Support Australian communities
especially during major
disasters,
• Provide assistance in Vietnam
during natural disasters,
• Provide health education to
Vietnamese people, and
• One annual charity trip to
Vietnam to provide medical and
dental care and humanitarian
aid to disadvantaged villages.
Their annual Vietnam mission
trip takes place in July-August of
each year and in 2018 they went
to Tra Cu (about 150km south
of Ho Chi Minh City) in southern
Vietnam. The population of Tra Cu
is about 200 000, and over 80%
of families are classified as poor.
AFT supplied them with the
following products:
50
ALLERSOOTH TABLET PACKS
200
CANDACORT CREAM TUBES
5,000
L A X-TAB TAB LE TS
18,000
FER RO -TAB TAB LE TS
60,000
CALCI-TAB TABLETS
/ Bringing hope and health to disadvantaged
people in Australia and Vietnam
At AFT we recognise the benefits
that something as simple as daily
exercise can have.
Being physically active helps to
fight fatigue, reduce stress levels,
boost mood and self-confidence,
improve productivity and general
health. We teamed up with
Les Mills and encouraged our
employees to participate in daily
exercise by participating in a
21-day challenge.
Employees who participated
were put through an introductory
personal training session, along
/ AFT Pharmaceuticals & Les Mills
21 Day Challenge
AFT team setting
goals for the
Les Mills 21-day
challenge
While there, they:
• Conducted 1,000 general
medical examinations, which
included providing education,
doing basic investigations such
as blood tests and ultrasounds,
distribution of medications
where appropriate and referrals
where necessary.
• Conducted 1,000 dental
assessments, mainly on children
and provided dental care,
education and treatment where
possible.
• Performed 100 cataract
surgeries to restore vision.
• Distributed 1,000 school gift
packs for poor children, which
included notebooks, pens, carry
bags and other stationary.
• Distributed 300 food parcels
for poor families in the region.
All these services were provided
completely free and were carried
out by qualified Australian health
professionals in collaboration
with local Vietnamese health
professionals.
with a BMI (body mass index) test
as a starting point to base their
goals for the next 21 days.
We encouraged each other
with incentives and had weekly
Group updates to go over each
person’s progress and for a bit of
competition, who was leading in
the challenges set with Les Mills.
We found that the event sparked
new conversations amongst
employees, encouraging friendly
competition and motivation
to participate in daily exercise
throughout the office.
AFT PHARMACEUTICALS LIMITED
Annual Report 2019
KEY HIGHLIGHTS2829

AFT New Zealand have selected
three worthy local charities
to support that will make a
significant impact to their make
needed services.
The charities are:
• HeartKids
• Lifeline
• Look Good Feel Better
Concern is building around world,
but especially in the United States,
about the overuse of prescription
opioid medicines. The death rates
in the US resulting from opioid
overdose has now exceeded the
peak death rate at the height
of the AIDs epidemic [Source
US National Center for Health
Statistics].
A key problem is that patients
start on opioids in hospital
and are then discharged with
an outpatient script leading
to addiction problems in a
proportion of patients. Maxigesic
IV and tablets offer an alternative
non opioid analgesic thereby
creating new options for post-
operative pain management.
Locally in Australia and New
Zealand the epidemic has turned
attention on OTC codeine
formulations. Again Maxigesic
offers a good alternative to
codeine analgesics.
/ ESG Opioid Crisis
/ Kiwis Thinking About Health
(KTAH) and Maxigesic
80,000
60,000
40,000
20,000
0
19992002200520082011
Total
overdose
deaths
Opiod
deaths
AIDs peak
(1995)
Motor
vehicle
deaths
20142017
Source: US National Center for Health Statistics, CDC Wonder
Over the six months February to
July 2019, AFT is donating $1 from
each Maxigesic and Maxigesic PE
purchased from a participating
Pharmacy in New Zealand.
The shopper receives a $1 token
with each purchase and gets
to choose 1 of the 3 charities to
receive the donation.
To date, we have over 600 out of
the 950 New Zealand pharmacies
supporting this activity and the
funds raised for charity will be
announced in August 2019.
AFT PHARMACEUTICALS LIMITED
Annual Report 2019
30FINANCIAL STATEMENTS31
Contents
32 Independent Auditor’s Report
35 Consolidated Income Statement
36 Consolidated Statement
of Comprehensive Income
37 Consolidated Statement
of Changes in Equity
38 Consolidated Balance Sheet
39 Consolidated Statement
of Cash Flows
40 Notes to the Financial Statements
65 Statutory Disclosures
73 Directory
73 Financial Calendar
2019
Financial
Statements

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
3233INDEPENDENT AUDITOR’S REPORT



Key audit matter How our audit addressed the key audit matter
Research and development costs
As disclosed in notes 7 and 13 and the related accounting
policies set out in note 4(i) and 4(w), the Group is involved in
the research and development of new products and variants of
existing products.

During the year ended 31 March 2019, product research and
development costs of $2.366 million were incurred. Of this
total, $0.914 million was expensed through profit or loss and
$1.452 million has been capitalised as intangible assets.

Judgement is required in assessing whether research and
development costs for each project should be capitalised or
expensed in accordance with the relevant financial reporting
framework.

A key consideration that impacts whether costs should be
capitalised is the technical feasibility of completing the
development of a new product, which generally includes
demonstrating approval of the product by the relevant market
regulatory authority.


We consider this to be key audit matter because of the level of
judgment involved in considering whether it is appropriate to
capitalise these costs.


In performing our procedures we:
a) understood management’s processes and controls
to assess the appropriate accounting treatment for
each project;
b) determined
whether the Group’s accounting policies
are consistent with requirements of the relevant
accounting standards;
c) obtained an analysis from management as to the
status of each individual project and corroborated
with operational management;
d) tested a sample of costs expensed to supporting
documentation to verify the amounts being
expensed and the status of the project;
e) considered whether the costs tested as part of our
sample in (d) should have been capitalised;
f) tested a sample of costs capitalised to supporting
documentation to verify the amounts being
capitalised and the status of the project;
g) considered whether the expenses tested as part of
our sample in (f) should have been expensed;
h)
challenged whether management’s treatment of the
costs is appropriate.


Other information

The directors are responsible on behalf of the Group for the other information. The other
information comprises the information in the Annual Report that accompanies the
consolidated financial statements and the audit report.
Our opinion on the consolidated financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If so, we are required to report that
fact. We have nothing to report in this regard.
Directors’ responsibilities for
the consolidated financial
statements
The directors are responsible on behalf of the Group for the preparation and fair
presentation of the consolidated financial statements in accordance with NZ IFRS and
IFRS, and for such internal control as the directors determine is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf
of the Group for assessing the Group’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.




Independent Auditor’s Report
To the Shareholders of AFT Pharmaceuticals Limited
Opinion We have audited the consolidated financial statements of AFT Pharmaceuticals Limited and
its subsidiaries (the ‘Group’), which comprise the consolidated balance sheet as at 31
March 2019, and the consolidated income statement, statement of comprehensive income,
statement of changes in equity and statement of cash flows for the year then ended, and
notes to the consolidated financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying consolidated financial statements, on pages 35 to 64,
present fairly, in all material respects, the consolidated financial position of the Group as
at 31 March 2019, and its consolidated financial performance and cash flows for the year
then ended in accordance with New Zealand Equivalents to International Financial
Reporting Standards (‘NZ IFRS’) and International Financial Reporting Standards (‘IFRS’).
Basis for opinion We conducted our audit in accordance with International Standards on Auditing (‘ISAs’)
and International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Consolidated Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing
and Assurance Standards Board and the International Ethics Standards Board for
Accountants’ Code of Ethics for Professional Accountants, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
Other than in our capacity as auditor and the provision of taxation advice, we have no
relationship with or interests in the Company or any of its subsidiaries. These services
have not impaired our independence as auditor of the Company and Group.
Material uncertainty related
to going concern
We draw attention to the going concern disclosure in note 1(b) of the financial statements,
which indicates there is a material uncertainty concerning the Group’s ability to repay its
existing interest bearing liabilities which mature on 31 March 2020. Note 1(b) sets out the
Group’s plans to repay these interest bearing liabilities through a combination of new
financing, generating sufficient operating cash flows and potentially also raising additional
funds from issuing new shares. As stated in note 1(b), these events or conditions, along
with other matters as set forth in note 1(b), indicate that a material uncertainty exists that
may cast significant doubt on the Group’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.

Audit materiality


We consider materiality primarily in terms of the magnitude of misstatement in the
financial statements of the Group that in our judgement would make it probable that the
economic decisions of a reasonably knowledgeable person would be changed or influenced
(the ‘quantitative’ materiality). In addition, we also assess whether other matters that
come to our attention during the audit would in our judgement change or influence the
decisions of such a person (the ‘qualitative’ materiality). We use materiality both in
planning the scope of our audit work and in evaluating the results of our work.
We determined materiality for the Group financial statements as a whole to be $1 million.
Key audit matters Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period.
These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. In addition to the matter described in the Material
uncertainty related to going concern section, we have determined the matter described
below to be the key audit matter to be communicated in our report.

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
3435FINANCIAL STATEMENTS
Consolidated Income Statement
For the year ended 31 March 2019
$NZ000’s Note 20192018
Revenue585,12781,176
Cost of sales(4 4,397 )(4 5,8 8 0)
Gross profit
40,73035,296
Other income
62,2371,130
Selling and distribution expenses
7(a)(26,540)(28,533)
General and administrative expenses
7(a)( 7, 2 0 2 )(8,308)
Research and development expenses
7(a)(2,588)(8,230)
Equity accounted loss of joint venture entity
14 (b)(521) (1,494)
Operating profit/(loss)6,116(10,139)
Finance income42125
Interest expense
7(a)(5,394)(3,496)
Other finance costs
7(a)(3,023)844
Loss before tax
7(a)(2,259)(12,666)
Tax expense
8(a)(168)(58)
Loss after tax attributable to owners of the parent(2,427)(12,724)
Basic and diluted loss per share ($)
26(0.03)(0.14)



Auditor’s responsibilities for
the audit of the consolidated
financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and
ISAs (NZ) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial
statements is located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for -assurance-practitioners/auditors-responsibilities/audit-
report-1
This description forms part of our auditor’s report.
Restriction on use

This report is made solely to the Company’s shareholders, as a body. Our audit has been
undertaken so that we might state to the Company’s shareholders those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the
Company’s shareholders as a body, for our audit work, for this report, or for the opinions we
have formed.





Jason Stachurski, Partner
for Deloitte Limited
Auckland, New Zealand
21 May 2019
































This audit report relates to the consolidated financial statements of AFT Pharmaceuticals Limited (the ‘Company’) for the year
ended 31 March 2019 included on the Company’s website. The Directors are responsible for the maintenance and integrity of the
Company’s website. We have not been engaged to report on the integrity of the Company’s website. We accept no responsibility
for any changes that may have occurred to the consolidated financial statements since they were initially presented on the
website. The audit report refers only to the consolidated financial statements named above. It does not provide an opinion on any
other information which may have been hyperlinked to/from these consolidated financial statements. If readers of this report are
concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of the
audited consolidated financial statements and related audit report dated 21 May 2019 to confirm the information included in the
audited consolidated financial statements presented on this website.

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
3637
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2019
$NZ000’s 20192018
Loss after tax(2,427)(12,724)
Other comprehensive income
May be subsequently reclassified to profit and loss:
Foreign currency translation reserve10174
Other comprehensive income for the year, net of tax10174
Total comprehensive loss for the year
attributable to owners of the parent(2,326)(12,650)
Consolidated Statement of Changes in Equity
For the year ended 31 March 2019
$NZ000’s Note
Share
capital
Redeemable
preference
shares
reserve
Share
options
reserve
Foreign
currency
translation
reserve
Retained
earnings
Total
equity
Balance at 31 March 201762,944 - 295256(4 4,025) 19,470
Loss after tax - - - -(12,724)(12,724)
Other comprehensive income -- -74 -74
Total comprehensive income---74(12,724)(12,650)
Preference dividends accumulated
27-483---483
Issue of share capital1,065 - - - -1,065
Movement in share options reserve - -135 - -135
Capital raising expenses
18(266) - - - -(266)
Preference dividends paid or
accumulated
27----(895)(895)
Balance at 31 March 201863,743 483 430330 ( 57, 6 4 4)7, 3 4 2
Loss after tax - - - -(2,427)(2,427)
Other comprehensive income - - -101 -101
Total comprehensive income---101(2,427)(2,326)
Preference dividends accumulated
27-758---758
Movement in share options reserve - -252 - -252
Preference dividends paid or
accumulated
27----(935)(935)
Balance at 31 March 201963,7431,241682431(61,006)5,091
FINANCIAL STATEMENTS

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
3839
Consolidated Balance Sheet
As at 31 March 2019
$NZ000’s Note 20192018
Assets
Current assets
Inventories
925,15824,412
Trade and other receivables
1019,18716,954
Cash and cash equivalents
116,9166,770
Derivative assets
21-176
Total current assets
51,26148,312
Non-current assets
Property, plant and equipment
12357330
Intangible assets
138,2395,118
Deferred income tax assets
8705708
Investment in joint venture entity
14 (b)3,033 2,135
Total non-current assets12,3348,291
Total assets
63,59556,603
Liabilities
Current liabilities
Trade and other payables
1515,0981 7, 3 9 1
Provisions
161,2701,098
Current income tax liability145118
Derivative liabilities
21241-
Interest bearing liabilities
1741,750-
Total current liabilities58,50418,607

Non-current liabilities
Interest bearing liabilities
17-30,654
Total liabilities58,50449,261

Equity
Share capital1863,74363,743
Retained earnings(61,006)( 5 7, 6 4 4 )
Share options reserve
20(b)682 430
Redeemable preference shares reserve1,241483
Foreign currency translation reserve431330
Total equity
5,0917, 3 4 2
Total liabilities and equity
63,59556,603
Net tangible assets per ordinary share $0.03 $0.02
For and on behalf of the Board who authorised these financial statements for issue on 21 May 2019.
Consolidated Statement of Cash Flows
For the year ended 31 March 2019
$NZ000’s Note 2019
Restated
2018
Cash flows from Operating Activities
Receipts from customers84,13179,278
Payments to suppliers and employees(82,915)(88,296)
Tax (paid)/received(149)(149)
Net cash generated from/(used in) operating activities
191,067(9,167)
Cash flows from Investing Activities
Purchases of property, plant and equipment(140)(70)
Purchases of intangible assets(3,325)(2,783)
Investment in joint venture(1,419)(3,002)
Net cash used in investing activities
(4,884)(5,855)
Cash flows from Financing Activities
Proceeds from issue of share capital-1,065
Share issue costs-(188)
Dividends paid(134)(41 2)
New borrowings
177, 41 77, 1 3 5
Interest received42125
Interest and finance costs paid* (3,602)(1,862)
Net cash generated from financing activities
3,7235,863
Net decrease in cash(94)(9,159)
Impact of foreign exchange on cash and cash equivalents24024
Opening cash and cash equivalents6,77015,905
Closing cash and cash equivalents6,9166,770
* Interest and financing costs paid and interest received, which were previously shown as operating activities, have been
presented as Financing activities on a basis consistent with Operating profit in the Consolidated Income Statement
(refer also note 19).
Hartley Atkinson
Managing Director and
Chief Executive Officer
David Flacks
Chairman
FINANCIAL STATEMENTS

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS4041
Notes to the Financial Statements
For the year ended 31 March 2019
Issuance of new equity
The Directors are confident that, having raised capital most recently in May 2017, new capital could be accessed through
the Company’s listing on NZX and ASX, if required.
2. Adoption of new and revised standards
New and amended NZ IFRS Standards that are effective for the current year.
(a) Impact of initial application of NZ IFRS 9 Financial Instruments
In the current year, the Group has applied NZ IFRS 9 Financial Instruments (as revised in 2014) and the related consequential
amendments to other NZ IFRS Standards that are effective for an annual period that begins on or after 1 January 2018.
The transition provisions of NZ IFRS 9 allow an entity not to restate comparatives. The Group has elected not to restate
comparatives in respect of the classification and measurement of financial instruments. Additionally, the Group adopted
consequential amendments to NZ IFRS 7 Financial Instruments: Disclosures that were applied to the disclosures for 2019 and
to the comparative period.
NZ IFRS 9 introduced new requirements for:
1) The classification and measurement of financial assets and financial liabilities,
2) Impairment of financial assets, and
3) General hedge accounting.
Details of these new requirements as well as their impact on the Group’s consolidated financial statements are described below.
The Group has applied NZ IFRS 9 in accordance with the transition provisions set out in IFRS 9.
(i) Classification and measurement of financial assets
The date of initial application (i.e. the date on which the Group has assessed its existing financial assets and financial liabilities
in terms of the requirements of NZ IFRS 9) is 1 April 2018. Accordingly, the Group has applied the requirements of NZ IFRS
9 to instruments that continue to be recognised as at 1 April 2018 and has not applied the requirements to instruments that
have already been derecognised as at 1 April 2018.
All recognised financial assets that are within the scope of NZ IFRS 9 are required to be measured subsequently at amortised
cost or fair value on the basis of the entity’s business model for managing the financial assets and the contractual cash flow
characteristics of the financial assets.
The Group may irrevocably designate a debt investment that meets the amortised cost or FVTOCI criteria as measured at
FVTPL if doing so eliminates or significantly reduces an accounting mismatch.
In the current year, the Group has not designated any debt investments that meet the amortised cost or FVTOCI criteria as
measured at FVTPL.
(ii) Impairment of financial assets
NZ IFRS 9 also requires a simplified approach for measuring the loss allowance at an amount equal to lifetime ECL for trade
receivables, contract assets and lease receivables in certain circumstances (refer note 4(n)).
The application of NZ IFRS 9 has had no material impact on the measurement of the Group’s financial assets.
(iii) Classification and measurement of financial liabilities
The application of NZ IFRS 9 has had no impact on the classification and measurement of the Group’s financial liabilities.
(iv) General hedge accounting
The application of the NZ IFRS 9 hedge accounting requirements has had no impact on the results and financial position of
the Group.
1. (a) General information
AFT Pharmaceuticals Limited (the “Company”) is a company that is incorporated and domiciled in New Zealand. It is registered
under the Companies Act 1993. These financial statements comprise AFT Pharmaceuticals Limited and its subsidiaries (together
referred to as the “Group”). The Group is a pharmaceutical distributor and developer of pharmaceutical intellectual property.
The Company is a FMC reporting entity under the Financial Markets Conduct Act 2013.
The financial statements of the Group have been prepared in accordance with the requirements of the Companies Act 1993,
Financial Reporting Act 2013 and the Financial Markets Conduct Act 2013. As Group financial statements are prepared and
presented for AFT Pharmaceuticals Limited and its subsidiaries, separate financial statements for AFT Pharmaceuticals
Limited are not required to be prepared under the Companies Act 1993.
These financial statements are authorised for issue on 21 May 2019 by the Directors.
1. (b) Going concern assumption
At 31 March 2019, the Group has an interest bearing loan from CRG of $41.7m ($30.7m at 31 March 2018) and held a cash
balance of $6.9m ($6.8m as at 31 March 2018). The movement in the loan during the year came from a draw down of USD$5m,
capitalised interest of $1.7m and the balance from movement in foreign currency exchange rates.
The Group generated an operating profit for the year ended 31 March 2019 of $6.1m, of which the second half of the year
generated $6.2m (operating loss for the year ended 31 March 2018 of $10.1m) and a net operating cash inflow for the year
ended 31 March 2019 of $1.1m, of which the second half of the year generated an inflow of $3.2m (net operating cash outflow
for the 12 months ended 31 March 2018 of $9.2m).
The CRG loan is due for repayment in full on 31 March 2020 (refer to note 17).
The Directors have a reasonable expectation that the Group will be in a position to repay this loan on or before 31 March 2020
from a combination of positive operating cash flows, refinancing from debt market sources and issuance of new equity, if
required. Accordingly, the Directors have adopted the going concern assumption for the purposes of the preparation of these
financial statements. The Directors are conscious that their reasonable expectations are based on what they consider to be
the likely outcomes of these future events and for this reason they consider that a material uncertainty exists which may cast
significant doubt on the Group’s ability to continue as a going concern and therefore may result in the Group’s inability to
realise its assets and settle its liabilities in the normal course of business.
Positive operating cash flows
The Directors have approved internal forecasts for the two financial years through to 31 March 2021, considered achievability
of the assumptions under these forecasts, tested for sensitivity, reviewed the existing working capital against Group
requirements and considered forecast compliance with applicable and anticipated debt covenants. The forecasts for both
financial years 2020 and 2021 indicate the continuation of positive operating cash flow surpluses and a return to profit after
tax. The key revenue assumptions, which like all assumptions, are subject to a degree of uncertainty are:
• the launch of Maxigesic into further new licensed markets. It is currently sold in 20 countries and there are currently
confirmed orders for a further nine countries. It is licensed for 128 countries.
• the continued sales growth for the Group’s range of products in Australia and in particular Maxigesic due to the
re-scheduling of codeine-based painkillers from over-the-counter to prescription only from 1 February 2018 (Maxigesic
is codeine-free and is therefore exempt and remains available over-the-counter).
In addition, the Group is confident of its ability to execute further licensing agreements and to generate future international
revenues for the key innovative products: Maxigesic, Pascomer and NasoSurf. Given the uncertainty on the timing of these,
they have not been included in the forecast assumptions other than for a small amount of upfront license income for Maxigesic.
Refinancing from debt market sources
The Group expect to have a new long-term facility in place with a local commercial bank prior to 31 March 2020 which,
together with the positive operating cash flow surpluses, will enable full repayment of the CRG loan on 31 March 2020.
The Group is currently in discussion with two local commercial banks.
As an interim step towards this and in order to reduce the cost of interest, the Group has on 21 May 2019 established a $15m
interim facility, which matures on 31 March 2020, from the Bank of New Zealand utilising the existing security arrangements
and will be used to repay US$9.5m of the CRG loan.

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS4243
2. Adoption of new and revised standards (continued)
(b) Impact of application of NZ IFRS 15 Revenue from Contracts with Customers
In the current year, the Group has applied NZ IFRS 15 Revenue from Contracts with Customers (as amended in May 2016)
which is effective for an annual period that begins on or after 1 January 2018. NZ IFRS 15 introduced a 5-step approach to
revenue recognition. Far more prescriptive guidance has been added in NZ IFRS 15 to deal with specific scenarios.
The Group has applied NZ IFRS 15 in accordance with the fully retrospective transitional approach without using the practical
expedients for completed contracts in NZ IFRS 15:C5(a), and (b), or for modified contracts in NZ IFRS 15:C5(c) but using the
expedient in NZ IFRS 15:C5(d) allowing both non-disclosure of the amount of the transaction price allocated to the remaining
performance obligations, and an explanation of when it expects to recognise that amount as revenue for all reporting periods
presented before the date of initial application, i.e. 1 April 2018.
The Group’s accounting policies for its revenue streams are disclosed in detail in note 4 below. Apart from reclassifying the
Group’s revenue transactions, the application of NZ IFRS 15 has not had an impact on the financial position and/or financial
performance of the Group. The amount, after reclassification, of each financial statement line item affected by the application
of NZ IFRS 15 is illustrated below.
$NZ000’s 20192018
Revenue from sale of goods83,64979,882
Revenue from royalties255189
Revenue from licensing income1,2231,105*
Total revenue85,12781,176
Research and development grant378409
Other income1,859721
Total other income2,2371,130
* This was included in Other income in the FY2018 Financial Statements.
3. New and revised NZ IFRS standards in issue but not yet effective
At the date of authorisation of these financial statements, the Group has not applied a number of the new and revised
NZ IFRS Standards that have been issued but are not yet effective.
The Directors do not expect that the adoption of these Standards will have a material impact on the financial statements of
the Group in future periods, except as noted below:
NZ IFRS 16 leases
General impact of application of NZ IFRS 16 leases
NZ IFRS 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the financial
statements for both lessors and lessees. NZ IFRS 16 will supersede the current lease guidance including NZ IAS 17 Leases and
the related Interpretations when it becomes effective for accounting periods beginning on or after 1 January 2019. The date
of initial application of NZ IFRS 16 for the Group will be 1 April 2019. The Group has chosen not to adopt the full retrospective
application of NZ IFRS 16 in accordance with NZ IFRS 16:C5(a). Consequently, the Group will not restate the comparative
information.
In contrast to lessee accounting, NZ IFRS 16 substantially carries forward the lessor accounting requirements in NZ IAS 17.
Impact of the new definition of a lease
The Group will make use of the practical expedient available on transition to NZ IFRS 16 not to reassess whether a contract is
or contains a lease. Accordingly, the definition of a lease in accordance with NZ IAS 17 and NZ IFRIC 4 will continue to apply
to those contracts entered or modified before 1 April 2019.
The change in definition of a lease mainly relates to the concept of control. NZ IFRS 16 distinguishes between leases and
service contracts on the basis of whether the use of an identified asset is controlled by the customer. Control is considered to
exist if the customer has:
– The right to obtain substantially all of the economic benefits from the use of an identified asset; and
– The right to direct the use of that asset.
The Group will apply the definition of a lease and related guidance set out in NZ IFRS 16 to all contracts entered into or
modified on or after 1 April 2019 (whether it is a lessor or a lessee in the lease contract).
In preparation for the first-time application of NZ IFRS 16, the Group has carried out an implementation project. The project
has shown that the new definition in NZ IFRS 16 will not change significantly the scope of contracts that meet the definition of
a lease for the Group.
Impact on lessee accounting operating leases
NZ IFRS 16 will change how the Group accounts for leases previously classified as operating leases under NZ IAS 17, which
were off-balance sheet.
On initial application of NZ IFRS 16, for all leases (except as noted below), the Group will:
a) Recognise right-of -use assets and lease liabilities in the consolidated statement of financial position, initially measured at
the present value of the future lease payments;
b) Recognise depreciation of right-of -use assets and interest on lease liabilities in the consolidated statement of profit or loss;
Lease incentives (e.g. rent-free period) will be recognised as part of the measurement of the right-of -use assets and lease
liabilities whereas under NZ IAS 17 they resulted in the recognition of a lease liability incentive, amortised as a reduction of
rental expenses on a straight-line basis.
Under NZ IFRS 16, right-of -use assets will be tested for impairment in accordance with NZ IAS 36 Impairment of Assets.
This will replace the previous requirement to recognise a provision for onerous lease contracts.
For short-term leases (lease term of 12 months or less) and leases of low-value assets (such as personal computers and office
furniture), the Group will opt to recognise a lease expense on a straight-line basis as permitted by NZ IFRS 16. As at 31 March
2019, the Group has non-cancellable operating lease commitments of $3.2m.
A preliminary assessment indicates that all of these arrangements relate to leases other than short-term leases and leases of
low-value assets, and hence the Group expects to recognise a right-of -use asset and a corresponding lease liability in respect
of all these leases. The impact on profit or loss is to decrease selling and distribution expenses and to increase general
administrative and interest expenses. Lease liability incentives of $0.1m previously recognised in respect of the operating
leases will be derecognised and the amount factored into the measurement of the right-to -use assets and lease liabilities.
Under NZ IAS 17, all lease payments on operating leases are presented as part of cash flows from operating activities. The
impact of the changes under NZ IFRS 16 would be to increase the cash generated by operating activities and to increase net
cash used in financing activities by the same amount.
4. Statement of accounting policies
The financial statements have been prepared under the historical cost convention with the exception of derivative
instruments revalued to fair value.
(a) Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with Generally Accepted Accounting
Practice in New Zealand (NZ GAAP). The Group is a for-profit entity for the purposes of complying with NZ GAAP. The
consolidated financial statements comply with New Zealand equivalents to International Financial Reporting Standards
(NZ IFRS), other New Zealand accounting standards and authoritative notices that are applicable to entities that apply
NZ IFRS. The consolidated financial statements also comply with International Financial Reporting Standards (IFRS), and
interpretations issued by the IFRS Interpretations Committee (IFRIC) applicable to companies reporting under NZ IFRS.
The accounting policies presented below have been applied consistently to all periods presented in these consolidated
financial statements, except that certain items in the Financial Statements have been reclassified as set out in note 2(b) and
on the face of the statement of cash flows.
The reporting currency used in the preparation of these consolidated financial statements is New Zealand dollars, rounded
where necessary to the nearest thousand dollars.
(b) Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities and the results of the parent and its subsidiaries
controlled during the period.
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are deconsolidated from the date that control ceases.
Notes to the Financial Statements (continued)
For the year ended 31 March 2019

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS4445
4. Statement of accounting policies (continued)
The acquisition method of accounting is used to account for the subsidiaries of the Group. The cost of an acquisition is
measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date
of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The excess of the cost of acquisition over the fair value of the
Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the Group’s
share of the fair value of the identifiable net assets of the subsidiary acquired, the difference is recognised in profit or loss.
Inter-company transactions, balances and unrealised gains on transactions between subsidiary companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Joint venture
Where the Company has joint control in a joint venture, the principles of equity accounting are adopted. In these cases,
the Company’s investment is recognised in the balance sheet and its share of after tax profits less losses of the joint venture
are recognised in the profit and loss, with the value of the Company’s investment carrying value adjusted accordingly.
(c) Critical accounting estimates and judgements
In preparing these financial statements the Group made estimates and assumptions concerning the future. These estimates
and assumptions may differ from the subsequent actual results. Estimates and judgements are continually evaluated and are
based on historical experience and other factors, including expectations of future events that are believed to be reasonable
under the circumstances. The treatment of research and development costs (detailed within notes 4(i) and 13), and the
appropriateness of the Going Concern assumption (refer to note 1(b)) are considered critical estimates and judgements.
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of the subsidiaries’ operations are measured using the currency of the primary
economic environment in which it operates (the ‘functional currency’). The consolidated financial statements are presented
in New Zealand dollars, which is the Company’s functional currency and the Group’s presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised
in the income statement.
(iii) Foreign operations
The results and balance sheets of all foreign operations (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from New Zealand dollars are translated into the presentation currency as follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet.
• income and expenses for each income statement and statement of comprehensive income are translated at average
exchange rates, unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the dates of the transactions.
• exchange differences arising are recognised in other comprehensive income and accumulated in equity.
(e) Revenue recognition
Revenue comprises the fair value for:
• the sale of goods, excluding Goods and Services Tax, rebates and discounts, which are recognised when control of the
product is transferred to the customer
• royalties owing on licensees’ sale of product which are recognised when licensee has sold the product;
• licence income, which is recognised when the Company has completed substantially all of its obligations under the licensing
agreement and through until the expected finalisation of the event. The Company’s obligations are a) the provision of
territorial rights to the Company’s intellectual property and b) the provision and support of the documentation required to
enable registration of the product in the territory.
(f) Other income recognition
Other income comprises research and development grant and other income:
• Research and development grant
Research and development grant income is recognised when eligible research and development expenses are incurred
and conditions relating to the grant are satisfied.
(g) Finance income recognition
Finance income comprises interest income that is recognised on a time-proportion basis using the effective interest method.
(h) Property, plant and equipment
All plant and equipment is stated at historical cost less depreciation and any impairment losses. Historical cost includes
expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flow to the Company and Group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the income statement during the financial period in which they are incurred.
Depreciation of property, plant and equipment is calculated using the diminishing value method which apportions the cost of
the assets over their useful lives. The Group has the following classes of property, plant and equipment and depreciation rates:
Category Depreciation rate (%)
Plant and machinery 21% to 80%
Furniture and fixtures 9% to 60%
Vehicles 26% to 36%
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposal are determined by comparing proceeds to carrying amounts and are included in the income
statement.
(i) Intangible assets
Capitalised development costs and capitalised registration costs
Development and registration projects are regularly reviewed throughout the year by a staff committee comprising the
CEO, CFO, GM Development and Financial Controller. The status of each project is measured against the requirements
of NZ IAS 38 and the relevant costs incurred during the financial year are capitalised where projects meet those criteria.
The criteria considered in this assessment are:
(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale.
(b) the Group’s intention to complete the intangible asset and use or sell it.
(c) the Group’s ability to use or sell the intangible asset.
(d) how the intangible asset will generate probable future economic benefits. Among other things, the Group can
demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be
used internally, the usefulness of the intangible asset.
(e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset.
(f) the Group’s ability to measure reliably the expenditure attributable to the intangible asset during its development.
Finite useful life
Acquired patents, capitalised development costs, capitalised registration costs and software have a finite life and are carried
at cost less accumulated amortisation. Patents are amortised over a useful economic life of 20 years, capitalised development
costs and capitalised registration costs over the period of expected benefit, and software over 3 – 4 years.
Indefinite useful life
Acquired trademarks are considered to have an indefinite useful life while they continue to protect revenue streams.
Trademarks are carried at cost less accumulated impairment. Indefinite useful life assets are tested for impairment annually
or when impairment indicators exist. The asset’s carrying amount is written down immediately to its recoverable amount if
the asset’s carrying amount is greater than its estimated recoverable amount.
Notes to the Financial Statements (continued)
For the year ended 31 March 2019

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS4647
4. Statement of accounting policies (continued)
(j) Goods and services tax (GST)
The income statement and the statement of comprehensive income have been prepared so that all components are stated
exclusive of New Zealand, Australian and Malaysian GST. Malaysia ceased to impose GST during the reporting period.
All items in the balance sheet are stated net of GST, with the exception of accounts receivable and payable which include
GST invoiced. All components of the statement of cash flows are stated exclusive of GST.
(k) Income tax
The income tax expense recognised for the period is based on the accounting profit or loss, adjusted for non-taxable and
non-deductible differences.
Current tax is calculated by reference to the amount of income tax payable calculated using tax laws that are enacted or
substantively enacted at balance date.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been
enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax
asset or liability is settled. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised.
(l) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on a weighted average cost basis. Net
realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale.
(m) Leased assets
Operating leases are those in which all the risks and rewards are substantially retained by the lessor. Lease payments are
charged in the income statement on a straight line basis over the term of the lease.

(n) Trade receivables
The Group has applied the simplified approach to providing for expected credit losses, which requires the recognition of
a lifetime expected loss provision for trade and other receivables. NZ IFRS 9 now requires the Group to consider future
potential credit losses and consider items such as forecasted economic conditions. Nevertheless the Group does not expect
any significant expected credit losses due to the nature of the distribution and regulatory licensing structure of the industry.
(o) Trade payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial period which
are unpaid. These amounts are incurred and are usually paid within 30 days of recognition.
(p) Borrowings
Borrowings are initially recognised at fair value plus transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (plus transaction costs) and the redemption amount is recognised
in the income statement over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability
for at least 12 months after the balance sheet date. Borrowing costs are expensed as incurred.
(q) Share capital
Ordinary shares and Redeemable Preference shares are classified as equity.
(r) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term investments
with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to
an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities
on the balance sheet.
(s) Employee entitlements
Liabilities for wages and salaries, including non monetary benefits and annual leave, expected to be settled within 12 months
of the reporting date are recognised in trade payables or provisions in respect of employees’ services up to the reporting
date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating
sick leave are recognised when the leave is taken and measured at the rates paid or payable. The liability for employee
entitlements that are not expected to be settled within 12 months is carried at the present value of estimated future cash
flows.
(t) Share based payments
The Company has a share option plan for employees of the Group. In accordance with the terms of the plan, as approved
by the Directors at meetings, employees at the time of the Company’s initial NZX and ASX listing in December 2015 and
again in June 2018 were granted share purchase options.
Each employee share option converts into one ordinary share of the Company on exercise. No amounts are paid or payable
by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights.
Options may be exercised at any time from the date of vesting to the date of their expiry.
The number of options granted is calculated in accordance with the performance-based formula approved by the Directors
at previous board meetings.
The formula rewards employees to the extent of the Group’s and the individual’s achievement judged against both qualitative
and quantitative criteria including the following financial and operational measures:
• market share
• net profit
• target sales thresholds
• product registration and licensing targets
Staff share options are valued at fair value at the grant date as calculated independently using the Black Scholes model (refer
note 20(b)).
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight line basis
over the vesting period, based on the Group’s estimate of equity instruments that eventually vest, with a corresponding
increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments
expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the
cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity- settled employee benefits
reserve.
(u) Impairment of non-financial assets
Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash flows (cash generating units). Indefinite useful life assets are tested for impairment annually and whenever there are
indicators of impairment while finite useful life assets are tested only when there are indicators of impairment.
(v) Derivative financial instruments
The Group benefits from the use of derivative financial instruments to manage foreign currency exposures. The fair value of
forward exchange contracts is calculated using discounted cash flows by reference to contractual exchange rates for contracts
in place and the forward exchange rate at year-end, considered level 2 of the fair value hierarchy.
(w) Research and development
Research is the original and planned investigation undertaken with the prospect of gaining new knowledge and
understanding. This includes: direct and overhead expenses for research, pre-clinical trials and costs associated with clinical
trial activities. All research costs are expensed when incurred.
Notes to the Financial Statements (continued)
For the year ended 31 March 2019

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS4849
Development is the application of research findings to a plan or design for the production of new or substantially improved
processes or products prior to the commencement of commercial production. When a project reaches the stage where it is
reasonably certain that future expenditure can be recovered through the process or products produced, expenditure that is
directly attributable or reasonably allocated to that project is recognised as a development asset. The asset will be amortised
from the date of commencement of commercial production of the product to which it relates on a straight line basis over
the life of the relevant patent or period of expected benefit. Development assets are reviewed annually for any impairment
in their carrying value.
(x) Earnings per share
Basic earnings per share is computed by dividing net earnings (after Preference dividends) by the weighted average number
of ordinary shares outstanding during each period.
5. Revenue from operations
$NZ000’s 20192018
Sale of goods83,64979,882
Royalty income255189
Licensing income1,2231,105
Total revenue85,12781,176
FY2018 Licensing income has been reclassified from Other income as they represent revenues from contracts with customers
consistent with NZ IFRS 15.
6. Other income
$NZ000’s 20192018
Research and development grant378409
Other income 1,859721
Total other income2,2371,130
7(a). Net operating profit
$NZ000’s Note 20192018
(Loss) before tax (2,259)(12,666)
After charging the following specific expenses:
Finished goods material component of cost of goods sold43,27245,404
Inventory write off1,125476
Audit fees and review of financial statements
7(b)156193
Rental expense – premises580528
Operating leases – motor vehicles and equipment463450
Share options expense252 135
Short-term employee emoluments:
Selling and distribution expenses7, 1 8 46,683
General and administrative expenses1,9291,899
Research and development expenses1,5401,282
10,6539,864
Research and development expenses:
Product development9146,521
New market development1,6741,709
2,5888,230
Depreciation:
Plant and machinery8288
Furniture and fixtures2527
Vehicles811
115126
Amortisation (included in General and Administration expenses):
Patents128115
Software5499
Development costs22-
204214
Finance costs:
Interest5,3943,496
Foreign exchange losses/(gains)2,624(4 3 8)
Derivative losses/(gains)417(380)
Other financing costs/(gains)(18)(26)
8,4172,652
7(b). Fees paid to auditors
$NZ000’s 20192018
Audit of financial statements
Audit of annual financial statements131129
Review of half year financial statements2564
Total fees for audit and review services156193
Other services
Tax due diligence services – Deloitte1919
Other services15-
Total fees paid to auditors190212
Deloitte 190148
PwC-64
Notes to the Financial Statements (continued)
For the year ended 31 March 2019

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS5051
8. Income tax
$NZ000’s 20192018
(a) Tax expense
Loss before tax(2,259)(12,666)
Tax calculated at domestic tax rates applicable(630)(1,862)
Expenses not deductible8243
Tax losses recognised5462,323
Previous year losses now utilised-(603)
Non resident withholding tax170160
Prior year adjustment-(3)
Tax expense/(benefit)16858
Comprising:
Current tax171(4 0)
Deferred tax
(3)98
16858
$NZ000’s 20192018
(b) Deferred tax balance
Deferred tax asset705708
705708
Deferred tax assets relating to unused tax loss carry-forwards and to deductible temporary differences are recognised if
it is probable that they can be offset against future taxable profits or existing temporary differences. As at 31 March 2019,
the Group recognised deferred tax assets on temporary differences totalling $705,000 (2018: $708,000) since it was
foreseeable that temporary differences could be offset against future taxable profits. On the basis of the approved business
plans of subsidiaries, AFT Pharmaceuticals Limited considers it probable that temporary differences can be offset against
future taxable profits. There is no expected change in capital structure in the near future which is expected to affect the
recoverability of the recognised deferred tax assets.
The movement in deferred tax is:
$NZ000’s Provisions
Recognised
tax losesTotal
1 April 2017610-610
Movements98-98
31 March 2018708-708
Movements(479)-(479)
Recognition of losses-476476
31 March 2019229476705
The amount of tax losses carried forward that is available for future utilisation is $54,734,235 (FY2018: $45,964,000.
A deferred tax asset of $476,447 has been recognised in relation to these losses.
$000’s 20192018
(c) Imputation and franking credits available for use
NZD-252
AUD319319




9. Inventories
$NZ000’s 20192018
Finished goods25,80525,664
Provision for obsolescence(647)(1,252)

25,15824,412

Inventory on hand comprises pharmaceutical goods ready for resale.
The value of inventory is transferred to cost of sales in the income statement when sold.
10. Trade and other receivables
$NZ000’s 20192018
Trade receivables 20,77519,854
Provision for bad debt(31)(31)
Less provision for customer rebates(4,4 6 6)(5,044)
Prepayments2,9092,175

19,18716,954
Ageing of overdue trade debtors
$NZ000’s 1-30 Days31-60 Days61-90 Days90+ DaysTotal
31 March 20193,272-63703,648
31 March 20182,797 4332414 3,268
All balances are expected to be settled within the next 12 months.
The expected credit loss allowance provision has been determined as follows:
As at 31 March 2019
$NZ000’s Current+1 Month>1 MonthTotal
Expected loss rate**0.084%
Gross Carrying Amount17,127*3,272*37620,775
Expected credit loss allowance provision31
Short-term loss allowance provision0
Long-term loss allowance provision31
*Expected credit losses are negligible.
The average credit period on sale of goods is 49 days. No interest is charged on outstanding trade receivables.
The Group always measures the loss allowance for trade receivables at an amount equal to lifetime ECL. The expected credit
losses on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and
an analysis of the debtor’s current financial position, adjusted for factors that are specific to the debtors, general economic
conditions of the industry in which the debtors operate and an assessment of both the current as well as forecast direction of
conditions at the reporting date.
As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer
segments, the provision for loss allowance based on past due status is not further distinguished between the Group’s
different customer base.
No bad debt expense has been recorded for the current year.
Notes to the Financial Statements (continued)
For the year ended 31 March 2019

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS5253
11. Cash and cash equivalents
$NZ000’s 20192018
Cash at bank6,8976,745
Cash on hand1925
Total cash6,9166,770
Cash at bank earns, on average, less than 1% of interest.
12. Property, plant and equipment
$NZ000’s
Plant and
machinery
Furniture
and fixturesVehiclesTotal
(a) Cost
Balance 31 March 2017798 414 218 1,430
Additions43 12 1570
Disposals --(32)(32)
Balance 31 March 2018841 426 201 1,468
Additions1319-140
Disposals-(1)(27)(28)
Balance 31 March 20199724341741,580
(b) Depreciation
Balance 31 March 2017(636)(221)(187)(1,044)
Depreciation(88)(27)(11)(126)
Disposals -- 32 32
Balance 31 March 2018(724)(248)(166)(1,138)
Depreciation(82)(25)(8)(115)
Disposals--3030
Balance 31 March 2019(806)(273)(144)(1,223)
(c) Carrying amounts
Balance 31 March 2018117 178 35 330
Balance 31 March 201916616130357
13. Intangible assets
$NZ000’s Trademarks
Capitalised
registration
costs
Capitalised
development
costsPatentsSoftwareTotal
(a) Cost
Balance 31 March 2017610 --2,173 514 3,297
Additions84 -2,465234 1 2,784
Disposals --- - --
Balance 31 March 2018694 -2,465 2,407 515 6,081
Additions1111,4301,452315173,325
Disposals------
Balance 31 March 20198051,4303,9172,7225329,406
(b) Amortisation
Balance 31 March 2017 ---(437)(312)(749)
Amortisation---(115)(99)(214)
Disposals --- - - -
Balance 31 March 2018 ---(552)(411)(963)
Amortisation --(22)(128)(54)(204)
Disposals ------
Balance 31 March 2019 --(22)(680)(465)(1,167)
(c) Carrying amounts
Balance 31 March 2018694 -2,4651,8551045,118
Balance 31 March 20198051,4303,8952,042678,239
Trademarks are acquired to protect the current and future revenue streams of the Group.
They are considered to have an indefinite useful life while they continue to protect revenue streams.
During the year $1,430,000 of Registration costs were recognised where there is a high likelihood of gaining a registration and generating
future revenue.
14(a). Investment in subsidiaries
Interest held

2019
%
2018
%
Country of
incorporationPrincipal activities
AFT Pharmaceuticals (AU) Pty Ltd100%100%AustraliaDistribution of pharmaceuticals
in Australia
AFT Pharmaceuticals Singapore Pte Ltd100%100%SingaporeRegistration of pharmaceuticals
in Singapore
AFT Pharmaceuticals (S.E. Asia) Sdn Bhd100%100%MalaysiaDistribution of pharmaceuticals
in Malaysia
AFT Orphan Pharmaceuticals Limited65%65%New ZealandNo activity
AFT Limited Partner Limited100%100%New ZealandPartner in Dermatology
Specialties LP
AFT Dermatology Limited100%100%New ZealandDistribution of pharmaceuticals
All subsidiaries have a balance date of 31 March.
Notes to the Financial Statements (continued)
For the year ended 31 March 2019

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS5455
14(b). Investment in joint venture partnership
$NZ000’s 20192018
Interest in joint venture company at cost5,764 4,345
Accumulated equity accounted earnings/(losses) of joint venture partnership(2,731) (2,210)
Net equity investment in joint venture partnership3,033 2,135
The joint venture partnership of the Group and its activities are as follows:

2019
% Interest
held
2018
% Interest
held
Dermatology Specialties LP (incorporated in New Zealand)50% 50%
Principal activities: Development and distribution of pharmaceuticals
$NZ000’s 20192018
Balance at start of year 2,135 627
Investment during the year1,419 3,002
Share of current year loss(521) (1,494)
Dividend received- -
Balance at end of year3,033 2,135
The following table summarises the financial information relating to the Group’s joint venture partnership and represents
100% of the joint venture partnership net assets, revenues and net profits.
$NZ000’s 20192018
Extracts from joint venture partnership balance sheet (unaudited)
Current assets352 -
Non-current assets2,214 2,189
Current liabilities(96) (96)
Non-current liabilities- -
Net assets2,470 2,093
Extracts from joint venture partnership income statement (unaudited)
Revenue- -
Net loss after taxation(1,042) (2,989)
The joint venture did not have any contingent liabilities or capital commitments at balance date (2018: nil).
AFT Pharmaceuticals Limited has contributed cash and assets, whilst the JV partner has contributed intellectual property
that is not reflected in the JV accounts.
15. Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial period
which are unpaid. These amounts are incurred and are usually paid within 30 days of recognition.
$NZ000’s 20192018
Trade payables6,6737, 3 3 5
GST payable8841,189
Employee entitlements1,299932
Other payables6,2427,935
15,0981 7, 3 91
16. Provisions
$NZ000’s 2019
Additional
provisionsUtilised2018
Additional
provisionsUtilised2017
Supplier rebates1,2701,270(1,098)1,098 1,098 (564)564
1,2701,270(1,098)1,0981,098 (564)564
Supplier rebates are based on profit sharing arrangements with suppliers which are estimated on achieving expected set
margin targets and are expected to be utilised within the next 12 months. These are included as an expense in Cost of
sales.
17. Interest bearing liabilities
$NZ000’s 20192018
CRG loans41,75030,654
41,75030,654
$NZ000’s 20192018
Opening balance of CRG loan 1 April30,65423,426
Capitalised interest1,74 61,130
Additional loans drawn down7, 41 77, 1 3 5
Loss/(gain) on FX translation1,933(1,046)
Closing balance 31 March41,75030,654
The term loan agreement with CRG commenced in May 2014 and had a facility draw down of up to USD$30 million by
October 2016. USD$15 million was drawn down. Initially this facility was for a six year term with the first four years being
interest only, and the principal to be repaid in equal quarterly instalments in years five and six.
In September 2017, a new loan facility of USD$10 million was entered into, which includes a minimum mandatory drawdown
of USD$5 million on or before 31 March 2018. This was drawn down in December 2017. The second drawdown for the balance
was made in August 2018.
The repayment terms for all facilities were amended in September 2017 to interest only until maturity, and the principal to be
repaid in full on 31 March 2020.
The loans have a general security over the assets of the Group together with a group guarantee. Interest is fixed at 13.5% p.a.
The loans are denominated in United States dollars (USD) and during the period NZD$1,933,000 (FY2018 gain $1,046,000)
was recognised as unrealised foreign exchange losses. The carrying amount of the CRG loans are substantially in line with the
fair market value as at balance sheet date.
All covenants relating to the loan and BNZ facility have been complied with during the year (refer note 25).
Notes to the Financial Statements (continued)
For the year ended 31 March 2019

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS5657
18. Share capital
Ordinary shares and Redeemable preference shares are classified as equity.
SharesShares
2019
Number
2018
Number
2019
$’000
2018
$’000
Ordinary share capital97,308,019 97,308,019 5 7, 0 5 85 7, 0 5 8
Less capital-raising costs--(2,439)(2,439)
Redeemable Preference Shares3,330,0003,330,0009,1249,124
100,638,019100,638,019 63,743 63,743
$NZ000’s 20192018
Share capital at beginning of the year63,74362,944
Issue of Ordinary shares-1,065
Less capital raising costs-(266)
63,74363,743
The redeemable preference shares, issued in March 2017, attract a dividend of 9.4% accruing quarterly, which may be satisfied
in cash either in full or in part or deferred indefinitely at the Company’s absolute discretion.
They do not carry any right to vote except at meetings of an ‘interest group’ of holders of redeemable shares.
They may be redeemed at the option of the Company at any time two years or more after issue. On redemption, the Company
would pay the issue price plus unpaid dividends accrued to the date of redemption. The redemption can only be settled in cash.
After three years from issue, they may be converted to ordinary shares at the option of the holder in multiples of 100,000.
The holder would receive one ordinary share for every redeemable share held and a number of ordinary shares calculated by
dividing the amount of any accumulated dividends by the issue price. Conversion of the redeemable preference shares may
only be settled through the issuance of shares. Once the holder has elected to convert, neither the issuer nor the holder can be
obligated to settle in any other manner.
Optional conversion events arise if one of a number of conditions occur. These conditions were notified to NZX and ASX at the
time of issue of the redeemable preferences shares and are available on the Company website (www.aftpharm.com).
FY2018
In May 2017, a share purchase plan was issued to existing shareholders, who could elect to purchase shares @NZ$2.25 per
share (AUD$2.11) which was a 3% discount to the volume weighted average price of an AFT share on the NZX main board for
the 5 day period ending on 23 May 2017. Shareholders could subscribe for a minimum of $1,000 and maximum of $15,000
worth of shares at that price. Shareholders subscribed for 473,181 ordinary shares, raising $1,064,657.
19. Reconciliation of loss after tax with net cash flow from operating activities
$NZ000’s 2019
Restated
2018
Loss after tax(2,427)(12,724)
Non-cash items:
Depreciation115126
Amortisation204214
Impact of foreign exchange on cash and cash equivalents24024
Share options expense252135
Interest and financing expense5,3763,025
Unrealised (gain)/loss on foreign currency movements1,339(1,070)
Provision for tax168(143)
Interest received(42)(125)
Share in loss of JV entity5211,494
Movement in working capital:
(Increase)/decrease in inventories(74 6)(2,214)
(Increase)/decrease in trade, other receivables and derivatives(2,054)(1,080)
Increase/(decrease) in trade, other payables and derivatives(1,879)3,171
Net cash generated from/(used in) operating activities1,067(9,167)
Interest and financing costs and interest received, which were previously shown as operating activities, have been presented as
Financing activities on a basis consistent with the Consolidated Income Statement.
20(a). Related parties
The Group had related party relationships with the following entities:
Related party Nature of relationship
CRG Shareholder of both ordinary shares and redeemable preference shares
Atkinson Family Trust Shareholder of both ordinary shares and redeemable preference shares
The following transactions were carried out with these related parties:
(i) Loans
$NZ000’s 20192018
CRG (refer note 17)41,75030,654
Total loan balances41,75030,654
(ii) Interest expense
$NZ000’s 20192018
CRG5,2383,432
(iii) Dividends on redeemable Preference shares
$NZ000’s 20192018
CRG726698
Atkinson Family Trust209197
Notes to the Financial Statements (continued)
For the year ended 31 March 2019

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS5859
20(a). Related parties (continued)
Key management compensation
$NZ000’s 20192018
Directors fees292286
Executive salaries1,0781,084
Short-term benefits190127
Options expense12629
Key management compensation1,6861,526
Key management includes external Directors, the Chief Executive Officer, the Chief of Staff, the Chief Financial Officer and
the Director of International Business Development. These positions are mainly responsible for the planning, controlling and
directing the activities of the business. The Chief of Staff is the spouse of the Chief Executive Officer.
20(b). Staff share options
Staff share options are exercisable at the price of $2.80 each, being the issue price of a share at the time of the Company’s
initial listing on NZX and ASX. The vesting period is generally up to four years however this varies according to various
performance criteria. Other than in limited circumstances options are forfeited if an employee leaves the Group before the
options vest. The options are valued at fair value as calculated independently using the Black Scholes model. The options vest
over up to four years from date of issue.
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:
2019 2018

Average
exercise price
$ per shareOptions
Average
exercise price
$ per shareOptions
Balance at beginning of year2.80693,312 2.80850,000
Issued2.80525,000 - -
Forfeited2.80(17,668)2.80 (156,688)
Exercised-- - -
Lapsed- - - -
Balance at end of year2.801,200,644 2.80693,312
Weighted average share price for options exercised during the period $nil (2018: $nil).
Of the 1,200,664 outstanding options, 715,664 are currently exercisable (2018: 135,969).
Share options outstanding at the end of the year have the following expiry dates, exercise dates and exercise prices:
Expiry month
Exerciseable
month
Exercise
price20192018
April 2020December 20172.80135,969 135,969
April 2020December 20182.80554,695 557,343
April 2020March 20192.8025,000-
June 2022Various2.80485,000-
Total share options outstanding1,200,664693,312
The weighted average remaining contractual life of options outstanding at the end of the period was 2.5 years (2018: 2 years).
Notes to the Financial Statements (continued)
For the year ended 31 March 2019
Share options reserve
$NZ000’s20192018
Balance at beginning of year(430)(295)
Current year amortisation(252) (135)
Balance at end of year(682) (430)
No share options were exercised during the reporting period. The options outstanding at 31 March 2019 had a weighted
average exercise price of $2.80 and a remaining average contractual life of 2.5 years. In the reporting period, options were
granted on 15 June 2018. The aggregate of the estimated fair values of the options granted at that date is $326,000.
The inputs into the Black Scholes model are as follows:
15 June 2018
Weighted average share price$2.38
Weighted average exercise price$2.80
Expected volatility40%
Expected life4 years
Risk-free rate2.09%
Expected dividend yieldsNil
21. Financial risk management
(a) Managing financial risk
The Group’s activities expose it to various financial risks as detailed below.
• Market risk
Management is of the opinion that the Group’s exposure to market risk at balance date is defined as:
Risk factor Description Sensitivity
(i) Currency risk Exposure to changes in foreign exchange rates on
assets and liabilities of the subsidiaries, and USD
denominated borrowings As below
(ii) Interest rate risk Exposure to changes in interest rates on borrowings As below
(iii) Other price risk No commodity securities are bought, sold or traded Nil

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS6061
21. Financial risk management (continued)
• Foreign exchange risk
The Group benefits from the use of derivative financial instruments to manage foreign currency exposures.
The fair value of forward exchange contracts is calculated by reference to current forward exchange rates at year end and
the contract exchange rates, considered level 2 of the fair value hierarchy.
The Group purchases goods and services from overseas suppliers in a number of currencies, primarily AUD, USD, EUR and
GBP and has borrowings that are denominated in US dollar amounts. This exposes the Group to foreign currency risk. The
Group manages foreign currency risk through use of derivative arrangements, in particular forward exchange contracts.
The exposure is monitored on a regular basis based on Group foreign exchange policies. Future revenues from markets
outside Australasia will be denominated primarily in USD and EUR which will provide a natural hedge against these costs.
In the current year (FY2019) Foreign Exchange losses totalled $3,041,044 (2018: $817,992 gain) of which $1,933,053 (2018:
$1,046,000 gain) were unrealised losses on the USD denominated CRG loan. Future revenues derived in USD will be used
towards repaying a portion of this debt as it falls due. The balance of the losses are derived from the restatement of the
cash balances at the spot rate on the year end balance date of 31 March 2019 and the change in spot rates during the time
between when revenues, receipts and expenses are recorded in the general ledger and when they are paid/received.
In total, the Group had financial assets and liabilities denominated in the following currencies:
FY2019FY2018
Financial
Assets
NZ$000’s
CurrencyFinancial
Liabilities
NZ$000’s
Financial
Assets
NZ$000’s
CurrencyFinancial
Liabilities
NZ$000’s
13,931
AUD4,015
12,960
AUD4,366
1,650USD42,698134USD33,596
904MYR37202MYR62
542SGD177251SGD24
203EUR69630EUR2,897
5GBP175-GBP64
A 1% increase or decrease in foreign exchange rates on assets and liabilities will reduce/increase equity by $144,000
(2018: $111,000) and reduce/increase the profit or loss by $368,000 (2018: $354,000). A sensitivity analysis is done on
the basis of year end expenses.
The following forward foreign exchange contracts were held at the end of the 2019 financial year:
Forward Foreign Exchange Contracts
Buy currency
Buy currency
amount (‘000)
Sell amount
$NZ000’s
Buy amount
31-Mar-19
$NZ000’s
Fair value
$NZ000’s
EUR3,3005,7355,963(228)
GBP155302305(3)
USD4,2056,1926,202(10)
Total liability as at 31 March 2019(241)
All contracts mature within one year from 31 March 2019.
Notes to the Financial Statements (continued)
For the year ended 31 March 2019
The following forward foreign exchange contracts were held at the end of the 2018 financial year:
Forward Foreign Exchange Contracts
Buy currency
Buy (sell) currency
amount (‘000)
Sell (buy) amount
$NZ000’s
Buy (sell) amount
31-Mar-18
$NZ000’s
Fair value
$NZ000’s
EUR2,5504,2904,394104
GBP19736538722
USD6,0008,2688,31850
Total asset as at 31 March 2018176
• Interest rate risk
Borrowings are at a fixed interest rate, which exposes the Group to fair value interest rate risk. There are no specific
derivative arrangements to manage this risk.
• Credit risk
Financial instruments, which potentially subject the Group to credit risk, principally consist of accounts receivable.
Regular monitoring is undertaken to ensure that the credit exposure remains within the Group’s normal terms of trade.
The Group has one significant concentration of credit risk at 31 March 2019 with the largest debtor being $7,232,700
(2018: $3,510,000). There has been no past experience of default and no indications of default in relation to this debtor.
The Group’s cash and short-term deposits are placed with high credit quality financial institutions. Accordingly, the Group
has no significant concentration of credit risk other than bank deposits, with 7.2% of total assets at the Bank of New Zealand
(2018: 8.3%), 3.3% at NAB Bank (2018: 3.8%). The carrying value of financial assets represents the maximum exposure to
credit risk.
• Liquidity risk
Liquidity risk is the risk that the Group may encounter difficulty in raising funds at short notice to meet its commitments
and arises from the need to borrow funds for working capital. The Directors monitor the risk on a regular basis and actively
manage the cash available to ensure the net exposure to liquidity risk is minimised. Since May 2014, there has been an on
demand $1m BNZ overdraft facility.
The liquidity/maturity profile of the liabilities is as follows:
Liquidity Profile
$NZ000’s
31 March 2019 < 1 Year1-2 Years2-5 Years> 5 YearsTotal
Trade and other payables(15,098)---(15,098)
Borrowings(4 7, 4 8 2 )---(4 7, 4 8 2 )
Derivative instruments (outbound)(12,470)---(12,470)
Derivative instruments (inbound)12,229---12,229
Totals(62,821)---(62,821)
31 March 2018
Trade and other payables(16,122) - - -(16,122)
Borrowings (2,806) (36,458)--(39,264)
Derivative instruments (outbound)(1 2,747) - - -(1 2,747)
Derivative instruments (inbound)12,923 - - -12,923
Totals(18,752) (36,458)--(55,210)
(b) Fair values
The carrying value of financial assets and liabilities (trade receivables and trade payables) approximates their fair value.
Trade receivables are valued net of provision and trade payables are valued at their original amounts by contract.

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS6263
22 . Segment reporting
Operating Segments
$NZ000’s
31 March 2019 AustraliaNew ZealandSoutheast AsiaRest of worldTotal
Revenue – Sale of goods50,30426,7962,1424,40783,649
Revenue – Royalties---255255
Revenue – Licencing ---1,2231,223
Total Revenue50,30426,7962,1425,88585,127
Other income1,860--3772,237
Depreciation and amortisation292845-318
Equity accounted loss of joint venture entity---(521)(521)
Operating Profit/(loss) 5,321537(343)6016,116
Finance income/(loss)-42--42
Interest expense (1,333)(3,985)(76)-(5,394)
Other finance gains/(losses)447(3,483)13-(3,023)
Gain/(loss) before tax4,435(6,889)(4 06)601(2,259)
Total Assets24,58235,6533273,03363,595
Property, plant and equipment5229213-357
Intangible assets---8,2398,239
Investment in joint venture entity---3,0333,033
Total liabilities4,89053,56747-58,504
Capital expenditure39992-140
31 March 2018
Revenue – Sale of goods49,193 27,096 1,286 2,307 79,882
Revenue – Royalties---189189
Revenue – Licencing --1,1051,105
Total Revenue49,1932 7,0 9 61,2863,60181,176
Other income - 721 -409 1,130
Depreciation and amortisation25 308 7 -340
Equity accounted loss of joint venture entity---(1,494)(1,494)
Operating Profit/(loss)1,253(2,693)(792)(7,907)(10,139)
Finance income 4121 -125
Interest expense (1,041)(2,455)- -(3,496)
Other finance gains/(losses)32242894844
Gain/(loss) before tax538(4,599)(698)(7,907)(12,666)
Total Assets 25,706 28,622 140 2,13556,603
Property, plant and equipment39 274 17 -330
Intangible assets -- -5,1185,118
Investment in joint venture entity---2,1342,134
Total liabilities5,22143,95486-49,261
Capital expenditure11 50 9 -70
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-
maker (CODM). For the purposes of NZ IFRS 8 the CODM is a group comprising the Board of Directors, together with the
Chief Executive Officer, the Chief of Staff, the Chief Financial Officer and the Director of International Business Development.
This has been determined on the basis that it is this group that determines the allocation of the resources to segments and
assesses their performance.
Notes to the Financial Statements (continued)
For the year ended 31 March 2019
The Group has four operating segments based on geographical location reportable under NZ IFRS 8, as described below,
which are the Group’s strategic groupings of business units. The following summary describes the operations in each of the
Group’s reporting segments:
New Zealand – Includes the Head Office function for the Group, supplier relationships and procurement of all stock for
the Group, all regulatory activity, all marketing activity and all finance activity. The sales and distribution activity principally
relates to the New Zealand market.
Australia – Includes the sales and distribution activity relating to the Australian market.
Southeast Asia – Includes the sales and distribution activity relating to the Southeast Asian market (Brunei, Hong Kong,
Malaysia, Philippines, Singapore and Vietnam).
Rest of World – Includes the out-licensing of IP developments to markets in which AFT does not have a presence and
the export of products to export markets. The costs of research and development and new market development activity not
specific to the other segments are expensed to this segment.
Major Customers – Revenues from one customer of the Australian segment (being a licensed wholesaler) represents
approximately NZ$21.4m (2018: NZ$20.2m) and from one customer of the New Zealand segment (also being a licensed
wholesaler) represents approximately $13.6m (2018: $14.6m) of the Group’s total revenues.
23. Contingent liabilities
In May 2015, AFT Pharmaceuticals Limited signed as guarantor of AFT Pharmaceuticals (AU) Pty Limited for its five-year
lease contract with Investec Limited for the premises occupied in Sydney, Australia. A deposit of AUD$75,000 has been
placed with NAB as security for this lease. The Company has also placed NZD$75,000 on term deposit with the BNZ as
security for a guarantee issued by the BNZ in favour of the NZX, should the Company ever default on any of its payment
obligations to NZX.
24. Commitments
(a) Capital commitments
The Group has no capital commitments at 31 March 2019 (2018: nil).
(b) Lease commitments
Operating leases are those in which all the risks and rewards are substantially retained by the lessor. Lease payments are
charged in the income statement on a straight-line basis over the term of the lease.
$NZ000’s 20192018
Due within one year845843
Due later than one year but within five years1,6971,953
Due later than five years701 1,065
3,2433,861
The above includes leases for property (with lease terms of 2 to 8 years) and vehicles and equipment (with lease terms
of up to 4 years).
(c) Other commitments
The Company has entered into contracts to complete clinical trials overseas. These contracts call for stage or milestone
payments to be made progressively when those stages or milestones are achieved. Certain conditions allow for the termination
of the trials, with future obligations extinguished. The aggregate expected amounts to be paid under these contracts is
$2.2m (2018: $4.0m).

AFT PHARMACEUTICALS LIMITED
Annual Report 2019
6465STATUTORY DISCLOSURES
25. Management of capital
The Group’s objectives when managing capital are:
To safeguard the Group’s ability to continue as a going concern so that it can continue to provide returns to its shareholders
and to maintain a strong capital base to support the development of its business.
The Group meets these objectives through a mix of equity capital and borrowings. The level and mix of capital is determined
by the Group’s internal Corporate Governance Policies.
Under the CRG Loan Agreement, there is a covenant requiring a minimum bank balance of NZ$4m at each month end.
Under the existing BNZ facility, there is a covenant requirement that the facility, comprising an overdraft and letter of credit
facility, must not exceed the total of 70% of acceptable debtors plus 40% of acceptable stock.
The Group has complied with both the CRG and BNZ covenants during the 2019 and 2018 financial years.
In March 2017 the Group issued 3,330,000 Redeemable Preference Shares raising $9.1m, and in May 2017 an issue of
ordinary shares was offered to existing shareholders, resulting in the issue of 473,181 ordinary shares and raising an
additional $1,064,657. Details are covered in note 18.
26. Earnings per share
Basic earnings per share is computed by dividing net earnings attributable to ordinary equity holders of the parent by the
weighted average number of ordinary shares outstanding during each period.
$NZ000’s 2019
Restated
2018
Earnings used in the calculation of basic and diluted earnings per share
Loss after tax(2,427)(12,724)
Less Redeemable Preference shares dividend (935)(895)
Net Loss after tax attributable to Ordinary shareholders(3,362)(13,619)
Weighted average ordinary shares for the purposes of basic and diluted
earnings per share97,308,01997,248,871
Basic and diluted loss per share ($)(0.03)(0.14)
* The financial statements for FY2018 reflected the earnings per share before allowing for the Redeemable preference share dividend.
27. Dividends per share
No dividends have been declared to the ordinary shareholders of the parent company during the current year, nor in FY2018.
Gross dividends of $935k (2018:$895k) were declared on the Redeemable Preference Shares, with $178k (2018:$412k) paid or
payable in cash and withholding taxes, and $758k (2018:$483k) accumulated in a reserve for future settlement per the terms
described at note 18.
28. Subsequent events
Apart from the BNZ facility referred to in note 1(b), there were no events occurring after balance date that require disclosure
at the time these accounts were authorised.
Notes to the Financial Statements (continued)
For the year ended 31 March 2019
Statutory Disclosures
Non-executive Director Remuneration
AFT’s shareholders have approved a total cap of $575,000 per annum for Non-executive Directors’ fees, for the purposes
of the NZX Listing Rules. This annual fee pool has not been increased since it was approved by shareholders in 2015. The
current approved Directors’ fees payable are set out in the table below. With the return of the Company to profitability and
having held Directors’ fees at the same level since AFT listed in 2015, the Board will undertake a review of Directors’ fees
during the current financial year to ensure that the Company is offering appropriate levels of remuneration to both existing
and prospective Directors. More information about the remuneration payable to Directors is set out in AFT’s Corporate
Governance Statement which is located on the investor centre of the Company’s website.
The current approved fixed annual fees payable to Non-executive Directors are detailed below (as mentioned above, these
fees may be subject to review during the current financial year):
Position
Fees per annum
(paid in NZD except
where stated)
Board of DirectorsChair$95,000
Non-Executive Director$40,000
1
Audit and Risk CommitteeCommittee Chair $ 7, 5 0 0
Committee Member$5,000
2
Remuneration and Nominations CommitteeCommittee Chair $ 7, 5 0 0
Committee Member$5,000
2
Regulatory and Product Development Oversight CommitteeCommittee Chair $ 7, 5 0 0
Committee Member$5,000
1
Fee payable to non-United States (US) based Directors. US based Directors receive USD$50,000.
2
Fee payable to non-US based Directors. US based Directors receive USD$5,000.
Non-executive Directors received the following Directors’ fees, remuneration and other benefits from the Company in the
year ended 31 March 2019:
Remuneration and value of other benefits received in FY2019
2
Name of Director
Non-Executive
Directors’
Board Fees
Audit and Risk
Committee Fees
Remuneration
and Nominations
Committee Fees
Regulatory
and Product
Development
Oversight
Committee Fees
Shares and
Other Payments
or Benefits
1
Total
Remuneration
Jim Burns
2
$74,8 8 4 $ 7, 4 8 9$ 7, 4 8 8--$89,861
David Flacks$95,000
(Chairman)
$5,000---$100,000
Nate Hukill
3
- -----
Jon Lamb
$40,000 $ 7, 5 0 0
(Chairman)
$ 7, 5 0 0
(Chairman)
--$55,000
Doug Wilson
$40,000--$ 7, 5 0 0
(Chairman)
-$ 47, 5 0 0
Total$249,884$19,989$14,988$7, 5 0 0-$292,361
1
In addition to Directors’ fees, AFT meets costs incurred by Non-executive Directors that are incidental to the performance of their duties.
This includes paying the costs of Directors’ travel. As these costs are incurred by AFT to enable Directors to perform their duties, no value is
attributable to them as benefits to Directors for the purposes of this table.
2
Fees disclosed in NZD. Jim Burns receives fees paid in USD. These fees have been converted into NZD in the above table, calculated at an
exchange rate of 1: 0.668.
3
Nate Hukill agreed not to receive any Directors’ fees during the financial year ended 31 March 2019.
*
*